Sunday, May 6, 2012

New Money - Is Margrit Kennedy Right?

The monetary system we have inherited is more than 2,000 years old.
Margrit Kennedy, Interest and Inflation Free Money, p. 89

At the end of the day it all comes down to symmetry folks! The Oracle of Ottawa continues with the "Thinking About Thinking" project unabated. The revelations and epiphany's various are now occurring at a rather frightening rate. One of the minor developments is that all intelligent life in the universe could quiet possibly be the universe's way of dealing with failure. Think about it...

Same old..same old?

The richest veins in my recent ongoing search for enlightenment was my lifetime goal of reading all the major economists in their full and unabridged texts. I started with Capital by Karl Marx, then moved right on and through Adam Smith's Wealth of Nations, then John Maynard Keyne's General Theory of Employment, Interest and Money. Well, then it all got out of hand. I read the work of Ricardo, Say, and Jevons! And for then for total coverage I read volumes II and III of Das Kapital! Volume II damn near killed me, but Volume III was like it was written last year.

Once dear reader, the Oracle of Ottawa was a real little cheer leader for capitalism. I read all the works of Ayn Rand when I was a mere teenager. I have owned a stock or two in my own name, well okay, a couple of hundred actually, most (all), that I still own. Somehow the Oracle of Ottawa has nerves of steel and didn't bail in the crisis of 2008. As a matter of fact, the Oracle of Ottawa kept buying all the way through and ended
up with a wicked pile of good companies bought for a mere song.Well I realized recently that I am in reality a wee little rentier! But the whole experience left me troubled deep inside. Why did the whole system just about go down the tubes? How did the people that were supposed to protect us, fail us?

Then the Oracle of Ottawa realized that it was all a lie in reality. The whole problem presented itself in naked singularity. You can not expect an exponential interest growth economy to continue smoothly, or for long, when it is grafted to a finite, linear base, other wise known as the planet Earth. Now you can begin to understand why the novel Frankenstein was so popular when it came out in the 19th century! And why it is still so popular today.  

Now if you want to get a real handle on this problem you should read Margrit Kennedy's book Interest and Inflation Free Money. It is a small book, but all the really dangerous ones are, aren't they? The Oracle of Ottawa read it through very carefully, and could find no real points of disagreement. She totally hit it out of the park. The real fascinating bits were about the effects of compound interest on societies and in turn, its effect on human history. Now I don't want to give anymore away. If you want to read a more "rigorous" version of her ideas the Oracle of Ottawa has to guide you to the work of Didier Sornette and his wonderful book entitled "Why Stock Markets Crash". The end conclusions are pretty much in agreement as to the causes of the turbulence that is embedded in a capitalist exponential growth economy.

It all about the symmetry, and in the case of capitalism, inertia goes along way to grease the skids so to speak. The greatest power of capitalism is that it unbridles creative forces. Infra structures are created and go until there capacities are fully reached and / or exceeded. Think of the inertia part as the disc-jockey at the drunken rave. The party just keeps going, until it stops. The symmetry breaks. The ensuing depression is just that period of time where the symmetry is painfully and randomly recreated. Then we are off to the race to the top (bottom?)  yet again.

The only problem here is that we are achieving levels of ever more perfect information and it is global. This means that it is quiet possible that the symmetry of the worlds various market economies are becoming weaker instead of stronger as we progress into the future. Have a nice day.

At some point in the near future, we are going to have to deal with the reality and effects of these tired, ancient economic issues.

No comments:

Post a Comment