Risk Without Austerity

 

Excerpt from "A Systems Engineering Approach to Formal Monetary and Financial Stability Without the Vagaries of “Austerity” "


By Marc Gauvin and Sergio Dominguez PhD. Eng

Copyright © 2020
Reproduction expressly granted provided attribution is given and original link is provided.

 

The instability of the system as described above (A Systems Engineering Approach to Formal Monetary and Financial Stability Without the Vagaries of “Austerity) ultimately renders debt and liability/risk unmanageable over time. This in turn leads to last ditch dire measures in the form of extreme across-the-board contraction of economic activity and diversity in the real economy. Such “austerity”, leads to serious real world consequences, that in the light of the revelation of money’s misrepresentation are wholly unnecessary and therefore cruel and unusual, constituting a powerful legal imperative to correct said misrepresentation [10] [17] [18].

Moreover, this risk is mostly associated with arbitrary financial criteria without which, the “real” economy would only bear real world material and physical risk criteria, keeping in mind that typically purely financial assets represent two thirds of the total financial risk in the economy [8]. Finally, all financial risk is ultimately founded on the misrepresentation of money in that without it, financial mathematics as we know it would be impossible and so too would most of the “financial” economy without any harm to the economy.

However, in a scenario where as explained previously, money is defined logically as SOLELY the annotation of sums of value in terms of a common (arbitrary) unit attributed to each instance of goods and services, by judicious management of the different permutations of transaction types that we illustrate below, we can illustrate how such severe “austerity” measures are not only not required, but ultimately increase risk over time towards total system failure.

Transaction Type and System Balance dynamics

As explained above in a Passive BIBO stable system, “currency" units arise as mere annotations of the absolute value attributed to goods and services in transactions, where the positive and negative signs applied to account entries, serve only to determine the direction of value (goods and services) transacted between parties.

That is, all parties/agents are initiated in the system with zero balance and only by participating in one or other transaction of goods and services can any balance in the system be altered in either the positive or negative direction as the case may be.

To better understand this, consider the very first transaction in such a system for a population of two agents “U" and “I":

“I” provides a horse to “U” with a mutually agreed upon value of 100 units. Since I provides the horse, I’s account goes from zero to +100 and since U receives the horse U’s account goes from zero to -100. Units do not precede the transaction but arise out of the transaction. In such a system only U has received value corresponding to the exact same measure of value relinquished by I. Clearly, the total measure of value pending reciprocation i.e. “risk” recorded in the system at this point in time is 100 units or:

Total System Risk (System Balance) = the absolute value of the sum of either all positive or all negative balances in the system.

This “risk” represents “credit” for the estimated value pending future reciprocation of goods and services and NOT for currency units as tradable objects. That system risk, remains until U reciprocates in the future with some or other good or service of equivalent value, at which point all accounts including the System Balance return to zero.

In such a system, there are only four possible permutations of transaction types as follows:

A. Positive buys from negative (reduces system balance)

B. Negative or zero buys from positive or zero (increases system balance)

C. Negative or zero buys from negative (system balance unaffected)

D. Positive buys from positive or zero (system balance unaffected)

To understand how this is the case we can contemplate the following example of a community whereby positive and negative balances are generated as a function of transacting goods and services between agents: 

transactiontypes


Fig. 1 Transaction Dynamics

All agents begin with a zero balance. Transaction 1 of value from Jim to Mary necessarily corresponds to type B (negative or zero buys from positive or zero), as a consequence the “System Balance” (total value pending reciprocation in the System) is the absolute value transacted (30 units). Transaction 2 is type D (Positive buys from positive or zero) from John to Jim while decreasing Jim’s positive balance by 10 units it increases John’s by that same amount such that the total sum of positive balances remains unchanged and equal to the sum of negative balances in the system (Mary’s -30) The third transaction is again type B (negative or zero buys from positive or zero) from John to Julie, adding 10 units to the sums of positive and negative balances in the system, thus increasing the System Balance (total absolute value pending reciprocation) to 40 units. The fourth transaction of value is of type C from Julie to Mary both with negative balances, as a consequence and similarly to Transaction 2 (type D) the absolute value of the sums of either positive or negative balances i.e. the System Balance remains unchanged. Finally, Transaction 5 being of type A (Positive buys from negative) from Mary to Jim reduces the System balance by 20 units.

Notice that of the four types of transactions, only type B increases the net system balance or level of unreciprocated value or measured risk in the system while in all other transaction types, no risk whatsoever is added to the system. [14]

Understanding the above in a system so defined to be Passive (stable) by virtue of money being defined as ONLY a mere record of value in terms of a common arbitrary unit (e.g. $, €, ¥, , etc.), avoids any need to ever paralyse or exclude any agents from the system, because as long as overextended agents are capable of generating and trading new goods and services, ALL can continue to operate with unlimited C, D and A type transactions, not only without ever increasing risk in the system but reducing risk progressively over time with any number of type A transactions as required.

Finally, although transitioning to a Passive money system from current practises, will no doubt evolve the nature of agent roles and even system topology, immediate uptake requires no penalisation nor sacrifice to any agent or entity in the system nor any cost or loss. The reason this is certain, is because the change is at the conceptual rather than the mechanical level. That is, once the conceptual change is assumed and requirements for Passivity satisfied, the same principles illustrated above will apply no matter what the initial starting balances are.

References

[1] BoE Quarterly Bulletin 2014 Q1 Money in the modern economy: an introduction By Michael McLeay, Amar Radia and Ryland Thomas of the Bank’s Monetary Analysis Directorate.(1)
[2] BoE Quarterly Bulletin 2014 Q1 Money creation in the modern economy By Michael McLeay, Amar Radia and Ryland Thomas of the Bank’s Monetary Analysis Directorate.(1)

[3] Money: Commodity or Measure Not Both (www.bibocurrency.com) 21/4/2014 rev. April 2015, Aug. 2015, rev. June 2016, rev. May 2017, rev. June 2018 M. Gauvin.
[4] von Bertalanffy, L. 1968. General System Theory: Foundations, Development, Applications. Revised ed. New York, NY, USA: George Braziller, Inc.
[5] //cnx.org/contents/nVZ6PKeG@4/BIBO-Stability-of-Discrete-Time-Systems">https://cnx.org/contents/nVZ6PKeG@4/BIBO-Stability-of-Discrete-Time-Systems
[6] http://dictionary.sensagent.com/Passivity%20(engineering)/en-en/
[7] Gunter Stein “Respect the Unstable” IEEE Control Systems Magazine ( Volume: 23, Issue: 4, Aug. 2003)

[8] A WORLD AWASH IN MONEY Capital trends through 2020 Bain and Company. 2012 fig. 1.1. page 7.
[9] Narayana R. Kocherlakota, The Technological Role of Fiat Money* Research Department Federal Reserve Bank of Minneapolis.
[10] A proposal for harmonising current disparate (scientific and legal) definitions of money towards greater decidability in the provision of Justice according to universal principles of contract law Jorge Meira Costa and Marc Gauvin, 2015

[11] Formal Stability Analysis of Common Lending Practice, 2009 M. Gauvin, S. Dominguez
[12] Stable Currency Unit Theorem (www.bibocurrency.com) 2011, M. Gauvin, S. Dominguez
[13] The Beast of Compounding You Might Not Have Noticed (www.bibocurrency.com), Jan 10th 2020, M. Gauvin

[14] Austerity Fallacy (www.bibocurrency.com) 05/2015 rev. 7/2015, rev. 10/6/2018, M. Gauvin
[15] Passive BIBO Currency Distinguishing Claims www.bibocurrency.com Passive BIBO Currency Project 2013Marc Gauvin, Sergio Dominguez.

[16] Formal Passive BIBO Currency Specification www.bibocurrency.com, Passive BIBO Currency Project 2011-2019

[17] Legal Curriculum (https://www.moneytransparency.com/legal-principles)
[18] MSTA Resolution (https://www.moneytransparency.com/msta-resolutions) January-April 2020.

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Let's Cut All The Bullshit It Is Killing Us

By Marc Gauvin

Copyright © 4/5/2021
Reproduction expressly granted provided attribution is given and original link is provided.

 

What is more important "ecoside" or why it happens?

Do we make ecoside a crime and then do nothing about what causes it?

Do you have a simplistic view that what needs to be done is to restrain people's behaviour without understanding what motivates that behaviour?

Did you know that according to the systemics of our current absurd monetary imperatives the same problem continues even if no one makes "profits"?

Do the math, if you don't know how, now is the time to learn here is a full primer The Beast of Compounding (Latest Draft),  no more excuses for "not knowing".

If no one were to make any profits,  the same systemic imperatives to just break even,  still require unbounded growth!  "Control" as it is recklessly and negligently conceived in our current (erred) money paradigm necessarily produces compounding, as  the "cost" of that "control" is applied in the form of unit per unit fees and penalties, this then leads to systemic instability of the money system itself and subsequently to all related economic behaviour.  That in turn, in the eyes of our criminally negligent current economic "wisdom",  creates the "requirement" to "control" behaviour.  These "control" measures are thus justified through the abusive and repressive suspension of fundamental rights and freedoms as the "price" for our past collective (evil) excesses. But! Such faux control of problems through  money,  is a fool's or a psychopath's task because it isn't control but rather a means to fruitlessly punish in a vain perverse quest for retribution, as if that was in any way constructive or helpful which it simply isn't.

Is this part of YOUR plan?  Have really given it any thought, or were you planning to wing it?  If so,  think again as this so called "control" by money can be shown to be the very engine that systemically produces the very collective behaviour it attempts to offset hence the reference to fool or psychopath. That is,  in no uncertain terms, if we remove (correct) that "control" we will, in the most efficient, benign and rewarding terms,  accomplish the single greatest step towards full reform of human derelict behaviour, at no cost or penalty to anyone and yet to the greatest immediate benefit to all.

So,  if your moralistic approach to dealing with "ecoside" depends on mindlessly focusing on restraining people's behaviour, without first having given the least thought to our current illiterate false paradigm of money, then you are, wittingly or not, aiding and abetting a crime not only against the environment and humanity but against any sense of purpose and dignity.

Did you think that you were going to get on the "right side" of history by not having to question your immediate intuition? Ignoring that unless you free your mind and truly start thinking independently,  any intuition over a false paradigm,  is necessarily 100% ABSOLUTELY wrong.  Which is why you cannot just mindlessly follow your facile impulses to escape a false paradigm that has dominated your mind in most cases since birth.  But rather, you have to meticulously and rigorously logically analyse your (our) predicament,  using the kind of impeccable intellectual integrity that serves to support a minority position against the onslaught of a majority of group think nonsense. This, is what it really takes and if your not up to it,  then step out of the way as you are then part of the problem not any solution.

Are you ready to stand on your own?  Or are you measuring the wind with your finger, hoping to get in on the ground floor with the "right" group think without really understanding anything?

We identify the rivers of nonsense propaganda by noticing how they never focus on the cause of the behaviour they compel us to correct, all they do is reiterate "crisis" without ever providing any indication of what is the root cause and what exactly to do about it. Instead they count on people making the fallacy of assuming that knowledge is somehow measured by displaying "awareness" of how dire  things are  i.e. “those most aware of how bad things are must best know what to do”. But that is utter nonsense,  because no matter how eloquently one describes how dire a raging fire is,  yelling  "it must be dealt with!" louder,  in no way qualifies one to deal with the crises. It is simply an idiot's response, offering nothing useful and constructive and in fact,  such mindless whining and virtue signaling is at best a nuisance that ultimately adds to the problem.

Unfortunately, the worst among humanity are taking advantage of such "facile" and superficial mass response to "crises". They are using it as a lame excuse to "control" everything but themselves and their reckless indulgences.  Because while not having a clue of how to steer the bus,  they don't trust anyone or anything else in the driver’s seat, as their “success” has been wholly predicated on prevailing in today's money paradigm (a buss with no brakes) without noticing why and how that paradigm is false and is founded on the logically incoherent compulsion of conceiving money as both a measure of value AND a tradable commodity,  without noticing how these are mutually exclusive.

Thus their "success" is ultimately all for naught,  as being so over invested in their monetary prowess they are compelled at all cost to validate that system or relinquish any claim to any merit, privilege or prerogative that prowess of such an erred money system awards them,  a system that unequivocally can be shown to be a root cause of the crisis they now must somehow correct.

The good news is that anyone who understands the true abhorrent nature of our millennial erred notion of money and how it has perverted "civilisation" by misrepresenting recursive societal failure as the "price of our magnificent future progress and achievements" each reiteration inevitably bringing us closer and closer to a final abyss in spite of the many hints and warnings the best of mankind have  offered, lets hope not in vain.

Who are the current and past agents of such colossal mishap and failure, how do we readily identify them and how do they flock together to create the illusion of effective "communication" and "inclusion" to support their false claim to implied exclusive virtue? How do we know we aren't one of them or one of their unwitting groupies?

The test is actually very simple and straight forward, but takes courage on the part of each of us to face.   Think about it,  knowing that we are in dire trouble how do we respond when someone confronts us with a reasoned explanation as to why we are in such straits and what is required to correct our course,  when instead we are used to a barrage of prompts to virtue signal without any clear and transparent explanation beyond shouting “things are bad”, what is our response to being presented with such reasoned explanations?

1) Do we ignore them?

2) Are we afraid of reasoning objectively and where that might lead us away from our familiar and comfy group identities?

3) Do we insist on being vocal while presuming incompetence e.g. 'I am not smart enough to learn and understand such complex issues but I still feel compelled to add my voice to the "solution"'?

4) Or do we struggle to grapple with it until we are capable of truly understanding it proving it right or wrong, abiding by our honest meticulous rigorous efforts to reason before pronouncing ourselves. Knowing that the only contributions with integrity are those that expose themselves to independent objective falsifiability.  Because whether right or wrong, examining them advances knowledge and legitimate common causes and collective actions. Always keeping in mind that the biggest obstacle to meaningful benign progress is to seek facile and superficial inclusion over and beyond true knowledge and understanding that any real revolution begins with a collective of true leaders not followers, the latter only coming later when all the real work, risk and valor has already been spent.

Answer yes to 1) through 3) and you have identified the imposters and/or their little helpers, whose methodology enslaves us while enlightening no one. If you answered yes to 4) then you understand that while more demanding, truth and truthfulness is the key to our collective emancipation and those ready to serve truth not just use and abuse it,  are the only ones we can count on to make the difference we need, if ever things are to truly improve.

 

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The Beast of Compounding You Might Not Have Noticed

By Marc Gauvin copyright (c) Jan 10th 2020 All rights reserved
www.moneytransparency.com (MSTA) Revision 4.1 (Final)

An adventure of escaping the matrix and each coming into their own

Foreword

The purpose of this article is to provide and convey a simplified yet thoroughly illustrative mathematical model of the general nature and dynamic systemic effects of producers integrating into their costs of production percent commissions (e.g. for financial services) charged to them on the basis of the value of their production being transacted, as opposed to on the basis of any determinable calculation of the real value and costs of those services for which producers are being charged. These % commissions are typically charged by banks and lenders in general but not exclusively, government taxes have the same mathematical effect. Although this article does not attempt to represent any real life scale or breadth of actual amounts or scenarios, the scenarios presented do accurately represent the actual nature and consequences of common financial compounding as illustrated herein.

I dedicate this to all MSTA supporters and team who have taken the leap to see long before most, what others will also discover herein.

Introduction

Guess what! You are a worker! If you want to escape that, you either become a villain or a true hero. True heroes are actually workers too, but with the difference that they choose their job and accept the consequences. True heroes do not choose what knowledge to learn but learn all knowledge that is required of them, they overcome weakness with patience and resolve and defy defeat with grace.

 “A coward dies a thousand times before his death, but the valiant taste of death but once. It seems to me most strange that men should fear, seeing that death, a necessary end, will come when it will come.” W. Shakespeare

Let’s now have an earnest look at the current machinery we have been born into whether rich or poor. Beginning with seeing how players serve, wittingly or unwittingly, undeclared masters.

Some use tricks none have contemplated or ventured to understand, or at least dare not admit to having done so, should what they do mark the eerie presence of untold mischief, malice or unconscionable evil. To live in a world free of such tricks, is not only possible but inevitable as truth always outruns error and deceit. The only question, is if in the process of the elimination of such deviance, souls can be spared in a state of wise innocence as opposed to one of inexorable culpability. Only such a prospect makes what we are about to undertake worthwhile. This is an adventure that begins by perusing our seemingly mundane, repetitive and boring practices that underlie our economy. But in doing so, we will soon begin to notice the trace of a strange beast, that is anything but boring, but rather surreal and ominous. A beast that while seemingly motionless, stirs everything it touches and everything it touches becomes an extension of it, lest what is touched by it be blessed by a true vision of it, the beast. During our adventure, we will apply all the necessary tools to arrive at a long awaited conclusion. A determination, that while it may seem to impact us considerably upon reaching it here, even jar us into a new sense of ourselves and our reality, whatever jolt it brings now, will seem little compared to all we will begin to see once we raise our gaze from these pages. It matters not whether we are poor, rich, famous or anonymous, beautiful, handsome or homely, talented or ordinary, this knowledge will transform us into what only can be recognised by those who share such knowledge fully and completely. To rise to this knowledge, is to become in this instant at least, integrally and wholly good, insightfully constructive and able to take on the responsibility of becoming a force for restoring all and everyone, beginning with our very selves.

The Battle Field and Horizon

In the world of this year 2020 “workers” still exist and in so far as they are able to do so, seek to “charge” for their value in “units” according to their “cost of living” (expenses, food, housing, utilities, clothing, tools and materials, schooling, medical, etc.) charged to them in those same “units”. Depending on a given worker’s demeanour and fortuitous circumstance, each fares better or worse.

All those things that make up our “cost of living”, are what we call material “goods and services” or simply “real wealth”, which is why they are included in what is called the “real economy”, without which we would all be pecking grains and worms from the ground like stray pigeons.

Workers are for the most part producers in that each contributes in one way or other to those “products” of “real wealth” that are “consumed” by “consumers” including all workers in the “real economy”. One peculiar type of worker, keeps track of all those units, that all use to represent the relative value of those things each of us produces and consumes. In our world of today, such a worker is called a “banker”, a term we will use to represent the collective of such workers as one entity, because as the Spanish say: “God creates them and then they choose to cluster together.” That is in general, what one bank does all banks do.

Workers operate within what are called value chains. Value chains represent links between workers that extract and distribute resources to those that manufacture and distribute products through to stores that deliver those products to final “consumers” i.e. everybody. Each link of a value chain accumulates the costs of all links that provide what they need, to which they add the value of their own contributions and then pass that sum to the next link, so on and so on successively throughout all links up to the final consumers.

In the vast majority of cases, the value each link charges to its corresponding value chain, is uniquely based on only its products and services, never that of any other products and/or services. Following, we provide a rudimentary example of a value chain that extracts wood to produce chairs for consumers:

1.    Jack goes out into the woods and cuts trees for wood and charges 100 units for the wood.

2.    George who builds chairs, gets the wood from Jack and builds five chairs, for which he charges 200 i.e. 100 for the wood to Jack and 100 for his efforts in building the chairs.

3.    Mary who distributes many other things to stores gets the chairs from George and charges 250, 200 to George, 50 for her effort delivering the chairs to a store.

4.    Marlene who has a store with many different things for sale gets the chairs from Mary and charges 300 for them, 250 to Mary and 50 for her efforts of storing and selling the chairs to consumers.

5.    Jack, George, Mary and Marlene are all consumers too and each get one of the five chairs at 60 units each for a total of 300 units, with one chair left over for someone else, perhaps a worker from some other value chain.

This example doesn’t include any bank charges and so serves to illustrate the accumulation of real wealth brought together for a common end, from resource extraction up to final consumers of real wealth summarised as follows:

Value Chain

Contributor

Contribution

Value

Contributed

Value

Summed

Jack

Wood to Builder

100

George

Chairs to Distributor

100

200

Mary

Distributor to Store

50

250

Marlene

Store to 5 Consumers

50

300

 Fig. 1 Real Wealth Transfer

For a total of 5 chairs at 60 units/chair).

Notice that the cost of each contribution of real wealth in the final consumer price is constant in the calculation of the final costs of the chairs? That is the value of Jack’s wood doesn’t change throughout, similarly the values of George’s, Mary’s and Marlene’s contributions are also constant.

Enter the Banker

Bankers offer services and record transactions for which they charge fees. This collective along with governments and a few others, are of a class that charges most everyone and for almost all if not all transactions that take place.

Now, assuming the banker in our example is like everyone else in terms of how they charge their value, i.e. according to the costs and measured value of the services they render, the following is what it would look like:

Let’s say that in our simplified but very illustrative mock value chain, to record/annotate any given transaction no matter the amount, a fair and generous fee is 10 units per transaction. Then, the banker fees to the whole value chain would be for 8 transactions in total (3 between producers and 5 to consumers).

Following is a summary of the cumulative cost of flat banker fees to our friendly value chain:

Value Chain

Contributor

Contribution

 Value Contributed

Real Value

Sum

Transaction
Fee (10)

Transaction

Cost*

Jack

Wood to Builder

100

100

10

110

George

Chairs to Distributor

100

200

10

220

Mary

Distributor to Store

50

250

10

280

Marlene

5 chair transactions 

50

300

50

380

 Fig. 2 Real Wealth Transfer + Bank Service (flat fee)
* Transaction Cost = Previous Transaction cost + value contributed + flat fee

For a total of 80 units in banking fees 26.66% of the 300 units of real wealth, raising the cost of the 5 chairs from 300 to 380 or from 60 to 76/chair. Right? 

The Banker’s “divine/diabolic” inspiration

But, what happens if the banker convinces everyone against all reason, that each of those 300 units represent individual “products”, that the banker makes available to society, i.e. each unit bearing its own independent value? Such that, the more units used by society (i.e. the larger the sums), the more value the bank is actually providing the world! Thus, the banker so inspired (divinely or diabolically), ventures to test the waters by deciding to adopt a new regime of charging a percentage of the balances transacted, at say 10% per transaction.

Let’s look and see how this plays out:

Value Chain

Contributor

Contribution

Real Value

Real Value

Sum

Transaction
Fee (10%)

Transaction

Cost

Jack

Wood to Builder

100

100

10.00

110.00

George

Chairs to Distributor

100

200

21.00

231.00

Mar

Distributor to Store

50

250

28.10

309.10

Marlene

Store to 5 Consumers

50

300

35.91

395.01

 Fig. 3 Real Wealth Transfer + Bank Service (10% Compounded)
* Transaction Cost = Previous Transaction cost + value contributed + 10% of (Previous Transaction cost + added value)

For a total of 95.01 in banking fees generated to the banker, 31.67% over the cost of all the real wealth (i.e. 300 units). Thus raising the cost of the five chairs to 395.01 or 79.00/chair. Now representing a 15,01% increase in income to the banker compared to the case of charging a flat fee of 10 units/transaction.

But notice, all society has to show for all this is the exact same five chairs. Except for the bank, that by switching from charging passively in terms of the cost and merit of its own real service to charging dynamically in terms of the real wealth values of others, the bank so achieves a dynamically increasing return for their services on the basis of the value of other goods and services not their own, and for which they are not responsible at all. This means that in our example, the corresponding share to the bank of the final 5 chairs increases dynamically and as we will see, faster than the banker increases the cost of real wealth to everyone including the banker! Please ponder if this is true or not. Not sure? Maybe or maybe no? Well read on, the proof follows. I hope you take the time to learn what follows, if you need help with the basic math, contact any good engineer or engineering student, if the basic reminders and “tutorial notes” included herein prove insufficient.

Knowledge as a Weapon

First thing to notice from the above scenarios, is how the banker’s fee is obtained by virtue of multiplying by a percentage factor that in our example is 10%, the fixed sums of values corresponding to the instances of real goods or services, that are the objects of numerous transactions across a value chain and that the bank is not responsible for. The second thing to observe, is how the sums of the value assigned to those real goods and services by producers, are constants i.e. none of those values have any dynamic impact on the cost of final consumer products. The third and perhaps most important thing to remember, because it is conceptual and without it, NONE OF THIS WOULD BE HAPPENING!! Pause and think for a moment before continuing, remember the phrase above “...that each of those 300 units represent individual “products” that the banker makes available to society, each unit bearing its own independent value.” Remember that!

For greater simplicity, in illustrating the general principle at play, all we need is to examine the effect of any real object of value being subjected to a service with fees that are:

1.     Not based on the measure of value of the service being rendered but on the value of the objects transacted for which the service is charged, i.e. a % commission, and;

2.     Applied to several consecutive transactions, e.g. as in a value chain.

So, with that in mind and continuing with our mock example, but only focusing on the banker’s 10% charge over just the value of Jack’s wood, that we will represent as “W”, because it is a constant so no matter what we do to it, it will never change. That is, instead of writing 100 all the time we simply write W, that way we know it to be that hundred that corresponds to the value of Jack’s wood and not any other 100. Ok?

Jack´s wood is “W” = 100 units, a constant that will never change throughout.

(Tutorial note 1: Most will remember that percent (%) is simply “per hundred” represented by a % sign which corresponds to the number 1 divided by 100 i.e. 1/100 =0.01. So 10% is just 10 x 1/100 = 0.1. this is important to keep in mind for later.)

When we say the banker charges a fee of 10%, we are saying that it takes 10 for every 100 of something transacted. Now we know that the cost of Jack’s wood W = 100, and that for the bank to keep track of any transactions the bank wants 10 for every 100 transacted. So, the total cost of W plus 10% of W, can be written as follows:

Total Cost = W + 10% W

(Tutorial note 2: Now would be a good time to remember basic factoring. If you don’t, here is an easy refresher, if you have two numbers that you are adding together and that each share a common factor, you can take that common factor out to simplify the addition and turn what was a simple summation into a multiplication of two simpler terms, here is an easy example:

6+4 = 2 x (3+2) or 2(3+2) = to 2x5 = 10.

This will be important to remember for later. Also important is to remember that number 1 is the universal factor of all numbers and all numbers are a common factor of 1, for example 2 + 2 is equal to 2(1+1).)

Got it? If so, do we have a summation of two numbers with a common factor in the total cost here?

Total Cost = W + 10%W.

Yes! W is a common factor of both terms, so we can factor it out

Total Cost = W(1+10%) or W(1+ 0.1)

This factoring out of the constant W, is important because it allows us to isolate the remaining critical factor in our case (1+10%) or (1+0.1). That, as you will learn next, is what is operated on to constantly grow the banker’s income faster than the growth of the cost of everything to everyone including the banker.

The critical factor (1+10%) alone, helps understand any singular summation of 10% to anything. For example, if you wanted to represent the cost of a car “C“ plus 10% you would write, C(1+10%).

But what about representing the cost of the second and third and the nth transaction of W plus the accumulation of 10% fees over all previous links in a value chain? Well let’s see how we can do that:

Since we’re concerned with the total cost i.e. W + 10%W for several consecutive iterations, Lets call the whole thing “Csubscript”. Such that, C0 represents the value before W is ever transacted, C1 when W is first transacted, C2 the second time and Cn the nth time of any n number of times W is transacted.

 

The archer loads up with arrows

 

(Tutorial note 3. Now the last bit of math ammunition you need are “exponents”. Remember those? Exponents are superscripts that tell us how many times something appears as a factor in a multiplication of itself. For example 21 is simply 2 and 22 = 2 x 2 = 4 and 23 = 2 x 2 x 2 = 8. Notice how each unit increment of the exponent results in a doubling of the value expressed? Keep that in mind for every time you hear the word “exponential!!!”.)

One more amazing thing, what do you think 20 or 1,000,0000 are both equal to? Well, as it turns out, any number no matter how big or small raised to the power (exponent) of 0 is equal to just 1, so 20 = 1,000, 0000 = 1.)

With what we have covered so far, along with the tutorial notes, we should readily comprehend the following fully and perfectly:

The value of Jack’s wood “W = 100 before it is transacted is,

C0 = W(1 + 0.1)0 = 100.

(Remember, anything raised to the power of 0 is just 1, so (1 + 0.1)0 = 1, this just shows that our model works for the case 0 transactions.)

Now, Jack’s wood + banker’s 10 % for the first transaction (remember?) is,

C1 = W(1 + 0.1)1 = 110 .

And for the second, stop let’s think...., is it not C1 times the critical factor i.e. W(1 + 0.1)1? Yes it is! So,


C2 = C1 x (1+0.1)

= W(1+0.1) (1+0.1)

= W(1+0.1)2 .

And for the general case of any n subsequent transactions of W, where the same critical factor is applied we have:

Cn = W(1+0.1)n

Remember, that in this form i.e. with W factored out, we can look at the critical exponential factor (1+0.1)n and study it on its own, separate from W the passive constant in all and any subsequent n transactions.

Hold on, we are getting closer to what all this means! We’re past the halfway point! The journey back is now longer and at least as perilous as continuing, more now hangs in the balance than ever before if we quit.

“A coward dies a thousand times before his death, but the valiant taste of death but once..”. “True heroes...choose not what knowledge to learn but learn all knowledge required, they overcome weakness with patience and resolve and defy defeat with grace...”.

The archer takes aim

Back to our quest! Now that we know that the compounding (exponential) factor that compounds 10% onto itself is,

(1+0.1)n

Why do we care? Well, because we want to show how to calculate how the banker multiplies banker’s income faster than that same factor increases the cost of things for everyone including the banker.

Remember our number crunching where we showed how incorporating the bankers 10% in the cost passed on, raised the return to the bank by 15.01%? Well that increase gets bigger faster as the number of transactions (links in the value chain) of the constant W increases, Stick around and see!

Nowhere better to begin our exponential journey than with exponent 0!

So, for n = 0 (i.e. no transaction has taken place yet),

(1+0.1)n = 1

Here the bank receives 0% because (1+0.1)0 = 1 and the difference of that result and 1 is 1 - 1 = 0% going to the bank! Neat how this shows how our model works even before anything has happened.

And for n = 1? (we’ve done this before the factor is simply itself (one times) )

(1+0.1)n = 1.1,

so the difference of the result is 1.1 - 1 = 0.1 (i.e. 10%) going to the bank as income, as expected, right? Right!

And for n = 2 we have,

(1+0.1)n = 1.21

with the difference of 1.21 - 1 = 0.21 (i.e. 21%) going to the bank as income, again as we demonstrated in our first brut force number crunching, so this too is as expected.

But do we see a pattern? Hmmm, sneaky beast eh?

And now, drum roll.... for n = 10! Let’s see (take out your calculator),

(1+0.1)n = 2.59

with the difference 2.59 - 1 = 1.59 (i.e. 159% yikes!!!) going to the bank as income! Let’s try that again 2.59 x 100 = 259 = (100 + 100 x 1.59) = (100 + 159) = 259. Yep it pans out! Amazing beast!

And for n = 20,

(1+0.1)n = 6.73

With a difference of 6.73 - 1= 5,73 (573%!!!) of units of income to the bank.

Getting the picture now? No matter what we charge for our REAL goods and services, by applying the notion that each unit of the numbers that represent the value attribituted to those goods and services are products in and of themselves and thus have a unitary value if not cost, such that their use can be charged:

1.      Not based on the measure of value of the service of providing the units, but on the value of the object being transacted measured by those units.

2.      And applied over several subsequent transactions.

Then, it follows that no matter the cost of living, those who charge for their services on the above criteria, are guaranteed an increase in income that is equal to that increase in cost of living such that the proportion of wealth that corresponds to that increase grows correspondingly. All this without that income corresponding to their costs/value but rather to everyone else’s costs, that as we have well established are constants. And finally, that income being the cause of the increase to the system must necessarily be received before it the increase is incorporated .

Note also, how this compounding feeds back into subsequent value chain cycles thus the growth becomes a function of the cycles too.

The archer shoots at the heart of the beast, or?

Notice how if everyone tries to raise their cost of living, by increasing the initial nominal cost of their real value, nothing is solved, the same proportion is applied to the final distribution of real wealth (always in favour of the banker) because it is the result of multiplying with the percentage based compounding (critical) factor! Which is why we emphasised that W is a constant! That is, no matter how much or little people decide to charge for their constant value in units, the same growth rate takes place relentlessly, NOT as a function of the value of things but as a function of the critical factor we isolated. And reducing the banker’s percentages doesn’t stop the growth, i.e. any lesser percentage > 0 will do the same thing just slower. But all percentages have the same insane target, i.e. all aim to reach infinity over the number of transactions over time.

There you have it. With skilful stealth we have invaded the beast’s domain and even its den. We’ve seen its seemingly limitless tentacles reaching out every which direction up down and all around, even when it seems to be inanimate. Along the way we have armed ourselves with mastery of all the relevant knowledge to spot, observe, slay the beast and to lay down barriers so that no more can such a vile creature invade us robbing us of our wise innocence. Meanwhile, our world will, with exponential speed, restore itself replete with all the requisite strength, goodness, courage and genius that comes with true knowledge.

So, there are only two solutions, we either shoot the beast in the heart that which multiplies bankers income faster than that same factor increases the cost of things for everyone including the banker i.e. slay the compounding factor (1+0.1)n so that no banker or anyone else for that matter e.g. Government will charge in terms of anything but the true value of the services they provide. But, to prevent this from happening again, all we have to do is correct this insane idea that every unit of a number can be rationally treated as a separate product as without this concept none of the compounding could ever take place!

OR! All this journey is mostly for nought and our arrows will keep being shot off target and in our frenzied panic, we will shoot more and more of them in all directions but upon the beast. Is that not what we are doing now, wittingly or unwittingly, maliciously or hopelessly?

“A coward dies a thousand times before his death, but the valiant taste of death but once. It seems to me most strange that men should fear, seeing that death, a necessary end, will come when it will come.”

 

Causes, Outcomes and Solutions

By Marc Gauvin

Copyright © 4/02/2021
Reproduction expressly granted provided attribution is given and original link is provided.

 



Many refer to states such as anarchy, political self-determination or reverting to a pre-civilisation human state as "solutions".  But they are not solutions, they are desired outcomes that require taking certain and different actions to achieve depending on where one finds oneself both individually and collectively.  An individual caught in a trap cannot escape by ignoring the logic of the trap.  That is,  the individual must somehow understand the trap to become free of it, no matter how foreign that logic is to the individual nature.  

Anarchy requires dissolving hierarchy in general and one common error is to assume that hierarchy necessarily is a manifestation of illegitimate and abusive power, a thus constitutes domination.  But that by no means is necessarily the case, take for example a stadium's (central) score board that without affecting how the players play, can transparently keep a common score. Now, if the game happens to somehow be rigged on the field, then giving everyone their own score board and suppressing any "centralised" score board will not correct that rigging, it will just undermine keeping a common score preventing individuals from collectively realising how much the rigging (in the field) is affecting the score.

Keeping score is not the problem if it can be done correctly and fairly. If it cannot be done properly and fairly then by definition it is not score keeping. Humanity's shackles have become the lazy and lackadaisical belief that the score is somehow valid and by that negligence on the part of most everyone no one is looking to see how and why it may be invalid. When one does the science to formally unveil what is wrong, what one discovers is far more precise than any description or label of an outcome and so cannot be delimited by those.

If you are shackled you need to understand the nature of those shackles how they are locked and how they can be broken or unlocked.  Describing and labeling the state of being free of shackles won't do anything to unshackle you and can even be counterproductive if such descriptions are sold as "solutions" when they aren't. Similarly, the other examples speak to the assumed nature of outcomes but do not represent the means to achieve those outcomes appropriately i.e. they are not in and of themselves solutions but the out come of the appropriate solution. 

Now, when we say domination is "the cause", wittingly or not we are saying that domination itself has no relevant cause because if it did,  then "the cause" would be what causes domination not domination itself. If domination is in any way selectively applied, then the conditions in which it is become the root cause of what domination produces.

When we realise this,  then one has to ask whether domination is necessarily wrong and distinguish between when it is legitimate and when it is not. If for example one is caring for someone e.g. a child in a dangerous environment,  domination can be what saves the child from being run down by a bus.  Another case is self defense that requires the ability to dominated in order to protect one self or others. 

A fundamental distinction that is too often overlooked and that arise by not distinguishing between outcomes and the causes that produce them, is the difference between wrong and systemic wrong. The latter is what is lethal because once a wrong becomes systemic then by definition its effect compounds by virtue of wrong + right = wrong. Wrong actions that are not systemic have isolated effects. A nuclear explosion is systemic while a random crime is not. A psychopathic serial killer while being systematic is not systemic because his actions do not induce others to become psychopaths. However, any logical error or erred belief can make people behave as psychopaths when otherwise they wouldn't. Finally if that belief or (il)logic is systemic in nature then the resultant psychopathic behaviour will become system wide even among a predominantly non psychopathic populace. In fact, such can come about by collective error without any need for conspiracy even if psychopaths are enabled by it.

 

 

 

 

 

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A Tale of Authoritative Undecidability

By Marc Gauvin

Copyright © 6/10/2018
Reproduction expressly granted provided attribution is given and original link is provided.

 

Once upon a time someone disrupted the social theorists with some facts that they happened to have overlooked but couldn't accept because then they and everyone might realise that they don't have a clue about what they are talking about. So the social theorists agreed to disagree on everything except for the following dictum:

"Truth cannot be known other than for isolated trivia and for that reason it is delegated to simpleton scientists and engineers while the big decisions and complex problems are to be left to us social theorists for which we will avoid decidability at all costs, because that kind of nonsense is just for scientists and engineers and their isolated trivia. Oh and yes, we will invent a pseudo science called economics to put order out of our inherent disorder while keeping everything comfortably undecidable."

Subsequently, the social theorists bamboozled the public, divided it and pitted it against itself over a vast range of theories and proposals eloquently spoken in undecidable logic, about all no one can know about including themselves but that must be decided! Thus,  using hindsight for foresight they dictated the "will of (the) people" to the scientists and engineers as to how they are to implement their simplistic isolated trivia as long as it was in the most economically undecidable fashion possible.

This gave way to fantastic undecidable achievements so unprecedented that they quickly out grew their resource base and unleashed wonders such as atomic energy/bombs, depletion of resources, destruction of the environment, evermore refined tools of killing and torture (doubling as entertainment), destruction of culture and any particular way of life, mass communication/surveillance, compelling, unfulfilling and addictive entertainment, and many more undecidable wonders,  and of course, the systematic suppression of any spontaneous uncomfortable decidability other than that related to engineering and scientific trivia.

The key players in all this marvelous "progress" thought they were making great headway by a phenomenon invented in economics called profit. Profit was the most amazing invention only possible if we maintain undecidability of course, those genius economists got that right! You see the invention was what made  their particular unit of value measure so unique from all other measures in the universe, defined (undecidably) so as to incorporate into all "measures" of value and merit, a component that just happens to be entirely disassociated from any value or merit and not only that,  it had the fantastic capacity to compound as a function of itself.

The engineers and scientists at first were skeptical,  until they remembered the comfort of undecidability so ingenuously built into everything on purpose.  But more important than that, if they ever even implied that economics should be decidable they weren't going to get any of those magic units!

Then suddenly the social theorist realised that without at least the semblance of decidability they could not enforce anything in a way everyone would accept without bludgeoning them,  so they informed the Judiciary that just happened not to study science, engineering or economics, that they should have decidability.

And so here we are, we can continue with this nightmare in comfortable undecidability or we can show the judiciary that economics needs to be decidable or at least its unit of value and merit must be,  because that is the only way their decisions can be judiciously decidable.

 

 

 

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