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| Joined: | Mon Nov 21st, 2005 |
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I'm going back to the above site to finish reading the entire series called: The Coming Trade War.
Here is a gem:
Material overcapacity is a result of mental undercapacity.
Here we go:
Mercantilism and fiat money
Unless products are sold for gold to Martians, or at least to foreigners or colonial subjects in a mercantilist trade regime, lowering prices requires a corresponding lowering of wages, which in turn shrinks effective demand further.
How can that be true?
Answer:
Less energy surplus
Do you see this?
Anyone?
If the supply of energy is reinvested into creating an ever increasing supply of energy (electricity for example), then, the cost of everything produced with energy (which is everything) lowers.
Increased supply reduces costs.
Increased supply reduces price.
Increased supply INCREASES purchasing power.
That is opposite when economic calculation is applied to everything except energy because energy is POWER stored.
Purchasing is unleashing stored POWER.
Example:
Jump ahead 20 years from now and imagine what happens to the global economy if everyone stops 'saving' and starts 'investing' in Solar Panels, Wind Generators, Water powered vehicles, and all things that do, in fact, increase the total supply of ready energy (energy that can flow or stop flowing at the flip of a switch).
Very roughly speaking (for the sake of argument if you will):
In 20 years the supply of energy doubles.
What happens to two things:
Purchasing Power
The demand for human labor
Put on your thinking caps.
If the supply of ready energy doubles, triples, quadruples, and so on, in time, then, the cost of energy halves, reduces by 50% again, again, again, until energy is COST - LESS.
What happens to everything that is produced by Energy?
This isn't that tough.
For example: What happens when the price of gasoline (world wide) is cut in half? What happens if the price in gasoline doubles?
When the supply of gasoline reduces, then, the price of gasoline goes up. What happens if the price of gasoline double every year for the next twenty years?
This is simple. The price of everything made with the help of gasoline goes up and keeps going up.
Meanwhile the people in control of the flow of oil gain wealth while everyone else loses wealth. Does that look just a tad bit convenient and beyond coincidence?
What happens, instead, if the supply of oil (or Solar Electricity running electric cars) doubles every year for 20 years?
The cost goes down. The cost of everything goes down.
You have Solar Panels and a Solar Car as does everyone else. How much do you pay for home heating, cooking, washing cloths, drying clothes, and how much do you pay for fueling your car when the cost of electricity is steadily lowering. You can't give the stuff away because everyone is producing their own; and the few people not producing their own can buy electricity for practically nothing.
What does that do for the price of everything made with electricity?
Backing up slightly:
Material overcapacity is a result of mental undercapacity.
Suppose the entire population of the world woke up smart tomorrow.
Everyone decided to use a few new forms of currency; just to get things going in the right direction.
The first form of currency is issued by a few new businesses that no government forced anyone to use other than one 'legal' measure.
Anyone using this new form of currency can pay taxes with this new form of currency.
That is the extent of the "Law" for this new currency - for now.
Suppose California started things going by incorporating a new currency that can be used to pay California state tax and U.S. National tax and since the whole world signs on to this new currency idea the U.S. National government can use this currency to pay United Nations Taxes (If the U.S. joins the United Nations).
It may be a good idea to note how taxes are the same thing as insurance payments where many pay into a fund that accumulates wealth to be spent on security (or taxes are just a euphemism for extortion).
The California state currency corporation (or any name will do like the California Security Fund) begins the process of creating the new currency with a new web page, computer program, and numerous computers to store the program and the data. All transactions are encrypted and recorded on various hard drives within the system to ensure that the program and the data remain un-adjusted by any criminal element seeking to use the system for their own nefarious gain.
The initial public offering of the new currency is offered as a strict one time deal for any person alive anywhere on the planet to borrow the new currency to be paid directly to any mortgage company for the transfer of the title of one residence.
No one is forced to borrow the money and no one is forced to accept the currency with the exception of an agreement, in writing, for all governments of the world to accept the currency as payment of taxes (remember the part about everyone waking up smart tomorrow?).
Will any current mortgage company accept the new currency? Do you know what the term “competitive advantage” means? If one mortgage company did suffer from a tax burden and this one mortgage company did accept the new currency to help cover its tax burden, then, will this one mortgage company gain or lose more business compared to the companies that will not accept the new currency?
This brings us to the subject of interest charged for the new currency.
Suppose that California charges no interest on any person who is borrowing the currency to pay for their own residence within the boarders of California and California charges 1% interest on the new currency to any person borrowing the new currency anywhere within the United States and California charges 2% interest on the new currency to any person borrowing the new currency anywhere on the Planet (with the exception of anyone known to be currently torturing or mass murdering people = George Bush and Dick Cheney can’t borrow).
Now, knowing that the above is possible if not easy to realize, will you borrow any of the new currency?
This may take some thought. You borrow your one time loan and you pay off your Mortgage (including any charge for early pay-off) so you gain free title of your primary residence and you pay no interest if you live in California.
Do you know how compound interest works? With a 6% loan that is amortized for 30 years you will pay approximately twice the price of the home to the bank. At zero percent interest you will pay only the price of the home; therefore – that is not the same thing as cutting your payment in half. Just for the sake of argument, then, suppose that this does amount to cutting your monthly payment in half.
Now you have, say, 500 more dollars a month to invest, save, or spend.
The California Investment Fund Mutual Bank Currency Monopoly Corporation Business or whatever name is attached to this enterprise adds a few new products for reasons that may, or may not, become self-evidently doable.
Product A was the interest free primary residence mortgage get out of jail free card.
Product B is the ‘if you want to be a good boy, then, pay off your interest free loan – loan’.
Product B is a one time offer to any person with a good credit rating for the purchase of a fully functioning home energy generating unit complete with two electric automobiles. The loan is at 1% interest for California Residents and 2% interest for anyone in the U.S.A. and 3% interest for anyone in the world.
For the additional reduction of .5% interest on Product B the person borrowing the money must increase the output of his purchase to include enough energy output to provide enough current for one more residence two more electric vehicles and the person receiving this loan can sell the extra autos to anyone and sell the extra electricity to anyone at any price they so desire.
The stipulations of the loan are only enforced by the repossessions of any capital purchased with the new currency and a lowering of the credit rating of the person who does not utilize the new currency as stipulated in the loan document or in cases where repossession requires excessive costs – the person guilty of fraud must pay back all the stolen funds before any more currency loans can be borrowed. Call that the fool me once rule and don’t ask Bush to explain it.
Who would not borrow the new money and perhaps a more relevant question is; what happens if everyone borrows the new money?
Can you hear the neo-economists yelling “INFLATION” from the roof tops?
Note: The amount of new currency printed will be directly proportional to the wealth contained within primary residences; Energy producing home Power Generating Systems (including transportation) and this is only the beginning.
If everyone borrowed the new currency to the current limit (residential and Energy loans), then, how many people will be building new and better houses, how many people will be dumping old houses for sale to people who can’t afford paying high monthly payments, how many people will be starting solar panel business, production, installation, sales, maintenance. Etc.
How much more Energy will be produced world wide?
Will the new energy be clean?
What happens to the cost of everything produced with more and more energy?
What happens to purchasing power?
What happens to the demand for human labor?
What happens to the price people will pay to someone willing to work?
If you can’t answer these questions, then, you may have been educated by neo-economists. Don’t blame me.
Last edited on Wed Jun 27th, 2007 05:27 pm by Joe Kelley