Why did the decoupling of production from consumption through the operation of financial markets and the leverage of values become the greatest historical economic experiment?<\/p>\r\n\r\n\r\n\r\n
The financial “bubble” that began in the late 1980s is expected to burst with a wave sweeping away the forms of economies we know. “Bad currency” had long driven out “good” according to Thomas Gresham’s famous law (1518-1579) in order to enforce consent to the establishment of “big governments” which bribed citizens with money in which the central banks printed lavishly.<\/p>\r\n\r\n\r\n\r\n
One – we assume – is a sovereign citizen and the “drop” in our nation’s capital, i.e. the government, is an undifferentiated mass of protoplasm. Each person contains a world of ideas and aspirations. The “drop” is an accumulation of deception and failure of a mass society that flattens the individual sphere. The ‘drop’ represents itself, not the country \u2013 a self-replicating system of reproduction of social power and surveillance.<\/p>\r\n\r\n\r\n\r\n
A country’s economy is at its best when it was the sum of choices made by its sovereign citizens, while a state-run economy is an accumulation of baseless assumptions that have nothing to do with the pursuit of happiness.<\/p>\r\n\r\n\r\n\r\n
We see this in the ominous rumors of a Federal Reserve digital currency that will attempt to recreate the bubble of youth and turn real wealth into nothing.<\/p>\r\n\r\n\r\n\r\n
The Fed’s digital currency will be used to cover the failure of the monetization of the economy undertaken and carried out by the massive state and the political class that sucks it. Finances symbolized the unity of the economic sphere and its relationship with the social sphere, with a special role to play.<\/p>\r\n\r\n\r\n\r\n
The purpose of finance, in the past, was to accumulate surplus wealth from previous productive activity in order to make new productive activity possible – through the accumulation of capital.<\/p>\r\n\r\n\r\n\r\n
Financialization, however, does not do this. It was an attempt to replace the economy of real production with a “hologram” of production. Financialization is a scam \u2014 and a scam is an attempt to get something for nothing, that is, dishonestly. The “big state” feeds and thrives on dishonesty and corruption, its favorite food.<\/p>\r\n\r\n\r\n\r\n
The production of value<\/strong><\/p>\r\n\r\n\r\n\r\n Financialization seeks to reproduce value, not from a wealth-producing activity, but from\u2026things which\u2026claim to represent wealth: stocks, bonds, currencies, and anything else that can be considered to have value.<\/p>\r\n\r\n\r\n\r\n These subvert the ability of the hierarchy of desires to operate within the framework of the market, i.e. the mechanism of supply and demand and thus prices through the countless choices made by its participants. Its activities are based on “derivative goods” because they aim to derive additional “wealth” from things that “mean” wealth, but which are not themselves wealth.<\/p>\r\n\r\n\r\n\r\n Any increase in the value of a derivative further removes its value from the real signifiers of value production, initially through leverage, such as businesses that produce real income, interest-bearing loans, leases, and contracts for the delivery of commodities. Derivatives can be considered “false wealth” and when enough of them accumulate in a financial system, they will mathematically blow up the economy, a real big bang in terms of asset value.<\/p>\r\n\r\n\r\n\r\n The coming explosion<\/strong><\/p>\r\n\r\n\r\n\r\n Many observers do not expect such an explosion anytime now. They point out that it can take the form of stock market crashes, bond market collapses, bank closings and disruptions in the money (currency) supply. All this can impoverish many people and raise poverty levels to unprecedented levels.<\/p>\r\n\r\n\r\n\r\n We are experiencing a corrosive early phase of this now, the first signs of a big bang. The effects are keenly felt in the middle classes of Western society, who struggle in vain to maintain a level of consumption in terms of their basic needs.<\/p>\r\n\r\n\r\n\r\n The intervention of the Federal Reserve and the first crack<\/strong><\/p>\r\n\r\n\r\n\r\n The global financial system nearly imploded in September 2019, when symptoms of serious dysfunction emerged in an arcane corner of it known as the reverse repo market, where banks lend each other money on an extremely short-term basis, usually overnight, in order to to acquire so-called “liquidity” \u2014 this means the emergence of a latent solvency crisis.<\/p>\r\n\r\n\r\n\r\n The crisis manifested itself as a dangerous spike in interest rates. The Fed found enough liquidity to pre-empt the crisis and then the Covid-19 “emergency” a few months later gave it cover to “print” trillions of dollars and quickly distribute money to the domestic economy where people were buying things of everyday life.<\/p>\r\n\r\n\r\n\r\n The result of this monetary disorder was today’s inflation. Inflation, of course, is one way to avoid the “explosion”. The abundance of money is inversely related to its true value. The other mode of monetary policy is deflation, where the money supply decreases.<\/p>\r\n\r\n\r\n\r\n Overall in the case of deflation, no one will have money, so at least everyone will live in misery. A severe deflationary crisis is the most likely outcome of the current situation.<\/p>\r\n\r\n\r\n\r\n Deflation occurs when people and companies can’t meet their obligations – they can’t “service” their loans (pay interest), or repay contractual amounts of borrowed money, or simply can’t pay their bills.<\/p>\r\n\r\n\r\n\r\n Every loan that goes “red” causes a certain amount of money to disappear from the economy, and when many such incidents occur, there is simply no money – we have credit suffocation.<\/p>\r\n\r\n\r\n\r\n The last resort<\/strong><\/p>\r\n\r\n\r\n\r\n The Federal Reserve’s digital currency is a kind of last resort to these massive impasses that start in monetary policy and spill over into the financial system and then into the real economy. It’s a simple way for the system to make it look like there’s a lot of money when there really isn’t.<\/p>\r\n\r\n\r\n\r\n It has the huge added benefits of, through digital accounting, allowing authorities to control where everyone spends their money, especially the ability to direct spending towards real goods. It also allows the authorities to levy taxes, duties and penalties at will, without any consent from the citizen.<\/p>\r\n\r\n\r\n\r\n A Fed digital currency would be a giant step toward the worst kind of highly targeted political tyranny. The justification and legalization, of course, will be about a “national emergency”. A digital currency will likely be tested first among the poorest, those with little or no income. It is already, in fact, on the debit cards currently issued to illegal immigrants at the border.<\/p>\r\n\r\n\r\n\r\n Their card accounts are refilled monthly, which equates to a guaranteed basic income. This “privilege” will then extend to the lower economic classes of American citizens, and so on up, until the entire middle class and even the upper income classes are subjugated, and then the authorities will be able to control everyone – an absolute monetary surveillance regime.<\/p>\r\n\r\n\r\n\r\n That’s the case, anyway. Not sure it will work. The authorities have underestimated the number of citizens who know what it means to be a sovereign citizen. They will refuse to be placed in a state of complete heteronomy. Citizens of the US and other countries may go so far as to create their own money, which would lead them to reclaim their sovereignty. This will be a problem that cannot be overcome by state authorities, let alone central banks around the world.<\/p>\r\n","protected":false},"excerpt":{"rendered":" Why did the decoupling of production from consumption through the operation of financial markets and the leverage of values become the greatest historical economic experiment? 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