Math is fun

A couple of commenters are saying the only thing that matters is international trade deficits. This is true if you’re taking the perspective of a plutocrat whose geopolitical opinions matter.

Here’s a great exercise for the rest of us: Divide your income by 8. That’s your income in 1960 US dollars. The other 7 out of 8 dollars have been effectively taxed to pay for gibs via inflationary debt spending. That’s only since 1960, mind.

This is an unpaid plug for G. Edward Griffin’s book, The Creature From Jekyll Island. You can get the overview from this speech:

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About Aeoli Pera

Maybe do this later?
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20 Responses to Math is fun

  1. bicebicebice says:

    Melons reserved the Thals moneyz for the saps, and for themselves of course, itz in the name after all, Federal Reserve System. Your money has been reserved.

    Goes without saying really. Globalism is communism, Melons are globalists.
    Communism is very expensive. When the Melon crashes the econ-enemy, the Melon gets a raise. The Melon is very expensive.

    We should tax the internet, that will stop global warming and the egyptian goddess Isis, and help Melons not having to work. They are like the ooga booga but in reverse, whereas the Melons go through a lot of work(sort of), of not having to work, the oogba booga simply just don’t work, the kicker is that they are both living on the Thals dime. And time. And space.

    The Melon has been known to frequent something called a “meeting”. A meeting may look like work, but itz just a congregation of like minded individuals getting high on their own supply. The sap is very impressed by this hard work, especially if the Melons are wearing suits.

    General assembly (a meeting), a trial (a meeting), a hearing (a meeting), the boardroom (a meeting) etc. The sap is very impressed by this.

    When the Melon is very happy with the sap being impressed by the Melon, the Melon reserves some more gibs for himself and the sap to celebrate.

    Thals work, Saps vote. Melons rule.

    1+1=1

  2. Aeoli Pera says:

    The only meaningful question in political science is slavery.

    • Koanic says:

      IQ * altruism * technology * population = firepower.

      • Aeoli Pera says:

        Agreed, except I’d replace technology with “culture”, as estimated by the number of words in that language (technical and otherwise, expressing the number of concepts).

        • bicebicebice says:

          Bird Foot Noose(?) Owl Bird House Foot Another Bird Unintelligible Object Wave Bird Again. Bird.

          …amazing how they made that shit fly for so long. Guess everyone was an idiot and it just looked funny. Kinda like memes.

          Pepe is winning this election baby!

  3. Heaviside says:

    >A couple of commenters are saying the only thing that matters is international trade deficits. This is true if you’re taking the perspective of a plutocrat whose geopolitical opinions matter.

    We have to understand balance of payments issues because they are crucial to the functioning of the whole system, and it’s not mere plutocrats but men with guns who have the ultimate authority over these matters. The balance of payments makes and breaks empires.

    >Here’s a great exercise for the rest of us: Divide your income by 8. That’s your income in 1960 US dollars.

    Inflation is only directly a tax on savings, not on wages. Inflation has indirect effects on real incomes. This is why we speak of “wage and price inflation.”

    Changes in real income are mainly due to changes in the composition of the labour force and the lack of industrial capital formation.

    >The other 7 out of 8 dollars have been effectively taxed to pay for gibs via inflationary debt spending. That’s only since 1960, mind.

    “Gibs” are an easy cop-out. Gibs are necessary to prevent upheaval in the face of declining economic prospects. The most important culprit is defense spending. (Even “radical leftist” Bernie Sanders voted to give 1.5 trillion to Lockheed Martin.) Gibs only end up consuming consumer products, but defense spending eats up the greatest scientific talent and most advanced industrial capacity.

    http://www.reuters.com/article/us-usa-audit-army-idUSKCN10U1IG

    • Aeoli Pera says:

      >We have to understand balance of payments issues because they are crucial to the functioning of the whole system, and it’s not mere plutocrats but men with guns who have the ultimate authority over these matters.

      I really wish that were true because then it wouldn’t be necessary to have central banks. But the fact of the matter is that homo sapiens doesn’t have the moral character to fight or die for his country, he will only fight if he’s well-compensated. I actually admire the designers of the central banking system that way, they do the culling and currency swap-out in one big magic trick.

      >Changes in real income are mainly due to changes in the composition of the labour force and the lack of industrial capital formation.

      Value extraction matters. I know you think sociopaths add value back to the system with their clear-minded social brilliance, but you’re wrong on this point.

      >Gibs only end up consuming consumer products, but defense spending eats up the greatest scientific talent and most advanced industrial capacity.

      I’m using gibs in a general sense that includes defense, medicare, NGOs, etc.

      • Heaviside says:

        >I really wish that were true because then it wouldn’t be necessary to have central banks. But the fact of the matter is that homo sapiens doesn’t have the moral character to fight or die for his country, he will only fight if he’s well-compensated.

        Central banks cannot do much to defend the value of the dollar other than raise interest rates. When the British ran a trade deficit with China, they solved the problem by engaging in the opium trade, and we picked up the business from them in the late thirties, after which we quietly dropped War Plan Red. Drugs must be sold not only to finance covert operations but also to defend the value of the dollar. The military must also ensure that the House of Saud continues to engage in Petrodollar recycling. This is also the reason for illegal immigration. In order to make having dollars a necessity, the U.S. must ensure that it controls as large a share of world agricultural markets as possible, so it gives enormous subsidies to Big Agribusiness to bankrupt Third World competition and tries to assure that American growers have the greatest comparative advantage by importing cheap labor.

        • glosoli says:

          ‘Central banks cannot do much to defend the value of the dollar other than raise interest rates.’

          Central banks don’t control interest rates. Rates are set by net selling/buying of the existing stock of sov bonds (yields move inversely to price). But you’re in distinguished company in not realising that, most fund managers, economists, politicians don’t seem to realise.
          Central bankers know, but they ain’t telling.

          • Yes. The Fed, particularly under Volcker and Greenspan, got so good at this that people forgot that part.

            That said, Heaviside is correct the Central Banks can’t do much to defend a currency’s market value agaonst fundamental trade or fiscal balance issues.

          • bicebicebice says:

            +1

            I believe there was a chapter on that in stock market wizards, or maybe it was millionare traders… check out a chart on bonds and currency pairs, the overlap, it is actually not rocket science.

            But it is still Melon woo irl imo.

            When the Melon needs to spawn more saps, the interest rates are low, when he needs a good ol culling, they go up. Interest being the operative word.

            Government sovreign bond(age). Some call it chutzpah, but Melons gonna Melon.

        • Aeoli Pera says:

          I would really like to see you guys work out whether interest rates are centrally managed, because that would be as important to know about as price setting.

          • Government interest rates are effectively cordinated, at least in their effective currency bloc, by the respective central bank.

            Non-government guaranteed corporate, business, and consumer rates…..there’s a question that requires too many definitions to answer.

            • glosoli says:

              AP, it needs no working out at all.
              There is a large stock of fixed rate sov bonds in the market.
              If the market keeps buying, up goes the price, down goes the effective yield, and vice versa.
              All central banks are just like little poodles, following along behind the market, wagging their tails, all talk and no trousers.
              These days, all the markets see is the dog with its tail wagging, it does not see the bond market.

              I explained here:

              http://www.monetaryperspectives.com/tensions/

              I was right, monetarism is a myth, and I was right, it has died. No one seems to realise yet.
              They will do. They…will…do!

    • I’m going to have to agree with Heaviside’s stance on Balance of Payments, and the incidence of the “inflation tax” falling on savings, in the modern economic sense. I have no comment on the defense spending portion.

      @Heaviside
      By “Real Income”, do you mean “inflation-adjusted income going to the median person”? If so, I agree with you.

      Because of the long-term deflation trend since at least the 1980s, I’m not sure there is productive net industrial capital formation, over a developed economy, outside of electricity and liquid fuel production.

      @Aeoli,

      Does the model in the Blog Post take into account any adjustment on the basis of consumer-level goods, foodstuffs, liquid fuels, and/or manufactured consumer goods?

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