This is Not a Market


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    René Magritte La trahison des images 1929   “[Price discovery] is the process of determining the price of an asset in the marketplace through the
    [See the full post at: This is Not a Market]

    V. Arnold

    Ilargi; that was just awesome; you took down the whole thing; which isn’t even a thing; but a no-thing…
    My alter ego, buried in a Pioneer cemetery, well more than 100 years ago, in Portland, Oregon, named Thayer Dowd, would say this:
    Everything you know is crap.
    Everything you think is crap.
    Everything you have been taught is crap.
    Everything you say is crap.
    And everything you believe is crap…
    Thayer Dowd
    I would add; anything you do know; you discovered yourself…


    Off topic
    Important topological properties include connectedness and compactness.


    A most astute observation and elucidation of the state of affairs we find ourselves in. Yesterday being gone, and tomorrow being blind, about all we can do is try and stay clear of the tracks upon which this Central Planning train is speeding towards the cliff. As Tverberg put it, “An economy is a self organizing structure.” Something that, to remain efficient (functional), can’t be tweaked or meddled with. Parasitical power has nearly killed it’s host. When there is no more blood to draw, the parasite falls off. That’s when things will get messy. Might be prudent to have something shiny to carry with us over that bridge to the “Other Side,” when the time comes to cross it?


    “…central banks bought us 10 years of respite. But it was all fake…”

    And AE loyalists have long understood this and that the inevitable marking to market will be disproportionately severe the longer the charade continues. Severe deflation, defaults on sovereign debt, record interest rates on long bonds and demise of central/global banks are all just over the horizon. Freedom from debt and security/liquidity of saved after tax principal will be essential for individual economic salvation.

    Dr. D

    An excellent article, more concise than I could do it for certain.

    What do you have with a central bank intervening in everything, the whole economy? Soviet-style central planning. And that will work for a while, on the order created from capitalism (here meaning free action), until the whole thing becomes so out of order, prices, incentives so upside down, that it doesn’t.

    And what do we have with the Fannie Mae or similar agencies owning all the houses, via mortgage bonds? Soviet-style government ownership of the land.

    What do we have with bailouts, protected corporate winners and ma-n-pa unprotected losers? Soviet-style central planning and ownership of Capital.

    What do we have with Dept of Education mandates right through student loans? Government provided education, with the addition, as Obama said, to work for the state in repayment.

    What do we have with farm loans, subsidies, protection of ADM and John Deere? Soviet-style central planning of food collectives, long since eliminating the family farm.

    We’re already there, my friends, need I add the media, the initiative for universal *government* health care?

    And what will we have with a Universal basic Income? The final piece of the Soviet system: From each according to his ability, to each according to his need.

    And we all saw how that worked out.

    Everybody’s talking about the last war, about Socialism, Capitalism, Freedom. Get over it people: we lost. But since Soviet style systems are both violently oppressive, and complete economic failures, the question is what to do now.


    “…central banks bought us 10 years of respite. But it was all fake…”

    If the banks had not done what they did, would we be back to “before”?
    The last 10 years of life has left me 10 years older and wiser.
    Before, it was fake, it was la-la-landöbius_strip

    ” …And the ‘market’, or rather the 2-dimensional picture of a market, depends only on what they do….”


    It’s funny, this also as a reply to anticlimactic’s comment on today’s Debt Rattle, that the traditional (“Old”) media, BBC, NYT et al, are trying to defend themselves from new media by 1) attacking the latter and 2) attempting to define the premise upon which any discussion can take place. Skripal, Douma etc. You can’t suggest it wasn’t Russia in either case. It’s more like: do Russians only encourage Assad to gas people, or do they make him eat babies too?

    These media are old, and that’s what they look like when doing these things. But what choice do they have? They’re trusted sources, that’s their meal ticket.

    It feels like eons since I wrote it, I truly don’t remember, but I did say at one point that they have one choice only if they wish to remain viable in the social media era: be brutally truthful, unforgiveably so. If they don’t go that route, they’re done. Because anyone can lie, we don’t need BBC or WaPo for that.

    As much as I despise Facebook, if only for killing the Automatic Earth’s account without any notice or explanation, either before or after the fact, I got to say this about social media: they’re changing the media landscape so much it won’t be recognizable anymore soon.

    And given my feelings about the anti-Trump echo chamber, I guess it should perhaps be clear that I think that is a good thing.

    Diogenes Shrugged

    Hear, hear. Nailed it, Ilargi, as only you seem to be able to do.

    I sometimes wonder if Ilargi might have finally run out of good things to say, and then he once again comes up with something like this. AE is unique, providing front row seats to viewing the grail. I’m surprised more people don’t come here. I’m surprised a ZeroHedge article gets several pages of comments while we enjoy a sense of small community here. Pinch me.

    Anyway, right or wrong, just know that what I’ve written below was written in earnest.

    Central banks are the world’s governments by default simply because they impose and enforce their debt-based money systems on nearly everybody. What we’re otherwise accustomed to calling “governments” are really just the muscle protecting central bankers from ropes on lamp posts. All else is theater.

    Why do our political “governments” endorse and protect the central banking debt-based money scam? Because they can spend so much money they they don’t actually have. It enables them to cut taxes and increase spending even when they’re in hock up to the tops of their ears. Consumers are content to remain oblivious to central bank dangers for similar reasons.

    In my flights of fancy, I envision a world where only one money supply exists, a worldwide money supply entirely beyond the reach of bankers and anybody else wanting to tamper with it. A money supply that derives its utility by serving as an instrument of freely-determined bid & ask, and that derives its value by serving as a perfectly predictable store of value. Remarkably, it just so happens that this turns out to be the promise of Bitcoin, possibly as soon as a half-decade from now. Fact is, if Bitcoin doesn’t fulfill that promise, nothing else ever will. If Bitcoin fails, Orwell’s vision of boots stamping on faces will almost certainly serve as the financial model for mankind “forever.”

    Bitcoin utilizes blockchain technology alike all cryptos, but differs from all but a tiny few by being decentralized — that is, permanently and securely out of anybody’s unilateral control. Transaction middle men are eliminated, as well. It facilitates peer-to-peer transactions, and in the post-central-banking world will serve as a stable store of savings. Centralized cryptocurrencies are all just as manipulable as central bank fiats. Speculate with them if you like, but the word “blockchain” does NOT in any way imply decentralization.

    Grains serve as stores of savings, too. A food merchant stockpiles wheat to last through the parts of the year it isn’t being harvested. But nobody expects a ton of stored wheat to slowly grow to a ton-and-a-half over time. The same is true for gold, as there is no “return” on physical “shiny” stored in your safe. The same is true for Bitcoin. You can’t put bitcoin in a cold wallet and expect it to accumulate interest somehow. So the expectation that dollars will grow over time in a bank savings account — that expectation indeed stems directly from a flaw in all debt-based money systems.

    And a massive flaw it is. I remember many decades ago reading articles extolling the virtues of a free market economy. In a free market economy, they said, rich families often become poor families over the generations, and poor families often become rich. And although that used to be true, it is much less true today, as the manipulation, rigging and theft in “the markets” preserves the positions of the super-rich. This deeply flawed money system is why 2% of the population is projected to soon own two-thirds of the world’s wealth. Permanently.

    Banks and their muscle men need perpetual economic growth to keep the flawed debt-money system operational. Bitcoin, however, does not need economic growth to function. Bitcoin will enable the scaling-down we Automatic-Earthers yearn for, stimulate popular rejection of leviathan governments (i.e. central banks) and their captive muscle, and enable bona fide price discovery in efficient, local economies. Local economies with full access to the entire world.

    I don’t buy Bitcoin because its dollar-price movements, properly timed, will make me richer (though admittedly, it certainly helps that it’s currently on sale). I buy Bitcoin because it represents the only hope for the future of all mankind, not just the 2%. If you think I’m “talking my book,” you don’t understand Bitcoin.


    Here in Cairns, they are building massive apartment blocks. There are cranes all over the place. The locals tell me that none of them can afford the putative prices of these apartments. They are being built for people in Sydney and Melbourne who have done well out of their property boom – and who will only use these apartments occasionally.

    I am trying to rent a place with a number of bedrooms that I will sublet – either long-term or on Airbnb. I don’t like to live alone and it would work out cheaper than me getting a place with one bedroom. I was about to sign a contract for a 3-bedroom place and when I asked them for 3 sets of keys they refused to give me three sets only one. They wanted me to ask their permission before sharing with anyone. I walked out.

    If interest rates were at all connected to the real world, there would not be all these empty houses and apartments about. There would be no construction frenzy.

    It looks like I will be forced to borrow to buy a place in order to live the way I want. Ridiculous.

    John Day

    Thanks Ilargi,

    This really hammers it out clearly.
    Also: Tom Keiley at INN World Report would like to talk to you about an interview
    His email is pretty simple, and Eleni may be contacting you about it. I’ll happily provide it for you.
    Again, BRAVO!
    (Oh, cool, my avatar image shows up now)

    Dr. D

    While many cryptos are centralized (Ripple) or have centralized flaws (Monero supernodes) it’s by no means uncommon to find fully decentralized cryptos other than Bitcoin. And that’s taking out the non-currency cryptotokens that are probably the majority now.

    Although promising, Bitcoin cannot escape the human problem: if we are corrupt, surveilling everything for power, profit, and oppression, Bitcoin will not give us a ticket of escape as it’s not anonymous and in fact will track you better than anything. If we’re not at that deep, pervasive level of Big Brother, then it will do well enough, especially with an ecosystem of competing currencies and atomic swaps making tracking and exchange-rigging harder. I still expect Bitcoin to be relegated to fewer, larger, sovereign state jobs, and the mass of daily transactions to go elsewhere — demanded by the limits of their tech — and that’s fine. As long as we have something.

    But remember, the present system was put in for freedom too, but has methodically been channelled into extraction and oppression. The Whole Bill of Rights is the same. If Bitcoin gets in with perfect tracking and we get lazy to defend freedom (again) then it will be an especially diabolical tool of oppression, worse than anything we’ve seen so far, and that’s saying something.


    “Although promising, Bitcoin cannot escape the human problem: if we are corrupt, surveilling everything for power, profit, and oppression, Bitcoin will not give us a ticket of escape as it’s not anonymous and in fact will track you better than anything.”

    Talk about essential truths. Nota bene. Eventual corruption is a certainty….it is a HUMAN monetary construct.

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