Thursday, April 17, 2008

One-Pig Certificates

A religious organization once effectively ruled Europe for over a thousand years, but in the aftermath of the "Enlightenment" we have come to refer to that period as The Dark Ages. And yet, we still have a long way to go before we have completely removed the layers of unquestioned assumptions that still insulate our ignorance. For example, the whole of civilization is ruled today by the convoluted reasoning of so-called Modern Monetary Theory(s), and in spite of mankind's daily experience that something is deeply awry, no one questions why economists are still unable to provide a fully consistent explanation for the economic phenomenon. That something is profoundly wrong is particularly self-evident at the level of macroeconomic events, whereat every authority and institution has nothing more than a system of educated guesses and dubious statistics to guide them through the apparent maze of events. The field of economics is unable to provide a consistent definition for "prosperity" --a challenge that one would otherwise expect to be fairly simple and straightforward.

So in spite of every indication that the field of economics is simply unable to explain the nature of economics --especially in terms of currency alone-- the field as a whole nevertheless continues to cling to the bizarre notion that a mere medium of exchange can be so "fundamental" to events that it can be effectively utilized as the very essence of the economic process itself.

And therein lies a fatal flaw with global consequences that manifest in terms of perennial widespread political and economic instability. For in reality, money is merely a tool for the underlying reality, and as a tool shares the same fundamental meaning common to every tool: as a device to effectively amplify the energy of the economic continuum. How? --by reducing the total quantity of energy that would otherwise have to be expended (consumed) for a given number of trades... In other words, it has a direct bearing on the underlying physics of the "economic" continuum. Unfortunately, this result is already presupposed by the present system, and no further vitality can be injected into a given system simply by manipulating the quantitative flow of the prevailing currency.

The only exception to this rule would be if energy was the currency of the day...; that is, if the money system was fully integrated with energy as the source of all "value."

But this explains why every attempt to prevent or mitigate the ravages of economic decline simply by manipulating the Money System has never proved to be very effective; because if you wish to truly control the system at hand, increasing the flow of energy through the system is the only effective means. After all, this has been natures' way since time began.

Since all this still very problematic to a great many people, I will therefore offer a simple parable to illustrate the distinction between the Money System and the underlying Energy System of physical reality: This is the parable of One Pig Certificates:

Let's say that I have a small herd of pigs. This herd is the essential substance of my personal "economic" system. In order to maintain this economy, I must of course provide a source of energy (food) for these pigs to consume, or else they will neither grow nor even remain alive. In short, each pig is an organic energy system that, in turn, requires an organic energy source.

This is a circular, feedback energy system.

Pigs eat in order to continue eating; just as I continue feeding pigs in order to feed myself. The pigs themselves are an organic source of energy for me; otherwise, I would not have the energy to continue raising and feeding pigs. It's a system: I, the pigs, the food that the pigs eat, and the energy I expend to insure that the pigs are fed, comprise an economic continuum of events. Moreover, the more pigs I have (more potential energy in my possession) the wealthier I am, because the energy they represent is absolutely equivalent to the total "value" with which I make my living.

But now, let's say that I need to paint my house and the front door is hanging off its hinges. I'm too busy maintaining my pig system, so I don't have the time (i.e. energy) to repair these things myself, and therefore must find someone else, but the only thing I have to offer this person in fair exchange for their (labor) --the energy they must expend in order to complete these tasks-- is a pig.

However, for whatever reason, while they are willing to expend the energy, they cannot immediately take possession of the pig itself, so they are willing to accept a title to a pig instead and perhaps come back at a later date to collect it --although they do mention in passing that they might also trade this title to their Uncle Sam on their fathers' side in exchange for a small plot of land-- so! on a piece of paper I write: "Good for One Pig. This Certificate May Be Redeemed by Any Bearer for One Pig." After the worker has completed the job, I then give him this Certificate and off he goes, and we are both pleased with the transaction.

But what if the pig to which he now has title dies? What if I run out of food (the fuel source for my pig economy) and they all die? What would be the "value" of the One Pig Certificate I gave him? Absolutely nothing, of course! Why? Because the "value" of the Certificate I gave him is based entirely on the essence of a purely physical reality. It is in fact a concrete energy system --not a Certificate System that can be manipulated to produce prosperity.

The real principles of the "pig" economy are thus the energy principles of the "value" of food. For example, the idea of deferring payment by means of a written promise on paper is itself surely an abstract concept, and it can be exchanged over and over again by others in a long chain of deferred payments. However, at some point, the economic process itself will spontaneously require a final accounting: --in that the essence of the "value" that backs all these transactions is truly supported by some form of accessible energy (labor, food, fuel, tools, etc).

Otherwise, I would be able to merely feed my pigs One Pig Certificates instead of their favorite energy sources, and all would be well. But naturally, only a government would think that it could do that with impunity...

For instance, what if the worker who received title for his potential pig also decided to simply print copies of his One Pig Certificate, and then offered these as redeemable One Pig notes in exchange for, say, bushels of corn, stacks of lumber or perhaps, a very, very long vacation out of town? If the pig he was given title to gave birth to a litter, then there might be enough pigs to go around, but if not, all of his One Pig Certificates in total would still only be backed by one pig in reality --and the realizable value of each Certificate would depreciate in direct proportion to the ratio of Certificates to Pigs. In other words, each Certificate would potentially retain its stated value only if the energy system that it stood for also expanded in direct proportion.

The point of all this is to merely underscore a fact that seems to defy the perceptive power of conventional intelligence: that the dominant principles of the economy are not based on the nature of currency or the principles of money management, but are based only on the physical energy resources of the underlying system! In brief, "economics" is not a sociological field at all: it's a field whose principles are ultimately derived from, and dependent upon, the principles of pure physics.

As even as the U.S. economy continues to spiral downward therefore, the quasi-public control center of the money system --otherwise known as the 'Fed'-- is actually oblivious to the most fundamental principles of economics, and has little power to do more than merely normalize the rate of descent.

So naturally, when one is unaware that "value" is just an unrecognized synonym for energy, then ones' interpretation of the system one thinks one perceives is axiomatically disassociated from reality. The Money System thereby becomes nothing more than a highly relativistic, schizophrenic power tool without any firm foundation, and our authorities , who devise macroeconomic policies based on monetary principles alone, cannot even make sense of the dynamics of money. And how bizarre is that?

In the final analysis, the public is much like a hostage victim, trussed up in the back seat of a speeding car, with a four-year old in charge of the steering wheel.

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In the Beginning, there were Consumers and Food...


WAKE UP! It's an ENERGY System --Not a Money System!

"Energy is also measured in joules. In many ways it resembles money: it is a currency in which all processes in nature must be paid for. Just as money can come in dollars, pesos, yen, rubles or liras, so energy can come in many forms--electricity, heat, light, sound, [kinetic], [mechanical], chemical, nuclear."

Mankind as a whole is profoundly muddled concerning the nature of economics. The most prominent symptom of this is represented by the common euphemistic assertion that economics is an extremely ‘complex’ phenomena, first of all because it appears ‘inarguably’ comprised of a vast host of distinctly different physical “factors,” but whose ultimate impact is also determined by the vagaries of human psychology.

This would be laughable if it did not also reflect an essentially universal consensus. There is scarcely a soul on the planet that does not accept this state of affairs as an inevitable fact of nature. So instead of laughing, I –who may be the ultimate contrarian— am forced to feeling far more appalled and saddened than entertained by mankind’s general incapacity for critical thinking.

Even our scientists don’t question the most basic premises of modern economics. Why? Apparently, the reason is because it’s not a field of science –an observation that of course, merely points to the reason behind the reason: that they are themselves generally incapable of recognizing their own immersion in a cultural cul-de-sac of circular reasoning.

Here is what I mean. I have yet to meet anyone who doesn’t automatically accept it as a fact that economics is something that originated with barter and trade. The moment once accepts this premise as a fundamental principle of economics however, is precisely the very same moment in which one stumbles blindly into a labyrinth of unintegrated ideas and circular logic, because the act of trade presupposes a far more fundamental and energetic set of principles.

For the sake of what brevity is possible at this point, I will state the reality more succinctly. Life is subject to the phenomenon of economics for the simple reason that it gets hungry. This is why food is ultimately the most basic of economic necessities, but even this is merely a foreground expression for the reality –entirely provable—that “economics” is grounded in pure physics, because life itself is nothing more or less than the biological manifestation of a circular, feedback energy process.

Make no mistake. There are no other principles, and the only reason you believe otherwise is because you have been deeply immersed in the concepts and trade language of money since you were in diapers. But “economics” is pure physics, and I can say this without equivocation, exemption or caveats of any kind, because I have developed a completely integrated and internally consistent explanation, made possible only because I began by identifying the actual origin of the economic process. From that point on, a process of enlightenment unfolds, being hinged simply on an observation with respect to how the principles of energy in various states of feedback have manifested through the agency of various representative forms, such as food, tools and money. The result is a seamless overview that is particularly applicable towards a complete understanding of the phenomenon of economic decline.

Do you remember any of your high school science classes? You were clearly told that every thing and every event could be described in terms of energy. Everything! This, of course, is what E= MC2 means. And yet, as you grew into adulthood, you quickly adopted the prevailing notion that the ‘value’ of money was really just an ‘abstract concept’ and therefore something best left in the hands of people who really understood money ... bankers. Don’t even bother wondering how they managed to take over the world. And don’t scratch your head over why the monetary systems are now collapsing. Nature hates a vacuum; so it hates the financial sector most of all.

So in order to avoid the implosion of our own skulls, let’s all take a fresh look at reality. In seventh grade, you were also told that every form of energy could be converted into every other form. Therefore, take a moment to consider all of the various forms of energy that comprise the phenomenon of economics today: Food (energy source); human and animal labor (energy sources); the entire spectrum of technologies, all based on --take a note!-- the physics of fundamental forces, forces that serve to provide either a direct source of energy, or as a means to effectively amplify the effective energy of every consumer organism (can-openers; telephones; cars, etc.); and fuels (food for technology) of a chemical or atomic nature.

Think now. Many times a thing is more obviously recognized by its absence than its presence. Therefore, if we conceptually remove all of the above categories from the economic process, what remains? Money –which all of our banker friends would have you believe comprises the very essence of the economic process.

But what does money represent? It represents “value,” but this really just begs the question. We have to go just a tad deeper. For example, one can buy food with given quantity of money, because money is supposed to accurately reflect the relative ”value” of food? And what comprises the essence of this ”value.” In the most fundamental sense, the value of food essentially lies in some given quantity of energy. In this case, as in all others, we can clearly see that, at the most basic levels, the term “value” is really just an unrecognized synonym for “energy.” In other words, if one removes all of the energy from food (fuels) –or tools, then one also automatically removes their very purpose and meaning as well.

Everything about economics can therefore be transcribed in terms of energy and understood in terms of pure physics. After all, while physics can most assuredly be described in the symbolic terms of numbers, this obviously does not mean that the dynamics of physical systems are based on abstract concepts.

In other words, money is far from fundamental to the phenomenon of economics and can, in fact, be completely replaced in terms of energy.

Gold is an implicit energy standard

And this finally brings me to a final and brief discussion of the gold standard. At this moment in time, I am, myself admittedly a gold bug. But this is merely as a practical matter, because I know that the true attraction of gold as money stems from its virtue as an implicit energy standard.

You see, while the ”value” of gold is often alleged to reside in its relative rarity –and therefore uncommon and “precious” by definition— the term “rarity” is really just shorthand for “requiring a great deal of energy to obtain.”

For example, Earth probably has a blob of gold the size of Texas floating at its core. Go ahead, pick a number; but the point is, what would be its “value” as a currency if every particle of gold in the planet were to somehow vibrate its way to the surface one fine day? Under these remarkably horrifying circumstances, it is likely that the entire surface of the globe would become covered with gold to the depth of several inches at the very least.

What would be its “value”? It would not be absolutely zero, because gold does indeed provide significant technological advantages in terms of current flow over many other elements. However, this value would essentially be determined by how much energy it would take to bend over …and pick it up…

As fate and nature would have it though, gold remains the ultimate fallback currency --to this point anyway-- because the cost in energy to obtain it has remained largely consistent over the centuries. There are more industrial methods of extraction since the days of the Roman Empire, but the quantitative demand and the “cost” of energy itself is greater (“cost”: i.e. takes more energy to produce energy).

Gold is therefore necessarily the default currency towards which the world is inevitably gravitating in its spontaneous search for stability. Gold secretly represents a relatively consistent quantity of energy, and thus provides a relatively stable benchmark for the underlying value of everything else.

Parallel reality: a Post Paradox world

Beyond gold and fiat currencies and currencies based on multiple-commodity standards lies a whole new set of potentials. This is a stage at which the underlying reality and the true principles of principles emerge into the light of day. “Economics” is transforms into a field of science, and the implications are such that economic systems can then be literally engineered to produce states of permanent and universal prosperity, and all the paradoxes and economic conundrums and shortages characteristic of the current regime are automatically nullified.

NESTED LOOPS: The Economic Process As Experienced By Every Consumer Organism at Any Given Level:

NESTED LOOPS: The Economic Process As Experienced By Every Consumer Organism at Any Given Level:
The "Single-Celled" Economic Template: Every single-celled creature represents a complete economic system comprised of electrical, mechanical and chemical forces whose fundamental natures are not separate, but merely represent translational stages, stages in which energy is merely transferred from one state or level into another. Ultimately therefore, they cannot be parsed, so from the position of a comprehensive overview, as in the case of a fully integrated theory, complete understanding depends on perceiving the state of the whole as a reflection of a single entity: "energy." Itemization in this instance is entirely counter productive. (It is, in fact, the very approach that has prevented the world from achieving any true understanding of the nature of economics.)

For example, the flow of electrochemical or electromagnetic energies throughout a nervous system is projected into the "economic" environment by means of the mechanical force of contracting muscle tissue. For eons, the job of obtaining food --which, like currencies today represented an acquisition of greatest "value." That is, food has always been valuable because food represents energy. Therefore, the feedback loop of the internal economic system of each consumer organism--that is, the neural and metabolic continuum of energy that comprises Life--
cannot be distinguished as separate from the economics of its life as an externalized system.

Precisely this same pattern is observed at every level of scale. Beginning with single consumers (regardless of their evolutionary standing), the pattern repeats in the form of collectives of consumers (sponges to corporations, etc.); and manifests simultaneously at the level of collectives of collectives of consumers (i.e. nations, etc.). In brief, as seen from the most fundamental perspective, the internal and "external" economics of any given nation is absolutely identical in essence to that of a microscopic protozoa.

And if you think that the economic forces of a nation are 'more complex' than those of a single cell, then you haven't looked closely enough...

If Economics is Physics, then why does consumer psychology play such a large role; or rather, why is "value" also appear to be a merely subjective phenomenon? Rethink everything. There is really no contradiction. Remember, the economic process is ultimately just an extension of the feedback dynamics of life itself. The core loop entails the aquisition of the energy represented by food, which after ingestion, then in turn becomes incorporated into the nervous system as the energy of sensation. This itself is an example of pure physics, but when couched in terms of sensation, we must say that the search for, and digestion of food is itself merely an expression of sensory feedback and motor control. This is why economics appears so "subjective," and yet at the same time, we can also describe it entirely in the "objective" terms of physics.

In short, the internal economic process is ultimately projected into the environment and "objectified" in terms of tools and money, to produce the economic process that we conventionally observe. And yet the underlying principles and process remain utterly one and the same.

As always, all confusion is eliminated through the total unification of concept and sense, and the destabilizing and volatile effects of "subjective" phenomenon cease to be an issue.

In fact, the engineering principles for a truly integrated economic system could well be said to reflect the fundamental physics of sensation.

Think about that for awhile...

Why is this theory referred to as "Post Paradox"?
Nature is constructed in such a way that any dynamic continuum without perceivable roots becomes a chicken-and-egg problem. Today, the worlds' monetary systems have been cut loose from physical reality primarily because modern economists have never realized that the term "value" is always and everywhere merely an unrecognized code word for "energy."

(For example: What is the "value" (meaning) of food?) Consequently, because the meaning of meaning, of value has never been fully digested, modern logic --which starts somewhere in the middle with "barter" and "trade"-- automatically defaulted to the notion that "value" must therefore be just an abstract concept. However, this is precisely why economics is still plagued today with an aura of metaphysics, rather than imbued with the simple clarity of physics.

The world community of economists doesn't realize that it is dealing with a pure energy system, so it is essentially characterized and trapped within this following vicious circle of reason: To "control" inflation, the authorities raise interest rates in order to reduce the flow of money. Unfortunately, this increases the rate of unemployment; however, they only way they know to decrease the rate of unemployment is to increase the flow of money. Now "obviously," the only way to do this is to decrease the prime interest rate, so they naturally feel compelled to lower interest rates... And around and around we go...

So, what if both inflation and unemployment are already high and on the increase? What if an economy is in a state of "stagflation"? What can anyone do? Well, if one is in charge of the money system, nothing at all --because you are trapped, by definition, in a paradox created by a faith in the sequential logic of cause-and-effect.

When faced with a continuum however, linear logic produces only vicious circles; so the primary strategies of the money-centric mind really merely define a balloon-squeezers' strategy to make the balloon bigger --but if a balloon is shrinking, it will continue to shrink no matter which end is manipulated.

In short, the only way to reverse the progressive decay of an economy in decline is to fully integrate the Money System with the far more fundamental principles of the underlying Energy System.

The term 'Post Paradox' thus signifies a point of view that transcends the vicious circles of reason that are inadvertently generated by modern thought processes, because from our new perspective, economies can be engineered to render permanent and stable states of prosperity.