CoinCube afaics you always repeat the same mistake (same myopia despite your obvious expertise in logic, math, etc). Annealing only occurs at a fine grained level, not at the macro level. Entropy and time are not reversible. That which is more efficient (anneals better) destroys that which doesn't (that which doesn't needs a crutch such as government theft).

I leave it to you to work through how that disproves your statement. Remember debt isn't concerned with performance, only with return of capital.

You can refer to my refutation of your mathematical limit proof for clues.

Once this light bulb goes on, I think you will finally understand that I won all the debates about anarchy vs. top-down governance.

The world is about to undergo a radical change in social organization. We will not be going back. The NWO will fight to survive by any means of totalitarianism. But it will lose, or make the human race extinct (e.g. nuclear winter). There is no middle ground because of the economics I explained recently.

http://www.armstrongeconomics.com/archives/36568





P.S. once the epiphany slams you in the face, you will realize that what we face is much more severe than any hopes you've had for a calm or slow resolution to the current crisis. See this post. You now see Armstrong was correct yet again about October 1 being the start of the BIG BANG global sovereign debt crisis. Don't lose valuable time sitting on the fence. What is your game plan? I think you are crazy if you don't take a $5000 rider on a Bitcoin killer. But I don't need you. I just think you are crazy for not doing it. No need to answer me publicly.

As you correctly argue they can go 'positive' over short periods of time but they are fighting against the trend they are not really positive (and increasingly not so) and just pushing forward demand.

Thus your rough model on cursory glance appears to be reasonable. Good point!

You taught me something[1]

[1] And it isn't first time. Remember your astute private argument that collapse in the USA could not come before 2017. That was before we had clarified Armstrong's model on that point.

Kudos on being able to pull that model out of your hat so quickly. That is what an applied math degree can do.

The problem is not leverage. Rather root of the problem has been that capital enslaved labor until (just recently) knowledge became the predominant component of production startup costs.

Think it out[1] and you will see the generative essence of the issues you are raising are all due to the fact that capital enslaved labor and this actually supported (and required![2]) the large collectivization of society.

Normally the interest rates now should be around 10-15%, to massively restructure the economy from a speculator/spender one, to a savings/producer one,

It might hurt and cause a bit of recession, but mixed with regulation elimination and tax decreases, it should work.



However the clock is ticking: http://www.nationaldebtclocks.org/


It's impossible to increase the interest rates anymore due to the amount of debt that has been created by it. So to illlustrate:





The dam is under so big pressure, that if you stop pushing "water" into the dam's left side, then the water will just smash through and the hyperinflation will be so big that alot of catastrophes could happen in the meantime.

If you dont increase interest rates then the dam will eventually crack and hyperinflation will still come.

There is a 500 year financial pressure buildup we are talking about, and in our lifetimes the dam will break!

HYPERINFLATION IS INEVITABLE NOW, NO MATTER WHAT THE CENTRAL BANKS DO, THEY CAN ONLY STALL IT, BUT THEY CANT STOP IT!

This time its different, because it's not just the surface problems that is caused by this massive disallocation of resources, but the economy is also fundamentally distorted.

In an average depression, many jobs get lost, business go bankrupt, for the same fact that they are not belonging to that economy, so they have no place there to exist.

But now its over 50% of the GDP that is comprised of financial services/banking & corporate business, and not just the jobs that will be lost, but the capital.


1) If they put more concrete, a.k.a. print money and buy all bubbles up, then eventually the leaked inflation becomes so big that the real earnings of the populus will be detrimentally hurt. If the inflation increases more than your earnings, and drastically more, then eventually you will starve to death as you cannot even buy the food in the stores, despite the food supply being constant. And of course this hurts the economy even more, imagine if 99% of the GDP is got from banks, who will produce anything?

And each time they print money, the GDP gets distorted more, if the financial sector is 50% of the GDP and the bust sets in then consider a 49% GDP decrease depression, because about 49% out of 50% does not belong there. But the hyperinflation will probably wash away the rest too, so my guess is about 80-90% depression, and alot of unemployed people (+robotics caused unemployment). By the next decade we can easily see 50% unemployment of able bodied people.

2) If they dont print money then obviously speculators will pull out their money, and it will cause a bust spiral that will bust the entire economy, starting from the 1:1000 leveraged firms , down to the small vendor who has a little mortgage.

The amount of financial devastation pending will be big, and it will cause civil unrest probably.

@Coincube - Wikipedia? Webster's dictionary?
Please tell me you got these from Google. (If so I get to ROFL)

Would you happily accept a $1,000,000 IOU from a guy who is $5Tn
"in the hole"  than a $1 IOU from me (I am debt-free)?

We are discussing banking, and I'm going with narrow definitions:

JP Morgan : "Gold is money and nothing else"

Bitcoin, Gold, a Central Bank Note, and an IOU from minor transgression.
Of these only Bitcoin and Gold have no counterparty risk, and are money.
The others are valued entirely on the creditworthiness of the issuer,
and are credit. Where Notes are issued by government or a Central Bank,
they create both a credit and a debt.
Similarly when you spend with a credit card, you expand the supply of credit,
and when you spend with a debit card, the supply of credit decreases. No new
bitcoins or gold (real money) are created or destroyed in these transactions.

This point is relevant because at one time real money was the "Reserve" in
fractional reserve banking. History provides a list of bitter experience
where prudent lending limits were exceeded.
   
Fractional Reserve Banking implies a hard limit on the supply of credit.
An important consideration is that as the limit is approached, there is a
reasonable expectation that rates of interest on loans will rise. This
should provide some measure of stability to an otherwise unstable system.
In my humble opinion, fractional reserve banking ceased when Nixon took
the dollar off the gold standard in 1971, and I harbour some doubts that
it was ever effective post 1913. Clinton and Brown buried it in the 2000's
via "light touch regulation" and "risk-based regulation".

Haldane, "Why Banks Failed the Stress Test" speech [p12], 2009, summing up
the beyond-laissez-faire ethos perfectly:
"No. There was a much simpler explanation according to one of those present. There
was absolutely no incentive for individuals or teams to run severe stress tests and
show these to management. First, because if there were such a severe shock, they
would likely lose their bonus and possibly their jobs. Second, because in that
event the authorities would step-in anyway to save a bank and others suffering
a similar plight."
http://www.bankofengland.co.uk/publications/speeches/2009/speech374.pdf

These perverse incentives render further discussions moot until we can
agree on some basic definitions. Asking me to believe in fractional reserve
banking where the "reserve" is conjured up after the fact out of thin air, is
asking an awful lot. Once we understand each other we can talk.

I will put up a new thread to handle further discussion on this topic.

@TPTBNW thanks for the heads-up on whatsapp. Somehow the MSM was able to keep that
request for a backdoor well away from the front page.

You repeated almost verbatim what I have written upthread

http://www.armstrongeconomics.com/archives/36655




Please everyone email this to Armstrong. His email address is: armstrongeconomics@gmail.com

Can't he see what the above chart says? I have written about this extensively in the Economics Devastation thread.

This is the end of usury finance and debt. I have explained why in the Economics Devastation thread.

This is a momentous change for humanity.

Why do you think I am working on anonymous solutions we need in order to cross the chasm!

Please support my efforts. It is that damn important.

But its impossible to tax the rich from a practical standpoint since every new tax you put on them will just simply be outsourced to his employees or customers.

The only solution to taxing the rich is to nationalize everything, which will obviously be a catastrophe as we know the government is unable to drive the economy at all.

So communism (as in central planning) doesn't work, socialism (currently used) is on the decline.


The only possible future is a free capitalist system with self-regulated bodies. There are plenty of clever and innovative people who can build use a better society in the future, but for this we really need to get to a knowledge age so I agree with that.

If the collapse hits soon then everybody will go wild and it will be a disaster filled with looting, mobs forming, and total societal breakdown.

If it hits gradually then we will have an opportunity to slowly replace it, with a better and well though system.

I suspect taxation will increase for a while as well as Socialism continuing its march to devastation.  I agree that it is the productive sector (the active participants in the Knowledge Age) that is the only real solution to our worldwide economic problems.

But, intrusive government looks very likely for at least some time.

Government dictatorship is one of the very ugliest set of scenarios facing us.  I hope TPTB's project is a step on the long & hard road to eventual freedom.