THE CRACKERNOMICS EQUATION

The Equation

Lets make it simple:

N.G.M.=G.M.O

N.G.M. -Non Government Money

G.M.O. -Genetically Modified Organism

From

N.G.M.=G.M.O

can be derived:

GMO is to Agriculture as NGM is to Economy

COMPARISON OF FEATURES

GMO NGM
Is justified because of ‘crisis’ in food production Will be justified because of state currency crisis
Takes commonly held good – seed-stock and modifies it to produce privately held GMO Takes commonly held good -state currency and modifies it to produce privately held NGM
Replaces natural seed that can reproduce itself State Money now produces no interest
Requires proprietary weedkillers ‘Roundup’ etc Will be used to control what can be bought where and when
Contaminates natural fields Is mixed with state currency through purchasing by Federal Reserve etc
The law is being rewritten to force natural farmers to comply with the introduction and proliferation of GMO The law is being rewritten to force everyone to comply with the introduction and proliferation of NGM
Is being introduced in semi-secrecy Is being introduced in semi-secrecy

Who benefits from the introduction of GMO? Who loses out?

Who benefits from the introduction of NGM? Who loses out?

It is the same trick being applied in agriculture and economy

 NGM=GMO

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CRACKERNOMICS: The Exchange Rate Is The Key

 

*NGM- Non Government Money

A standard bubble begins when one investment has a more productive rate of earning than any other in the economy.

In other words when lots of people can make more money investing in one particular thing (as opposed to anything else), a bubble begins.

In the first phase of a bubble, surplus (discretionary) wealth in invested; people put their spare cash in.

When that round of inputs is exhausted new people enter the bubble; investment wealth is put in. Now the bubble is at its maximum ‘credibility’. Investing at this stage is seen as common sense.

When investment cash is used up, credit is obtained and invested. At this stage the bubble changes its character because now the investment is valued not against other investment opportunities in the economy, but against the investment value of money itself. As more and more people try to get in on the bubble using credit, interest rates rise and the supply of money dries up.

The bubble deflates.

In the housing bubble that is supposed to have led to the credit crunch, the money in question was NGM.* There was an inexhaustible supply of NGM because the financial institutions kept creating it. This made the Credit Crunch bubble fundamentally different from what had gone before. The bubble could not end on its own because there was no limit on the amount of NGM money that could be printed and moved around on the back of  it. (Does this remind you of anything? It does? There is a reason for that….)

The more NGM that was created on the back of housing, the more opportunities there were for ‘earning’. The more opportunities for earning an investment offers, the more investors it draws in and the more NGM is printed. It is like a financial Black Hole collapsing under its own gravity and sucking in more and more material forever!

But the Credit Crunch ‘problem’ actually started when the exchange rate between state issued money and NGM came under scrutiny. The banks refused to lend STATE ISSUED MONEY (SIM), to each other when they asked this question: What is this NGM actually worth in comparison to SIM? It got so bad they were not even prepared to lend to each other SIM overnight. The risk was not worth it.

I had  thought that  the Credit Crunch appeared to have left the supporters of NGM with two difficulties:

1. The bubble relationship between housing and NGM This unique, unprecedented ‘sovereign’ bubble allowed the production of NGM to spiral out of control.

2.And the value relationship between NGM and SIM.

I now realise that the bubble problem is actually an expression of an economic problem in the exchange rate between NGM and SIM and the value relationship between NGM and SIM is actually an expression of a political problem in the exchange rate between the two.

Both these problems are really the political and economic expressions of the same problem: The exchange rate problem.

Look at the solutions that have been adopted.

First the bubble relationship between housing and NGM.

The solution to this problem requires that the value of NGM in relationship to housing has to be raised or at least maintained. This means that somehow the supply of NGM has to be cut off, (The equivalent of raising interest rates in SIM). But by definition the state cannot control the issuance of non-state money- that’s the whole point of NGM after all. So what can it do instead? The authorities can force the banks to carry more state issued money for the NGM that they issue.  In a bizarre way they really did ‘force’ the banks to accept free state money! By forcing the banks to acquire SIM in relation to the amount of NGM they have they are effectively enforcing an exchange rate between NGM and SIM.

The second problem is that the value of NGM in relationship to state money has to be raised or maintained. At the moment the democratised money gang want the exchange rate to be 1:1.  It follows from this that to the extent that NGM is worthless then state money has to be worthless. Printing seemingly endless amounts of SIM and then swapping it for NGM moves you along this road. But remember this is a political statement of support for NGM and carries with it political problems.

The key point to understand is that Q.E. is NOT a ‘negative’ interest rate. It is NOT extending zero interest rates into negative territory. This is mindless and impossible.

It is trying to manipulate the exchange rate between NGM and SIM.

This helps us to answer the question: How long will Q.E. go on for?  Which brings us to the Democratised Money Conundrum which is this:

Individual instances of NGM must be allowed to fail but NGM as a principle cannot be allowed to fail. In the same way that individual businesses can go bankrupt but capitalism cannot.

And that is the present problem. Since there is only one major type of NGM available at the moment (mortgage based), if it collapsed it might take the entire principle of democratised money with it. And that can’t be allowed to happen.

This is what all the radicals cannot understand. The proponents of NGM  are fighting for the establishment of an economic and political principle- the principle of Democratised Money. What you have seen so far is not a ‘mistake’. It’s not nasty bankers buying corrupt politicians. It’s the birth of a new political and economic structure.

So,

Individual NGM has to be allowed to fail-its a matter of principle, but NGM as a class cannot be allowed to fail-its a matter of principle. And at the moment there is really only one viable individual example of the class of NGM. Funnily enough, again it calls to mind a Black Hole, where the world of relativity and the world of quantum somehow exist in uneasy mutual contradiction.

But the contradiction does allow us at least to answer in part one question: How long will government intervention go on?

The answer must be until there is more than one kind of NGM.  I would imagine that when there are say, over ten types of different NGM the state will stop managing the transition. Then there will be room for individual NGMs to collapse without damaging the principle of NGM as a whole.

Or until someone stops them.

*NGM-Non Government Money

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CRACKERNOMICS PARTICIPATION 3: WHAT’S LOVE GOT TO DO WITH IT?

‘What’s Love go to do, got to do with it?’

 Tina Turner

You have probably have, or will have a reason at some time in your life to ponder the question:

What is love?

And of course you will come to the conclusion that there are as many different definitions of love as there are sentient people on the planet.

So the question might be more usefully asked:

What is the value of any particular love?

In other words, if we accept that if someone proclaims love, then it is love, the real defining difference is that the love from a self obsessed alcoholic is worth a lot less than the love from a kind thoughtful person. Someone might genuinely offer you their love, but that does not mean that love is worth anything to you.

Which brings us to money.

There has been a largely fruitless debate over what money actually is between Gold Bugs, Bitcoiners, and the mainstream.

It is much more useful to accept that if someone says something is money, then to all intents and purposes it is money and instead ask the question; What is the value of this money?

So we  need a useful definition of the value of any particular money. The only definition of money value that does not rely on relative values is how acceptable it is.

In other words the power of any currency rests on how many people use and accept it. In fact you could argue that any given society is more usefully defined by the currency it uses than anything else. After all, the national boundaries of a nation can be violated by an immigrant hiding in a lorry, but that same immigrant cannot spend his home currency in the place he has penetrated. You can think of currency as a little national flag that you carry around in your pocket. National territory, it’s political and economic norms are defined by currency.

So if there were to be more than one currency operating in any given territory that would cause some interesting consequences.

It has been the  policy of governments in the Saxon Axis to allow the creation of NGM (Non-Governmental Money) for over a decade. The Credit Crunch and the reconstruction we have experienced are all direct results of the operation of the NGM (Democratised Money).

Since it is the purpose of governments in the Saxon Axis to encourage the use of NGM they wish to make it as valuable as possible. How is this to be achieved? by maximising the number of people who use NGM, to maximise the territory it covers. How is this being achieved? By swapping state currency for NGM, in other words Quantitive Easing. By purchasing Mortgage bonds, with freshly printed state currency, governments explicitly back the value of mortgage derivatives. By purchasing Government debt with freshly printed state currency governments explicitly devalue their own currency.

More importantly this increases the territory covered by NGM. Up until Q.E., NGM was limited to the financial sector, accepted and traded nowhere else, (most people did not even know it existed!). Now NGM is held and traded by your Government. Ideally, the proponents of NGM want it to be held and traded by you but in order for that to happen there has to be a number of further modifications to the system.

At the moment, NGM is traded at 1:1 with state issued currency. The state purchases NGM at its nominal value. But in order for it to be a truly sovereign currency, it has to have a floating exchange rate. How can this be achieved?

The purchasers will have to pick one. They have to break the existing link between the amount of mortgage NGM they purchase and what they pay for it. The difficulty is that they have no idea how much of this paper is actually out there, so they cannot assign it a value based on how much there is. What they can do is maximise the territory it covers by mixing the national money economy as thoroughly as they can with the NGM money economy before they are stopped.

Notice I say before they are stopped.

So who is going to stop them?

You can refer to Crackernomics for a fuller list of those who will lose out as a result of NGM but for the moment I want to concentrate on national governments. It has been pointed out that debasing national currencies in the Saxon Axis has led to debasement of foreign held debt and manipulation of exchange rates. This is the basis for the idea of ongoing ‘Currency Wars’. ‘Abenomics’ in Japan in cited as an example. After implementing Crackernomics to the power of ten in Japan in order to ‘stimulate’ the economy, it is anticipated that Japan will have to go even further to offset the fact that the Fed failed to taper last week. This in turn will cause other players to devalue their national currencies and this is a ‘ currency war.’ This, in turn, is taken as an indicator that things are getting out of hand. But if every nation state continues to devalue and QE then cumulatively it becomes a war on state currency itself! This plays directly into the hands of those who want to devalue the very idea of state currency and to promote the idea of NGM!

In other words those who promote NGM are more than happy to see a head fake national state currency war in the same way that Israel is happy to see the two sides tear each other to pieces in the Syrian national war.

Let your enemies fight till you are the last one standing

My friend, you would not tell with such high zest
To children ardent) for some desperate glory,
The old Lie; Dulce et Decorum est
Pro patria mori.

Wilfred Owen
8 October 1917 – March, 1918

CRACKERNOMICS: Participation Economy 2

Record 90.5 Million Out Of Labor Force As Half A Million Drop Out In One Month; Labor Force Participation Rate Plunges To 1978 Levels

Submitted by Tyler Durden on 09/06/2013 08:47 -0400

Look at this stuff from zero hedge. It shows a massive fall in the number of people participating in the economy, or should I say participating in the open economy. An ever increasing proportion of the workforce is simply disappearing off the books, to levels last seen in the late seventies when the cult of Monetarism was introduced.

‘the Labor Force Participation Rate declined from 63.4% to 63.2%: the is the lowest print since August 1978!’

I am coming to understand that this question of participation is of fundamental importance.

Consider this proposition: That the fundamental difference between Catholic and Germanic economies in Europe is the amount of labour participation in their respective economies.

In Greece, Italy, Ireland, Spain and Portugal, economies have been characterised by the relatively large amount of non state sanctioned economic activity, in other words low participation as defined by Monetarists. This has shown itself in low tax collection rates and perhaps more importantly the difficulty in understanding the real composition of these economies and predicting what will happen to them.

This explains the accusations of fraud while joining the Eurozone that were levelled as a result of the Credit Crunch. Credit agencies and governments simply did not know what people were really up to in these economies. Now these are the economies that the Germans want to reform- they want to increase participation but on Monetarist terms.

I have written previously about post Germanic war policies in Europe and the Saxon Axis to encourage participation in the economy and how they differ from the new forced participation policies.

This is a much more useful way of understanding developments since the Second Germanic War than left or right or Keynesianism or classical economics.

Why?

Because it allows us to see past the nonsense of a two party system or opposing political blocs. Now we can see that both sides of the mainstream political spectrum are concerned with achieving high levels of participation and the political and economic argument, such as it is, is about the best method to achieve this.

I would like to propose this prototype of a Spectrum of Participation as a way of understanding contemporary political and economic forces:

Maximum Monetarist participation (Formally known as Neo-Con/Liberal or ‘right wing’)

No use of cash.

Minimal discretionary spending.

Private provision of everything.

Complete integration of activity.

Social participation (Formally known as Keynesianism or ‘left wing’)

No use of cash

State provision of health education etc

Consumer society

Complete integration of activity

None participation (Broadly known as ‘Libertarian’)

Black activity

Use of gold as store of wealth

IMPORTANT

This is not a linear spectrum- drop this crap about left right etc.

These three types are arranged as the points of an equilateral triangle.

WE MUST DROP THIS IDEA OF A LINEAR SPECTRUM OF POLITICAL THOUGHT THIS IS THE SINGLE MOST IMPORTANT POINT TO UNDERSTAND.

Back to Zero Hedge:

‘Whether or not this means the Fed will continue QE at this point is largely irrelevant: what is more relevant is that the Fed so far has failed miserably at its core mandate: to boost real employment.’

At least we understand the priorities of the fed a little clearer now. We can now clearly see that participation is a major strategic objective of the Monetarists. We can say with certainty that their next moves will be aimed at this end.

By the way, I would now like to formally proclaim the end of the consumer society

CRACKERNOMICS: THE ‘PARTICIPATION’ ECONOMY

The earliest print cite to the phrase was 19 March 1876 in a short story about Mexico, an American being held up by a Mexican bandit, and the outcome. “Go-!” said he sternly then. “We will call it a stand-off, a Mexican stand-off, you lose you(sic) money, but you save your life!”

Wikipedia

In my short film The Great Money Train Hi-jack I describe how the QE program has turned into a financial Mexican standoff between the Monetarists and the public at large. In the aftermath of the crash, the workforce in the Germanic territories have been ‘invited’ to go back to work on the post Credit Crunch economic reconstruction on new terms.

On Wednesday Ben Bernanke decided to keep riders on the Democratised Money train supplied with a blizzard of free tickets, (much to the surprise of everybody), specifically citing as one justification the participation rate of employment in USA. Bernanke cited falling participation rates as evidence that the employment figures were not as rosy as first seemed. Since Bernanke expressly targets unemployment in his QE program it is just as well to consider this concept of ‘participation’.

As I said in Money Train Hi-jack, in 1945 the Anglo Saxon elite were forced to encourage a much larger than ever before participation in the post war economy by means of offering limited access to the money train in the form of credit – a form of economy saver ticket on the Money Train if you like. Access to washing machines, cars, houses etc funded by credit got the people working for the system again. Perhaps more importantly, state spending on health and welfare meant that the nature of the economy was changed. Welfare spending underpinned what we came to understand as the ‘consumer economy’.

Seventy years later the Anglo Saxon elite is no longer under the intense political  pressure of the post war years at home and abroad so now the message is : take it or leave it. Now the free tickets go to the bankers, not the people. This means that the recipients of QE can happily sit in the money train buffet car for as long as it takes until finally the people realise its clear the track under the new regime or starve.

And this in the end is what the labour participation rate is now all about. Its not about someone leaving the labour market because they are discouraged, it’s about too many people finding a way to slip through the net. So its keep the money train in a siding until the livestock can be rounded up and put back on the cattle truck

Participation has changed from something that was voluntary into something that is forced. In you want further proof of this new form of pleb participation in the economy try this

King Willem-Alexander delivered a message to the Dutch people from the government in a nationally televised address: the welfare state of the 20th century is gone.

In its place a “participation society” is emerging, in which people must take responsibility for their own future and create their own social and financial safety nets, with less help from the national government.

The classic welfare state of the second half of the 20th century in these areas in particular brought forth arrangements that are unsustainable in their current form.”

After several consecutive years of government spending cuts, the Dutch economy is expected to have shrunk by more than 1 percent in 2013, and the agency is forecasting growth of just 0.5 percent next year.

Willem-Alexander said that nowadays, people expect and “want to make their own choices, to arrange their own lives, and take care of each other.”

The ‘participation society’ has been on its way for some time: benefits such as unemployment compensation and subsidies on health care have been regularly pruned for the past decade. The retirement age has been raised to 67.

costs for the care of the elderly, for youth services, and for job retraining after layoffs will now be pushed back to the local level, in order to make them better tailored to local circumstances.

Eurozone rules specify that countries must keep their deficit below 3 percent, and Rutte has been among the most prominent of European leaders, along with Germany’s Angela Merkel, in insisting that Southern European countries attempt to meet that target.

However, the government said Tuesday it has decided once and for all not to abandon the U.S.-led “Joint Strike Fighter” program to develop new military aircraft. The program has suffered cost overruns and created divisions within Rutte’s governing coalition.

it must seek help from opposition parties to have the budget approved.

Rutte insisted in an interview with national broadcaster NOS on Tuesday that he ultimately will find support for the budget.

“At crucial moments, the opposition is willing to do its share,” he said.

Geert Wilders, whose far right Freedom Party currently tops popularity polls, called Rutte’s budget the equivalent of “kicking the country while it’s down.”

Dutch King Willem-Alexander declares the end of the welfare state

Tuesday 17 September 2013 Independent

http://www.independent.co.uk/news/world/europe/dutch-king-willemalexander-declares-the-end-of-the-welfare-state-8822421.html

Lets run the main points:

No more welfare

Look out for yourself; health care, education, old age

Local provision of services don’t bother the government it’s not our problem

Money for weapons

An opening for the far right as the post war consensus ends.

After the reconstruction everyone must be forced to participate in the economy on the new terms. Non-participation will not be an option.