Plea for a New Economic Order.
In fluid dynamics, turbulence or turbulent flow is a fluid regime characterized by chaotic, stochastic property changes.
This includes low momentum diffusion, high momentum convection, and rapid variation of pressure and velocity in space and time.
It owns most of the discontinuous and chaotic properties of
a Market Crash and of a Keynes' Liquidity Trap.
Chapter VII.
The Dark Kingdom of Central Banks.
March 14tn, 1879 -- April 18tn, 1955
Abstract:
I am going to show here that central banks have excessive powers which are coherent neither with democratic principles nor with morality. Their existence can not be justified from a mathematical point of view.
Worse, in light of the exercise of their extraordinary power by Bernanke, I argue that they can pose a real threat to peace, privacy and individual freedom.
Because of the dangers that are evoked in these lines I strongly suggest that you reproduce my deeds.
Money Supply:
In a capitalist system money is emitted when the central bank lend it to banks, which, in turn, lend it to their best customers, the wealthiest among them.
Why the central banks should loan our own money to the banks is an intellectual challenge for me. Why they would lend it to us with a premium should be an puzzle to any pragmatic individual.
The fact that it does proves that the central bank is not a public system but at the service of private vested interests.
Another mistery is the mandate of central banks, which is both to keep a low level of inflation and optimize economic output.
Any mathematician knows that it is impossible to optimize two parameters, you can optimize one under constraint of another but you can't optimize two variable at the same time. By giving the central banks an impossible mission the executive and legislative body in effect gives it the freedom of doing whatever it chooses.
We have seen that inflation is a illusory concept [Confer The Myth of Inflation.] and that keeping it at a low level was only a way to preserve the scarcity of money and a high level of interest rates [Confer The Fallacy of Monetarism.]. However the mandate to keep a low level of inflation was the argument the bankers chose to justify the independence of the central bank.
Its choice to give predominance to inflation over growth, I pretend, produced a much lower level of economic output than that would otherwise be possible.
The central banker although designed by the executive and/or legislative body gets a mandate whose length makes it go through several mandates of the legislative and executive, which increases its independence.
In effect make the central bank a state within the state at the service of vested interest. They have succeeded in reproducing a feudal system in which the king is the chairman of the central bank, the systemic bankers are the marquis, the big corporations are the earls... They each decide arbitrarily and according to the hierarchy, who will get the money and how much money they will get. Till Bernanke Rule that decision was made purely by setting discriminatory interest rates.
A kingdom can be a could thing with a enlightened king like Alan Greenspan, who restrained voluntarily his powers, used transparent rules for the exercise of his power, applied a policy, given the scope of his mandate, which was in the best interest of the people and succeeded in avoiding any major breakdown of the system.
Under Bernanke Rule the things have dramatically changed.
Bernanke Rule:
Bernanke has used economic breakdown as a weapon of global, systemic terrorism [Confer Ben 'Systemic Risk' Bernanke.] .
Terrorism is the systematic use of terror especially as a means of coercion. At present, there is no internationally agreed definition of terrorism. Common definitions of terrorism refer only to those acts which are intended to create fear (terror), are perpetrated for an ideological goal (as opposed to a lone attack), and deliberately target or disregard the safety of non-combatants.
Bernanke has overtaken both the American executive and the legislative bodies: by making them vote and sign the TARP he made them the unwillingly accomplices of his crimes.
He has grown the amount of money he has emitted to high never heard about before.
Using extraordinary powers that were granted to the FED after the Great Depression and never used since, he has included in the balance sheet of the Federal Reserve System an arbitrary amount of arbitrarily chosen assets purchased at an arbitrarily set price.
He has refused to let the people audit the FED (Confer Congressman Ron Paul) by menacing it of an eventual breakdown of the sanctity of the value of the US Dollar should they transgress his independent power.
He has tighten his grip on his lords making them feel his iron fist. [Confer Ben 'Systemic Risk' Bernanke.].
He is succeeding in getting the central bank a power that is far reaching its traditional mandate by getting the function of Systemic Risk Regulator, Systemic Risk, I proved [Confer Ben 'Systemic Risk' Bernanke.] he, himself, created.
How and why he got extraordinary power from both the Bush and Obama administration is not something we are going to fully understand, certainly except in retrospect.
The reach of Bernanke's power is not limited to the United States of America. By granting swap options to foreign central banks, options they had to exercise in order to help them circumvent the collapse of their domestic banks, he has been able to increase their "systemic" dependency on the Federal Reserve System and influence their monetary policy. For example the ECB, which had, against its will, to implement the barbaric Bernanke Quantitative Easing policy.
Under Bernanke rule the Federal Reserve System has been transformed in an organization that openly transcendsinternational boundaries, executive powers, legislative powers and judiciary powers:
"I will argue here that, to the contrary, there is much that the Bank of Japan, in cooperation with other government agencies, could do to help promote economic recovery in Japan.
Most of my arguments will not be new to the policy board and staff of the BOJ, which of course has discussed these questions extensively.
However, their responses, when not confused or inconsistent, have generally relied on various technical or legal objections-objections which, I will argue, could be overcome if the will to do so existed."
Prof. Ben Shalom Bernanke
Japanese Monetary Policy: A Case of Self-Induced Paralysis?
For Presentation at the ASSA Meetings, Boston MA,
January 9th, 2000.
It has become a criminal organization with uprecedented powers.
All that are the least of the dangers we are facing.
The Real Danger we Are Facing Now:
The extraordinary power the central bank is getting puts the democracy in danger, and to my opinion that danger is much higher than what people can even envision. These dangers, history tells us, can even reach grave menaces to the world security. [ConferBlack Thursday & Hitler Rise to Power.].
Ron Paul by asking to audit the FED is making an important point [Confer Ron Paul vs. Bernanke.]. However, by limiting the scope of his demands to the issue of vested interests, he misses even more important issues that relate to freedom, democracy and even security.
If there is a conspiracy, and I am not saying there is one, I am sure that the bankers are not part of it. They are only, by maximising their profit, the unwilling tools of people who have a much higher aim than simply accumulate money. These people, if they exist, are aiming at an absolute power, which, I claim, is now within their reach. If we do nothing now, before The Crash, I claim that the global economic system they could impose on us, and to which we would agree because of our anxiety about our economic future, would have the capacity to do just that. It is even possible that Bernanke is just a piece in that gigantic chess game and that after The Crash he will have outlived his usefulness.
If that happens, and I am not saying it will, no one would ever be able to recover their lost freedom be it either by a democratic process or through violent means.
If there is a conspiracy, and I am not saying there is, it can be traced to, at least the Bretton Woods agreement [July 1944 - December 1945] where worlds economist decided, willingly or against their will, on the gold standard at a time when, after the Great Depression, they all knew that this barbaric relic was a factor in accelerating economic depressions.
"There is no escape from a 'managed' currency, whether we wish it or not.
In truth, the gold standard is already a barbaric relic."
John Maynard Keynes, 1st Baron Keynes of Tilton
June 5th, 1883 -- 21st April 1946
Here again Ron Paul by asking for a return to the gold standard instead of my managed credit free currency is, with good intentions, making a proposition that could have unintended disastrous consequences.
As you already know I am insane and sometime paranoiac [ConferPreface.]. I have imagined that they could implement a credit free economy similar to mine with a simple difference: instead of indexing the accounts on a random number(The serial number of a à "š ¬5 banknote) [Confer The Crash and Thereafter, Our Credit Free Currency.] as I suggest, which preserves to the highest possible extent your privacy and your individual freedom, they would simply index it on your DNA. Your DNA would be your account "number". That would allow them to filter who would participate on any genetic pattern they would chose. It would give a grip on any element of your private life like an improved Google that would be indexed not on your Google Account but on your DNA. But again I am insane.
It would mimic the events described in Book of Daniel and the Book of Revelations with the Mark of the Beast being your DNA. But well again I am crazy and you shouldn't, as pragmatic individuals, rely on these fantasies. That would give rise to the dreaded: New World Order.
Given a sufficiently inverted yield curve [Confer Model of The Yield Curve.] Bernanke could at any moment start The Crash: by jacking up short-term interest rates in order to, apparently,curb the inflation that arises from the inverted yield curve [Confer The Commodity Conundrum Solved! The Hidden Parameter in Interest Rates. and The Stagflation Paradox.] he would, at will, invert the yield curve to such a degree that it could immediately trigger The Crash [Confer Bubbles & Bursts.] He has done it already, possibly willingly, [Confer Ben 'Systemic Risk' Bernanke.].
The next scheduled announcement of the FOMC is August 12ve, 2009 at 14:15 EST for now the yield curve, according to my model, is not sufficiently inverted. But the following one will be September 22nd, 2009 at 14:15 EST.
"Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate,
secretly and unobserved, an important part of the wealth of their citizens.
...
Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose."
John Maynard Keynes, 1st Baron Keynes of Tilton
June 5th, 1883 -- 21st April 1946
The Economic Consequences of the Peace.
pp. 235-248.
1919
Conclusion:
The central banks existence can not be justified: nor on a mathematical ground, neither on constitutional grounds, and more importantly not on a moral ground.
"Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back."
....
But apart from this contemporary mood, the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood.
Indeed the world is ruled by little else.
I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas.
Not, indeed, immediately, but after a certain interval; for in the field of economic and political philosophy there are not many who are influenced by new theories after they are twenty-five or thirty years of age, so that the ideas which civil servants and politicians and even
agitators apply to current events are not likely to be the newest.
But, soon or late, it is ideas, not vested interests, which are dangerous for good or evil."
John Maynard Keynes, 1st Baron Keynes of Tilton
June 5th, 1883 -- 21st April 1946
The General Theory of Employment, Interest, and Money.
Chapter 24: Concluding Notes on the Social Philosophy
Toward Which the General Theory Might Lead, Paragraph II.
December 13tn, 1935
On all of these grounds it is important and urgent to abolish the central banks.
"But the essential issue here is one of insurance, with a relatively modest premium,
against a potentially catastrophic, very low probability event.
With that, Peter, would you outline your proposals to us?"
Chairman Alan Greenspan
Meeting of the Federal Open Market Committee.
August 24th, 1999
First, and with all due respect, Sir Chairman, my name is not Peter. My name is Shalom, Shalom Patrick Hamou.
That said, the only way you can still losen the grip of the cental banks would be, to my opinion, that a big enough number of people Enter The Serial Number of Their à "š ¬5 bank note in The Public Cra$h Rà "š ¬gi$tà "š ¬r before The Crash [Confer The Crash and Thereafter, Our Credit Free Currency.].
Because the serial number of a à "š ¬5 bank note does not tell anything about his owner the New Economic Order can not discriminates or limit individual freedom.
That would allow us to act faster than the New World Order and would give rise to our New Economic Order, which, I have proved, would give us, prosperity, stability, equity and would respect our privacy and individual freedom.
What do we do Before The Crash?
I have designed a Strategy: Preparing for The Crash, The Age of Turbulence.
Its
purpose is to profit from both the inflation of The Mother of All Asset
Price Bubbles brought by Irrational Exuberance and The Crash and the
Deep Depression that will necessarily ensue.
ameliorated the crisis that began last summer.
Much as we might wish otherwise, policy makers cannot reliably anticipate financial or
economic shocks or the consequences of economic imbalances.
Financial crises are characterised by discontinuous breaks in market pricing the timing of which by definition must be unanticipated - if people see them coming, then the markets arbitrage them away.
The clear evidence of underpricing of risk did not prod private sector risk management to tighten the reins.
In retrospect, it appears that the most market-savvy managers, although conscious that they were taking extraordinary risks, succumbed to the concern that unless they continued to "get up and dance", as ex-Citigroup CEO Chuck Prince memorably put it, they would irretrievably lose market share.
Instead, they gambled that they could keep adding to their risky positions and
still sell them out before the deluge. Most were wrong."
Alan Greenspan
The Age of Turbulence: Adventures in a New World [Economic Order?].
However the Members of My Networks
Will Still Have Access to It & Will be Regularly Updated.
Join my Networks Now!
It Will Be Published on September 17tn, 2009.
Buy The Tract Now! & Get it Just on Time.
What do we do After The Crash:
My Credit Free, Free Market Economy, will be organised among the people who will have Entered a à "š ¬5 banknote in The Public Cra$h Rà "š ¬gi$tà "š ¬r before The Crash.
It is a conspiracy to create a New Economic Order among us before they can implement theirNew World Order.
I.10.82
"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.
It is impossible indeed to prevent such meetings, by any law which either could be executed,
or would be consistent with liberty and justice.
But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.
I.10.83
A regulation which obliges all those of the same trade in a particular town to enter their names and places of abode in a public register, facilitates such assemblies. It connects individuals who might never otherwise be known to one another, and gives every man of the trade a direction where to find every other man of it.
I.10.84
A regulation which enables those of the same trade to tax themselves in order to provide for their poor, their sick, their widows and orphans, by giving them a common interest to manage,
renders such assemblies necessary."
Adam Smith
June5th, 1723 -- July 17tn, 1790
An Inquiry Into the Nature and Causes of the Wealth of Nations.
Inequalities Occasioned by the Policy of Europe.
March 9th, 1776
I will jump start it after The Crash if the Number of Registered à "š ¬5 is Sufficient.
Because the serial number of a à "š ¬5 bank note does not tell anything about his owner the New Economic Order can not discriminates or limit individual freedom.
The Public Cra$h Rà "š ¬gi$tà "š ¬r
Before The Crash - It Is Frà "š ¬Ã "š ¬!
It is hence in our best common interest that we propagate these ideas as much as we can.
Talk to your family, to your friends, to your business associates.
To that order I am building redundant networks. Grow the Networks!
Get Involved With the #MarketCrash Discussion.
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"Even apart from the instability due to speculation, there is the instability due to the characteristic of human nature that a large proportion of our positive activities depend on spontaneous optimism rather than on a mathematical expectation, whether moral or hedonistic or economic.
Most, probably, of our decisions to do something positive, the full consequences of which will be drawn out over many days to come, can only be taken as a result of animal spirits""of a spontaneous urge to action rather than inaction, and not as the outcome of a weighted average of
quantitative benefits multiplied by quantitative probabilities.
Enterprise only pretends to itself to be mainly actuated by the statements in its own prospectus, however candid and sincere. Only a little more than an expedition to the South Pole,
is it based on an exact calculation of benefits to come.
Thus if the animal spirits are dimmed and the spontaneous optimism falters, leaving us to depend on nothing but a mathematical expectation, enterprise will fade and die;
though fears of loss may have a basis no more reasonable than hopes of profit had before."
John Maynard Keynes, 1st Baron Keynes of Tilton
June 5th, 1883 -- April 21st, 1946
The General Theory of Employment, Interest, and Money.
Chapter 12: The State of Long-Term Expectation, Paragraph VII.
December 13tn, 1935
Bernanke Orchestral Manoeuvres in The Dark! The Systemic Risk!
All of This Stays True Until the Poor Becomes Richer Relatively to the Rich.
As Will be Proved by The Crash.
My Political Orientation According to Nolan Chart Survey! As Liberal as John Maynard Keynes!
As Libertarian as Friedrich August von Hayek!
Extreme Economic Conditions Call for Radical Solutions.
The Provocative & Controversial Innovation
Since John Maynard Keynes and Friedrich August von Hayek.
Read the Publisher Agreement.
1994-2009 Shalom P. Hamou & My Yield Curve.
