[FoRK] the larceny crisis

[Bill Stoddard]

Very good video. Check it out.

Money as debt: 
    http://video.google.com/videoplay?docid=-9050474362583451279

Bill

Eugen Leitl wrote:
> Nicely put.
>
> http://www.populistamerica.com/trumpeting_a_credit_crisis_when_larceny_is_the_culprit
>
> Trumpeting a credit crisis when larceny is the culprit  		
> 		
>
> November 21, 2007 
> by Ben Tanosborn
>
> As the closing bell of the New York Stock Exchange stops ringing at the end
> of each session, there is this Chatty Cathy doll that makes this signature
> remark at America's business news channel: "Do you know where your money is?"
> One might want to ask this "Money Honey" Maria whether she is referring to
> real or imaginary money; or both.
>
> I came to accept imaginary numbers at a very early age; also made to
> understand by a dedicated mathematics teacher that they are abstractions as
> much as regular numbers, and definitely just as real. Of late, larcenous
> money handlers have been trying to tell us just that. what applies to exact
> sciences applies to inexact economics as well.
>
> Welcome to the world of financial derivatives, collateralized debt
> obligations (CDOs) and myriad other ballooning schemes that create imaginary
> wealth where there might be little or none, capital that can be real or
> imaginary, genuine or counterfeit.
>
> Einstein opened the universe to us with a rather simple equation (formula),
> e=mc². And it's beginning to look as if in the world of economics, debt or
> credit can also be brought down to a simple equation that defines where we
> stand in the monetary universe; where the "paper value outstanding," all
> floating around the world over burners of hot air, can be 4, 6, 8 or more
> times the annual gross domestic product (GDP) of the entire globe.
>
> I don't know what that formula should be, or the econometric model required
> to arrive at it, but I have reached the conclusion that under our capitalist
> system, one with few or no controls, debt - imaginary and real - is turning
> out to be simply a function of larceny, or D=f(L). And even more
> inconceivable to me is that we don't seem to understand or even care, putting
> ourselves at the mercy of financial predators and a government that is
> fiscally irresponsible, only concerned for those in society who represent
> power and monopolize wealth. Outstanding paper debt in excess of 4 or 5 times
> GDP is, in my estimation, likely to catapult us into a level of
> unconscionable risk, and deep recession.
>
> But hey, we are already there! Depending where you get your numbers, the
> world is fast-drowning in debt - imaginary money that travels at
> wire-transfer speed - most particularly here in these United States. An
> annual global GDP of about $60 trillion has been "derivatized" one way or
> another by a multiplier of at least 7, perhaps 8 ($450-500 trillion appears
> to be the range); and if that isn't economically suicidal, someone please
> tell me what is.
>
> In this new version of the Ponzi scheme, carrying the imprimatur of most
> governments around the world, many will get seriously hurt, some by virtue of
> their own greed tilting their leveraged debt on overvalued assets, others by
> being caught as innocent-bystanders in the great spiral of mismanagement by
> those long thought to be institutional low risk-takers - starting with the
> epitome of conservatism: pension funds.
>
> Much as the dot-com bubble which burst six years ago, or the prior bout with
> Milken's "junk bond" toxicity, both de facto consented by our
> economics-libertine Fed, the now-began recession is likely to affect the
> world economy in a measured way, particularly the emerging economies and
> energy-rich nations. Not so in the United States, where an unwarranted
> flattening of interest rates has created the perfect conditions for a major
> recession, one which could attain a life of its own in the cauldron of
> overvalued housing and investments, used as replaceable-manna for inexistent
> wealth and unreal growth.
>
> This long-lasting episode will turn out to be a larceny crisis, not the
> credit crisis the folks from Wall Street would like us to see. The chicken
> thieves, now that they have stolen all the chickens, are coming back to get
> any eggs they might have left in the coop. And they are succeeding, a quarter
> point, or even a half point at a time from the Fed, at a time when overall,
> and markedly understated, inflation is starting to run rampant!
>
> Globalization has always been about the free movement of capital, and not
> free trade - with the unequivocal response, not of a synergistic global
> economy as we've been told, but of greater distancing between rich and poor.
> In similar fashion, liquidity, now truly global, will greatly shrink and lose
> its hot air after the ascent has taken us to the apex of the pyramid, and
> many trillions in overvalued assets will start to slide down, something that
> will keep the US economy sober for some time to come: at least a decade,
> perhaps longer. All indications are that we have reached this apex. that we
> are at the very top.
>
> In the United States we may be hard-pressed to accept this moment of
> reckoning since we'll probably be affected two or three times as hard as
> people elsewhere in the world. For one thing, if there is any bailing out,
> we'll have to do it on our own, and no longer count on America's most
> exclusive and profitable export since it is unlikely to find itself without
> any significant market in the world. No, we are not referring to weapons; or
> technology; or commercial aircraft; or entertainment. for the most profitable
> export in recent times has been of the intangible variety and one which
> requires neither labor nor material. only wizardry and salesmanship in
> presenting highly overvalued debt paper, and a currency to match. Many
> Americans were probably fuming a couple of days ago when Iran's Ahmadinejad,
> at the OPEC meeting, stated that the American dollar wasn't worth the paper
> it was written on - irritation being probably his intent - but his pejorative
> proclamation wasn't really that irreconcilable from the truth.
>
> Don't blame "a few" unscrupulous operators in our free capitalist society for
> all the pain that is soon about to come our way. Yes, we are just welcoming
> the recession with our national anthem, and the game is about to start. But
> it's not a few rotten apples that got us where we are today; we are all
> complicit in this feat in reverse: subprime lenders; greedy house-flippers;
> an exploitive and greedy real estate industry ready to serve. itself; a Fed
> ready to please whoever holds the political reins; a government out of
> control in blatant warmongering and empire-building; an economy far more
> dependent on consumption than productivity and savings; and a people who have
> been purposely kept ignorant in their gilded cage, told by politicians and
> preachers that greed is ok. the heart of our capitalist system, Blessed be
> the Lord.
>
> There are trillions of dollars playing musical chairs and the music is about
> to stop; and from here one can see that many of the chairs are as imaginary
> as the phony capital that is about to sit on them. It's going to be a long
> and bumpy ride. "Maria, do you know where your money is?"
>
> It isn't a credit crisis we are living through, but a two-decade larceny
> crisis. Instead of authoring "The Age of Turbulence," Alan Greenspan should
> have opted for his very own confession, calling it "The Age of Larceny."
>
>
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