fundamentalism

Fundamentalism and distortion of the theoretical free market.

If adam smith stood in front of a theatre of economists holding a rambutan and asked..’who can tell me the top of the jackfruit?’ probably most of the class would happily point to the stem of the piece of fruit he was holding in total ignorance of what either a rambutan or a jackfruit was..

Who can pick the bottom of the market.. or the top of the market?

The point I want to make is that what we are talking about is not a market. * a free market presupposes buyers and sellers (bulls and bears) engaged in commercial transaction. That scenario is so obviously not congruent with what we actually get on the ground which is constant manipulation of the conditions between producers and consumers. I am not pointing a finger at government or monopolists or anyone else with sufficient leverage to manipulate the theoretical free market….. I wouldn’t want to be critical…..hehehe… the point is that the classic market mechanism scenario is a textbook fantasy that belongs fairly and squarely in pseudo-academia. Everyone knows that already but that is not what i'm talking about..

If a market is not a market then it follows that econometric models/ predictions are lies and nonsense and are probably there to distort the truth rather than reveal it. a pack of 52 jokers is not a deck of cards despite appearances.

such is the political structure of the world and the current level of the development of consciousness. It is non-market players that can call the shots.

Money seems to follow the law of economy which is that matter follows the path of least resistance. Water flows downhill. (I never claimed to have much new to say.) Politics and other businesses on the other hand follow a different rule. There it is about attracting support for group coordination. The two laws neither directly oppose one another nor are they synthesised. There is at times friction between them and it is part of the development of the human species to deal with it.

Central banks intervene in the market. They even publicise it. The swiss central bank intervened recently to keep their currency low. The americans are apparently attempting to do the same on a massive scale. the competitive devaluation race to the bottom makes a mockery of any pretention to respecting the principles of the free market.

So while a free market may be basically predictable, anything could happen in the tekram (that is market backward). People predicting the bottom of the market or the end of the current ‘global financial crisis’ should take up golf or something to spend their time more usefully. Whatever they are saying, its a lie.

As the true economics text on the emerald tablet in heaven says….. it’s a question of real demand. If in some economy there is a contraction, then it will pick up when it picks up. With a bit of luck, by the time it does the kind of irrational exuberance that characterised the earlier part of the decade will have learned a hard lesson.

I’m not holding my breath.

*(parenthetically, in a gay bar you will get tops and bottoms also and no one else has any business being there. Most people say that they are at times impossible to pick as well. heheh)

...

academic nonsense.

Here is a space where we attempt not to be straightjacketed by some version of sophistry .. establishment or antiestablishmentarian..

one cultivates philosophy as a guide. Or one doesn’t have it at all.

Economics is a branch of philosophy.

***

After a rainy day yesterday, the sky cleared so sunday evening I went for a walk down to the park. To get there I pass by the campus of sydney university. I guess that that ‘s what set me off..

I was reminded of what prof. Noam Chomsky said of tertiary education in one of his more recent books.. that 'universities' are instrumental in maintaining the status quo of thought : by simply failing anyone who disagrees with the current power structure or even questions it.

His observation corroborates my experience. Definitely.

What one is force fed at institutes of learning is simply the current illusion that maintains the establishment’s power. perhaps that isn't a bald enough statement.. i think that this is why economics departments have become so important in the past generation..

Well I completed my degree coz I refused to quit .. to tell the truth…….I just wrote the crap that would impress the examiners in order to be done with the 'faculty of economics' once and for all.… what I did quit was any illusion that the modern university is an academy. That is a lie… it should not be called an academy.

Needless to say, I seldom walk that way.

Plato is remembered as the one who established the academy in Athens in the heyday of its classical age.

He stood in the tradition of Pythagoras and the ancient philosophers of (ionian) Greece and Egypt.

The academy was the space devoted to the search for truth and the love of wisdom. It was a sacred task. Plato's epithet is/was ‘the divine’. (that is no mean appelation to have stuck.)

I wonder what they would make of him in sydney uni.. if he came down on campus.. or what he would make of it..?? it doesn’t really bear thinking about. Search for truth? Poppy cock.

Security would have him out of there in under 30 minutes.

Academy? utter nonsence.

Midway through the last century, in a country which shall remain nameless, where refugees had fled from a certain hindu majority country during partition, they had put their refugee camp in the river bed.. i didn’t ask why but the only reason why anyone would make camp in a river bed is because someone must have pointed a gun at them when they tried to put it some place else… well, they were still there in 1991 when I passed by. The power elite lived in fantastic mansions about the capital. It was so starkly obvious. I haven’t heard anything that might have changed the situation for either party till now. Au contraire.

(This incidentally is a country that has had gigabillions of ‘aid’ poured into it. There is no prize for guessing where it has ended up.)

even the mainstream media talk about foreign policy mistakes in this country. :snort:

no one can stay tuned in to this kind of thought wave and remain sane for long. Their reason will shatter and fall in shards on the carpet in front of the plasma screen.

My experience however is that the people who suffer most in this unnamed country are the refugees.. both those who came during partition. and the more recent ones who fled from factional differences in the northwest. So please spare a moment to pity those humble peace-loving humans who were caught up in the power manipulations of criminal establishmentarians and half a century later are still patching up the kerosene tins and sugar bags in the hope it doesn’t rain too much.

But heck! it isn’t a lot different anywhere else. Just more or less subtle. the sitdown money is just more or less better. The ‘academies’ are just more or less expensive. the lies just bigger or smaller.

I think professor Chomsky is spot on.

tejas fu

city of god

Thursdays at the local video shop they have a discount.. so I ususlly get a few out. I have a look at the first sequence of a movie (10 mins) before I hit the eject button. I end up watching about three out of ten.. per week.

Last night I got a ridley scott movie ‘kingdom of heaven’ (2006) from the adventure section. It was a surprise. I didn’t even notice the end of the first sequence. I was a bit pessimistic about it as the cover kinda hypes it as orlando bloom against the hun.

Well.. it describes itself as a ‘scott free’ production. And well, one bold scott told the story how he saw fit.

I don’t know how many crusades into the historical interface it was but at this point, the concerted effort of Europe met with salaah uddin who ended up taking back the holy city from the crusaders who had established a kingdom there. ( as transpired about 1000 years ago..) What surprised me about this dvd is that it was everything I didn’t expect. The crusaders were portrayed as pillaging bastards. But it was the sympathetic portrayal of salaah uddin who stole the show with really cool acting from the Syrian actor ghassan someone or other. He didn’t get a mention on the dvd box incidently.. well.. they tried .. in the editing room as well… to make it into a bloom vrs the hun flic….but it still flopped at the usa boxoffice.. heheheh. ( make sure you get the directors cut.)

Now.. in the 1980s I had the good fortune to live for 2 years in the holy city.. I recall that the current walls about the old city were said to be constructed by salaah uddin.(they actually meant something till the development of modern artillery.). the main street leading up to Damascus gate is the salaah uddin st. I know how highly esteemed this guy still is. I think the palestinians call him salaah uddin al ayyubi. He was a hero and the movie doesn’t take anything away from him.

The holy city (called Jerusalem in English) is portrayed as the city of god. “a kingdom of conscience and a kingdom of heaven” as the protagonist’s dying father calls it. *** in my book, that is an impressive take.

Well.. this is what I think it has to say to you and me and the state department….

While the movie fails to pander to popular us sentiment and so flopped at a commercial level, the movie is no flop… it faces a serious issue.

(among other things )It is a statement about just how wrong one can get foreign policy.

I think the ultimate point of it is that the holy city cannot be taken by force alone. Nor can it be held by the unholy. This is not an adventure movie. It is an historical drama. It is about ( the then European) policy in Palestine which was wrong .. wrong .. wrong.

I’m not going to mince words: the usa is not a positive force in the middle east. If they are looking for another salaah uddin, then that is what they will get..(if they haven't found one already.)

(at the risk of sounding apocryphal)… what is left of American foreign policy in Palestine will be tossed out of jeusalem al quds like the failed crusaders in the movie. Shock troops and those who have desecrated the holy places should not expect such good fortune.

Only time will tell. .والله اعلم

this movie gives a hint of the kind of thing to expect.

Full marks. :check:

render unto..

today's topic...

i promise not to say a word about deflation. inflation . or.. even the price of fish.

but it is so difficult to avoid so please dont hold me too close to my promise.

because fiat money, though usually a topic of economics where people talk of M2 or whatever, has so become an issue. everyone knows its basis is confidence in the system of the caesar whose head is on the coin or banknote in more modern times.

it is only redeemable in terms of belief in the system. you know that. (btw, the image above is of a coin issued by julius caesar, dictator of rome.)

in the days when rome was an expanding power, the currency was copper. lumps of it would be weighed out in exchange for goods etc. later silver was used. it was minted and the price of the coin was determined by factors other than its intrinsic worth/weight. i like to remind the gentle reader of these things. as we know, these days the metal of choice is gold though silver has certainly gone the distance.

well.. ceasar changes but rome doesn't change. ------despite the rhetoric emanating from the power locii.. hehehe.

but if you look at it now a couple of millenia further on then yes..indeed rome has changed.. in many ways the change has been positive. the romans were a distorted bunch whose contribution was largely negative and whose perfidy was so demonstrated time and again from the murderous conquest of italy to the punic wars to basically every betrayal of humanity they made. at least these days they stay in rome. the power they had has so shifted.

still some good things came out of it all.. cement and aquaducts. virgil and catallus.. thats about it.

rome fell and its bastards continued with their bastardry. louis the fourteenth (also known as 'cat whores' for some reason) you could say set in train a policy that bankrupted the most opulent of them and ultimately lead to the revolution of 1779 or whenever they actually cut the head of louis 16. his grandson.

everyone says that this is the only way to kill a zombie, but i have my doubts.. lol. (hey dont quote me on the dates or the details.. i wasn't a history major.. & i only visited versailles once..)

zombies just seem to be coming up a fair bit in the ether recently..hehehe.

the french kings lost credibility. the portrait on the coin (the franc) had no value. only the metal it was made of. commodities don't lose value.. they are value. obviously

grandmother used to say..

'most of life is froth and bubble,

two things stand as stone,

kindness in anothers trouble

and courage in your own.'

i dont know where it comes from..

she passed away years ago. bless her.

i would tend to add certain commodities to the list after the aforementioned courage and kindness.

karma & political-economy

Today.. karma and political economy..

While this blog is not essentially about the usa, the issues facing the amerian economy are certainly the object of attention of many atm.. It def. makes a big splash.

When I was a grad student, I took a course in first year economics .. macro and micro. The Chicago school was way dominant in the textbooks of the day. (I’m talking early ‘90s.) but even so I seem to recall that on the subject of the percentage of debt relative to g.d.p. there was a figure somewhere under 10% beyond which it was understood to be unsustainable. its about the only thing that really stuck in my mind from the whole semester.

Yesterday I read figures on the American national debt being like 100% of gdp in five years at some 15 trillion. ( whatever that means)

In short, it means that the usa is about to default on its debt. Obviously the question is what happens when this happens?

The current ‘recovery’ is so obviously wishful thinking . There can only be a pick up in an economy when there is real demand. Not with falling wages and prices along with tight credit. that much macro I did understand. Supply and demand are the economic expression of yin and yang. J like an immutable law. There is no demand in the usa as people can't get credit and have no savings. (what they have is debt which has to be paid down). But when banks do start lending, inflation will be commensurate with the credit... unhappy circle.

I reckon its got a lot to do with oil as well, but that’s another story.

I failed that unit in macro. I just couldn’t take the Chicago school seriously. But you don’t have to have failed first year ec. to know that no-one will lend money to a defaulter. It’s a rule.

As for what will happen ... well. The the world will move on and find that it can do without america. as for the americans, well , people will just have to do something that is of value to the rest of the world for a change, and build their own capital in the process . Prosperity comes from capital formation…that is part of the first law of economics. we did that yesterday.

but while the law re- prosperity is basic, there are other factors in the equation.

It is primarily a question of karma and certainly not just economics or political-economy.

There was a time when the usa was a powerful force for good in the world. it was a fair while ago.

black box mysteries

black box mysteries.

its a new moon .. if anyone is interested . once upon a time these things meant something.

however....

ive just been reading about black box software.. how citigroup paid hundreds of millions for a company that had developed software that managed to trade a few milliseconds faster than

anyone else.. something like that. yeah.. they are now so going out of business.

jim rogers, in his book about commodities, says he has found people who have made plenty of money out of selling technical trading software, but few who have made money using it. does anyone else take what mr. rogers says about high finance seriously? i sure do.

but that isnt really what i wanted to talk about today. i would like to set down some ground rules for this blog..

as this is about political-economy, defining political economy is a place to begin.

first of all .. economy: the word comes into modern usage through latin after a greek model. οικονομια... οικος and νομος -- the first meaning house.. second meaning law (among other things) .. so its the law of the household or business. ie. the rules that keep the place going.

you can get an idea of how important the word nomos is from its usage not only in greek and associated languages, but its impact on others as well.. it is a key word. i'd go so far as to say that it is a word of power.. if that makes any sense. (take om nama shivaya for example).

the name of something is like a seed that has programmed into it its total blueprint and destiny .. its true nature.. its secret. something like an acorn.

so.. the law of the house is not something that you want to mistake or take lightly. .. and the first law of economics is to spend less than is earned. of course the mechanism of credit is there to facilitate payment and ease the temporary shortages in the natural flow of events.. shortfall.. etc.

it is not really up to me to take it upon myself to explain what happens if the law is broken.

others have done so.. and while hammurabi's code has been updated by various prophets and the christ himself, the bottom line is that if you break the law, you will suffer. .

ok.. moving on. so far as i know oikos is a household.. of course in antiquity it would have been more extended than a simple modern family house.. in greek today one says 'to spiti'. ' oikos ' has dropped out of usage.. we live in a post classical age.. we most certainly do.

as for politics.. well. i heard on the radio that politics in this country (australia) has become the art of getting scalps.. i can only assume that it is part of a trend in post post-modernity and widespread.

but as for what should be intended by the word, my guessis that it is from the word polis.. like in city state....again from the greek language. the place where many people live.. and by virtue of their collective reason, find out and apply the laws of co-existence. (politikismo... or culture...) i did say its a guess. i probably should have said high hope.. with a bit of luck, built on more than thin air..

hehehe.

hope was left in pandoras box. i wonder if it was a black box.. oh god. ... hope not.... lol.

ninelives and political economy

it is said that a cat has nine lives.

cats being cats take risks.

whoever risks is no stranger to loss.

noone wants to lose by its very definition... any more than pain. pain is exactly what you dont want.

so.. while the better informed one is, the less risk one carries, the problem is the quality of the information.. coz as every cat knows, there is nothing more confusing than too much information.

so.. the aim of this blog is to take a reading of the pulse of the worlds political economy.. so .. you may ask what kind of a doctor can take such a reading?? ans. one with 9 lives. heheheh.

the current global crisis..

its a beat up.. it isnt global.. its related to the usa and its associates. several of the major economies of the planet are doing just fine thanks. some economies are better suited to weathering a storm than others.. like some boats. others maybe have to give up a life to get to shelter. maybe more than one.

terrorism

a total beat up prompted by paramilitarist and militarist cliques. from washington to tell aviv to wherever else that fear is big business. you dont believe me.. ? k. they're your lives. believe too many lies and you will definately get the wrong idea.. its the wrong idea that kills the cat.. trust me.. ideas are formed by thoughts.. your thoughts come down to what you believe.. believe a heap of lies and .. well you can work it out for yourself.

aah .. what else is on the agendum for today?

my opinion on what? gold? well.. its anyones guess. it could go anywhere. i believe james turk (kitco) who says it is manipulated by a cartel. seems to me that they dont want it to top us$1000 per ounce. so.. they will keep it down for now.. the greenback is likely to strengthen in the short term.. hyperinflation is not going to happen.. the fed. has the power to destroy the usa economy as greenspan has proved, but it also has the power to mend itself and with the political structure of america being what it is, return to solid austrian economics.. we hope..

the usa is a bit of a misnomer though.. others have pointed out that it is not so much a union of states but a central bureaucracy.

but this blog isnt about america..

till tomorrow.

tejas fu.