What to believe in~?

Audio -


Keen paper

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  • CSArichardo

    I cannot believe what you are saying ?!  But you reflect where I am coming from too.  I think you want to play the game but like a logical person you want to know the rules so you understand the game before you play it.  My current view is that the economic system is a system of systems.  Every economic theory taught by a current or past expert is based upon their experience in say one of the systems which makes up the financial system of systems !  Hence their advice might be correct in regard to the system or sub system behavior they operate in but be sub optimal in the overall financial system of system behavior.  Hope you followed me on that !

    • http://overthepeak.com/wordpress/ Mystic

       Strangely……….I think I did.
      Example (one of everyday millions) – Bernanke made a complete hash of explaining the gold standard in the mini lecture series he just did.

      We expect too much of people~!

  • NascentMind

    You can not give information without  opinion (selecting the relevance.)
    If you Tab, you close your (and others) mind.
    We come here to try and understand the way of fools.
    We are Jigsaw pieces, trying to find a straight line, and there are no straight lines in Nature.

    • http://overthepeak.com/wordpress/ Mystic

       Opinion is one thing.
      Having an agenda, is different.
      Take the 1% / 99% thing.  I can point to the charts and call it how it is.  I can say that it comes with problems attached, but not be `for` one side or the other.
      (at least, I think I can~!?)

      • NascentMind

        What formed the agenda? why have an agenda, if you had not an opinion that need exploring first.

  • CSArichardo

    Finally some engineer applying some system analysis as opposed to economist looking at the problem space. Funny how your video seemed to hint in this direction, as to the lack of economists ability to really being able to figure out the Big Picture.   I am sure there are many more non economists out there but this is a recent paper presented at SysCom 2012, IEEE International Systems Conference, 19-22 March 2012, Vancouver, Canada which I am doing a second read of but cannot post due to copyright.  I will attempt to get the longer version directly from the author. ==============================
    A System Analysis of the Basel Capital Accord’s
    Regulatory Control over the Behaviour of Modern
    Banking Systems.
    Jacky Mallett
    Icelandic Institute of Intelligent Machines
    Reykjavik University
    Reykjavik, Iceland
    Email: jmallett@ieee.org
     
    Abstract—The banking system plays a critical role in the economy controlling both the supply of money and a significant percentage of total debt. Originating in medieval book keeping practices, it has developed into a distributed recursive feedback system, where money in the form of bank deposits is created by banks when loans are made, and removed as they are repaid. The total quantity of loan capital that can be created by the entire banking system, and by extension the total amount of money in the economy is locally controlled at each bank by several factors including the bank’s individual capital reserve, its required central bank reserves, and its liquidity with respect to the daily difference between its income, expenses and liquidity holdings. With the stability and successful operation of the pricing mechanism for the entire economy directly linked to the money supply, understanding the mechanical operation and behaviour over time of banking systems under different regulatory frameworks can be regarded as a critical problem for modern systems analysis. In this paper we present a computer simulation of a simplified banking system using the internationally agreed Basel Accords in use since the 1980’s. We show that the Basel Framework does not appear to provide the stability guarantees that might be expected for such a critical system, especially with respect to its regulation of the supply of money and credit over time, and the multiplier relationships embedded in the system. We show that loans to customers at other banks, interbank lending relationships, and failures in loan demand, continue to be a source of instability for the system. We also show that in the current regulatory framework, there appear to be no absolute constraints on the bank deposit creation/lending process and that the main factor controlling the expansion rates of the system appears to be the individual bank’s liquidity constraints, which originate from the difference between their profits and expenses. Since banking profits are directly proportional to interest rates minus their loan defaults, this implies that the relationship between interest rates and expansionary economic policies may be significantly more complex than currently presented by economic theory. It also suggests that interest rate raises may be required in order to stimulate lending in many of today’s economies.
     

  • snedmeister1

    Evening, NIck.

    Very fine couple of vids lately…. ( good comments from all in there too )…

    My question from todays video is; 
    Why would any bank lend it’s reserves…??

    They can keep the reserves, lend some cash into existence, and then create a new asset too for the balance sheet…!!??

    Lastly, apologies for the lack of comments of late, although I have been popping in to watch, my job is taking up a disproportionate
    amount of Sned hours at the moment, ( with a couple of Overtime nights too ) and I wouldn’t want to have “empty” comments here….

    I have a bit more time over the next couple of days, so your opinions on the question would be appreciated..!!!!

    P.s. You probably guessed, but a Money tab ( and MMR ) would be at the top of my “pyramid”…:)

    • http://overthepeak.com/wordpress/ Mystic

       I have asked the `reserves question` on a few sites that I thought I may get a reply.
      It is a very difficult question to ask ……… (and answer it seems, as I have had no replies as yet~!)

      The main problem I have, is the same problem you have………There are only 24 hours in a day (and many routine things must be done in them).

      I give you this by Pavlina – http://www.levyinstitute.org/pubs/pn_12_02.pdf
      (I could have a full time tab on how the MMT groups split into factions~!) 

      • snedmeister1

        Morning, NIck.

        Not a bad paper there, and although a Job guarantee ( not for profit ??? – Is that the same as making a loss ??? or just balancing the books???
        because the difference is significant in providing what is needed )  is a nice idea, it leads back to the same fears of many….

        Namely, how do we ( or politicians ) decide what is needed accurately, if we are not chasing profit, as profit is seen as a measure of 
        a viable business….???

        There is a lot of waste in having people in the Dole Queue, yes, but there are many in charge who would implement bad decisions and waste
        resources too – and thus be competing for a shrinking supply of said resources….

        Having said that, on the pro side, we have many energy/ infrastructure projects which will never be funded by the private sector,
        precisely because there is no profit, but that we all know would benefit society as a whole ( and create a new employment boom )….

        I think, between us here, we can see it as a great idea ( as long as there is a sensible debate first, on what is needed etc ),
        but convincing the general public and “pure capitalists”…???
        I’m not too sure…. But of course, I could be wrong…???

        You are quite right in this video though, when you say that having “money” tabs, and “political” tabs is too hard to do on OTP, as they
        are so intertwined….
        We can not separate them here I suppose, precisely because, they are so intertwined in the “real world”…??

        • http://overthepeak.com/wordpress/ Mystic

           You are not wrong.  Effectively no one will go for anything like this.
          Look at Spain….50% youth unemployment and no idea of doing it.

          I put it forward to show the inevitability of continuing on the course we are on.
          (all very Newtonian (is that 2nd law of thermodoodahs~?))

          So, we can project out all linear like, all things that won’t change and then all we have to do is watch out for the things that may knock it off course.

          Easy.  

          • snedmeister1

            What do you think may be the cause people to reject such ideas…???

            Lack of understanding..???
            Lack of desire to try and understand…???
            Fear of change…???

            All of the above…???

            • http://overthepeak.com/wordpress/ Mystic

               Lack of vision.
              Modern politicians are very little people.
              Three generations of them have had it very easy.
              It has been only necessary to hold on and things would come out ok.
              The world has been on a downhill roll.

              Now they have to do some uphill slogging, none of them (or their advisers) know what to do.

              They are being sensible.
              They don’t KNOW things are now different, so best make like nothing has changed and just hold on.

              Maybe they’re right…………..(but I don’t think so).

  • Stephen Simpson

    In recent years, I have also had
    a number of “Copernicus moments”. Alan Savory (the Steve Keen of the ranching
    world) has spent a lifetime looking into the cause of desertification.  He found desertification was not caused by too
    many grazing animals, but by too few. More precisely, a lack of large herds of
    herbivores kept tightly packed and on the move by predators. His thoughts on
    having a holistic goal might help you think about the top of your pyramid. Here
    is a link to a 60-minute presentation http://vimeo.com/8239427  . View the last 10 minutes first, and then if
    you are interested see the main body of the presentation. I do hope this is not
    off topic. I included it to show how (in so many areas) the mainstream view of
    the world seems to be wrong!

    • http://overthepeak.com/wordpress/ Mystic

       I am downloading the video and will rip off the mp3 and listen to it.  (this is what I do, so I can work in the garden at the same time).

      As I said to someone else in this comment section – We are all only human and expect rather too much of ourselves.  Billions of people, with trillions and trillions of actions, have build a great big complex ever-changing machine that individuals cannot possibly understand. 

      Thanks SS.

    • http://overthepeak.com/wordpress/ Mystic

       Listened to it this morning (while digging on the land).
      A classic example of what I was talking about.
      I noted that an example he gave was of land `next to` his, that needed food to be sent in……Note – “next to his”~!
       
      What chance do we have.
      Closing the mind is the lazy thing to do……..so, that is generally what we do~!

    • Anonymous

      This is a brilliant lecture.  Thank you for calling our attention to it and posting the link!!  I hope everyone will take the time to watch it!

  • Haploid

    That was a good debunking of the myths underlying the current finanacial system, “not saying what you mean” and/or misconstruing (deliberately perhaps) the actual reality of financials; and is equally applicable to other spheres of influence.
    I only wish the world would bother to watch your videos, It would do its part atleast in perhaps averting apocalypse. 

    • http://overthepeak.com/wordpress/ Mystic

       I see the world as a vast running river of happening.
      It doesn’t get knocked of its course very easily.

  • http://maxwellsrepublic.tumblr.com/ maxwell

    Things don’t have to be divided necessarily. The front page can show it all… but the tabs can ‘kind of’ categorize things… The tabs don’t have to be broken up into money either… they could be, but they could also be broken up into concepts; a concept can be ‘presentations’, ‘chats’ or money, energy, etc. I think Business Insider is a nicely organized blog for what it is. Anything and everything appears on the main page, but they categorize things so that when less popular or older things get pushed down on the main page, they are still relevant in the category. Just a thought.

    I watched all of your philosophic stuff on youtube when that was going on too. I really enjoyed that back and forth. That has a certain feel to it, similar to these kind of chats have a feel to them. You used to do the news updates and now presentations, and they are different. And I’m sure you will come up with new things. Also, there are other people on your front page who post things that have a feel- a category too.

    Its tough to categorize things when you are forced too. I think the feeling is the only way to go in this situation… of course with tags, some things (like on other blogs) could appear in multiple tabs too. I know wordpress allows that too.

    At the end of the day, what you have works… but its hard to go back to things in the past. If there is a particularly ‘impactful’ post that you or someone else does, it can be tricky to find unless you bookmark the post… which is why starting a categorization system could help. It might be cool if you could also select (as in YOU) posts from the forum/activity tab/page for the front page and then it would be really helpful to have a category or two… or three or four.

    • http://overthepeak.com/wordpress/ Mystic

       I think you hit it with – It has changed, because I have changed and will change again, when I change again.

      I used to like BI as well (but I don’t go there now)…it is / was a good set-up.

      Bottom line (at the moment)…As long as it is mostly just me putting it out there, there is no need for new tabs.

      • Guest

        If it helps: tabs don’t have divide information up – they can be used to as a quick way of finding posts about a specific subject or topic – with the same posts appearing under multiple tabs. If tabs are used, they can be used any way you want and don’t have to mimic what other sites do. But tabs or no tabs, if you would like to change the format all I really need to know is what you want to change. 

        • http://overthepeak.com/wordpress/ Mystic

           No……I am over all that.
          I’ll plug on as normal.  I saw no advantages, only extra work.
          (I really don’t like `tagging` the presentations~!)

          Eating is optional.

  • http://maxwellsrepublic.tumblr.com/ maxwell

    one more thing… http://www.youtube.com/watch?v=yVkdfJ9PkRQ&feature=player_embedded

    this is the code. How people interpret this is important ~I think? When everything is swinging around together, some might see this as equilibrium. But when it gets choppy, that could be it [equilibrium] too because an equal number of things are moving against the other. The perception is key… and perception can only be subjective. Yes, there is an objectivity to everything [base camp 1 perhaps], but we’ll never really be able to understand that; we only have our own perception to rely on, period.

    • http://overthepeak.com/wordpress/ Mystic

       That was the most moving thing that I have seen in a long, long time~!
      Thank you.

  • Bigcollapso

    The “stability” of the markets of the past was simply the fact that the exponential monetary system harvested no more wealth from the system that the physical economy created. But as an exponential system, it now is very short on wealth and long on promises. This will not resolve without great trouble. The trouble stems from the fact that there is a severe shortage of wealth. The only “stability” that can exist in this system is one based on fantasy, ignorance and lies. The end of it comes either when it gets so unstable that a child buying candy collapses it, or a billionaire loses faith and cashes out.
    One should not spend too much time analyzing this financial system, because it is not a well though out, engineered or documented system. Unlike other critical systems in our economy, there is no proper design.
    It is just a political system where the people with the most power get to control the issuance and the cost of money. That is it. There is no more to it than that. The fact that it is a deeply negatively stable exponential system has escaped many. This is unfortunate since these types of systems are against many religions because the church has to pick up the pieces of society after the failure of these missing wealth monetary systems.

  • Arif

    Idea - http://www.zerohedge.com/news/bernankes-speech-decrypted 

    Is it possible to add tabs/words to the new videos? So then we will have some database and we will know what is the most “popular” words in OTP? What we are focused on? Maybe this would help. 

    Decrypt all words from all videos would be cool ;) 

    In my mind there is a visual concept of all videos sorted by tags clouds. Link from zerohedge. Then for example you click the word “Steve Keen” and then you will see list off all videos when Mysic talk about Steve Keen. If you are interested in Steve Keen then you just simply klick in the link to see all videos about it. In the first video there will be  BIG tag – “Steve Keen” – becouse Nick talked about Steve all the time in this particular vidoe. Next video would have the same tag but a litte bit smaller, becouse Nick is talking 90% of the video time about Steve….or something like this ;) 

    This would be very elastic, becouse we can change our conversation and cloud tags would follow us. Implement multiple filters (tags from last 30 days, tags from comments, popular tags, favored tags, you name it).

    This is possible, but very difficult to implement.  

  • Anonymous

    I have the most important question that will probably every be asked on OTP….Would that be a bowling ball sitting on a shelf behind you ?

    • http://overthepeak.com/wordpress/ Mystic

       Ah~!…..I see what you mean now.
      No.
      It is a little fountain thing.  Tube up the middle, water streams down with a bit of a tinkle tinkle at the bottom.

  • Anonymous

    Great video, thank you.

    Downloaded the Keen paper- tried to read but is making my tired mind spin too much.

    Wish I had more time… probably have about 30 minutes per work day to spend on all this stuff & about 4 hours on weekends. Hopelessly inadequate.
    Can well understand how the average person out there does not even bother to bother.

    • http://overthepeak.com/wordpress/ Mystic

       There will be a second video from me today….It may help to put in some base for this silly money stuff.
      It is not a heavy video.  I will probably call it Mystic Money or something like that.

      Keen’s main problem is with economists who think this way -
      Savers put money into a bank…..and borrowers borrow that money.  That’s it when it comes to advanced economic thinking.   As in, it matters not if you are a borrower or a saver, because either you are spending your money…..or someone else is spending your money…….and the economist moves on.

      Keen points out the `endogenous money creation` by a third party that is ignored completely by advanced economic thinkers……the bank.
      The bank is ignored, because economists don’t know how banks work.
      They `print up new money` to lend to people and this is not taken into account by economists.

      I repeated `economists` a lot, because it is hard to believe that they could be so blind for fifty years of modelling.

      (of course there is more that Keen hates about them, but that will do for now)

      Hello down there~!

      • Anonymous

        Cheers Nick…

        Listened to the latest Econ talk whilst driving back from work- Ross R talking to Don Beudroux (spelling?) about debt. I was fascinated by how they seemed to align with mmt (around the 26 min mark).

        • http://overthepeak.com/wordpress/ Mystic

           I haven’t done EconTalk yet…….Ah yes iTunes sees it.
          Thanks…I will listen up~!

        • http://overthepeak.com/wordpress/ Mystic

           Don’t feel bad, because I would have listened anyway………..but what a pile of shoite~!
          Russ and Don agreed on one thing – they were being `classical economists`, as they said – `pre-1930 view of debt`……………What is the point of that~!?

          It doesn’t make Krugman right, but FFS~!?

          It was just a political spin job.
          Russ often lets Don bully him, but Russ should be getting a little less stuck in his views (but he is not).
          I guess he has his job to protect.
          Sad.
          Horrible.