Arthur might have posted this. If so, just dump it. Steve
Begin forwarded message: > From: Steve Kurtz <kur...@ncf.ca> > Date: August 17, 2013 7:09:28 PM EDT > To: Futurework <futurework@lists.uwaterloo.ca> > Subject: Counterfeiting Trust > > Hello again (4th or 5th time in a decade). Rather than try to do an inferior > job, I'm forwarding two blog posts which might alter the mindsets of some old > school economics thinking. > > Steve > > #1 > > >> >>> Date: July 30, 2013 10:45:00 AM EDT >>> Subject: Counterfeiting Trust >>> Reply-To: Charles Hugh Smith <nore...@blogger.com> >>> Source: oftwominds-Charles Hugh Smith >>> Author: Charles Hugh Smith <nore...@blogger.com> >>> >>> We are fast approaching the moment when the value of the counterfeit trust, >>> the counterfeit assets and the counterfeit promises are revealed as fakes. >>> >>> The heart of any con is winning the trust of the mark, and the heart of >>> counterfeiting is persuading the mark that a facsimile of value is real. >>> Counterfeiting is one con among many, but its terrible beauty lies in the >>> durability of the con: just as counterfeit paper currency can continue to >>> pass as authentic money from one mark to the next, counterfeit assets can >>> be traded until the very moment the con is revealed and trust is lost. >>> >>> Understood in this way, what the central banks and governments of the world >>> are really doing is counterfeiting trust: trust that the paper money in >>> your wallet/purse will hold its value in the future, trust that assets >>> presented as zero-risk can be sold for full face value at a later date, and >>> trust that entitlement promises will be paid. >>> >>> Please forgive the repetition of this chart of the S&P 500 over the past 18 >>> years, but it raises this question: Which do you trust more: the Fed's >>> implicit promise that the stock market will never crash again (because "the >>> Fed has our back"), or that every asset bubble boom is inevitably followed >>> by a bust? >>> >>> >>> >>> When the Fed creates dollars out of thin air to buy Treasuries or >>> mortgages, it is counterfeiting trust: trust that the Fed can manage >>> inflation so that only 3% of our purchasing power is stolen every year, >>> trust that the Fed's ceaseless support of the banking cartel won't collapse >>> the financial system (again), and ultimately, trust that a centrally >>> managed financial system is stable and a benefit to the real economy. >>> >>> When the Treasury sells $1 trillion in Treasury bonds, indenturing future >>> taxpayers to the payment of interest essentially forever, it is also >>> counterfeiting trust: trust that the money refunded to the bond holder upon >>> maturation will be worth its current value in purchasing power, trust that >>> the central state can borrow $1 trillion a year (or more) forever with no >>> systemic consequences, and trust that the interest on this Federal debt >>> will never crowd out funding for all the entitlements promised to 317 >>> million citizens. >>> >>> What happens when trust in the counterfeiters is lost? What happens when >>> the assets presented as zero-risk lose value? What happens when "the Fed >>> has our back" doesn't stop the stock market from careening off the cliff of >>> a global credit crisis, which is another term for a crisis of faith that >>> the system is as stable and resilient as it is presented? >>> >>> Trust is a fragile creature. It is a most ephemeral yet powerful force. >>> Once lost, it can never be fully regained; it can only be earned back, one >>> step at a time. >>> >>> We are fast approaching the moment when the value of the counterfeit trust, >>> the counterfeit assets and the counterfeit promises are revealed as fakes. >>> >>> >>> Things are falling apart--that is obvious. But why are they falling apart? >>> The reasons are complex and global. Our economy and society have structural >>> problems that cannot be solved by adding debt to debt. We are becoming >>> poorer, not just from financial over-reach, but from fundamental forces >>> that are not easy to identify or understand. We will cover the five core >>> reasons why things are falling apart: >>> >>> 1. Debt and financialization >>> 2. Crony capitalism and the elimination of accountability >>> 3. Diminishing returns >>> 4. Centralization >>> 5. Technological, financial and demographic changes in our economy >>> >>> Complex systems weakened by diminishing returns collapse under their own >>> weight and are replaced by systems that are simpler, faster and affordable. >>> If we cling to the old ways, our system will disintegrate. If we want >>> sustainable prosperity rather than collapse, we must embrace a new model >>> that is Decentralized, Adaptive, Transparent and Accountable (DATA). >>> >>> We are not powerless. Not accepting responsibility and being powerless are >>> two sides of the same coin: once we accept responsibility, we become >>> powerful. >>> >>> Kindle edition: $9.95 print edition: $24 on Amazon.com >>> To receive a 20% discount on the print edition: $19.20 (retail $24), follow >>> the link, open a Createspace account and enter discount code SJRGPLAB. >>> (This is the only way I can offer a discount.) >>> >>> Go to my main site at www.oftwominds.com/blog.html for the full posts and >>> archives. >>> >>> Read more… >>> >> >
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