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mathematically perfected economy™ (MPE™)    1  :   the singular integral solution of  1) inflation and deflation,  2) systemic manipulation of the cost or value of money or property, and  3) inherent, artificial multiplication of debt into terminal systemic failure;    2  :  every prospective debtor's right to issue legitimate promises to pay, free of extrinsic manipulation, adulteration, or exploitation of those promises, or the natural opportunity to make good on them;    3  :  our right to certify, to enforce, and to monetize industry and commerce by this one sustaining and truly economic process.

MORPHALLAXIS, January 14, 1979.

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Ron Paul supporters are after the problem; but they have yet to round out the principles of solution. Here’s to that objective.

An Alex Jones article, “How to stop the Great Crash of ‘08” (Spengler / Asia Times | July 1, 2008), reiterates the fatal errors of the Ron Paul spiel.

The article tries to draw together a probability of failure by observations of consequences, rather than unraveling the root cause in the nature of the currency. To support Mr. Paul’s drumming that circulatory inflation is the cause devaluing the dollar, the article tells us largely that monetary movements/creations are responsible for an “excess” of circulation:

The oil price has doubled in the past year because the US Federal Reserve panicked over risks to the over-leveraged financial system and flooded markets with excess liquidity.

In the pattern that Mr. Paul has followed, the article doesn’t even cite relevant data which would necessarily, by definition, demonstrate that the years of such purportedly inflationary increases in circulation have rendered a circulation exceeding the value of the wealth we have produced. In other words, we do not have inflation; we suffer deflation, because the circulation is far less than the remaining value of the wealth we have produced. Yet the article harkens back to the dawn of the Reagan failures, falsely claiming their success as a model of solution:

Under parallel circumstances, then Fed chairman Paul Volcker did precisely that [raise interest] in 1979, bringing the central bank’s lending rate up to 20% over two years of tightening. Inflation under the Carter regime had run out of control, the dollar collapsed, and the price of oil rose to a then menacing $40 per barrel. After Volcker tightened monetary policy the dollar’s trade-weighted exchange rate doubled and the price of oil fell sharply.

At the same time, the Ronald Reagan administration cut marginal tax rates sharply, and the American economy began a quarter-century growth cycle.

Whatever “growth” an “economy” subject to usury succeeds in, essentially prevails only over the redundant costs of interest. What the article hails as a success refers in fact to a prevailing over 7 years that saw us descend from “the greatest creditor nation” in the world to its lowliest debtor ? a position from which we have sunk further ever since.

Interest obstructs growth and success, because it makes either more expensive. Elevated interest rates thus are more preclusive than more tolerable rates.

The article yet draws from its misperceptions of the past to advocate saving the purported economy by raising interest.

Nonetheless, the reason why you can’t raise interest in the later stages of the lifespan of any purported economy subject to interest is simple:

A circulation is only maintained by re-borrowing principal and interest paid out of the circulation in the process of servicing debt. The re-borrowing necessary to replenish the circulation of its perpetual deflation thus preserves the previous sum of debt in the principal which is re-borrowed, and converts what periodic interest is re-borrowed into new debt. The sum of debt under interest therefore grows at an inherently escalating rate of ever greater sums of periodic interest on an ever greater sum of debt. The higher the rate of interest, the faster the multiplication of debt, and the greater the cost of servicing debt.

In the later stages of the finite lifespan, as far greater debt exists in relationship to the circulation, to extend the lifespan against the prospect of near term failure (as would be evident in present housing foreclosures), it is necessary to relax interest rates so that the heavily burdened system can sustain itself against the weight of servicing a far greater mountain of ever growing debt than before.

But the proposition that price inflation is controlled by interest was always a lie.

Rather than Mr. Paul’s non-existent or non-attributable “inflation,” it is interest which multiplies the cost of all things as industry is forced to account for the costs of ever greater debt in preserving necessary margins of solubility. The degree to which elevated interest purportedly exceeds in holding prices down is only by making money so expensive to the market that the market cannot afford the price increases which are necessary to maintain margins of solubility. Moreover, there is no real benefit at all: the cost which would have manifested in increased prices instead manifests in an equally damaging increase in the unearned profit of usurers, in the form of unearned “interest.”

After all, we are claiming a benefit from an imposed cost, only by suffering at least an equal magnitude of cost somewhere else!

So, not only is the whole idea an intended deception; the least conducive time to try to return to this facade of rectitude is a time when the system is so marginalized that the market can least afford a higher cost of money and faster multiplication of debt, while the little industry which has survived multiplication of debt too is so marginalized, that it can least afford not to maintain margins of solublility.

Under the present mountain of far greater debt, and under the very prospect of catastrophic failure the article purports to address, we have exactly those dubious conditions ? against which to weigh the prospects of the damaging facade of the past.

Obviously then, unless someone can refute these facts of detriment, we would be quite ill advised to follow the advice of the article.

Because there is one solution only, I left the following post:

You have us further treating consequences without treating the cause. I suppose, because Alex rubs elbows with so many Austrians, that nobody here accepts the fact that interest multiplies debt in proportion to a circulation. Thus you can have households putting away whatever you want to let them for retirement, but if you can’t protect the value of the dollar, why should they put the first cent there?

There is one way only to solve this mess, and that’s mathematically perfected economy?:

Alex believes the dollar is devalued by “inflation.” If we have inflation, then everywhere you look, the circulation exceeds the remaining value of the related assets. But au contraire, everywhere you look, nobody has any money.

Why is that?

Because there is a constant deflationary phase to the cycle of money, in which we are perpetually paying interest and principal out of the general circulation in the process of servicing debt.

What drives up the costs of all things then?

Servicing an ever greater sum of debt. Worse, as ever more of the circulation is dedicated to servicing debt, ever less remains to sustain the commerce which is obligated to service the debt.

This is the systemic cause of price inflation. We don’t have circulatory inflation.

Beyond systemic price inflation, we have artificial multiplication of cost by every conceivable form of unearned gain ? commodities trading for instance. Either one can kill us. But systemic multiplication of debt in proportion to potential means of servicing debt *inevitably* kills us, because multiplication of debt in proportion to a circulation is irreversible so long as we maintain a circulation, and the banking system consumes less of our production than we pay periodic interest on debt.

But make no mistake then Alex; the cause of the collapse is inherent multiplication of debt by interest; and the only thing that will save us is eradication of interest.

Furthermore, if you want to preserve the value of the dollar so that we can succeed in all other directions, then you have to solve inflation and deflation; and the only way to do that is to introduce so much circulation as the original value of the related asset; and to pay off a monetary obligation equal to no more than that at the rate of depreciation or consumption. Thus neither can we solve inflation or deflation or achieve that abstract goal that Ron Paul and Alex call “sound money” if we pay interest as well, because then (as now) the deflationary cycle exceeds the replenishing cycle.

Only mathematically perfected economy? achieves these goals.

Or maybe you’d like to debate otherwise on your show, Alex?

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One Response to “WHY YOU CAN’T RAISE INTEREST IN THE LATE STAGES OF USURY”

  1. WHY YOU CAN’T RAISE INTEREST IN THE LATE STAGES OF USURY Says:

    […] unknown wrote an interesting post today onHere’s a quick excerpt Ron Paul supporters are after the problem; but they have yet to round out the principles of solution. Here’s to that objective. An Alex Jones article, “How to stop the Great Crash of ‘08” (Spengler / Asia Times | July 1, 2008), reiterates the fatal errors of the Ron Paul spiel. The article tries to draw together a probability of failure by observations of consequences, rather than unraveling the root cause in the nature of the currency. To support Mr. Paul’s drumming that circulatory inf […]

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mike montagne — PEOPLE For Mathematically Perfected Economy™.

"To find the players in all the corruption of the world, 'Follow the money.' To find the captains of world corruption, follow the money all the way."

mike montagne — PEOPLE For Mathematically Perfected Economy™

While 12,000 homes a day continue to go into foreclosure, mathematically perfected economy™ would re-finance a $100,000 home with a hundred-year lifespan at the overall rate of $1,000 per year or $83.33 per month. Without costing us anything, we would immediately become as much as 12 times as liquid on present revenue. Transitioning to MPE™ would apply all payments already made against existent debt toward principal. Many of us would be debt free. There would be no housing crisis, no credit crisis. Unlimited funding would immediately be available to sustain all the industry we are capable of.

There is no other solution. Regulation can only temper an inherently terminal process.

If you are not promoting mathematically perfected economy™, then you condemn us to monetary failure.

© COPYRIGHT 1979-2009 by mike montagne and PEOPLE For Mathematically Perfected Economy™. ALL RIGHTS RESERVED.COPYRIGHT 1979-2009 by mike montagne and PEOPLE For Mathematically Perfected Economy™. ALL RIGHTS RESERVED. TRADEMARKS: PEOPLE For Mathematically Perfected Economy™, Mathematically Perfected Economy™, Mathematically Perfected Currency™, MPE™, and PFMPE™ are trademarks of mike montagne and PEOPLE For Mathematically Perfected Economy™, perfecteconomy.com. ALL RIGHTS RESERVED.

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