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John Merryman's avatar

Nathan,

To understand the avalanche/earthquake, it is not so much the precipitating event, but the stresses built up in the system being released at that point of circumstance.

The primary social, economic stress built up in the West, if not the entire world, is mistaking capitalism, rule by finance, for a market economy.

As I keep pointing, to little effect, in that as states function as social super organisms, government, executive and regulatory, is the nervous system, while money and banking are blood and the circulation system.

We have evolved enough to understand that as government has to serve the entire society, if only to prevent civil wars and revolutions, that it works best as a public utility. Much as our mind is referee of the desires and needs, government has to sort among all the factions and needs.

We haven’t yet come to understand the same principle applies to banking.

When the medium enabling markets is a player and not a utility, the rest are tenant farmers.

In a market economy, money is the medium. In a capitalist economy, money is the message. One is a tool, the other is a god.

As linear, goal oriented creatures in this cyclical, circular, reciprocal, feedback generated reality, people see money as signal to save and store, while markets need it to circulate. Consequently Econ 101 refers to money as both medium of exchange and store of value.

Roads are a medium, parking lots are a store. If we treated roads like we treat money, everything would be paved over, but we would still be fighting over who has the biggest lots.

In your body, blood is the medium, fat is the store. Mix them up and you are dead. Try telling a doctor that medium and store are interchangeable and he will look at you like you are really stupid, but to an economist, it would be common knowledge. Consequently the entire financial accounting system of society has been turned into a giant casino.

So rather than resources being allocated where they would have the greatest benefit, much is siphoned off to feed large egos, leaving the rest to fight over the scraps. It would be like the heart telling the hands and feet to go suck dirt, as it is keeping the blood for itself.

When greed is the primary motivating factor, strategy is basically bacteria racing across the petri dish. Infinite growth economics and moving onto Mars is not really a viable long term plan.

In fact, the advantage of multicellular organisms is being able to sense and navigate their surroundings.

So as a medium, you own money like you own the section of road you are on, or the air and water flowing through your body. It doesn't have your picture on it, you don't hold the copyrights and, most importantly, are not directly responsible for its value, like a personal check.

While we might think of it as a commodity to mine from the economy, like we mine gold from the ground, or bitcoin from computer processing, it functions as a contract, between the holder and the rest of society.

As a contract, storing the asset side of the ledger requires a debt on the other side, so much economic, social and political activity is designed to generate debt, to store the illusion of wealth. Such as indebting younger generations, rather than investing in them.

That the flunkies allowed in DC are best at running up debt and the financial sector needs this debt to grow metastatically is not coincidence. The secret sauce of capitalism is public debt backing private wealth.

“The real money is in bonds.”

The banks are having their, "Let them eat cake." moment.

We are seriously getting to the pitchforks and torches moment, as all the "divide and conquer" is starting to wear thin.

Here is interesting commentary on the state of play with "private equity," ie, asset stripping;

https://mispricedassets.substack.com/p/the-smart-money-is-the-subprime-this

Tedder130's avatar

China experienced an epoch of war and destruction, The Warring States Period, over 2000 years ago. I figure she learned something and henceforth was a peaceful nation, only interrupted by the occasional revolutionary turmoil caused by, as Pearl Bucks wrote in THE GOOD EARTH, "When the rich get too rich." Of course, there were several invasions, but even then the invaders quickly became Chinese themselves.

However, it seems the Europeans failed to learn anything from these wars as they are still up to warmongering.

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