Shaking Itself Apart

Basic economics: Do you understand how inflation works?

Human activity in exchanging goods and services has limits. There is only so much exchange that can take place because of the natural friction of people deciding how to exchange. Introducing a medium of exchange speeds it up. Inflation is when the commonly accepted medium of exchange loses value against the goods and services being exchanged. Thus, the numeric price of things goes up.

This works out to be theft in that those who have their hands on the controls are provoking inflation, raising the prices while suppressing what they pay back out to those who produce the things everyone is buying. They force everyone by laws to hold their currency in accounts at a bank, and the bankers get to use all that aggregate productivity as they see fit. They don’t contribute a damned thing except to give the appearance that the system can be trusted.

They lend and borrow in massive amounts, and in the process play the wider economy as a market in itself by adding or subtracting the amount of currency in existence. Of course, they always add more because it makes their old debts cheaper to repay while creating new debts that they put off for a longer while. They then cut in government officials for a share of the flow so that laws continue to enforce the system in their favor.

From where we stand, it’s not readily apparent who has their hands on the controls to raise the prices. We know some names, but not all of them by any means. It’s not just a simple matter of these secretive folks deciding to mark things up. There is a broad system that at least appears to be based on the market as a whole. Thus, the prices of things and the wages are bumped up all at once, you would think. Naturally the common complaint is that whoever decides the wages is not raising them to match.

When you hear noise in the news about the Fed worried about inflation, what that really means is that the wage earners are getting a bigger slice of the pie than the financiers like. When they say “inflation” it means that everyone is still getting the same share and they want to take a bigger share for themselves.

This is how unions gained power. It was a way of gathering the market presence of wage earners so that they could participate in the market, could be a member of the bargaining powers. I must warn you that it is far more complicated than that (like union leadership being compromised by the financiers), but this is what most people see.

The whole point of the financial elite causing inflation is to reduce their expenses against their income. They are the ones trying to game the system so that they pay less and take more of the flow of currency. You see, it’s not simply a matter of how much you hold in raw numbers, but what portion of the flow you capture regardless of the raw numbers.

Thus, they don’t steal it directly from you. Rather, they rig the system to demand more for them without sharing back to those of us who produce what makes the economy work. All boats most certainly do not rise in a flood of liquidity; the 0.1% punch holes in everyone else’s boats. The financiers are the folks in the banking system who are empowered to set rates of interest and various conditions that can slow or speed up the flow of currency.

But they are not gods. They cannot force the economy to keep humming along when the wage earners are losing ground. It’s a delicate balance they seek to maintain so that their gains are marginal in the millions of details, but whopping big in the system overall. But it’s the complexity of the system itself that causes the problems. A very large and very busy economy has more to plunder, but it also has more ways to get out of control.

In physics, anything sufficiently large and complex that moves will inevitably develop modulations in movement. There will be waves, vibrations, pendulum swings, etc. Oddly enough, this manifests in economics, as well.

Cycles arise that no one expected, and some which defy management. What we are seeing as these modulations are showing up in ways the financiers cannot control, nor even accurately calculate. They cannot predict these unexpected motions in the complex economy, nor how those motions will affect the whole system. Humans are inherently incapable of managing more than a very limited size system. While AI might be better equipped if left to itself, we know that AI would be compromised by algorithms designed to favor one group over others. It would defeat the purpose of having an AI.

This is how economic collapse happens. The thing shakes itself apart because it is not humanly possible to account for all the variables. Our system is shaking apart.