Saturday, March 26, 2011

P < P+I

The title of this week’s blog is an equation I came across in this video lecture. I have seen it elsewhere, but for some reason it's expressive power really hit me this time around. Principal is always less than principal plus interest. Since money is created as debt, yet the interest owed on that debt is not, a debt-money system slowly, but surely, sucks wealth to money lenders, until the entire money supply is debt owed minus the interest. “Bankers own the earth; take it away from them, but leave them with the power to create credit, and with the stroke of a pen they will create enough money to buy it back again.” (Attributed to Josiah Stamp, former director of the Bank of England.)

P < P+I is the simple equation that describes the forced-growth dynamic of pyramid or Ponzi scheme debt-money. The only differences between Bernie Madoff’s short-lived Ponzi scheme and fractional reserve banking across the globe, are the scope of operations, available man power, and the fact that the latter is state sanctioned. Because the global monetary system uses as much of the planet’s population and resources as it can to fuel its mathematically necessary growth—rather than the wallets of select Hollywood actors in Madoff's case—it takes longer to collapse totally. There are mini-collapses along the way, but new fuels are found in new lands, and the process boots up again. In periods of ‘growth’—better called expansion of the money supply—people do well, there are jobs to be found, prices seem stable enough, and so on. In periods of contraction unemployment grows, there is price volatility, and times are hard.

Banking is a pyramid scheme—if it's not growing, it's collapsing—networked and interconnected across the globe. Money as debt is what it sells. That everyone must have money to live decently adds spice to the brew, and gives the controllers and owners of the money-producing mechanisms enormous power, which they secure via a welter of propaganda, media ownership, secrecy, a ‘high priesthood’ of obedient economists, and sufficient control of the educational agenda too. Money influences almost every decision made in society; “Shall we do it?” “I don't know, how much does it cost?” Hence, if you control money, you control society. Not in fine detail of course, that’s impossible, but the ebb and flow are yours to steer, for a while. Nothing grows forever.

Money is not wealth. Money is not wealth. Learn that well. That we see money as wealth, or even a representation of wealth, is part of the propaganda, part of the myth we must penetrate. Money is a control medium, a medium of control more than of exchange. If you can create it out of thin air as debt, you can have as much of it as you want, certainly more than you could ever spend. Owning houses and jets and cars is quickly boring. Controlling nations and billions of people is a game of ever changing variety, and remains for this reason sufficiently challenging to keep a talented psychopath nicely entertained. Control, generating fear, wielding power, causing war, being saviour and destroyer, God and Devil, that’s what money is all about. That’s the game.

Money is the force that keeps the pyramid together. Money builds the pyramid. It is an energy of symbolic power enabling a vortex-like flow from the bottom to the narrowing top. It is a controlling idea we must learn to pierce if we want to grow up as a species and experience mature 'freedom.'

Now to Franz Hoermann’s “The End of Money”. (I have been in contact with the Professor and have his generous permission to translate excerpts from the book. He has also invited me to join him and his team in establishing an Internet portal on economics, something I have long wanted to do on my own. I shall keep you posted on developments.)

Any system not resting on physical foundations, whose operation depends on the belief of its proponents, is in truth a religion. Should this religion then be insisted upon by the state—the creation of debt-money as the legal medium of exchange—it is then a state religion.
But because the public is told none of this, people of today's so-called free market are actually in a secret state religion, which, without their knowledge and consent, determines the shape of their lives. Accountants, auditors, economists and every board contributing to the laws of this system, are therefore not scientists of our society, rather they are the secret priests of Money Religion, who ensure the uninitiated will forever subjugate themselves to their senseless, exploitative and harmful rituals.

[ … snip … ]

[On establishing the value and costs of things via standard accountancy.] All these questions are not, scientifically, unambiguously answerable. Sir Karl Popper would speak here of non-falsifiability, that is, the impossibility that other scientists can refute the allocation of future cash flows to individual assets [e.g. machine or let flat or increase in value of property]. The allocation of revenues to the individual components of a produced good always occurs arbitrarily. Each possible theory for such allocation can be supported by some arguments, but undermined by others. Hence, such theories of value are never falsifiable and for this reason are not part of empirical science.

[ … snip … ]

Today's money-values [prices] arise in the Market, allegedly from the Law of Supply and Demand. Even money itself is traded on the Market. But this means the measure of value itself possesses a variable value. A meter on the other hand is a length but does not possess length. Were the meter as a measure of length to behave as do the euro or the dollar as measures of value, then it would lengthen when measuring longer boards—because of higher demand—then shorten when measuring shorter boards, because of lower demand.

It is immediately clear to anyone with sound common sense, that is, to those without a formal education in economics, that, with this sort of measurement methodology, you couldn't even build a shed.

Money is not wealth. Value cannot be measured because it is relative and subjective. There can be no science that measures value, or beauty, or stink, or the sound of colour. Until economics concerns itself with planetary carrying capacity and sustainability it will remain propaganda of money value, money being a medium of control. The devise of that control is P < P+I. While we, the victims of this long, ongoing hoax, continue to allow The Great They to use money as sole judge of our worth, of the worth of everything, we subjugate ourselves to a myth which secretly enslaves us and keeps from us the real power we all possess.

“None is so hopelessly enslaved as he who wrongly believes he is free.”


Anonymous said...

The problem of interest and the problem of value abstraction are separate issues. Saying that the use of money is a religion and a method of control is true enough, but these are only aspects of the fundamental problem which is ignorance. Ignorance is what the value abstraction promotes. Interest charged on money only emphasizes its non-real valuation, and is only one method of gaming its valuation.

Hmmm... those variables P and I.
Promotion of Ignorance? Intellectual Property? Pragmatism of Idealism? All these concepts are curiously related. Heh, I just read this article yesterday:

Toby said...

The left and right hand are separate but related by the body. Money is fascinating because it seems to be the root of so much which appears separate until we look closer. I'm not sure though how 'valuable' it is to highlight the separateness of value and interest, seeing how joined by money, historically and systemically, they are. Solving the problem of valuation--a problem engendered by trade, itself an activity engendered by farming, specialization and private property--gave rise to interest. Money as commodity has been through many forms, one of the earliest of which was cattle as money. Repayment of cattle-loans included interest, the 'growth' or 'multiplication' of the cow's reproductive ability. Money as gold 'inherited' this feature, and has kept it ever since.

The real problem is money as commodity, or money as good, or money as wealth, which I will be addressing (again) next week.

As to ignorance, this is a necessary part of hierarchy generally, which is about top-down control of as much as possible, information being the first, the most important thing to control. Undoing ignorance is therefore the first part of the solution which leads either to 'no more money needed' as part of a resource-based economy, or a democratic and open information money in a resource-based economy. Undoing ignorance is effected like this, by what I and others do. But these efforts are tiny drops in the vast ocean of ignorance beautifully massaged and nurtured by the system's owners. Nevertheless, we must keep on at it.

I'll check out that article.

Toby said...

I find the article too couched in the present money myth. The 'humans can be ethical because they're people, corporations not because they're aggregates' argument is very weak. Society is an aggregation of people too. People are aggregations of living things called cells. Everything is an aggregation, nothing makes sense in isolation. Language, culture, history, all the things that make ethics possible, are consequences of aggregations of various forms.

I stopped reading on page two. The writer does not go deep enough, which I see again and again. Pragmatism is about the way Universe works, it is not 'maturely' accepting the way modern society works as we now have it. We are obliges to question that too. Our scarcity/fear/competition paradigm is destroying us all, and there is another way. In fact there are other ways.

Anonymous said...

It think it is important to identify the root to the problem, which is having a singular, virtual, measure of value. Interest, as you say, is a derivative problem. A more accurate analogy to the body would be that valuation is the 'heart' and interest the 'hand'. If you want to kill the beast, aim for the heart.

I didn't really read the article too closely. It's simply of interest because the concepts of idealism and pragmatism are, like money, about values and knowledge. The important take-away is that pragmatism is often used as an excuse to ignore new ideas, which are seen as idealistic.

Another related P/I: Power of Intention

Anonymous said...

Holy virtual value Batman! Check out the comments on this article:

One commenter claims that the only thing that can replace money is violence. Many ask what is the alternative. Barter? Communism which is always and for all time, so they say, a failure? It's truly sad that so many have no ability to see anything beyond what they have known.

Toby said...

Now that I look at your point more closely it makes more sense to me. The 'scientific' attempt to measure value is a very deep part of what money is about. The urge to do so is hierarchical, it is about holding power over others because you control value-measurements. If you control the assessment of value, you say what society 'needs,' and what can be ignored or thrown away. Money is the visible symbol of this process and comes to us as abstract or real 'wealth,' wealth being accumulated value.

Actually, this is really what I'm getting at in this blog post, albeit in a circuitous way. Through the symbol, through the myth and into the root. The root is top-down control of value, kind of paternalism gone mad, an arid and destructive lack of faith in nature's bounty, a lack of trust in our fellow humans, an inability to see and appreciate how self-organizing everything is. And a fear of death, nature's best invention according to Steve Jobs!

I shall check out that Guardian article, though I always get angry and depressed when I read the comments. The ignorance is shocking, even though we must expect it. None of us can understand the very new until something opens us to it. The mainstream media is not going to do that job.

Toby said...

Ah England, my England, the country I left behind!

Another P/I for you, Karl: Pig Ignorant.

I sometimes comment at The Guardian, but less and less nowadays. The screechings of the dumbed-down is just too shrill.

The guy who put together that video lecture I link to in this blog blogged a while back that he's giving up on the blogosphere because debate is too much effort for too little gain. I understand that completely. For the most part blogging and commenting is a lightning-rod, an pressure-valve. It's only rarely about listening and learning, mostly it's about bellicose posturing and 'my two fucking cents.'

In short, moving from hierarchical to anarchical/egalitarian structures is one helluva challenge, and no one has enough time.

Malagodi said...

"What we need to do is make the world safe for poverty." ~John Cage

The problem is not that everyone doesn't have a job, the problem is that you can't live properly without one. ~me.

Anonymous said...

The world will be overturned in a single day. That will be the day in which the financial elites determine they do not want their "slaves" anymore

CPA firm in Indianapolis said...

Thanks for giving me the useful information. Good post however, I was wondering if you could write a little more on this subject?
gas station accounting
Accounts Payable Services
Accounting for QSR Owners
Accountant in Laredo Texas
Best Bookkeeping Services
Account Reconciliation Services
Accounting Services in Thousand Oaks, California
Tax preparers in Indianapolis