–Who says the Fed has no sense of humor? QE to end Friday, Oct 31 2014 

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

Mitchell’s laws:
Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.
●The more federal budgets are cut and taxes increased, the weaker an economy becomes.
●Austerity is the government’s method for widening
<the gap between rich and poor.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●Everything in economics devolves to motive,
and the motive is the Gap.
=================================================================================================================================================================

As readers of this site know, Quantitative Easing (QE), is touted as a way to stimulate the economy by adding dollars to the economy.

It does no such thing. QE is a fake, a fraud, a flimflam. The purpose: To give the impression that the Fed is “doing something” to stimulate the economy, without federal deficits.

To a small degree, QE actually reduces the number of dollars entering the economy.

Here’s how QE works. First, there must be a Treasury Security:

1. From thin air, the Treasury creates on its books an entry: “Treasury Security.”

2. An investor (you, for instance) tells your bank to debit your checking account and to credit your Treasury Security account at the Federal Reserve Bank.

A Treasury Security account is very much like a bank savings account, so in essence, you have transferred dollars from your checking account to your savings account. No dollars created or destroyed.

Then, comes the QE process:

3. The Fed instructs the Federal Reserve Bank to transfer your dollars from your Treasury Security account back to your checking account, and to transfer ownership of the Treasury Security to the Fed.

Again, no dollars are created or destroyed. No stimulus. No nothing. Dollars moved from one of your bank accounts to another of your bank accounts.

Bottom line, the Treasury created a Treasury Security and gave it to the Fed. The Fed gave dollars to the Treasury, which being the original creator of those dollars, has no use for them. So they are destroyed.

This leaves unanswered the question: If adding dollars to the economy stimulates the economy, and if the Treasury can create Treasury Securities from thin air, why doesn’t the Treasury create dollars from thin air, send them into the economy and dispense with the shell game scam?

The answer: That is exactly what the Treasury does every day, when it pays government bills. It should do more. (See Ten Steps to Prosperity, below).

What QE does do is reduce long-term interest rates, by increasing the demand for Treasury Securities, which increases their price, which in turn, decreases rates. (Price and rates move inversely.)

And by reducing rates, QE reduces the interest paid to the economy by the Treasury. QE cuts the deficit, which probably is one of its purposes.

Here is where the Fed’s sense of humor comes into play:

BloombergView
The Fed’s $4 Trillion Bet
OCT 29, 2014

The U.S. Federal Reserve announced today that it will halt the bond-buying program known as quantitative easing — one of the biggest experiments in economic policy ever attempted. The policy was a gamble, and it’s too soon to be sure of the results.

See the humor. QE started in November 2008, a full six years ago. It is “one of the biggest experiments in economic policy ever attempted.” Yet, “it’s too soon to be sure of the results”!

What??! Six years of the biggest policy experiments ever, and it’s “too soon” to know the results?

That’s like saying, “For the past six years, we’ve been dropping atomic bombs on Peoria, IL, but it’s too soon to know what happened.”

This doesn’t mean the program is over. The Fed still holds more than $4 trillion in bonds, roughly a fifth of all U.S. Treasury and mortgage-backed securities outstanding.

Until they’re divested — a challenge in its own right — these vast holdings will continue to have an effect on markets.

These “vast holdings” are nothing more than a line on the Treasury’s books saying that X dollars worth of the Treasury Securities created from thin air, are owned by the Fed. The left pocket owes the right pocket.

To eliminate these “vast holdings,” one government agency needs only to debit and the other agency needs to credit, and Presto! The “vast holdings” disappear into the thin air from whence they came.

The whole process is an accounting embarrassment, a juggling of the books, in an attempt to obscure the fact that it is Congress, not the Fed, that has the power to stimulate the economy. Congress does it by deficit spending, which really adds dollars to the economy.

Exactly how much QE has helped the economy remains a matter of debate. Former Fed Chairman Ben Bernanke said in 2012 that the Fed’s first two rounds may have boosted output by 3 percent and added more than 2 million jobs.

Where did Bernanke get these numbers? From that same thin air that provided the Treasury Securities.

In a more recent paper, San Francisco Fed President John Williams said such estimates were uncertain.

Yes, the effects of the biggest policy experiment ever, are “uncertain.”

Some believe QE has gradually diminishing effects; others that it has no positive effect at all.

Well, that seems to settle it. The effects are huge, or uncertain, or diminishing, or none at all — or as I believe, negative.

The BBC reported that as a result of this grand experiment, the Fed has added $3.7 trillion worth of assets to its holdings, about an eightfold increase.

So where are those 3.7 trillion dollars? What became of them?

This year’s federal deficit is below $500 billion. That is how many dollars the federal government added to the economy. So you can imagine the effect of adding 3.7 trillion dollars to our economy.

It would have been gigantic. The debt-hawks would have been screaming “hyper-inflation.”

But, nothing. No hyper-inflation. Hardly even any inflation. The economy creeps along, rising slowly, slowly.

In answer to the question, there are no additional $3.7 trillion. They are dollars that moved from private checking accounts to private Treasury Security accounts and back again. Just a Three-card Monte shuffle.

And you probably thought the Fed had no sense of humor.

Rodger Malcolm Mitchell
Monetary Sovereignty

===================================================================================
Ten Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually
8. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (Click here)
9. Federal ownership of all banks (Click here and here)

10. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)

The Ten Steps will add dollars to the economy, stimulate the economy, and narrow the income/wealth/power Gap between the rich and the rest.
——————————————————————————————————————————————

10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt

No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia.
1. A growing economy requires a growing supply of dollars (GDP=Federal Spending + Non-federal Spending + Net Exports)
2. All deficit spending grows the supply of dollars
3. The limit to federal deficit spending is an inflation that cannot be cured with interest rate control.
4. The limit to non-federal deficit spending is the ability to borrow.

THE RECESSION CLOCK
Monetary Sovereignty

Monetary Sovereignty

Vertical gray bars mark recessions.

As the federal deficit growth lines drop, we approach recession, which will be cured only when the growth lines rise. Increasing federal deficit growth (aka “stimulus”) is necessary for long-term economic growth.

#MONETARYSOVEREIGNTY

–How did the Kochs get so rich, and the rest of you get so poor? A primer. Thursday, Oct 30 2014 

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

Mitchell’s laws:
Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.
●The more federal budgets are cut and taxes increased, the weaker an economy becomes.
●Austerity is the government’s method for widening
<the gap between rich and poor.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●Everything in economics devolves to motive,
and the motive is the Gap.
============================================================================================================================================================================================================================================================
This past May, we published, “PRIVATIZATION: The Road to Perdition in the United States of Koch.”

It described the Libertarian / Tea Party / Republican Koch Brothers, the too-big-to-jail billionaire, world-class polluters and law-breakers. The description was in general terms, focusing mostly on the phony drives for privatization concocted by crooked politicians.

Now, we have a more detailed look at how the Kochs have purchased three political parties — Libertarian, Tea and Republican — and the minds of millions of voters.

Here are some excerpts. I urge you to read the entire article. You may have trouble believing the depths of the chicanery, so keep an open mind:

Rolling Stone
Inside the Koch Brothers’ Toxic Empire

The Kochs are our homegrown oligarchs; they’ve cornered the market on Republican politics and are nakedly attempting to buy Congress and the White House.

The Kochs have been aided and abetted by the right wing Supreme Court, which tells us that money is the same as speech, and in the immortal words of Justice Scalia, ” . . . the more speech, the better.”

Koch Industries’s troubled legal history – including a trail of congressional investigations, Department of Justice consent decrees, civil lawsuits and felony convictions, combine to cast an unwelcome spotlight on the toxic empire whose profits finance the modern GOP.

Under the nearly five-decade reign of CEO Charles Koch, the company has paid out record civil and criminal environmental penalties. And in 1999, a jury handed down to Koch’s pipeline company what was then the largest wrongful-death judgment of its type in U.S. history, resulting from the explosion of a defective pipeline that incinerated a pair of Texas teenagers.

Yes, yes, I know. Before the brainwashed apologists for right wing excesses bombard us with “There are bad Democrats, too,” let me say that I know of no people with the record of lying, cheating, stealing, fraud, unimaginable greed and blatant attempts to control the politics of America, as the Kochs.

If the apologists for criminality know of someone with a worse record, please do this: Read the entire article, then tell me of anyone to equal what you read, and detail their criminality.

Only three companies rank among the top 30 polluters of America’s air, water and climate: ExxonMobil, American Electric Power and Koch Industries. Thanks in part to its 2005 purchase of paper-mill giant Georgia-Pacific, Koch Industries dumps more pollutants into the nation’s waterways than General Electric and International Paper combined.

The cost is borne by communities in cities like Port Arthur, Texas, where a Koch-owned facility produces as much as 2 billion pounds of petrochemicals every year. In March, Koch signed a consent decree with the Department of Justice requiring it to spend more than $40 million to bring this plant into compliance with the Clean Air Act.

Imagine you being fined $5 for polluting the air and water of millions of people, while you earn millions for doing it. That seems to be what fines mean to the Kochs.

In a recent acquisition, Koch bought Frac-Chem, a top provider of hydraulic fracturing chemicals to drillers. Thanks to the Bush administration’s anti-regulatory­ agenda – which Koch Industries helped craft – Frac-Chem’s chemical cocktails, injected deep under the nation’s aquifers, are almost entirely exempt from the Safe Drinking Water Act.

This is a test of your logic: Why would the Bush administration give the Kochs a free pass to pollute drinking water?

Denser, dirtier and cheaper than coal, petcoke is the dregs of tar-sands refining. U.S. coal plants are largely forbidden from burning petcoke, but it can be profitably shipped to countries with lax pollution laws like Mexico and China. One of the firm’s subsidiaries, Koch Carbon, is expanding its Chicago terminal operations to receive up to 11 million tons of petcoke for global export.

Koch’s thinking is crystallized in a manifesto Charles wrote for the Libertarian Review in the 1970s, recently unearthed by Schulman, titled “The Business Community: Resisting Regulation.”

Charles lays out principles that gird today’s Tea Party movement. Referring to regulation as “totalitarian,” the 41-year-old Charles claimed business leaders had been “hoodwinked” by the notion that regulation is “in the public interest.”

He advocated the “barest possible obedience” to regulation and implored, “Do not cooperate voluntarily, instead, resist whenever and to whatever extent you legally can in the name of justice.”

If you’re like you and me, you have to obey the law. But, if you’re richer than God, you can resist the law, even be convicted of criminal activity, and never spend a day in jail.

Money isn’t bribery; it’s speech. Ask Justice Scalia.

Bill Koch called Charles and David, “the biggest crooks in the oil industry.”

A Senate committee investigating Koch business with Native Americans would describe Koch Oil tactics as “grand larceny.” The Senate committee concluded that over the course of three years Koch “pilfered” $31 million in Native oil.

Stealing is one crime. Destroying the environment is another. But:

Richard Fink, head of Koch Company’s Public Sector and the longtime mastermind of the Koch brothers’ political empire, confessed to The Wichita Eagle in 1994 that Koch could not compete if it actually had to pay for the damage it did to the environment.

Now you know the definition of “compete.”

And be sure to read the section describing how two teenagers, Danielle Smalley and Jason Stone were burned to death by a an explosion in a Koch pipeline — a pipeline that never should have been opened.

Bill Koch said: “Koch Industries has a philosophy that profits are above everything else.” A former Koch manager, Kenoth Whitstine, testified to incidents in which Koch Industries placed profits over public safety.

As one supervisor had told him, regulatory fines “usually didn’t amount to much.” When Whitstine said he was concerned that unsafe pipelines could cause a deadly accident, another manager said that it was more profitable for the company to risk litigation than to repair faulty equipment. The company could “pay off a lawsuit from an incident and still be money ahead.”

What is a human life worth compared with profits? Ask the Koch brothers.

Now nearing 80 – owning a large chunk of the Alberta tar sands and using his billions to transform the modern Republican Party into a protection racket for Koch Industries’ profits – Charles Koch is not about to see the light.

Nor does the CEO of one of America’s most toxic firms have any notion of slowing down. He has made it clear that he has no retirement plans: “I’m going to ride my bicycle till I fall off.”

So long as the punishment costs less than the criminal profits, and there never is jail time involved, a criminal has no reason to stop.

Their political network helped finance the Tea Party and powers today’s GOP.

Koch-affiliated organizations raised some $400 million during the 2012 election, and aim to spend another $290 million to elect Republicans in this year’s midterms.

So far in this cycle, Koch-backed entities have bought 44,000 political ads to boost Republican efforts to take back the Senate.

Now, think about it. Why are people convicted of polluting your air and water, people responsible for the deaths of American children — why are people of that ilk happy to spend hundreds of millions of dollars to elect Republicans?

Is it for your benefit? Will helping the Kochs grow richer and more powerful benefit you and your family?

How did the Kochs get so rich and the rest of you get so poor?

The Kochs are riding your bicycle — and you’re happy to let them.

Rodger Malcolm Mitchell
Monetary Sovereignty

===================================================================================
Ten Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually
8. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (Click here)
9. Federal ownership of all banks (Click here and here)

10. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)

The Ten Steps will add dollars to the economy, stimulate the economy, and narrow the income/wealth/power Gap between the rich and the rest.
——————————————————————————————————————————————

10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt

No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia.
1. A growing economy requires a growing supply of dollars (GDP=Federal Spending + Non-federal Spending + Net Exports)
2. All deficit spending grows the supply of dollars
3. The limit to federal deficit spending is an inflation that cannot be cured with interest rate control.
4. The limit to non-federal deficit spending is the ability to borrow.

THE RECESSION CLOCK
Monetary Sovereignty

Monetary Sovereignty

Vertical gray bars mark recessions.

As the federal deficit growth lines drop, we approach recession, which will be cured only when the growth lines rise. Increasing federal deficit growth (aka “stimulus”) is necessary for long-term economic growth.

#MONETARYSOVEREIGNTY

–More credit agency nuttiness: Ignorance or criminality? Wednesday, Oct 29 2014 

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

Mitchell’s laws:
Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.
●The more federal budgets are cut and taxes increased, the weaker an economy becomes.
●Austerity is the government’s method for widening
<the gap between rich and poor.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●Everything in economics devolves to motive,
and the motive is the Gap.

Today, October 29, 2014, reader Ian Winograd wrote:

Off topic, but here is something of interest:

http://www.cnbc.com/id/102132053

“Moody’s reported on Wednesday that the U.S. government’s current fiscal position remains healthy but if there aren’t policy changes, there will be long-term risks from social spending that could affect the nation’s credit standing.

Spending, especially for Medicare and Social Security programs, will cause a rise in future deficits and debt levels toward the end of the decade, Moody’s said. An aging population will contribute to rising cost and demand for health-care services.

The report called for additional revenue, which could be realized from a higher-than-expected U.S. economic growth rate or policy changes such as an increase in Medicare premiums and co-payments.”

So Moody’s is going to lower the credit rating of a monetary sovereign nation, fearing that the US won’t be able to pay its bills.

This is the same company that gave A+ ratings to mortgages given to people with no jobs, no incomes and no assets.

My response was:

During and after the Great Recession, the credit agencies gave higher ratings to some monetarily non-sovereign euro nations and to many corporations (all of which are monetarily non-sovereign), than they gave to the U.S. government.

These agencies are owned by the rich, and their clients are the rich. The rich hate government spending, because most government spending benefits the middle- and lower-income groups.

And, of course they hate progressive income taxes (but love regressive FICA and sales taxes), because the rich pay “too much.”

In short, the credit agencies are paid to widen the Gap between the rich and the rest. And the management of Moody’s either is ignorant of basic economics, or they are criminals doing the bidding of the rich — and I doubt they are ignorant.

Moody’s is not the only “ignorant or criminal” rating agency. Take Standard & Poors (please):

Standard & Poors rates the following euro nations AAA: Austria, Finland, Germany, Luxembourg. It rates the euro nation, the Netherlands, AA+

All euro nations are monetarily non-sovereign, meaning they have no sovereign currency. They use an “alien” currency, the euro, over which they have no control. They can run short of euros.

They all rely on taxes and net exports to provide sufficient euros. If taxes and/or exports decline, they could be unable to pay their bills.

By contrast, the U.S. government is Monetarily Sovereign. It is sovereign over its currency, the dollar. It never can run short of dollars. It pays all its bills by creating dollars, ad hoc.

Even if all taxes fall to $0, and net exports remained below $0, the federal government will be able to pay its bills forever. Despite recessions, depressions, wars, inflations, stagflations and epidemics, no federal check ever has bounced. There is no need.

S&P rates the federal government AA+, below Austria, Finland, Germany and Luxembourg, and equal with the Netherlands.

Fitch, the 3rd large rating agency, provides equally “ignorant or criminal” ratings.

But, that is not the worst of it.

Here are three corporations (corporations!)rated AAA: Microsoft, Exxon Mobil, Johnson & Johnson. They all are monetarily non-sovereign. They cannot create money, because they have no sovereign currency. The rely on net sales and borrowing, to pay their bills.

Yet, these corporations are rated higher than the U.S. federal government!

Apple, with an AA+ rating, supposedly is as credit-worthy as the United States. And if you believe that, surely you will want to buy my bridge going to Brooklyn.

So what do you think? Ignorance or criminality?

Rodger Malcolm Mitchell
Monetary Sovereignty

===================================================================================
Ten Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually
8. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (Click here)
9. Federal ownership of all banks (Click here and here)

10. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)

The Ten Steps will add dollars to the economy, stimulate the economy, and narrow the income/wealth/power Gap between the rich and the rest.
——————————————————————————————————————————————

10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt

No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia.
1. A growing economy requires a growing supply of dollars (GDP=Federal Spending + Non-federal Spending + Net Exports)
2. All deficit spending grows the supply of dollars
3. The limit to federal deficit spending is an inflation that cannot be cured with interest rate control.
4. The limit to non-federal deficit spending is the ability to borrow.

THE RECESSION CLOCK
Monetary Sovereignty

Monetary Sovereignty

Vertical gray bars mark recessions.

As the federal deficit growth lines drop, we approach recession, which will be cured only when the growth lines rise. Increasing federal deficit growth (aka “stimulus”) is necessary for long-term economic growth.

#MONETARYSOVEREIGNTY

–The Merger: How science created religion Monday, Oct 27 2014 

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

Mitchell’s laws:
Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.
●The more federal budgets are cut and taxes increased, the weaker an economy becomes.
●Austerity is the government’s method for widening
the gap between rich and poor.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●Everything in economics devolves to motive,
and the motive is the Gap.
==================================================================================================================================================================

The Merger: How science created religion

There are times when each of us discusses things we don’t understand. This is one of those times.

Mathematics represents reality, and no one really knows why.

The physical sciences, physics, chemistry, astronomy, biology et al are based on mathematical formulas. Or perhaps “based on” is wrong. “Mirrored by” may be better. The laws of science are mathematical laws.

Science is prediction. Science is the search for cause and effect. If “A” happens, “B” happens, and we have created mathematical formulas for that.

Contrast that with religion. God moves in mysterious ways. We search for the formulas; we wish there were formulas; we believe there must be formulas. We act as though there are formulas. But we find none.

The good are rewarded. Or not. The bad are punished. Or not. Our prayers are answered. Or not. These are our formulas, but they are not reliably predictive. They seem random.

The social sciences, psychology, sociology et al are not as well founded in mathematics, though they try to be. The problem, in part, is complexity. A formula consists of terms and weights.

Two terms, properly weighted, always have the same result. For instance E = mc2, and mc2 always = E.

But what if instead of 2 terms there were trillions of terms, and the weight of each one affected the weights of all the others? And, what if these effects changed depending on myriad unknown outside factors, including both current and historical factors?

And, that is a description the human brain.

And its not just mind-numbing complexity, but rather a more fundamental problem: Free will.

Does free will exist? Are we more than the sum of our atoms and molecules and sensory inputs? Is there something beyond chemistry and quantum mechanics that gives us control, beyond mere cause and effect?

If free will exists, what does that say about the formulas of physics? How are the two compatible, if by our free will we, not mathematics, have the ability to change the course of atoms?

Economics tries to follow mathematics. But how many terms and how many weights will predict the S&P 500, just one year from today, let alone ten years? We’ve not yet discovered that formula. Economics is a social science. Unpredictable.

So strong is our need to apply mathematics to science – so strong is our desire to predict cause and effect and , thus to exert control — we simplify where we should not.

We say, “All things being equal,” which they never are. Investment chartists speak of “resistance levels” and “buy signals.” It is nonsense. There are no such levels or signals. They are prayers. They are religion.

When fact disputes our math, we change the math or we change the facts. We’ll do anything to join fact with mathematics. Anything to predict.

And this all came to mind, when I read a question and answer in the April edition of Discover Magazine:

Question: “How does (Max Tegmark’s discussion) account for radioactive decay or other random events. Are these things not truly random, or is there some mathematical equation for true randomness that we have yet to discover?
Colin Bott, Ann Arbor, MI

Answer:According to the Everett interpretation of quantum mechanics, randomness is an illusion.

There are effectively two universes, one where the atom decays and one where it doesn’t. There’s a copy of you in both univereses, and to both of you it feels random when you observe the atom and thereby find out which universe you’re in.

And so we have a statement from quantum mechanics, perhaps the most sophisticated science man ever has created.

No one truly understands quantum mechanics. It is too distant from our experience. So we invent mathematics to tell us what experience cannot. We believe mathematics mirrors reality.

As humans, we seek control, which requires our knowing cause and effect. In our desperation to find the mathematics of cause and effect, we may turn to the “Everett interpretation”of quantum mechanics.

Consider this: Every trillionth of a trillionth of a second, each one of the estimated 10 to the 78th power atoms (that’s 1 followed by 78 “0s”) in the observable universe does something. It moves; it splits; it gains or loses one or more electrons or neutrons. It changes in various ways.

According to the Everett interpretation, when just one of those atoms changes in just one way, an alternative universe exists: One universe where the atom changed in that certain way, and one universe where it did not.

If two atoms changed, there would be four universes: AA, AB, BA and BB. Now consider the number of universes necessary to accommodate every atom in our universe changing every trillionth of a trillionth of a second, and multiply that times every atom in every succeeding universe changing every trillionth of a trillionth of a second.

Today, you may be reading this article in your office. In another universe you are on the beach. In another, you are in a plane. Another, you are old. Another, you have three eyes. Another, you are a twin. Another, you are a cat in a garden. Endless, infinite variation.

Further, there is not just one version of you being a cat in a garden, but an infinite number of you being a cat in a garden. The Everett interpretation of quantum mechanics implies infinities of infinities.

Anything that possibly can happen has happened, and will happen, an infinite number of times. All that can be, was and is and will be.

And that means, Genesis happened. Adam, the Garden of Eden, Eve, the apple, the serpent. They all happened. An infinite number of times.

In fact, according to the Everett interpretation (and other, similar postulates) the entire bible happened – old and new Testaments, every version – they not only happened, but happened an infinite number of times.

As did the stories of the Koran, the Tipitaka, and indeed, the sacred texts of every religion, they all happened, not once, but infinitely.

Is the “Everett interpretation” reality? Impossible to say. It is one of many ideas, neither proved nor disproved, about a science we don’t understand.

All we can say is, it does rely on mathematics, and mathematics is thought to be the basis or mirror of all reality – depending on which mathematics, of course.

But if science and mathematics do prove that everything that can be, is, was and will be, then science and mathematics will have proved all the stories of all the religions. They all are true, somewhere.

Somewhere the good are rewarded. Somewhere the bad are punished. Somewhere our prayers are answered. Always.

Science will have proved religion. And that is the ultimate merger.

(In some universes, even resistance levels and buy signals actually might work.)

Rodger Malcolm Mitchell
Monetary Sovereignty

===================================================================================
Ten Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually
8. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (Click here)
9. Federal ownership of all banks (Click here and here)

10. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)

The Ten Steps will add dollars to the economy, stimulate the economy, and narrow the income/wealth/power Gap between the rich and the rest.
——————————————————————————————————————————————

10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt

No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia.
1. A growing economy requires a growing supply of dollars (GDP=Federal Spending + Non-federal Spending + Net Exports)
2. All deficit spending grows the supply of dollars
3. The limit to federal deficit spending is an inflation that cannot be cured with interest rate control.
4. The limit to non-federal deficit spending is the ability to borrow.

THE RECESSION CLOCK
Monetary Sovereignty

Monetary Sovereignty

Vertical gray bars mark recessions.

As the federal deficit growth lines drop, we approach recession, which will be cured only when the growth lines rise. Increasing federal deficit growth (aka “stimulus”) is necessary for long-term economic growth.

#MONETARYSOVEREIGNTY

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