CANCER CENTER Special Note Special Cancer Center
Natural law Once upon a time the liberal economic system based on the law of attraction economy, equivalent to the law of gravity in physics : the law of supply and demand. Left free to interact as the prices of goods, services, and exchange goods par excellence: the money (the law in a nutshell says that if demand increases relatively tender, the price rises, and vice versa, also said that the the price rise demand tends to fall relatively tender, so it is a mechanism autoequilibrantesi).
Savings In this system, the savings were collected by professionals (bankers) who lent a hand to those who want to demonstrate their use in profitable businesses, and were available to share with them some of the profits by paying interest. In turn, bankers recognized a portion of the proceeds to investors by paying them interest, and encouraging them to entrust their savings that otherwise would have remained under the mattress and the entire circuit would stop.
Bankers should be clear that in a normal economic system, the role of intermediary (bankers) between employers money (savers) and borrowers of money (business) is a positive function that drives economic activity. If no such saving feature remains under the mattresses, and new economic activities can start only to the extent that the contractor already has his savings.
The interest rate This function has a crucial role in the interest rate, the market price of the asset, the result of supply and domanda.In a free market does not exist by definition interest rate wrong or right, up or down, there is only the rate that balances supply and demand. In a free economic system (without central bank) that happens when, for various reasons - it increases the desire to undertake and therefore increases the demand for savings, its price goes up, so stimulating the supply of saving (cycle of economic expansion), however, the rising rate of interest, begin to reduce business ventures that can generate the profit necessary to sustain the burden of saving and demand begins to drop, bringing down the rate of interest also because in the meantime the increased supply of savings is acting in the same direction, the other side. Similarly, when - for various reasons-the urge to take up and therefore the demand for savings, its price goes down, so it unprofitable to offer (the cycle of economic contraction), however, down the interest rate, increase profitable initiatives in relation to it, and demand for savings to rise again raising the interest rate because in the meantime also reduces the supply of savings.
works if free The beauty of the law of attraction is that the economy automatically produces the best possible world, automatically adjusting any imbalance would occur gradually. MA to work this wonderful natural clock (and I speak of nature because the economy is the activity of human beings, which are part of nature) needs a fundamental requirement: it must be vacated. Signfica that only works in a state of perfect competition, in which no participant has the size to influence supply and demand for money.
As this condition is released, increasing the degree of oligopoly and monopoly is a distortion of the economy, and it happens that the system gets sick and starts to produce cancer cells that kill the body in the long run.
cancer center Unfortunately, late 1800 and early 1900, just as economists formalized general equilibrium theory, the trend and introduce oligopoly monopolies of various kinds has established itself in an irreversible way, generating a series of deadly cancer cells including the creation of the bank CENTRAL. It, in an economic system, is CANCER CENTER, leading to the tomb that incurable, if not eradicated in time.
Let's see why and see how we come to this' horrible invention that has destroyed the liberal economic system.
State should be clear that what has been said is particularly true for the state. In a liberal economic system the state's role is purely to enforce the rules, starting with the anti-trust, exercise justice. It 'important that the State has a balanced budget and that spends only what it collects from taxes. Otherwise, as unfortunately become the norm since the state monopoly has unlimited growth during 1900, if the State has a budget deficit (spends more than it earns from taxes) to finance it needs to absorb private savings by reducing its availability for entrepreneurs (the opposite would be negative: with a budget surplus in the state takes away resources to the private collecting more taxes than then spends). In a liberal system without cancer (pardon: bank) central budget deficit produces - ceteris paribus, a rise in interest rates, exerting a depressive effect sull'intrapresa private, which produces a decrease in taxes collected, with increased deficit and the effect that more and more depressed. This, in the long run (in a system democratic), causes a strong demand for elimination of the deficit, triggering the reverse process: greater savings available for private industry, decline in interest rates, recovery of the economic cycle. As always, therefore, the system tends to rebalance itself naturally.
Unfortunately, however, as there is the Central Bank, the State may prevent the interest rate rise as a result of its deficit: it is in fact financed by an increase in the monetary base, and the resulting inflation. It should be clear that in a liberal system of inflation, as deflation, which could not be temporary phenomena, for the reasons given When, I described the wonderful law of supply and demand. Of course in a nationalized system, however, inflation can be manipulated at will by those in power and thus be used as a hidden tax permanent (more or less pronounced).
cycles
To understand how it could have come to the creation of central banks should also be noted that economic activity, as a matter of course, inevitably has its ups and downs, its cycles, because the Men are not machines. Now it happens that during the expansion, for the reasons MENTIONED ABOVE, you make more profits (banks, businesses), there are higher incomes, and the forfeited taxes. Exactly the opposite happens during deceleration phases. The attitude that everyone should be wiser in this regard is to take advantage of the strong phases of the cycle (the years of fat cows) like ants, and then deal with those serenity cycle low (lean) and accepted exactly as is done with the beautiful and the bad weather, without claiming to Nature instead of requiring only the good weather, because nature is angry, and then sends the Tsunami.
Greed
but there is a great enemy: greed, unrestrained thirst for power and profit, a virus that mainly affects (paradoxically) the already rich and powerful already. Rather than be content, I always want more. They feel omnipotent. So they try to go against nature, or rather to force nature to their will. The goal has thus become the elimination of the economic cycle, have always and at all costs a permanent strong growth, the most possibile.E this action against nature has been set politically easy, because the explosion of consumerism has affected everyone.
Interventionism evil
For this reason, in late 1800 and early 1900 the main bankers of the time they invented the Central Bank, expanding the model so far existing only in the UK (since 1694), taking the excuse a classic cyclical crises of the period which had led to some failure banks. In the U.S., were Morgan and Rockefeller, who succeeded in spite of the special constitutional ban on politicians to approve the establishment of the Fed in 1913.
The Fed set to work and immediately created a huge bubble: that of the 20's, known as burst in 1929 and from which came the famous Great Depression. Then the politicians took the excuse of the Great Depression, to increase dramatically the state's role in the economy, and took advantage of their theoretical coperura given by a noted economist of the time, Keynes, to spend more than the amount collected from taxes. It was the end of general equilibrium theory, and the effects of that order are the ones we have just begun to see today.
The end of the gold standard In fact, after the Second World War, both the budget deficit in the manipolazone of money, interest rates and exchange rates were used with some restraint, because it resists the gold standard: the dollar, which has become the out important international currency, it was still redeemable in gold. Then the 60 was a growing, unleashed by chance after the abolition of the dollar's convertibility into gold in 1971 and culminated (after a series of bubbles to burst when it reacted promptly with handling more and more) in the biggest bubble of all times, broke out officially in the summer of 2007, which in time gave rise to the worst possible response: a further incredible acceleration of nationalization of the global economy, with more and more arrogant manipulation of interest rates and exchange rates (including some you will come to fix the prices of houses and stock prices by decree law, nothing new - for charity - they did the Soviets, but they had the gall to consider themselves the standard bearers of the "free market").
The worst is yet to come. What we have seen so far is just the appetizer (and maybe the first): the strong flow with the contours and the desserts are still out of the kitchen. Suffice it to say now that the salvation the system is to depend on governments, which become the true central bank: they just decided that they are the lender of last resort for banks and the economy. But there is a small problem that nobody talks about:
the king is naked governments, states, in debt and deficit year after year, the resources available to the banks and take their economy (ie all those who buy their bills). So it is a paradox that can not stand: savers and banks should take the money from the State which takes from them. We are the ridiculous, pure and simple. Yet it is plain for all: meeting up meetings, g4 g7 g8 g20, government proclamations of all nations, to say exactly that absurd.
And that is: That money that we do not have them they will not have them.
Remember the famous fairy tale: the king is naked, but nobody says it, everyone pretends to believe that it is beautifully dressed.
Recycling International And it is wrong to think they can prop up the cabin Asians and Arabs, for they are in surplus and profitability in their foreign trade, but so far have grossed only and only those bills of exchange issued today are going to fail. Of course, if they agree to continue to be paid in bills, while keeping alive the customer, give a contribution to the continuation Agony. But this would only perpetuate another key aspect of the disaster today, one connected to the manipulation of exchange rates and foreign relations (which so far I wanted to speak not to complicate ideas, partly because the essence remains as described, even on a global scale).
It fosters cancer Absolutely not want to be pessimistic, no more than I know what would be good to think positive. But there may be hope in a situation like this where instead of understanding the lesson for how long and eradicate cancer with chemotherapy, the most powerful or the more drastic surgical procedures, there is nothing that nourish the cancer cells more and more?
balance in bank balance sheets
But there's more: In a liberal economic system, WITHOUT the central bank, who carries out banking activities must necessarily be careful to match the maturities of its debt and of its claims. This is because if you were to raise money predominantly short-term receivable by the owners, and used this money mainly long-term loans, we would find nell'antipatica condition of not having the money when its creditors will have to ask. In such a condition that would not have two possibilities: either find someone else who pays him, substitution of debt by doing so, or find someone else that takes over his claims by including the cash they need. Of course both these alternatives have a cost that would significantly reduce the net interest earned until then theoretically the difference between the amount paid to depositors and the amount collected from its assigned.
For these basic reasons, each manual for "science" bank, the first thing we teach is precisely the balance between an asset and liability maturities of the budget. After the disaster of 30 years was also provided by law to establish the difference between commercial banks deposit (collecting short-term, they could make loans beyond 18 months), and investment banks (in Ialia the special credit institutions), that those banks which offer long-term loans: it had to be financed by bond issues also in the long run.
Unfortunately, there are central banks .
The carcinogenic effects in the economy which are expressed in various ways, among them the function of lender of last resort to commercial banks. This has the effect that the long deresponsabilizzante to bribe them, after all stirred up to make more profits possible. It is clear that - since the long-term rates higher than short-term (always in a normal world) - they are forced to break the balance between the deadlines "by taking short-and long-giving" as the jargon. So, in case of difficulty, the central bank is involved (let alone make the bank fail INCA). So this has taken so many feet from embezzlement to be legislated again: in the middle of the famous Bubble authorities - those responsible for today should depend on the salvation of the world - they even abolished the distinction between banks and banks in the short to long: everybody can do everything , cheers to the competition. But beneath this deceptive reasons, but there was the thirst for increasing profits: why do not you make more money if so then pay trousers (the central bank, namely the government, ie the community)?
cancer spreads And the cancer has spread leads to accumulation of unbalanced positions with banks full of illiquid loans, bad in the long term - completely unable to meet its short-term debts. From here the descent alarmed Western governments gathered in the field who have taken note that ridiculous position of lenders of last resort - guaranteeing bank deposits - just to ensure that depositors are presented in mass to demand their money. In that case, in fact there is no possibility of restoring poterglieli. Need to print huge quantities and would struggle even materially. On the ridiculous position of governments have already wrote: must decide, they have their money there? so as to guarantee all bank deposits? So why ask for them month after month to pay salaries and to meet their normal expenditure commitments? I mean to be a credible lender of last resort, can not be both borrowers of First Instance. Sorry if I came back on, but the fact that you do not read a line or a voice rises in that sense to me is incredible (as always welcome note to that effect, especially in Italy).
The yield curve Now I would like instead to see how the carcinogenic action, arising from the fact that everyone takes short-and long-damage, hits the economic agency. Also in the renowned "normal", the long-term rates are necessarily higher than short rates, as there would be no rationality to lend money at a lower performance for a longer period, but cancer can also central in this. In fact, due to the law of supply and demand, if all the banks want to borrow especially in the short, it is clear that the short-term rates tend to rise (because it increases the demand for short-term funds), and similarly if all the banks want to lend Long is clear that the long-term rates down (because it increases the supply of long). It follows that the yield curve flattens, and under the action of central banks can actually to reverse. Of course this is frowned upon by the borrowers of money to see that far down the cost of their debt, and so they see it well that they increase their demand for loans, because lower rates are, the more steps that can be tentare.Ed everything is exacerbated by the tendency of the cancer center already shown to lower rates as much as possible. It brings the famous bubbles that are created just for an abundance of cheap credit, in a context where the aversion to risk is minimized by the widespread belief that the central bank will intervene, if necessary (moral hazard).
Dishonesty So the chain reaction of damage arising from the cancer center could not be more devastating. The most striking aspect is the following: as it is very easy and affordable for all, understanding these mechanisms, and as it is obvious that a similar congengo come out huge amounts of profits purely parasitic and above risk-free, because it knows that the losses will impact on the community, then there can be no doubt about bad faith and dishonesty Dulla deep and soul that inspired those - leading the cabin - have triggered the cancer center. We'll see if all this tragedy will end up as the Bastille.
The cause
summary: The primary cause of genetic degeneration of the economic and financial system lies in the tendency of capitalism to create monopolies and oligopolies in contravention perfect competition, the only one capable of expressing a set of prices "natural" fruit of the free application and offered from which the spontaneous tendency to rebalance.
effect from that cause follows the effect of imposing a political price of money, made dall'apposito monopolist. If the interest rate was left free to fluctuate according to supply and demand, you could never create bubbles devastating as those that we know well, because the mechanism to equilibrate spontaneously. If the exchange rate had been vacated and the monetary system anchored to a real asset (gold), would never have been able to create a state of permanent imbalance in the relationship between consumption and production of the world's largest economy (at least until now), allowing its people to live beyond their mezzi.Vediamo why.
The carcinogenic action of central banks on the international .
remember that the income (or GDP) produced in a country during the year can only be consumed O O be spared. There is no definition for other alternatives. If the country was alone in the world could consume up to all the income it produces, eliminating the savings. It would be unwise to have a policy, but at least you'd have this limit. But in a context of international trade, the country can consume more than it produces, more so because that may take days, accumulating a negative savings. In an international monetary system based on gold, the country in deficit would remain so only until the gold reserves has to be taken abroad in exchange for its excess consumption. Out of the gold, you should stop by force, and reduce their consumption. In addition, under the gold standard for the amount of money and credit in the country is proportional to gold available, reducing this, also reduce money and credit, and then the country would forzaro to reduce their standard of living, that is, consumption and imports, and was automatically pushed to the balance.
Unfortunately, abolished the gold standard ,
replacing it with the dollar standard (as if the dollar was gold, but the dollar may be printed at will, gold NO). Even in this case have potentially disastrous, but if you should observe the demand and supply in a deficit situation of the country the currency depreciate, which would automatically lead to a disincentive to imports (which cost more) and an incentive to exports (which become cheaper for foreign partners), and also the devaluation would lead to upward pressure on interest rates, and thus in this way you would exercise the tendency to rebalance.
Unfortunately, there are central banks . The
who decide to manipulate the price of money, both internal and external, and both the rate of 'interest that the exchange rate. So instead of selling the currency of the deficit country sopraillustrato triggering the mechanism, the holding of its foreign exchange reserves to avoid the change in exchange rates, and also as they need to get something, to remind the country of origin in exchange for taking off his debts and thus exerting a downward pressure on rates interest of the deficit country. Here, then, that this horrible manipulation, results in the permanence of the imbalance is not only readjusts addiritttura but worse. It does not end here. Because by doing so the central bank manipulative, increases the money supply and credit in his country, to the extent that does not sell foreign currency which it received (the domestic currency to its exporting it to him to give). Then create inflation inside.
War
Thus the cancer spreads to all levels, and proceed unhindered, paving the way for unimaginable future disasters. In fact, the country's "smart" that accumulates reserve currency of the deficit country, really accumulates a mass of bills that will never cash. And this can lead to war.
always wrong If such huge distortions (disastrous in the long run) we were able to create and keep growing over time because of the political price of money, that force is always wrong: a low interest rate Like the states debtors, entrepreneurs, citizens debtors (mortgages and consumer credit), so please everyone becomes a constant of the system, but unfortunately a low interest rate of the bubbles inevitably produce economic (devalues \u200b\u200bsavings) and financial , and even worse, the political management (through central banks) prices money that could be done to prevent spontaneous rebalance, rather the system is screwed to the deterioration, because when the bubbles grow (houses, stocks going up, for example) all applaud, and only when they burst all despair, and how to remedy? lowering the cost of money, proposing that the cause of the bubble, so if they form and move to another bubble in the bubble. Until the implosion of the system is simultaneous and final.
growth doped Among other things, the excess of economic growth, especially now that concerns six billion people, is an evil to be fought, because the planetary ecological system is not able to stand it. It is debatable whether the environmental disaster will come in between xo y years, but it is certain that it comes proceeding, so it would make much sense to change the model of development before possibile.Ma this model of "sustainable" development can come out only by the spontaneous forces of the free market, not by the imposition of a small group of oligarchs. Speaking of which shudder to think what now combine the new "Bretton Woods".
solutions
In fact, as is clear from what has been written, one need only observe the anti-trust laws, to dismantle monopolies and oligopolies, starting with the state, and let the law of domada and offered free to operate, thus restoring the general economic equilibrium theory of perfect competition, with three simple reforms
1) abolish the dollar standard (returning to the gold standard)
2) abolish the deficit spending (the obligation of returning state budget in balance)
3) abolish the central banks (returning to the uniqueness of the Treasury).
But of course there is no way that we go in this direction, so you just have to prepare for the worst.
