fractional reserve banking as economic parasitism

[vznuri@xxxxxxxxxxxxx]

hi all. fyi, a new paper that may make your eyes bulge a bit.
has a section highly critical of keynesianism for reasons probably
few have ever considered.

endorsed by economist michael hudson, Phd. author of
"superimperialism", a dissident book published three decades ago,
on IMF policy as exploitive.. long before it was fashionable
ala stiglitz-style.

a good review of the paper in this newsletter.

http://www.whatmatters.nu/wmemails/wmemails12.html#WM-67



Fractional Reserve Banking as Economic Parasitism:
A Scientific, Mathematical and Historical
Expose, Critique, and Manifesto

download it in PDF from the economics papers archive:

http://econwpa.wustl.edu/eprints/mac/papers/0203/0203005.abs


would be interested in any feedback. due to the contents,
am also attempting to maximize its exposure, please
help me spread the word.

abstract
--

This paper looks at the history of money and its modern form from a
scientific and mathematical point of view.  The approach here is to
emphasize simplicity.  A straightforward model and algebraic formula for
a large economy analogous to the ideal gas law of thermodynamics is
proposed.  It may be something like a new ``F=ma'' rule of the emerging
econophysics field.  Some implications of the equation are outlined,
derived, and proved. The phenomena of counterfeiting, inflation and deflation
are analyzed for interrelations.  Analogies of the economy to an ecosystem
or energy system are advanced.  The fundamental legitimacy of ``expansion
of the money supply'' in particular is re-examined and challenged.  From
the hypotheses a major (admittedly radical) conclusion is that the
modern international ``fractional reserve banking system'' is actually
equivalent to ``legalized economic parasitism by private bankers.'' This
is the case because, contrary to conventional wisdom, the proceeds of
inflation are not actually spendable by the state.  Also possible are
forms of ``economic warfare'' based on the principles. Alternative systems
are proposed to remediate this catastrophic flaw.


additional information:
--

- I draw key analogies to
    (a) capitalism as a religion,
    (b) invisible slavery,
    (c) parasitism, and
    (d) economic warfare
    (e) a short electronics analogy
  the parasitism metaphor is examined
  in most detail due to its apparent high fidelity.
- analogies of money issuance to company stock.
- there's a scathing critique of keynes & keynesianism
  as a ideology of economic parasitism.
- a large section on greenspan and the gold standard.
- I tackle the issue of growth in the economy, and
  relationship to interest rates.
- I define "scarcity integrity" of a banking system with
  features of "fairness" and "soundness".
- there is significant commentary on the federal reserve
  and by implication, international central banking systems.
- I look significantly at US banking history and historical
  personages such as jefferson.
- I challenge the conventional terminology of
  "deflation, price stability, fighting inflation, growth,
  market rates".
- I examine luddism & how technology can actually
  exacerbate slavery. "state-of-the-art 21st century sweatshops"
- re: parasitism, I look at very current research into
  parasites that can cause sinister behavioral changes
  in the host & draw the analogies.
- free press as an immune system is examined.
- mcmurtry's "cancer stage of capitalism"-- rampant, parasitical
  growth
- "silent weapons for quiet wars" paper considered seriously.
- "host psychological complicity"--  negative/pathological
  psychological qualities of the masses that allow parasitism
  to flourish
- virulence, how deadly is the parasite? also, what is the
  meaning of growth relative to a parasite infection?
- national or international economic warfare via failed or corrupt
  banks
- examination of pattern of economic warfare in IMF and
  World Bank policies, accusations of joseph stiglitz
- mcfadden's, traficant's charges against the federal reserve bank
- possible alternative systems & key themes to focus on
  for money reformists
- proposal of many new research directions to pursue


section summaries
--

introduction - analogies to econophysics, popular literature,
  complexity, computational revolution implication on economics,
  economics as biology, economics as energy system

brief history of money - fiat, receipt, fractional money
  defined. counterfeiting, publicly-owned, privately-owned
  money expansion. straight vs expansion borrowing. money
  manipulation vs supply & demand.

mathematical analysis - thermodynamics perfect gas law
  as bridge theorem, stock market, counterfeiting vs
  seigniorage, money energy extraction via money manipulation,
  velocity of money, temperature changes, growth, interest,
  deflation as a natural, emergent distribution of economic gains,
  optimal money expansion policy, higher verisimilitude models,
  electronics analogy, "blip corruption", scarcity integrity,
  fairness, soundness defined, money vs credit, blips used against
  nations

religion of capitalism - capitalism as taking irrational
  aspects of religion. orwellian doublespeak & false terminology
  and blind dogma. "voodoo economics". terms challenged:
  "money supply, deflation, fighting inflation, free market,
  lassiz fair, growth, market rates"

economic slavery - use of economic system for highly sophisticated,
  invisible slavery system. "21st century sweatshops". luddite
  movement re-examined. technology as a means for making
  slavery more efficient.

economic parasitism - parasite analogy developed in detail
  from latest research into parasitism. central importance
  of the bloodstream. leeches, bloodletting,
  destruction or deception of the host's immune system.
  "baitswitching and frogboiling". cancer metaphor.
  "zombiefication". IMF/world bank policies as corrupted
  by parasitism. keynesianism as bogus. red-queen dilemmas
  that accelerate rat-race conditions, host stress &
  activity due to parasite influence. virulence considered,
  could parasite be beneficial? importance of parasitism
  in real ecosystem, possibly as regulatory mechanism.
  "host psychological complicity", negative psychological
  qualities of populace conducive to parasitism.

economic warfare - silent weapons for quiet wars,
  use of bank failures and bailouts for parasite
  advancement & immune system sacrifices. phenomenon
  of money leverage at local or global level. invisible
  seizure & invasion of economic territory via the
  banking and money system. stiglitz accusation of
  money parasitism within IMF and World Bank. use of
  secrecy as a parasite mechanism. accusations by
  mcfadden and traficant on international banker conspiracy,
  treason.

21st century blip system - some possibilities of a
  parasite-free system. problem of free market solution
  relative to bailouts. full reserves.  digital
  currencies. fixed count blip system. problem of
  money laundering as "parasitism enforcement mechanism".
  uselessness of street demonstrations. "leverage polarity"
  of economics vs politics and how to identify it and
  transcend it. "monergy" system, new form
  of energy considered.

further research - better models, like global warming,
  improved econophysics research, fit the parameters,
  study it in terms of science/math/energy, fairness
  and soundness, localized testbest & experimental
  laboratories, CPI and other indicator skews or bias.

frequently asked questions - a frivolous, facetious, satirical
  section but that serves as a brief introduction to the material
  and some key themes. comedic relief. growth, inflation,
  gold, is there really a conspiracy? "witchhunts, mccarthyism".
  admitted weaknesses of the paper.

comments on references - info to other researchers looking
  to follow up on the material, a little road map. key
  references & brief comments. strengths and weaknesses of
  the references used for this paper. survey of especially
  the more definitive and comprehensive references.