E=MC Too

 

 

The American health care system clearly needs to be rationalised. It is inefficient, with multiple competing bureaucracies, high costs and poor outcomes. many people cannot understand how it has continued to develop in what appears to be such a dysfunctional way.

 

But what if the size and shape of American health care is entirely rational if you understand the parameters that it operates within?

 

In my general theory of money I argue that the fundamental structure of capitalist economies is a broad alliance of competing money forms, (partial money), that act as a means of extracting wealth from society as a whole for their respective constituencies and through this process money forms divide up the economy.

 

Under this model INSURANCE is a money form, whose purpose is to allow its issuers and users (constituency) to extract wealth protected by its representatives among the elite: FACTIONINSURANCE.

 

You might imagine that because ‘healthcare’ is the subject of insurance that ‘health’ is somehow integral to this insurance business. It is not. ‘Health’ is no more integral to health insurance than birds are integral to ‘Dove’ shower creme.

 

To make it absolutely clear: ‘Insurance’ does not exist as a consequence of the social need for ‘Healthcare’ rather ‘Healthcare’ exists as a consequence of the economic need for ‘Insurance’. Who has an economic need for insurance? The faction that creates, buys, sells and uses it.

 

An easy way to understand it is to look back at the development of both rail and then car travel. First trains were invented and then the marketing department for the rail companies had to think of somewhere desirable to go on them. The same applies to the motor car. First the car was invented and then a desirable destination had to be invented. In this way first the ‘seaside’ and then the ‘countryside’ were invented…as well as the suburbs.

 

Insurance was invented as a money form. Then the insurers had to find something desirable to insure- enter healthcare.

 

I will build on this insight:

 

There are a number of competing money factions of which FACTIONINSURANCE is one and FACTIONDERIVATIVE is another; the latest edition to the elite power structure.

 

I have previously explained how QE was specifically an economic and political arrangement to protect and regularise emergent derivatives in the wake of the crash they caused.

 

If we accept that there are a number of money factions competing for economic and political primacy and we accept that derivatives have been inducted into the elite club, we can surmise that the derivative share of power must have been allocated at the expense of another competing money faction.

 

In other words someone must have been made to move over to make room for derivatives at the money table. Which brings us to the following intriguing anomaly:

 

In both Britain and America the newly elected post credit crunch administrations undertook ambitious and far ranging ‘reforms’ of their respective health care systems, despite the fact that many observers noted that the administrations had far more pressing concerns that they appeared reluctant to confront.

 

It does seem odd that a Conservative a government in Britain and a Democrat government in America should go out of their way to look for trouble when they had so much of it already.

 

But what if, in line with my model, they had to rejig the position of FACTIONINSURANCE within the system as a whole to accommodate FACTIONDERIVATIVE?

 

To put it another way, to get the support of FACTIONINSURANCE they had to get something in return for what they were losing to FACTIONDERIVATIVE

 

Then the actions of both Anglo Saxon elites would entirely make sense.’ Healthcare reform’ can now be seen for what it is- a central ECONOMIC part of the QE programme.

 

If my model of how the system operates is correct- how would that be reflected in what we actually observe? We would expect to see an increase in health insurance without a corresponding increase in health. Sound familiar?

 

All of which brings me to my E=MC2 moment. This is a simple formulation which is the basis for explaining all economic and political history over the past hundred years. It supersedes and clarifies all other economic theory. (Is that all, Andy ?)

 

Among other startling things my theory makes it possible to calculate to 2 decimal places the Socialism of any individual in comparison to any other individual on the planet.

 

The Credit Crunch and subsequent QE heralded the formal acceptance of derivatives into the elite money pantheon.

 

I explained how FACTIONINSURANCE got paid off to allow this to go ahead. But what about FACTIONEQUITY, FACTIONBOND etc?

 

Well they all got paid off too. In fact everybody seems to have got paid off, except one faction, and you know who that is don’t you?

 

Yup,

 

FACTIONCASH got shafted on all sides.

 

And what happened as FACTIONCASH had its political and economic power stripped away?

 

Why, Socialism evaporated into the air as though it had never existed!!

 

Surely this is the time above all others when people would have turned to Socialism. But they can’t turn to socialism because it doesn’t exist as a real separate political force.

 

Which leads me to my central formulation:

 

CASH=SOCIALISM

SOCIALISM=CASH

 

Want to know exactly to two decimal places how socialist any particular person is?

 

Find out what percentage of their wealth is held in cash and how much cash  they carry around..

 

I have prepared the following graphic for you to approximate just how Socialist you and your friends and colleagues are…

 

If you doubt my analysis ask yourself:

 

What would the world be like if there was only one money form and it was cash?

Socialism, no?

 

Why were elites all over the Saxon Axis so desperate to get welfare recipients onto digital payments?

 

Because it is bad enough if some members of society are socialist, but it really would be too much if the poor were as well…

Crackernomics General Theory Of Money Part 1

I have been working towards finishing Crackernomics 2: The Structure Of Money for a couple of years.

 

When I first began writing about the credit crunch in 2010 I described the form of the crisis and recovery process the same way one might describe the appearance of a conjurors illusion without actually understanding how the trick works. I had the form of what was happening but not the underlying content.

 

After further observation I began to realise the significance of the specific case of derivatives- that they were in fact a form of money and that QE had the overall purpose of regulating and guaranteeing them as such.

 

Over the next year or so I extended this understanding of money issuance with my analysis of Bitcoin and other crypto currencies.

 

However, it turned out to be another six years or so before I understood the general rule and I could produce a comprehensive general analysis and monetary theory…There are two parts to the general theory.

 

Here are the bones of the first half of that General Money Theory.

 

Under the cult of Capitalism the state has an effective political monopoly on the creation of money.

This leads people to erroneously presume that since there is only one state operating within each nation state territory that each individual state only allows the production of one kind of money.

 

In fact capitalist states directly and indirectly sponsor various types of privately issued money including bonds, equities and some forms of insurance. State sponsorship of these other forms of money takes the form of guarantees and regulation. These sponsored other forms of money allow the extraction of wealth from and the regulation of, the capitalist economy.

 

In the nineties one faction within the American state began to sponsor and promote a new form of privately issued money. This form became generally known as derivatives. Because of the scale and novelty of this form of money issuance it inevitably led to destabilisation and a crisis that is referred to as the Credit Crunch.

 

The broad idea is the same as the CIA, Kennedy and the Bay of Pigs. The CIA started a crisis by invading Cuba and then tried to force Kennedy to back them up. Kennedy refused and you know what happened as a consequence.

 

In the immediate aftermath of the credit crunch Bush and Obama accepted the fait accompli offered to them by the derivatives faction and used the state to back up the new form of privately issued money.

 

Under the cult of capitalism Germanic elites established an effective political monopoly over the production of money BUT actually produce more than one kind of money through the sponsorship of bonds, equities, forms of insurance and unmentioned till now; BANK CREDIT which leads to the following central idea:

 

The history of money production under Capitalism follows this pattern:

 

A particular political/economic faction in a given society petitions to join the elite and create its own form of money.

 

It begins to manufacture and use this form of money.

 

The production of this novel form of money creates a social and economic crisis.

 

The existing elite either agrees to accept the new form of money and collectively guarantee and regulate it or it does not.

 

This is how paper cash came to be a form of money- crisis and then acceptance

This is how insurance came to be a form of money- crisis and then acceptance.

This is how bonds came to be accepted crisis and then acceptance

This is how equities came to be accepted -crisis and then acceptance

This is how bank credit came to be accepted crisis and then acceptance

 

THIS IS HOW DERIVATIVES ARE COMING TO BE ACCEPTED -CRISIS AND THEN ACCEPTANCE.

What do we call this process of collective acceptance of derivatives; their regulation and guarantee by the elite?

 

We call it QE.

 

Sometimes this process fails. The Dutch tulip bubble is a good example. The tulip faction failed to get bulbs accepted as a form of currency!!

 

Here is a fundamental insight:

When a faction bid to create a new form of currency fails it is referred to pejoratively as a bubble. The wealth accrued to that new form of currency is redistributed among its competitor currencies.

 

The Significance of Gold

 

The creation of the Federal Reserve was the crisis and acceptance of bank credit as a sponsored money form.

The Wall Street Crash and its resolution was crisis and acceptance of equities as a sponsored money form but;

 

But the withdrawal of the gold standard was EXACTLY THIS PROCESS IN REVERSE. The original and founding member faction- the GOLD MONEY FACTION was blackballed and EXCOMMUNICATED from the Germanic money elite like the founding CEO of a company being turfed out by other board members!!

 

This is the significance of going off the gold standard. The original founding faction reduced to penury and obscurity, the plaything of the very factions that it originally allowed into the gang!!

 

There are money factions operating within Germanic societies which sometimes successfully petition and join the elite. But the end of the gold standard was historically unique in the history of capitalism since it was the first time a money faction was DE-LISTED and DELEGITIMISED.

 

Next we can identify the money factions. The basic money factions at present are

 

FactionInsurance

FactionBond

Faction Credit

FactionEquity

FactionDerivative

and last but not least ,(not yet anyway),

Factioncash (which is supposed to be the pre-eminent faction but we all know about the war on cash).

 

After some consideration I believe there is only room for a LIMITED NUMBER OF FACTIONS at the top table.

 

Here is my prediction:

 

It is very possible that FactionInsurance or FactionBond will be delegitimised and expelled by Trump in this administration just like Nixon did to Factiongold!! (Actually on further consideration I think it might very well be Factioncash that is for the high jump..)

 

Notes On Factioncrypto

 

Presenters of The Keiser Report Max Keiser and Stacy Herbert are good exemplars of Factioncrypto. They are Pro gold-Anti derivatives- Pro Bitcoin because:

 

They want the  FactionGold to be re-admitted to the monetary elite but this is not going to happen. (I suspect they know this and their support for Factiongold is only rhetorical.)

 

They want to prevent the legal and political legitimisation of derivatives and Factionderivative, which is why they always refer to derivatives as ‘fraud’. But derivatives are more or less entirely legitimised. Only a major overturn can prevent the successful finalisation of this process.

 

Factioncrypto want Bitcoin to be accepted as part of the Germanic money elite. But to do this they have to do what every petitioning faction has done before them- they have to use MONETARY TERRORISM tactics- just as they rightly accuse the derivatives faction of doing.. to provoke a crisis, then bargain for acceptance and regulation.

 

How this general theory of money can explain Real political parties

 

I have argued that the actual history of politics and economy is not a duopoly/dichotomy of left or right or working class or capitalist or nationalist and globalist but rather a number of competing factions that use money forms to extract wealth and regulate and divide up the economy. This is the true underlying form of politics under capitalism.

 

But we can take this further and argue that each faction has its supporters in wider society and that this is the actual way we can understand how society is divided up and operates. Each faction has a broader money constituency within society that supports it. This constituency uses their specific money form to extract wealth from the general economy.

 

 

Factioncash has a corresponding cash constituency. Factioncash is the REAL PARTY of Cash constituency.

 

Factioncredit has a corresponding credit constituency  Factioncredit is the REAL PARTY of Credit constituency.

 

Factionbond has a corresponding bond constituency  Factionbond is the REAL PARTY of bond constituency.

 

Factionequity has a corresponding equity constituency Factionequity is the REAL PARTY of equity constituency.

 

FactionInsurance has a corresponding insurance constituency  FactionInsurance is the REAL PARTY of insurance constituency.

 

Factionderivative has a corresponding derivative constituency Factionderivative is the REAL PARTY of derivative constituency.

 

Factiongold has a corresponding gold constituency  .Factiongold is the REAL PARTY of gold constituency.

 

Factioncrypto has a corresponding crypto constituency  Factioncrypto is the REAL PARTY of crypto constituency.

Actual political identity; that which determines what any individual or group within capitalism will do is determined by the form of money each faction uses.

 

From this we can observe that some factions have a greater or lesser constituency than others to the extent that some constituencies have little or no faction representing them in the elite and some factions have little or no constituency on the ground.

 

This exactly and specifically determines how each faction/constituency will act politically. It means we can begin to predict with an unprecedented  degree of precision what each grouping will do.

 

These degrees of constituency can be arranged and compared in a PERIODIC TABLE OF MONETARY FORMS.

 

We can draw an analogy with the model of an atom. Factions represent the nucleus and constituencies represent the electron configuration outside the nucleus. CONSTITUENCIES therefore influence the relatively trivial domain- the physics and chemistry of the economy and factions influence the profound- the atomic power of the economy.

 

While the specific balance of components varies from nation state to nation state the basic relationship can be described thus

 

From top to bottom these are the money forms with the largest real parties (constituencies)

 

(Largest constituency):

 

FactionInsurance

Faction Credit

Factioncash

FactionEquity

FactionBond

FactionDerivative

FactionCrypto

 

(Smallest constituency)

 

I will apply my model to two well known historical anomalies to illustrate how effective it is:

 

The mystery collapse of ‘left wing’ working class politics and

 

The mystery of Quantitive Easing:

 

1:The mystery collapse of ‘left wing’ ‘working class’ politics

 

Each monetary faction has a constituency. This is the real nature of societal division. In Britain up until the 1980’s the vast majority of what is called the ‘working class’ were represented by Factioncash and were therefore members of Cashconstitiuency. They were paid in cash. They purchased in cash. They lent and borrowed in cash. They relied on cash as the means to extract their share of society’s wealth.

 

But as you know in from the 1980’s through massive economic reprogramming the majority of ‘working class’ was forcibly transferred from Factioncash to Factioncredit. They were relocated in Creditconstituency. And so their priorities and allegiances accordingly changed.They were paid in credit. They purchased on credit. They lent and borrowed in credit. They relied on credit as the means to extract their share of society’s wealth.

 

It is this which explains the collapse of ‘working class’ left wing politics. In essence it was the forcible transfer of political allegiance of the ‘working class’ from Factioncash to Factioncredit.

 

The mystery of Quantitive Easing

 

We are familiar with the immediate aftermath of the initial credit crunch. There were a number of meetings between Obama and the bankers. The story goes that the bankers issued Obama with an ultimatum: back us and back derivatives or we will bring the system down. Why did the administration go along with this demand? Was it because they are all Wall Street stooges etc?

 

Consider the reality of the situation from a faction perspective.

 

Derivativeconstiuency (DerC) was effectively bankrupt. That ‘s what the Credit Crunch crisis was effectively all about; are derivatives to be accepted and protected or are they to be refused protection are therefore be deemed to be worthless – a bubble?

 

Factionderivative (FacD) the political representatives of DerC went to bat in a do or die situation. But this was not something new it had been the same for every successful faction since capitalism began.

 

And FacD had an ace in the hole. The administration was Monetarist and as you probably know Monetarists ABSOLUTELY HATE cash more than anything else on the planet. So the FacD play was simple: Let’s use this opportunity to get together to f*ck cash for once and for all. That was the true nature of the play. And it has worked. Derivatives were preserved at the expense of cash.

 

Authors note:

I know this is all a bit scrappy and in semi-note form but it is covering a lot of territory and I want to get as much of it as possible down as quickly as possible. I will return to the themes and ideas I have outlined here at a later date.

By the way I am in the faction of the one in whose image I am created