The US merrily shipped most of our production and jobs overseas. We still do this, Obama has spent the last year going around the planet, making this even easier than before. The rich get richer and tax cuts and own Congress while the GOP screams about Obama not creating jobs. Well, the theory is, if we open up more trade, we get more jobs. After losing many millions of jobs with Free Trade, I would think someone would figure out, this is a stupid plan! But no, we had a ‘debate’ in the GOP last night and as always, they are more upset with gays kissing and teens getting abortions instead of appearing on Teen Mom with a baby in tow! Yup, anyways, INFLATION is now taking off in her usual leisurely way and has spread her gossamer wings to the rising winds of ZIRP interest rates to bankers. This is a problem, too, never discussed realistically.
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There is very little realism on many levels of business, control or society since this is irritating. Who on earth wants reality? For example, the reality of the hockey stick graph that has shown us totally and absolutely how things work if you aim for infinity, this reality doesn’t go down well with people wishing for infinite wealth, infinite life, infinite power. They need to believe that infinity is good, not total evil. They need to believe we can ignore infinity while taking pleasure in it as it happens. Alas! Infinity, if viewed as one of the nastier incarnations of the Goddess of Death, has to be avoided like the plague, not courted.
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There are fools out there who believe if we only have ZIRP lending coupled with money printing, we can all be rich via the magic of creating infinite credit. This insane notion keeps popping up just like Ponzi schemes because it involves very little thinking or labor. It is ridiculously easy to do! It is fantastically easy! Like any temptations, the ease is part of the dangers! Since it is easy, it has to be resisted. For if one falls into this scheme, it destroys everything when it hits a magic point: after doubling wealth over and over again, once it is doubled one more time, it shoots suddenly to infinity.
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This lesson was taught hundreds of years ago, no less. In the form of a very ancient story about the invention of chess: Wheat and chessboard problem – Wikipedia, the free encyclopedia—here is the formula all mathematicians know so well:
which is all about the size of the universe, ultimately. Here is a chessboard showing how the numbers climb relentlessly:
If a hockey stick graph doesn’t scare everyone, this one should. In the ancient story, the creator of chess wanted to have a wheat seed double on each square. The king thought this was a cheap deal! So they began to count out the seeds. By the end of the third row, the king was in despair. He was going bankrupt! The final tally would be 2 to the 64th power. That is, a nearly unmentionable number. What is this called, this number? 18,446,744,073,709,551,615 which is in the Vigintillion range. YIKES! Only one name for high numbers exists after this name: Centillion!
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That is the size of the universe. The name for non-infinity but still infinity numbers is ‘Googolplex‘. This is the name of the movie theater where the denizens of the Cave of Wealth and Death watch shows about foolish humans lured to destruction by greed. I am joking about this but seriously, if we view these natural forces at work, seeing them as creatures instead of ideas helps us understand their inherent dangers as well as alluring beauty. For infinity is also beautiful for it is eternal and it is bigger than the entire universe.
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It is the lodestone of reality, it is on the other side of the limitations of time and space. It is also the definition of death. Outside of the universe is nothingness that is infinite and eternal. And this is the scary other side of infinity: its end usually brings death and if any living thing tangles with infinite things, the end result is death and going back to zero again. It doesn’t matter what sort of system is being driven to infinity! Even thinking about infinity leads to madness if one doesn’t check the urge to despair!
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Again: thinking about this with concrete forms of creatures makes it safer as well as easier. Most religions toy with infinity by pretending they have infinite gods who came into being recently (thinking geologically, here, all our ‘gods’ are very recent things, hardly older than agriculture!). Claims of infinite life, infinite afterlife, infinite counter-worlds is just plain pathetic when set against the entire concept of how infinity works: it is always also ZERO at the same time! Scary idea, no?
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People don’t like this! We want things to multiply and then continue multiplying. This is why the ‘expanding universe is so popular and the ‘galaxies are actually crashing INTO each other, not running away from each other’ counter story is so unpopular yet, wherever astronomers look, they see galaxies sucking into each other, collapsing towards each other, oh my! HAHAHA…Here is the latest amusing example: APOD: 2011 June 12 – M64: The Sleeping Beauty Galaxy
In an unexpected twist, recent observations have shown that the gas in the outer regions of this photogenic spiral is rotating in the opposite direction from all of the stars! Collisions between gas in the inner and outer regions are creating many hot blue stars and pink emission nebula. The above image was taken by the Hubble Space Telescope in 2001 and released in 2004. The fascinating internal motions of M64, also cataloged as NGC 4826, are thought to be the result of a collision between a small galaxy and a large galaxy where the resultant mix has not yet settled down.
HAHAHA…for years and years, astronomers laughed at me when I warned them, the universe just might not be expanding to infinity but rather, is condensing together. As proof of this pours in, scientists can’t jigger this in with the ‘expanding universe’ story so they make up solutions that don’t say, ‘We are NOT expanding’ but rather makes it look like infinity will continue outwards as the Big Bang fills the Void forever. Well, it isn’t.
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Charming idea, though! But I am a pessimist when it comes to Infinity. I tangled with this dire Goddess in the past. She is pretty funny. Seeing her in her entirety means understanding that all things are mirror images whether it be bodies and antibodies or yin and yang: life exists inside of a precious scale of balance. Again, the ancient people who created civilizations realized this, too. Libra is all about life. Infinity is death.
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So, fearful of infinity, our government wants to run away from a self-created abyss when the Reagan tax cut revolution slit our throats and then the Free Trade gambit was cooked up to deal with the inflation caused by these tax cuts and overspending on wars. So, here we are, many years later, on the upper half of the dire Infinity Chess Board, knowing full well, we have gone past the halfway point to Infinity so spending has to be cut since the rich refuse to pay any taxes: Domestic spending, foreign aid to top White House budget talks this week – Political Economy – The Washington Post
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President Obama, in an interview with NBC’s “Today,” reaffirmed his confidence in the talks. “There is a way of solving this problem that doesn’t require any big, radical changes,” he said. “What it does require is everybody makes some sacrifices.”…
…“Wheels started to come off at the Appropriations Committee level two weeks ago”: David Rogers points out that the half-dozen 2012 appropriations bills moving in the House illustrate that the arithmetic of the crisis remains unchanged. “A $72.5 billion military construction and Veterans Affairs bill, reflecting only modest cuts, is expected to pass easily Tuesday. But fast on its heels is a $17.25 billion agriculture and rural development measure, which has had to absorb a $2.67 billion reduction on top of what was an almost $3.4 billion cut in April from 2010 funding… [T]he bill risks a trade fight with Brazil while pitting the cotton lobby against a nutrition program for low-income mothers and their infants. And amid rising world food prices, the bill’s manager, Rep. Jack Kingston (R-Ga.) appears to be having second thoughts as well about his proposed 26 percent, $487 million cut in overseas food aid.”
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Potential losers: Among the groups likely to find their government assistance slashed during the Biden talks are farmers, according to Phil Rucker. Dramatically cutting or even eliminating direct crop subsidies — which cost the U.S. government about $5 billion last year — has emerged as one of the few areas of agreement between Democrats and Republicans who had long protected such programs.
Aid to wealthy Jews in Israel is bigger than the $5 billion for US farmers! A smart politician who doesn’t care about the media can easily exploit this information in the future. And it WILL be exploited. For Jewish politicians and AIPAC lobbyists to insist on fully funding one of the wealthiest nations on earth while cutting funds to farmers here is heading towards a problem that the Germans understand very well. It is totally insane. Buying off present politicians to support this robbery is insane, too.
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For today, they will get what they want: cuts for Americans, funds for Jews in Israel. But in five years, this will boomerang badly! History is clear: someone will eventually dare the Jewish community and their media machine and ride a popular uprising against Israel. It is INEVITABLE now.
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Note how Congress and our ‘President’ both are fearful about Brazil! So, if killing off Americans, cutting our own incomes, is going to make Brazil happier….good lord! Talk about insane! In China, they have riots over unemployed workers demanding something from the government. Well, here, there are no riots…YET. But they will happen as the government kills domestic spending while increasing overseas military spending and money for ‘allies’.
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It is already happening in Greece as the Greek government announces new cuts amid mass opposition. Here in the US, Only one in four US teenagers will find summer jobs which means they will have to deal drugs if they want any incomes. I worked as a teen! It is terrible to not have money. I also worked in illegal professions back then (don’t ask) and so did most of my friends. The alternative was to go to war in Vietnam. Whoopee.
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Now, on to The Easy Credit That Fueled Brazil’s Boom Now Imperils It – WSJ.com
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Brazilian policy-makers have fueled their country’s economic boom through a state-owned bank that keeps business flush with credit. Now the engine that has helped the nation become a global player in beef, oil and mining is colliding with another policy imperative: battling inflation.The Brazilian National Development Bank, in its latest spur to the economy, last week announced it would lend $1.6 billion at below-market interest rates to help a large company to build a pulp and paper mill. Two days later, Brazil’s central bank raised its benchmark rate—for the fourth time this year—to the highest of any major world economy, 12.25%.
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China’s inflation rate rose slightly to 5.5% in May — up from an increase of 5.3% in April, according to China’s National Bureau of Statistics. After the announcement, China’s central bank raised the reserve requirement ratio for depository financial institutions by half a percentage point, effective June 20.
It was the fifth time the bank has raised the reserve rate — a way to rein in inflation — since March. Each time, the bank raised it by half a percentage point.
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On the other hand, China does the right thing by restricting credit, raising reserve ratios and rising interest rates! They are doing the true conservative thing. The US is keeping ZIRP interest rates while inflation rages out of control in many sectors of the economy. China is trying to balance things. The US wants a particular status quo to continue: one that makes the rich, richer! This is insane. The reason our economy is collapsing is because the middle class, teenagers and the poor are all getting POORER. This gets worse, the government tax situation gets worse and we are in a collapse downward spiral…while spending money like crazy trying to patrol the Seven Seas that have ZERO US civilian shipping! And spending like fiends to control all Muslims! YIKES.
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Consumer prices rose by 0.6% in April, from a year earlier, according to the Statistics Bureau. However, credit ratings agency Fitch has downgraded its outlook on Japan’s debt to negative from stable. Fitch said it was worried about the high levels of Japanese government debt…Including food, consumer prices rose by 0.3% in April, compared with a year earlier.
The latest data for inflation was in line with City forecasts, although Threadneedle Street expects higher domestic fuel bills to push the annual rate above 5% over the coming months.
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A majority of members of the Bank’s nine-strong monetary policy committee have taken the view that the factors leading to the inflation overshoot are temporary and have voted to keep interest rates at 0.5%.
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The figures showed that so-called “core inflation”, which strips out food and energy, fell from 3.7% to 3.3% last month…”The commodities and crude oil prices are pushing the inflation figures up,” said Credit Suisse chief economist Hiromichi Shirakawa. ”Although I expect consumer spending will recover in May and the months ahead in the wake of the disaster, wages and salaries haven’t risen.”
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Gross domestic product shrank 0.9% in the first three months of the year.
Meanwhile, youthful hackers with no jobs are on the attack: ‘Anonymous’ Allegedly Demands Resignation Of Fed Chair Bernanke
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This is not the only high-profile threat by the group — also threatening Bank of America and Sony — nor is it the first time the group has taken aim at Bernanke. The group first requested his resignation on March 12 of this year, in a similarly-designed video, according to Business Insider.
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Both Bernanke-related videos link to the same domain name: AmpedStatus.org. In an April video threatening Sony with a data breach, a group, also said to be part of Anonymous, uses a similar-looking emblem to represent themselves, although the domain name, irc.anonops.in, is different.
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Good luck to them! This is rather dangerous for the rulers: they created an army of unemployed computer experts who are very young and increasingly pissed off. They nearly destroyed Sony when Sony went after them over illegal downloads. No money for buying stuff means, they seek out other means to gain stuff. The rising chaos in the computer world as one cyber battle after another is waged is part of the deteriorating condition of workers in the IT fields. As their jobs are shipped overseas, they retaliate.
And here is an old story we made a lot of fuss about when it happened and it now is in the news again: Official: Billions missing in Iraq may be ‘largest theft of funds in national history’ | The Raw Story
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The Pentagon admitted last year that it could not account for over $8.7 billion in Iraqi reconstruction funds, and that about $2.6 billion of it was sent out without any documentation at all.
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Investigators said in 2005 that Bush officials apparently neglected to put procedures in place to track the money or hold recipients accountable for its proper applications.
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Iraqi officials have since threatened to take the U.S. to court to reclaim the funds.
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A trillion here, a trillion there’ soon you are talking real money.
2 000 000 000 000 dollar rise to debt ceiling.
It´s good to ask for some extra right away.
A trillion or two is good to have If you need to buy something or kill something or attack somebody.
Supreme Court Limits Investors’ Right to Sue
http://blogs.wsj.com/law/2011/06/13/supreme-court-limits-investors-right-to-sue/
This looks very third world to me. The ‘justice system’ doesn’t even protect rich investors. Only rich_and_connected ones. Even the pretense of being ruled by ‘market forces’ slipps away, to be replaced by a little pollit bureau of interconnected oligarches.
But it’s a tribute to the resiliency of the American system that the court decision was 5-4. It didn’t sell out by much.
“Claims of infinite life, infinite afterlife, infinite counter-worlds is just plain pathetic when set against the entire concept of how infinity works: it is always also ZERO at the same time!”
I don’t understand, Elaine. How can something be infinite and zero at the same time? As I see it, eternity being infinite, time doesn’t exist. So time=zero. Is that what you mean? That doesn’t scare me at all.
I understand you better when you’re not being so esoteric. Like giving aid to Israel. Now that’s concrete. The Brethren running our country give our money to their Brethren overseas. Simple. But how are you ever going to make the connection in people’s minds when someone who once dared to stand up to the AIPAC gang, David Duke, was assassinated by their press? Good luck getting any politician going down that road, especially when every single one of them are already bought and paid for.
Infinity will become 0 when inflation makes our paper money worth less than the paper it’s written on. That’s when the mobs who are looking to lynch someone will be rounded up in FEMA camps, and the sheeple who are left will be baaaiiiinnng for Da Gubbermint to save them.
I ponder paradoxes all the time. The point where things are ‘resolved’ are violent places. Lightning bolts happen when positive and negative energy is resolved, for example. They build up over time, something people don’t notice but I notice for good reason. The energy for a bolt builds long before the storm arrives to resolve it violently.
Dust in the air in a silo, for example, can reach a point of static energy where the positive and negative has to return to zero and it blows up. This is why any place creating lots of fine dust has to have some system to prevent static build up. Volcanoes have lots of lighting due to the fine dust, for example.
The build up of static energy is classic: it will go to infinity until it blows up or explodes. All things that can go to infinity blow up. When the Big Bang happened, it was a static situation that went to infinity and blew up. We don’t know what static this was but it was definitely some sort of positive/negative charge who knows how or why but it has to be something like this!
This is ‘philosophy’ not science…yet. Maybe someone reading my stuff will get a brain storm and figure out how to prove how the Big Bang happened. I hope so…for this is a huge hole in the Big Bang theory: it has to have a cause! Calling this ‘god’ is just putting off thinking about it.
What is a god?
YIN AND YANG. infinity and zero at the same time. The point where lightning happens.
I am too still lurking here!
Somehow fitting music video:
Since people and rulers won’t let go of old system, I guess it just has to implode first. I only hope we can make a new one without major wars erupting.
In my opinion anything of consequence is finite within this bubble of a universe we live in. Yet this bubble also needs big bang events in various areas to continue it’s existence. The cycle of life and death. The problem of infinity/zero is an absolute.
Money is nothing but a phantom in the minds of people. It only had real consequence when it was connected to the finite…minerals or food. But our minds are also subject to the boom/bust nature of the universe. Hence we want 0 or forever or death. But understand all living beings want forever. Every living system from single cells on up are prisoners of the finite/forever.
As Elaine points out all our fairy tales from every nation continually reveal the false nature of infinity. So we are one of the only living animals that can understand the forces working around us.
We will reach a pinnacle if we can all grasp this paradox of existence and live in balance for as long as possible. Maybe China can do it. They will almost certainly bring us back to the finite concept of money. But will their bankers also be able to accept the principle of the finite against the infinite.
Maybe. But I understand they must contend with the bubbles of humanity forming around themselves and India. And the fact that most women are choosing male over female children.
Do you see the growth and collapse in that situation?
“What is a god?”
Well, I’m not. I don’t have the power of life and death. God is the highest. No one higher, more powerful, or greater. Anyone less than the All Powerful One is not God. That’s God. That’s the God I know. Even if we are made in the image of God, and become perfect after this life, we are still not GOD. WE did not exist forever. We did not create the Universe. Maybe we will have the power to create someday. But only what power The Highest gives us. A servant is not greater than his master.
That’s why these people who think we are just a flake of dust in some tiny particle in someone else’s universe don’t know God. If they did, they’d know God wouldn’t be God if He allowed someone to be greater than He is. That’s the very definition of God.
‘Hell is the impossibility of reason.’ And those who try to approach or understand an All-Powerful Being, a Spirit solely with reason with end up there.
Well, Elaine, I see you have gotten into the hockey stick arithmetic. The wheat on the chessboard example you presented is a mind blowing demo of how critically important it is for individuals and institutions to recognize and escape from a hockey stick situation. Avoiding a hockey stick situation is as important as avoiding major earthquakes, tornadoes, hurricanes, hostile bacterial infestations and the like! They can all sneak up and quickly create devastating impacts.
A hockey stick situation is a sneaky little bastard. It always starts off slowly and is not initially noticed. Even as it begins to grow. it just appears to be so innocent and insignificant. Just ask the king in the wheat and chessboard story. Even a dumb king can see that it only takes 255 grains of wheat to supply the required amount for the first row of 8 squares on the chessboard. One row down and only a handful of wheat is required. This looks easy enough, so the king doesn’t flinch. Ignore any concerns for any issues with the remaining 7 rows. That is, ignore the hockey stick situation. Everything is in great shape.
Then, something disturbing began to show up. After the wheat required for the second row of 8 squares has been tallied, it added up to 65535 grains. The king was still confident in his decision, but he must realize a potential problem. By the end of row two, the king is in a frenzy about what to do. By the start of row three the king is in a panic. If he is “honorable” in this simple story, he is on his way to losing all of his wheat and the chess board. As you said, the king will be in wheat bankruptcy between the third and eighth row of the board. Actually, he may be out of wheat before the end of row three.
These hockey stick situations start out so mildly, really unnoticed, then noticed, and then, wow, it grows! And grows! Then it may quickly surpass all functional limits to manage the situation. The king entered an agreement to trade his wheat based on a hockey stick rule. The doubling on each square created arithmetic for ever increasing grains of wheat that could snowball towards infinity. But reality sets in. There is a specific limit to the wheat inventory of the king. This is where “infinity becomes zero”. The rising demand for wheat on it’s way to “infinity” runs into the wheat limit. In this case, the king started with a large, but limited, inventory of wheat, became involved in a rise to “infinity” rule, reached his limit, lost all of his wheat, and ended with “zero”.
I think the analogy of the wheat and the chessboard example is relavent to the current US national debt. The rule for the wheat and the chessboard example is a space based compounding (doubled) rule, while the US national debt approximates a time interval based compounding (annual percent) rule. The number of equivalevt annual time intervals required for doubling is
70 divided by (annual percent)
The annual compounded growth for the US national debt, (annual percent), has averaged about 9 percent between 1970 and 2010 (40 years). This implies that the US national debt is being doubled every 8 years. DOUBLED EVERY EIGHT YEARS!
ΩΩΩΩΩΩΩΩΩΩΩΩΩΩ
ELAINE: It is worse. It more than doubles every 8 years because the Democrats always slow down the rate of debt growth! The GOP then goes nuts and cuts taxes! This increases it beyond the doubling every 8 years. Now, we are out of control and as usual, the GOP has cut taxes every time Obama cuts spending.
“China does the right thing”
If we consider that the only policy Ben can continue to keep the US economy afloat is to use the FED bilge pumps, which keep pumping US dollars into the US dollar carry trade, filling China’s sovereign bank’s deposit box with US dollar FOREX reserves and US Treasury IOUs, which then spills out into China’s Yuan based economy with rapidly rising inflation, causing social stress that’s already causing riots.
In spite of higher bank reserves, Elaine, how long can this go on? And before you answer, please read the following analysis, Thanks.
http://www.financialsense.com/contributors/charles-hugh-smith/why-the-wheels-are-falling-off-china-boom
Inflation due to GROWTH is not evil. Inflation due to SPECULATION is evil. That is, in China, wages were going up and up. So inflation was ‘OK’.
In the US, when we had the housing bubble, wages were NOT going up. Credit was cheaper but when the commodities market bubble speculation began, this raised the price of food, fuel and other things and now bad inflation is here. We still have cheap credit despite this which is, in the long run, very bad.
China has made credit more expensive and this bothers people but it stops bubbles from getting worse. The US encourages bubbles which is much worse than the Chinese restraining bubbles. See?
If I see it correctly, the difference is the separate directions the two countries are taking, even though they both are now suffering from the same symptoms of too much mal-investment (RE) and a suffering working class due to inflation of the necessities of living.
The popular thinking right now is that China will also go through a painful readjustment process. The question is how much pain, and which country can hold up under the strain. The interesting part will be the interplay of this mutual financial readjustment of excesses between the US and China and how the national stresses play out in regards to mutual relations.
The internet provides a great front row seat. Thanks.
Speaking of financial readjustment, Elaine, any thoughts on the following……
Facing credit restrictions in China, where the government in recent months has been pushing banks to cool lending and thus control inflation, companies have been increasingly turning to banks overseas and borrowing foreign currency. They’re also lured by overseas banks with dollars to lend that offer better interest rates than Chinese banks that lend in yuan.
Bank regulators say offshore loans with foreign currency have been steadily increasing loans. And these loans to Chinese companies increased by US$ 27 billion in the first quarter compared over lending in the previous quarter.
Companies raise money overseas by using yuan deposits in Chinese banks as guarantees. Most of these “domestic guarantees for overseas loans” involve companies with overseas branches.
The system lets companies conduct business outside China with dollars or other foreign currency without having to buy foreign cash from the central bank or other banks tied to the foreign exchange reserves, thus blocking one potential channel for draining the reserves.
Another incentive for companies to borrow overseas is linked to yuan appreciation against the dollar. Companies making yuan in China and dollars overseas can find ways to profit from the strengthening Chinese currency, particularly if they borrow dollars from foreign banks.
Indeed, Citibank’s China analyst Peng Cheng thinks appreciation of the yuan is at the root of the foreign exchange growth problem. And since the currency is expected to continue appreciating against the dollar, he said, the reserves will likely grow.
http://english.caing.com/2011-05-12/100258436.html