[GJM] Two more programmes -- causes of collapse.

Mon Jan 7 17:03:45 MST 2008

Dear Steve,
1.  The major PressTv programme on Monday 7th January was not broadcast.  Moeen Yaseen has contacted PressTv and, as far as can be understood, PressTv naturally puts on the topical programs (today The Agenda was about the Benazir Bhutto) while the program which Moeen and I did (with two others) can be put on  at any time in the next few months or even longer and will still be very topical.  Apologies to all for giving (again!) wrong information.

2.  On one of the other two programs which have been broadcast I was able to deal briefly (a sentence or so) with the Kondratieff cycle and, at a little more length,  the immediate precipitating reasons for the impending collapse.

I do not have time here to set out all the information but it should first be said that perhaps the most important purpose of binary economics as it has developed is to correct the underlying causes not only of poverty but of the huge economic cycles.

The basic cause for the cycles is the issuing of interest-bearing credit (created out of nothing) which  is not directed at the development and spreading of productive capacity -- it goes into existing assets, derivatives, consumer credit etc.  This results in a fundamental imbalance in the economy  (which creates a need for more and more interest-bearing money to be issued) and Say's Theorem (Law) can never be implemented and, worse, the addition of interest means that there builds up vast amounts of debt -- which debt has to increase because, in the original money creation, only enough money is created for the repayment of the principal and not for the interest.

  So, to implement the Theorem, binary economics develops productive capacity and spreads its ownership (and, crucially, spreads the associated consuming capacity) to everybody in society/economy.   An interest-free money supply is used and all of it goes into the development and spreading of the ownership of the productive capacity -- see the diagram at www.binaryeconomics.net and associated text  which, inter alia, deals with b.e. and the environment.
Since the new money supply is only going into capacity which pays for itself and, in particular, the new owners include those with unsatisfied consumer needs, there is a Say's Theorem balance and there cannot be big cycles becasue suypply and demand are in balance.   All of this is dealt with in Binary Economics -- the new paradigm by Ashford & Shakespeare and The Modern Universal Paradigm (Shakespeare)

In the PressTv program I was also able to mention some of the other causes of the Kondratieff cycle -- a major one is that the legislation which was brought in in the 1930s was then cancelled in the 1990s e.g. the Glass-Steagall Act in 1998.  Moreover, things like capital/lending ratios became etiolated, even near to abolition.  Plus the arrogance  of Francis Fukyama-like 'free marketeering' which says that anything the bankers do is Perfection Embodied e.g. conventional economics upholds conventional endogenous money -- which is bank-created interest-bearing money directed at anything -- and this money is producing the disaster.

But there is at least one other big factor in Kondratieff (the man was very good -- he prophesised the 1930s and 1940s but then said that capitalism would revive again (as it  did).  The Communists liked the bit about the 1930s but did not like the bit about capitalism reviving again so they killed Kondratieff in 1938.........

Anyway another of the big reasons is that  the big K cycle cannot operate until most people have no effective memory of  previous disaster (and the reckless habits which occasioined it) and, since people today are living longer, I think that increased longevity is a factor in the increased length of the K cycle -- another factor in the increased length of the cycle  is that modern eocnomics can prolong the cycle by creating large amounts of money out of nothing; it prolongs but does not avoid.

Rodney Shakespeare.

  ----- Original Message ----- 
  From: Steve Consilvio 
  To: discussion at globaljusticemovement.net 
  Sent: Saturday, January 05, 2008 11:51 PM
  Subject: [GJM] Two more programmes

  On SaturdayJan 5, 2008, at 2:00 PM, discussion-request at globaljusticemovement.net wrote:

    On The Agenda  Moeen Yaseen (Globalvision2000) and I forcibly put the case that there is going to be a slump. 

  Rodney,

  How can you say "there is going to be a slump," isn't already here?  Or at least started?

  Anyway, predicting bad things is as easy as predicting good things.  There are deaths and births every day.

  How about a more serious question: WHY do these cycles of boom and bust occur?

  Observing them and predicting them is easy.  That is what stockbrokers and day-traders do every day for specific companies.  Doing it for a macro economy is even easier, since one can selectively choose the facts that fit their prediction.  If you predict a sunrise or a sunset you will eventually be correct, regardless of the current time.

  What I would like to ask of you and Robert Searle (and any one else who wants to chime in) is why these fluctuations occur at all?  The sun rises and sets every day.  We plant in the spring and harvest in the fall.  There should be a similarly natural rhythm to explain the cause of financial droughts and windfalls, as a mathematical phenomenon.  Our numbers are man-made afterall.  If we plant, then why is there no harvest?  Shouldn't a manufacturing-industrial economy be easier to maintain at a steady rate?  (Call it sustainable growth or sustainable consumption, either way there are no wild fluctuations.)

  Let us assume that you are correct.  The slump is "real."  WHY is there a slump?  WHAT is causing it, again?  We can't fix it if we can't explain it.

  Thanks,

  Peace,
  Steve Consilvio
  www.behappyandfree.com

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