Author Topic: What's the economy, and what's it not.  (Read 945 times)

Burt Gummer

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What's the economy, and what's it not.
« on: December 07, 2014, 02:53:03 AM »
I began by writing a response to a post that left a bad taste in my mouth. It became a bit more so now there's this.

What is the economy, and what is it not.

Simply put the economy is just an inadequate term attempting to describe all voluntary business transactions of a connected group of people.
It ranges from your local family farm to an Indonesian manufacturing collaborative. What I'm implying is that the entire world is connected via business.
Investors in the US buy goods from China and manufacturers in China buy goods from us in the Americas. You'd be doing yourself a disservice by sectioning off an economy depending on political borders



"Capital" is what it's all about... You might have heard of it, no not that marble building..
It's the valuable, durable good that is used in creation of more capital.
For instance your car / truck / 1950's VW van. Is a simple example of capital.
You use it as a tool to drive to work and make money or solve spooky mysteries, your vehicle is a capital good in your business.
And you my friend are investing it. By doing so you bear the risk that comes with all investment. This places you amongst the ranks the "Capitalists" congrats, welcome to the club!



Oh but you are important. You see: You, I, we've only got a limited amount of time on this rock. And you are growing, older, taller, fatter, slower, hungrier, thirstier. All an inevitability of our mortal selves. In order to survive this unforgivable world we must grow what we have along with ourselves, if we don't we will perish.

Look back on history the capital that is the stone axe grew into one made of bronze dug out of hillsides by hand, then smelted and forged over wood fire so one day it could transform into a steel wood saw pressed out of sheet steel with a machine driven by coal and steam. Which has now given way to a rotating serrated chain driven by a hand held internal combustion engine made up of thousands of components driven by chemical explosions of a liquid pumped out of the ground on the other side of the world. Which is now available to every person on this planet, as capital for their business.
This is just one simple example out of an uncountable multitude.



Life is improving food is increasing, wants and desires are being full filled. What could go wrong?
You could be robbed.
The second that happens your economy takes a hit worse then a bad investment which you could have learned from. The economy of those around you is hurt as you can't invest your capital with them. Everyone feels the pain, except for the thief.
Who is no longer part of the economy, he has become a predator of sorts praying on the those producing, so he can loot away the capital for his consumption.
Oh I’m sure he considers it “investment” but by bearing less of the risk that goes along with it they tend to be poor investments.


This person has joined a more exclusive club with allot of different names you can guess at. The most apt one I know is the “Looters” and like the capitalists they have evolved their methods over time.
What started out by traveling under the hot sun became easier if they stayed still near a river crossing, in order to spring upon the travelers. But why stop there? Surely their power over the crossing extended beyond just that. But more area meant more prey and they are only a few. How could they extract the capital they desired?


They would attach themselves to the economy of the capitalists, and instead of rob those at the crossing they would pay a “toll” instead of pillage they would tax, this would be consensual because they'd be proving a “service” they would become the capitalist’s protectors from their competition of course. They’d be their: Care Takers, Stewards, Lords, Kings sworn to protect the plebs under holy oath... their meals. For they are the State.



They became so good at their profession, they starved. The human cattle emaciated could not sustain them. So they would weaken and shrink and would be powerless to prevent what ever capital was left out there to grow. Only to be predated on by an other group.
This is a cycle evident through out history, when ever there is art, science, population growth, literature, land cultivation, music, in short life. There is an economy at work.
When there is a silence, a famine, a war, there is the State.



If anyone is interested still and wants to know about the little stuff such as:
  • What is a “stimulus” ?
An attempt of fixing over taxation with more taxation.

  • What's up with Cash for Clunkers?
Because destroying capital grows the economy... pause... pause... not

  • Why are businesses leaving the US?
Because they are smart, and you are stuck.

  • How do Exports & Imports matter?
They don't, unless you consider yourself a country.

  • What's this “Fed” thing and how's it virtually raping my wallet?
It's a way to tax you through your crummy type of money which you are helpless to stop.


Let me know and I’ll try not to be my boring overly serious self.
And please let me arm you with your preferred caliber choice of knowledge.


graynomad

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Re: What's the economy, and what's it not.
« Reply #1 on: December 07, 2014, 04:52:18 AM »
So essentially, why be a small crook and fleece a few people when you can be a big crook and rip off millions of people, and if you can make it legal as well then more's the better.

On the news here tonight there was a story about how an inquiry is recommending that failing banks no longer be bailed out by the taxpayer, they will he saved by their creditors and investors. Of course most people are taxpayers and don't consider themselves to be bank creditors or investors so they think this is a good idea.

Meanwhile in the background they are redefining things, the "cash" you have in the bank is no longer your savings it's a loan to the bank. Guess what, you are now an unsecured creditor.

So now when the bank looks like failing and they need a few dollars to get them out of trouble they can just take yours, as they did in Cyprus.

I don't really keep my ear to the ground on this stuff AFAIK this was ratified at the recent G20 and the EU has been moving in this direction for ages.

Burt Gummer

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Re: What's the economy, and what's it not.
« Reply #2 on: December 07, 2014, 11:00:30 AM »
You are right on the money GN  ;D

Ever since Fiat money has been introduced into the world economy it has granted the ability to tax completely the wealth away from it's users. This paired with our "fractional reserve banking" practices makes the big banks and government joined at the hip. Both are legally excused from theft / fraud.

Also thanks for responding GN  :thumbsUp:

Online JohnyMac

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Re: What's the economy, and what's it not.
« Reply #3 on: December 07, 2014, 01:57:35 PM »
Great write-up Burt!  :thumbsUp:

Keep in mind that every dollar that the Fed QE's with devalues your dollar in your saving's account. It's the old adage of supply and demand. If the supply of US dollars (¥,€,£,P, etc) increases your dollar is worth less or devalued. Devaluation is used by governments as a tax of sorts.

So every time the Fed QE's $50B they are in essence reducing the value of the dollars you have in your saving's or retirement accounts. 

With DMC's earlier predictions for the next 15 years I personally think think they are very optimistic. Pray for the best but prepare for the worse.  ;)
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Burt Gummer

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Re: What's the economy, and what's it not.
« Reply #4 on: December 07, 2014, 05:14:48 PM »
Which the money there of is "bought" by it's member banks to be loaned out on interest to it's lenders who then attempt to make a profit and pay back in installments.
But why does the bank need that money when it can conjure it up limitlessly anyway?
It doesn't, it just want's your labor, your capital in exchange.


Offline DMCakhunter

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Re: What's the economy, and what's it not.
« Reply #5 on: December 07, 2014, 05:48:13 PM »
Good write up Burt.
Taxation is all about wealth redistribution and influencing behavior.

Burt Gummer

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Re: What's the economy, and what's it not.
« Reply #6 on: December 07, 2014, 06:47:11 PM »
Then why do you advocate tax scams?

Offline DMCakhunter

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Re: What's the economy, and what's it not.
« Reply #7 on: December 07, 2014, 09:51:39 PM »
I am not advocating anything. Just calling it the way I see those in charge pissing away the potential of this country, that and all of the taxes I pay. Wasted on malcontents. Pretty disheartening position to be in.

Offline Kentactic

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Re: What's the economy, and what's it not.
« Reply #8 on: December 07, 2014, 11:29:35 PM »
Good stuff Burt. We live in a worst case scenario, where the criminals are as efficient as possible and are widely supported. They go by the term "government".
« Last Edit: December 08, 2014, 05:58:18 PM by Kentactic »
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Offline Kbop

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Re: What's the economy, and what's it not.
« Reply #9 on: December 09, 2014, 07:56:13 AM »
Nice post Burt.  good discussion too.

Online JohnyMac

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Re: What's the economy, and what's it not.
« Reply #10 on: December 09, 2014, 03:42:54 PM »
I thought adding this article to this subject line as I thought it added to the discussion.

Quote
JP Morgan Chase & Co. and Citigroup Inc. are among at least five banks urging big clients in the U.S. to park cash elsewhere as new rules make it onerous to hold certain deposits, the Wall Street Journal reported.

HSBC Holdings Plc (HSBA), Deutsche Bank AG and Bank of America Corp. expressed similar concerns in private talks with customers in past months, the newspaper said, citing unidentified people familiar with the conversations. In some cases, banks told clients -- including corporations, hedge funds, insurers and smaller lenders -- that fees may be added to accounts that have been free, it said.

The push was prompted by pending rules aimed at ensuring banks stockpile enough assets that can be easily converted to cash to cover a deposit flight in a crisis, the newspaper said. Because big, uninsured deposits are viewed as more susceptible to fast withdrawal, banks would be required to bolster related reserves rather than pursuing more profitable investments...


To read the whole article click HERE.
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