Economy Rigging 1

BSK log, 21.10.10 October 21, 2010

Filed under: Uncategorized — bashstreetkidjailbreak @ 5:45 pm

MAIN ITEM:

INBUILT PONZI DYNAMICS

BY PEAKCOMPLEXITY – ‘COMPLEXITY’ IN SYSTEMS THE ACHILLES HEEL : Simple Planet: The Limits to Complexity

More generally, there is an insatiable lust for maintaining complexity in our modern systems of economic exchange and social organization. Of course, this critique is not true of everyone in the mainstream camps described above, but I find it telling that we rarely (almost never) hear the word “complexity” or phrase “peak” anything mentioned in their bitter debates.

Complexity Analogized

One of the most familiar complex systems to Americans is our country’s inter-connected network of highways, which allow the interstate travel of goods and capital (humans included). This flow mainly passes through large urban centers that act as hubs for the rest of the network. We could have built these highways and then left drivers to their own decisions on how to use them, but it became clear that completely unregulated networks of travel imposed unacceptable safety/economic risks for our society. In fact, the potential risks and instabilities of such a system were so large that it may have completely broken down before it led to any significant gains. Instead, we resorted to licensing procedures and various vehicle and highway regulations. ..///// goto link for more

AN EXAMPLE OF AUTHORITIES BALANCING COMPLEXITIES IN THE SYSTEM IN ORDER TO KEEP IT STANDING ~ BY THE TELEGRAPH / PRITCHARD – PICK YOUR POISON, CURRENCY WARS : Currency wars are necessary if all else fails – Telegraph

BY ANON – COMMENT ON ARTICLE ABOVE

complexity as one of the fundamental drivers in inequality of wealth and therefore application of laws.

Finance = borrowing against future labor = borrowing against future energy = increasing complexity. To ensure increasing financial activity, the legal system has to promote “efficiency” and economic growth, so that’s how it becomes structured by central institutions. Old laws that were meant to promote stability/fairness/equality are repealed, modified or simply ignored and not enforced.

To enforce these laws means to sacrifice economic growth and increased complexity, and although I absolutely think this should be done, the elites are obviously not willing to do so. Fortunately, it is not really up to them anymore… natural forces win out over the idealistic desires of human beings every time.’

ITEM 1:

BY ZERO HEDGE  –  THE QUESTION IS WHETHER OUR ECONOMY IS GOVERNED BY ANY KIND OF RULE OF LAW : Krugman: “The Question Is Whether Our Economy Is Governed By Any Kind Of Rule Of Law” | zero hedge

ITEM 2:

BY OFTWOMINDS – PRIVATE BANKING TAKEOVER OF USA GOVERNANCE THROUGH THE MORTGAGE BACKED SECURITIES PYRAMID SCAM : charles hugh smith-The Coming Collapse of the Real Estate Market

The Coming Collapse of the Real Estate Market (October 14, 2010)
The system for financing mortgages and regulating that financing has failed, completely and utterly. The mortgage and real estate markets are now in collapse.

Yesterday I wrote about how positive feedback loops lead to collapse. Welcome to the U.S. housing and mortgage markets. As I have documented here numerous times, the entire U.S. mortgage market has already been socialized: 99% of all mortgages are backed by the three FFFs–Fannie, Freddie and FHA–and the Federal Reserve has purchased a staggering $1.2 trillion in mortgage-backed assets in the past year or so to maintain the illusion that there is a market for mortgage-backed securities.

There is, but only because the mortgages are backed by the Federal Government and propped up by the Federal Reserve.

The mortgage market is completely dependent on government guarantees and quasi-Government purchases of securitized mortgages. If the mortgage market were truly socialized, then the Central State would own the banks which originate, service and own the mortgages.

But then the private owners and managers of the “too big to fail” banks would not be reaping hundreds of billions in profits and bonuses. And since the banking industry has effectively captured the processes of governance (that is, Congress and the various regulatory agencies), then what we have is a system of private ownership of the revenue and profits generated by the mortgage industry and public absorption of the risks and losses.

Could anything be sweeter for the big banks? No.

The incestuous nature of the system is breathtaking. The Fed creates the credit which enables the mortgages, the Treasury guarantees the mortgages via Fannie, Freddie and FHA, the Fed buys the mortgages ($1.3 trillion in mortgages are on their balance sheet) and the private banks collect the fees and profits.

One of the core tenets of the Survival+ critique is the State/Financial Plutocracy partnership. There are many examples of this partnership (crony capitalism in which the State is the “enforcer” which collects the national income and distributes it to its private-sector cronies), but perhaps none so blatant and pure as the mortgage/banking sector.

But now the entire legal basis for that privatized-profits, socialized losses system has dissolved. The foreclosure scandal is not just a “scandal” in which various frauds were brought to light; it is the failure of the entire system of originating mortgages that props up the entire real estate market.

ITEM 4:

BY THE TELEGRAPH / PRITCHARD – PICK YOUR POISON, CURRENCY WARS : Currency wars are necessary if all else fails – Telegraph


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