Federal Reserve and Monetary Policy: Chaotic State Part 2. All FED UP

From the current beginning of The Colbert Report - Fundit

Today was a reminder that the US of A has really been flushed down the Toilet. I HAD a Doctor appointment today. I could not check in because of an Insurance Fight. The person in front of me had a problem checking in. Here is the biggest problem - This was at the Lidgerwood GROUPHEALTH Office in Spokane Wa. YEP, THAT is RIGHT. The very same Healthcare Business the Democrats are using as a model for their healthcare solution. The Public Option is the only solution now.

I was watching a Daily Show’s guest, VP Biden. He said that the RICH needed a Socialist government and everybody else had a Capitalist Type of government. Carl Max said that Capitalism had a self correcting mechanism. The end for Don Obama is near. The Democrats’ hand has been called regarding their healthcare plan. They have cover due to the Republicans’ own healthcare plan. Don Obama is either going to be an eight year president or he is going to be hiding in a bunker on a military base watching the bullets fly because Carl Marx is correct.

Viva La Revolucion!!!!

Federal Reserve and Monetary Policy: I Wish I had the Money to Short the Dollar, Part 6: Chaotic State.

Wall Street, the Beltway and Al Capone and his crooks, Whoops, I mean Don Obama and his Syndicate (formally know as the Democrats) {See the leaked Ethics Probe: http://news.yahoo.com/s/ap/us_congress_leaked_ethics_report }:
are a bunch of morons. They are convinced that the weak U$ Dollar is GOOD. Ha, Ha, the joke’s on US.

One has two ways to look at the real reason the U$ Dollar is weak:

1. US of A’s government is guaranteeing the entire debt of the US of A. See Flow of Funds Sept release. Total US of A’s Debt $34.4 Trillion.
   
2. US of A’s government is treating household net worth, $53.1 Trillion, as a demand deposit.
   

Either view implies that their model (US of A’s Government) requires Trillions of Dollars to keep it from crashing. Here’s the problem: US of A’s Mega-Corps are sending more money abroad than Foreign Corps sending here. See BEA’s International Accounts

Operations of Multi-nations balance of Payments and Direct Investments. US Direct Investments Abroad: $43,434 Millions of Dollars.

Foreign Direct Investments in the US of A: $21,301 Millions of Dollars.

Data from second quarter 2009.

So much for the re-investing in the GOOD OLD US of A.

Relation is a Category

Definition A category C is
- a collection ObC of objects, denoted by a, b . . . A, B . . .
- a collection MorC of morphisms (arrows), denoted by f, g . . . ,
- two operations dom, cod assigning to each arrow f two objects respectively called domain
(source) and codomain (target) of f
- an operation id assigning to each object b a morphism idb (the identity of b) such that
dom(idb) = cod(idb) = b
- an operation “ ° ” (composition) assigning to each pair f, g of arrows with dom(f) = cod(g) an
arrow f ° g such that dom( f ° g ) = dom(g), cod( f ° g ) = cod(f)
- identity and composition, moreover, must satisfy the following conditions:
identity law: for any arrows f, g such that cod(f) = b = dom(g)
idb ° f = f
g ° idb = g
associative law: for any arrows f, g, h such that dom(f) = cod(g) and dom(g) = cod(h)
( f ° g ) ° h = f ° ( g ° h )

Let’s get back to Earth as a Category. See previous post.

One can prove that Earth is a Category:

• Show your pictures to your thesis advisors. Point out the colors. If they agree that the colors are there then you have proven there are objects called Colors.
  
• A do nothing process is a valid morphism. You have just proven there is an id for each Color Object. At this point you have at least a discrete category. Wow, look at that!!! You have just proven there is a collection of morphisms.

Earth is not interesting enough. Let’s look at transportation. See Relations and Functions for a simple examples.

Apply this to the relation in vehicles. Car Doors are made out of Steel. Car Bodies are made out of Steel. You can add others to the Material -> Part Relation.

One can now use a monotonic relation to describe ships. One can make Ships out of Steel. No problem there. Monotonic means the relation holds.

Whoops, we forgot other materials can be used to make cars.
Car Doors are made out of Fiber Glass. Etc..

Monotonic is a functor between categories.

In previous post I stated category is the study of morphisms. Here’s how we can use are new relations and monotonic morphisms to get at the elements of our collection of object called Colors. Let’s say there is a transfer of cargo from land to sea therefore the relation between land vehicles and sea vehicles are stated.

Other Relations

• Protestors are Protesting.
• Protesters are bringing loaded weapons to their protest.
• GW Bush was a Pathological Liar and a Paranoid Schizophrenic.
  The classic features of paranoid schizophrenia are having beliefs that have no basis in reality (delusions) and hearing things that aren't real (auditory hallucinations).
  
• Don Obama is a Crook.
• Somebody took a shot at Lou Dobbs' wife.
• There is US verses THEM in the US of A.

Here’s an other look at the map from Tuesday, August 01, 2006

Federal Reserve and Monetary Policy:States' Separatist Movements and Local Currencies.

from What's New

Read this Hitler's Second Book. Hitler was a Pathological Liar and a Paranoid Schizophrenic.

Jewish Media, Jewish Financial, WW Armistice, Southern Tyrol, Jewish Marxist, .., it’s all here .

Describe the morphisms. Something like:

The annex of Southwestern states to Mexico => Giving Southern Tryol to Italy.

Jewish Media => Fight between Don Obama and Fox News.

Jewish Marxist => Don Obama's Socialist Agenda.

Jewish Financial => Don Obama's covering up fraud.

WWI Armistice => Withdrawing from the Middle East.

This is the danger of having a “financial” output instead of producing real goods and services. Read Hitler's Second Book.

If I had the money I would short the U$ dollar now regardless of the data. The FOMC has no effect until they put there money were their mouth is.
　

Viva La Revolucion!!!!

Congressional ethics report leaks, revealing names. By LARRY MARGASAK, Associated Press Writer Larry Margasak, Associated Press Writer WASHINGTON – Internal investigations into the conduct of over two dozen House members were exposed in an extraordinary, Internet-era breach involving the secretive process by which Congress polices lawmaker ethics.Revelations of the mostly preliminary inquiries by the House Committee on Standards of Official Conduct — also known as the Ethics committee — and a panel that refers cases to it shook the chamber as lawmakers were immersed in a series of scheduled votes Thursday.The panel announced that it was investigating two California Democrats — Reps. Maxine Waters and Laura Richardson — even as its embarrassed leaders took pains to explain that several other lawmakers' names should not have been revealed and they may have done nothing wrong.The committee said it was investigating whether Waters used her influence to help a bank in which her husband owned stock, and whether the couple benefited as a result. Separately, the panel is looking into whether Richardson failed to disclose required information on her financial disclosure forms and received special treatment from a lender.Ethics chairwoman Rep. Zoe Lofgren, D-Calif., went to the House floor to announce that a confidential weekly report of the committee from July had leaked out in a case of "cyber-hacking."A committee statement said that its security was breached through "peer to peer file sharing software" used by a junior employee who was working from home. The employee was fired.The fired employee was allowed to work on the document at home but was responsible for keeping it secure, said a House staff member with knowledge of the events, who spoke anonymously because he was not authorized to discuss it.The employee didn't realize that the file saved on a hard drive could be downloaded to another computer using the same file sharing software, according to the staffer. He said there is no indication that the individual accessing the document was looking for ethics committee material.The July report contains a summary of the committee's work at the time, but Lofgren said no inferences should be made about anyone whose name is mentioned.The committee typically makes a public announcement about its activities only when it begins an investigation of potential rule-breaking, which is conducted by an investigative subcommittee whose members also are made public.However, the weekly reports include a summary of the committee's work at an earlier stage, when its members and staff scrutinize lawmakers to see whether an investigation is warranted.The Washington Post reported in its online edition Thursday that the document was disclosed on a publicly accessible computer network and made available to the newspaper by a source familiar with such networks.The Post reported that more than 30 lawmakers and a few staff members were under scrutiny, including nearly half the members of the House Appropriations defense subcommittee.The previously disclosed inquiry involves lawmakers who steered appropriations to clients of a now-defunct lobbying firm and received campaign contributions from the firm and its clients.The names included three lawmakers previously identified in the inquiry: the chairman of the defense subcommittee, Rep. John Murtha, D-Pa.; and Reps. Peter Visclosky, D-Ind., and James Moran, D-Va.The Post said others whose names were in the report included Reps. Norm Dicks, D-Wash., Marcy Kaptur, D-Ohio, C.W. Bill Young, R-Fla., and Todd Tiahrt, R-Kan.The committee, however, has not announced an investigation of any of these lawmakers.Waters is the No. 3 Democrat on the House Financial Services Committee and chairwoman of its subcommittee on housing. She has been an influential voice in the committee's work to overhaul financial regulations. Waters came under scrutiny after former Treasury Department officials said she helped arrange a meeting between regulators and executives at OneUnited Bank last year without mentioning her husband's financial ties to the institution. Her husband, Sidney Williams, holds at least $250,000 in the bank's stock and previously had served on its board. Waters' spokesman, Michael Levin, said Williams was no longer on the board when the meeting was arranged. Waters has said the National Bankers Association, a trade group, requested the meeting. She defended her role in assisting minority-owned banks in the midst of the nation's financial meltdown and dismissed suggestions she used her influence to steer government aid to the bank. "I am confident that as the investigation moves forward the panel will discover that there are no facts to support allegations that I have acted improperly," Waters said in a statement. The committee unanimously voted to establish an investigative subcommittee to gather evidence and determine whether Waters violated standards of conduct. The committee said it would investigate "alleged communications and activities with, or on behalf of, the National Bankers Association or OneUnited Bank" and "the benefit, if any, Rep. Waters or her husband received as a result." The committee also voted unanimously to investigate whether Richardson violated House rules, its Code of Conduct or the Ethics in Government Act by failing to disclose property, income and liabilities on her financial disclosure forms. The investigation also will determine whether Richardson received an impermissible gift or preferential treatment from a lender, "relating to the foreclosure, recission of the foreclosure sale or loan modification agreement" for her Sacramento, Calif., property. Richardson said she has been subjected to "premature judgments, speculation and baseless distractions that will finally be addressed in a fair, unbiased, bipartisan evaluation of the facts." "Like 4.3 million Americans in the last year who faced financial problems because of a personal crisis like a divorce, death in the family, unexpected job and living changes and an erroneous property sale, all of which I have experienced in the span of slightly over a year, I have worked to resolve a personal financial situation," she said in a statement. The committee ended an investigation of Rep. Sam Graves, R-Mo., and released a report finding no ethical violations. It investigated whether Graves used his position on the House Small Business Committee to invite a longtime friend and business partner of his wife to testify at a committee hearing

Federal Reserve and Monetary Policy: I Wish I had the Money to Short the Dollar: Part 5. Here We Go Again.

The financial institutions are once again trying to dump their fraudulent behavior onto to the public. They are pre-packaging the same toxic assets with another layer of ownership to get an AAA rating from the same same rating agencies that helped them commit the original fraud. Here is the new deal: They are getting a risk taker to put some sort of stop on the most risky part of the security package. Here is the hidden systemic risk: These risk takers are not relying on a good economy. They are relying on Don Obama and the Obama Syndicate in changing the financial regulation that will allow more financial institutions to mark their holdings to a model not to the market. This is the same behavior that got Fannie Mae and Freddie Mac into trouble. They are going to be under capitalized. A slight down turn, say commercial real state, would force Don Obama and his Syndicate to steal from the citizens of the United States(?) to pay off these crooks.


Did I mention the fact that the new accounting regulation allows Fannie and Freddie to mark their portfolio to a model. Yep, the very same fraud that got them in trouble. They are in the suit, counter suit with their auditors. In other words, Don Obama is relying on a statical recovery and accounting fraud to get his Syndicate reelected. This was the same procedure GW Bush enacted.

The U$ dollar will be under severe selling pressure. The first causality would be Don Obama’s Syndicate, aka. Democrats. Don Obama is political dead meat once his syndicate becomes road kill. The circling republican vultures will pick them clean. The political pendulum will swing toward the right. A change of government is in the wind. We will have to go through the 2010 and 2012 election process with society in chaos.

Here is the big picture: Don Obama is controlling Housing prices through the FHA Banking system, Fannie and Freddie Mac route. Land control by the government is a Feudal System.

Let’s take a look at the user cost of capital. From Housing and the Monetary Transmission Mechanism (all terms are defined in the paper)

Fraud invalidates the after tax real interest rates. This went on for years. The problem comes in the form of appreciation/depreciation of house prices. One house sold can affect the asset price. We now know there has be some collusion in the appreciation between lenders and the appraisers.

Those morons at the Federal Reserve, Don Obama's administration, Democrats and Financial Institutions will eventually learn HOUSING is NOT INCOME. HOUSING is NOT a FRACTIONAL BANKING SYSTEM. HOME EQUITY is NOT a DEMAND DEPOSIT. In order to keep the HOUSING MODEL from collapsing, the Democrats will have to STEAL from the US of A citizens a few trillion of U$ dollars to give it to the RICH. They will also learn NOT to GAURANTEE TRILLION$ of U$ DOLLARS$: the ENTIRE DEBT of the US of A.

In general, Don Obama and his henchman Bernanke has been fooling around with the user cost of capital. The user cost of capital has not been allow to follow income but, to a political, made up model.

BUT,,, If they want to treat HOUSING as INCOME, then I want a certain $3 million dollar house (alright; a CASTLE) in the Spokane, Washington region as part of my pay and benefits package.

I would buy all of the housing builders, furniture, etc.. stocks and bonds because everybody else will also need $3 million dollar CASTLES as part of their pay package. End of the unequal distribution of INCOME. END of CLASS WARFARE. Can you say Hyper-Inflation due to a housing bubble???

A point: HEALTHCARE has changed its business model from service to investment.. Their portfolio is not to delay price increases (hedge against inflation) but, are investments. Their worth is measure by their investment portfolio not by the service they perform. In other words, the HEALTHCARE business has indexed their portfolio to inflation, aka UAW's collective bargaining contract with an inflation index and California's payouts index to future tax revenue. It makes sense: if one of their investments decreases in stock and/or bond value, they would have to raise fees to compensate the decline of their investment portfolio.

Another point: The Democrats want to tax "Cadillac" plans. They assume these plans pay out a dividend and/or non-use left over monies when the subscriber changes plans or dies. Taxing HEALTHCARE implies it is a demand deposit. Again, I what a "Platinum" Plan as part of my pay and benefit package. Everybody else would want a "Platinum" Plan also.

One more point: The US of A has no "FREE MARKET". Businesses are shifting their production over seas; China has become the factory floor and India has become the back office. Aka.. Japan shifting their production to China and the US of A, which resulted in their wost recession. Businesses and Investors will no longer taking risk without the HELP of Uncle Sam. Uncle Sam will have to spend TRILLION$ to compensate the risk taking and to keep their model going. Again, aka Japan spending billions without a change of policy that would have shifted production back into their country. Japan is still in their recession. Uncle Sam is allowing financial institutions to "HIDE" their fraudulent behavior. Once again aka Japan's policy of allowing their banks to hold on to bad loans in the hope they would be more valuable.

DO YOU NOW SEE US of A's STRUCTURAL PROBLEM??

CAN YOU DESCRIBE THE MORPHISM?? (Relation is a Category)

Viva La Revolucion!!!!

Federal Reserve and Monetary Policy: Stealth Take Over of Healthcare??

Let’s face it there is no Stealth Take Over of Healthcare by the US Government. Companies are going to discontinue their healthcare benefits to lower cost and pay Themselves. By “Themselves” I mean senior management, a hefty bonus for being “Clever”. There is no way the US Government can mandate the absolute requirement that firms has to offer healthcare.

The correct way to get the 40, 50 or 60 million(????) Healthcare is to go through Medicaid and the Medicare. Medicare has to become the social safety net. From the perspective of “Creative-Destruction” of jobs and sectors, a social safety net is needed to prevent the collapse of government.

Let’s look at the mechanism from the perspective of a “Capitalist”. There is no “concrete” proof of income growth for the aggregate. China and India has provided hundreds of millions of new labors, with respect to the US of A labor force. India is somewhat of a “Free Market” economy. With that stated, India is a natural barrier, respect to the US of A’s labor force, due to its lower wage and salary structure. China is an unnatural barrier due to its use of a Command Economy. Let’s face it, the healthcare sector has to go through a deflationary period. There is no force on Earth that will prevent this, from the “Capitalist” perspective. By healthcare sector I mean the providers, insurers and venders.

Let’s look a government program that should have had some cost control: Prescription Drug Program. I’m a “Capitalist”. I am a big customer. I expect a discount from my venders. I should expect the US of A government to get a discount from drug manufactures. After all, this is the “Capitalist” way.

Let’s look the delivery system. The healthcare delivery system is a “Capitalist” business. Treat it as such. Healthcare has to become a commodity. To achieve this, the regulatory frame work has to be created to allow the “Free Market to do its thing”. Split the malpractice insurance into “High Risk” and ”Low Risk”. Allow the pooling of US of A’s citizens, via state boundaries, into the “Low Risk” insurance. Have the state find the “High Risk” insurers. One can believe that if the state can not find a policy at a reasonable price due to its tort laws then those laws will be changed.

Once the regulatory frame work is known and stable one can conclude financial services will be created and sold to HMOs. Products such as, but not limited to hedging, interest rates, lost of income due to subscribers lost, etc.

Let me tell you a story. I developed blood poison in bootcamp. I saw a first class who basically nodded his head and said that it was blood poison. A Warrant Officer stepped in and confirmed the diagnosis. I did not see a doctor.

A change of perspective is also needed for the healthcare system. Airline pilots no longer pilot the jet. Pilots are now “Cockpit Managers”. Through the use of cameras and expert applications, doctors have to become “Managers”. The training of “Healthcare Specialist” is within the realm of a “Capitalist”. One does not need to be a doctor to reattach a finger. One just needs the training and equipment to do so. Specialization is natural to a “Free Market” economy.

You get the idea.

Viva La Revolucion!!!!

Federal Reserve and Monetary Policy: GREEN SHOOTS, What a Bunch of Cow Patties

It’s the bottom of the ninth and Don Obama and his Mob are on their last out.

Let us recap:

• The first was by Don Obama’s Treasury Secretary Geithner’s silence as Don Obama was sprouting his frustration at the financial institutions’ compensation.



• The second is this so call “Healthcare Reform”. Its is obvious this Senate package will not see the “Light of Day”. First off, Senator Reid and Dodd ignored other Democrats that were working on their particular solutions in other Senate Committees. For a Democratic Party, that is not of “One Mind”, this is going to trigger “Turf Wars”. The final blow comes from the really smart Republicans who argue the “Healthcare Reform” package is a tax issue. The really dumb Republicans will continue to argue this is Don Obama and his Mob’s attempt to gain control of the lucrative Healthcare biz. The end result will be no Republicans’ vote. At least 11 Democrats will not go for this regardless of Don Obama‘s threat to eliminate gang members who refuse to vote yes.



• The third out is shaping up to be the fault of Don Obama’s economic team’s insistence that “All is Well”. It is obvious the Federal Reserve has “Monetized” household debt (this is the reason the U$ Dollar is weak). Republicans’ who argue about the Federal deficit are wrong. I will be nice and give G.W. Bush’s record, about US Government’s debt; 2001 to 2008. From Flow of Funds: March 2002 $3.4 TRILLION: , from March 2009 $8.6 TRILLION. Increase in US Government Debt $5.2 TRILLION. It will be painfully obvious the US economic recovery has no “Green Shoots”. GDP will be about the same, -6% and the unemployment rate will reach double digits. This will negate the US Treasury’s worst case scenario. The result of which will require another $250 billion dollar bailout of the financial institutions due to the increase in late and the default of household debt. To counter the public outrage at another bailout for the “Rich“, a $1 TRILLION dollar stimulus package will have to be passed by the end of the third quarter of 2009. This is to counter the expected drop of GDP by at least -15%. If GDP drops to -10% then history, in the form of an Automorphism (see previous post) will indicate GDP can go to -25%. From the point of view of the Great Depression, Don Obama and his Mob will have to take command of the US economy and force the renegotiation of household debt (this will result in a known rate of return of invested capital) and force a recapitalization of output (it really was not World War Two that got the US out of the Great Depression. It was that the war allow President Roosevelt to take command of the US output in a “Free Market” economy).
  
  

Viva La Revolucion!!!!

Federal Reserve and Monetary Policy: I Wish I had the Money to Short the U$ Dollar: Part 4

Wall Street’s view: Liquidity will return if the housing market stops declining and FASB change of the Mark to Market Rules.
Main Street’s view: Wall Street is full of cow patties.

There is the belief there following needs to happen:
Low interest rates
Lenders willing to lend
Consumers willing to borrow

The Fed has achieved the first item for at least three months. The questions are will lenders lend and consumers borrow? This leads us back to the primary problem, according Wall Street, will housing prices stabilize? My answer is NOOOOOOO!!!!!!!!!! Financial models due not by assets, people do.

Since the FOMC has decided to by long term US treasuries and GSE’s mortgage securities to affect their respective rate, I can bitch about the effect their actions have on the elasticity of the U$ dollar. I will use arc elasticity (percent change of the value of the U$ dollar / percent change of the value of another currency).

Category Theory is the study of “Objects” and “Morphism” between them. “Objects” are primitive in Category Theory, therefore there are no “Elements”. “Morphisms” are also primitive in Category Theory. Compos“Morphism” is a logic statement. Properties of “Objects” are specified by the properties of the “Morphisms”. Category Theory is composed of logic statements.

Example: If one has a chance to look at the Earth from orbit one can see brown, green and other colors, These colors represents “Objects”.

Example: f o (g o h) = (f o g) o h, is not an equation, but a logic statement that evaluates to either True or False.

Example: A Geographic Economist can create a “Morphisms” that describes the colors (“Objects”) of Earth. He/She can state they will be using category theory. Or, they can prove the objects in Earth form a category. Or, they can cast their model in a form that is a category such as the Set category.

Arc Elasticity on Wikipedia gives the mid point formula for arc elasticity. I’m not going to use this formula because I’m going to change the algebra to that of operators. One can always translate the origin of each variable, in the case given by Wikipedia, to the mid point. Therefore, one can just analyze the changes at each time interval.

Arc Elasticity(y, x) = {[Y(finish) - Y(start)] / Y(start) * 100%} / {[X(finish) - X(start)] / X(start) * 100%}

Y(start) = X(start) = 1 => Arc Elasticity(y, x) = {[Y‘(finish - start)] + 1] / {[X‘(finish - start)] + 1]}

Where X’ and Y’ are delta X and delta Y respectably.

The above Arc Elasticity always starts at (1, 1) which means that at time t to time (t + 1); I translate the origin at time (t + 1) back to time t. I am only looking at the change of Y with respect to a change in X. Figure 1 will be used to illustrate the operator aspect of elasticity.

Figure 1b shows the operation on X then an operation Y is the same as if a rotation of the angle theta for X and then a rotation of the angle theta for Y. The concept of using a rotation to describe a system is used in nuclear physic’s “isospin“ (isotropic spin space SU(2)). {hint on where a later post will be going; SE(2)}

Figure 1c shows that as time evolues; the end point transverses a curve center about (1, 1). Here’s is an interesting observation; at any time t, the end of r ( the position of the elasticity of y due to x) has a point group. See for An Elementary Introduction to Groups and Representations point groups. However, there is no operation that will allow the symmetry of the point group to be realized. Yet the curve (parameterized by the time evolution of x and y) indicates an operation, in elasticity space, can select a point group. Elasticity is an example of groupoids. Operations on elasticity, in time, selects the point group implies time becomes a symmetric transformation (Elasticity has an automorphism).

Okay, what does this mean???? Category theory is really the study of “morphisms”. This means I can have an economic model based on the Set category and I know there is a “morphism” (functor) between Set categories. I will look at the highlights of Future Cast’s analysis of the Great Depression and point out the “morphism”, which we now know are automorphisms.

• Germany was unable to pay off its war time debt.



• Germany was printing money which triggered an inflationary environment.



• Germany’s inflation was transmitted throughout the world via gold prices.



• Germany was unable to captialize internaly due to Germany’s investor base’s not investing in their own country.
  


• Forign investors did not want to invest in Germany due to its inflation and debt.


• Global instability developed.
  
  
  

The automporphims:

• Households hold too much debt which they can not pay off.



• FASB encourages financial companies not to renegotiate household debt. The Federal Bankrupcy laws have not been changed.



• The Federal Resereve is printing money. The U$ dollar is the global reserve which now plays the role gold once held.



• US of A investors are not recapitalizing this country. Their investor advisors tell them there is a greater return in other non-EU countries, such as China.



• China is in violation of its WTO obligations and blocks forign ownership of its companies.



• India is a low wage country which subsidizes consumers’ commodities. Global stability is now threaten.



• Foreign investors do not want to invest in the US of A due to our debt. China is bitching about the U$ Dollar and US Tresuries.

The direction of the U$ Dollar now depends on the actions of other countries. For example, if counties, within the EU, can not implment a recovery, the U$ Dollar will weaken. This in turn will trigger another period of U$ Dollar denominated inflation. One can expect the pheasants to grab their pitch forks and torches. Whoops, I need to update this action; to grabbing guns and Montav Cocktails.

President Obama has now shoved his head up Wall Street’s ass. President of the Moron League Obama has no credibility. President of the Moron League Obama is continuing Don Bush’s policy of Institutionalizing fraud. Don Obama’s can now teach Ponzi schemes, double book keeping and skimming off the top.

If one is laying in the street with multiple gun shot wounds and burns, one can thank Don Obama. The up shot of this will be:

• Don Obama and his fellow criminals of the Obama Syndicate, formally known as the Democrats, will have to pass multiple trillion dollar plus economic stimulus package for the next two years.



• The Rush Limba Party wanting to put Reagan’s portrait on U$ currency.



• “Token” Steele will be ousted out of his position in the Rush National Committee.



• The Obama Syndicate will lose Congress in the 2010 election cycle.



• Don Obama will lose in the 2012 elect cycle.

Nothing will get done after the 2010 election cycle due to the continuing bickering between the Obama Syndicate and the Rush Limbaugh Party. In other words, this period is going to increase the flare up between Capitalism and a Planned Economy.

Definitions
An economy where supply and price are regulated by the government rather than market forces. Government planners decide which goods and services are produced and how they are distributed. The former Soviet Union was an example of a command economy. Also called a centrally planned economy.

Definition: A free market economy is an economy in which the allocation for resources is determined only by their supply and the demand for them. This is mainly a theoretical concept as every country, even capitalist ones, places some restrictions on the ownership and exchange of commodities.

These two definitions are simplistic to the extreme. See Planned Economy and Free Market at Wikipedia.

So we are not talking about a socialist agenda vs. the free market, we are really talking about how much government involvement is too much.


Viva La Revolucion!

Federal Reserve and Monetary Policy: Mark to Market

One can now look into their crystal ball and predict what is going to happen to the global economy. There are two leading indictors:

1. The “Right Wing”, “Rush Limbaugh” Party’s call that the down turn in the stock market is due to the rejection of President Obama.


2. The yield curve.

Both of these indicators point to the “Book Keeping Away” of debt. Specifically, long term debt will be “Book Kept” away. Long term’s debt value is not the return of investment capital, but the revenue stream of interest payments before the debt issuers' “so called” expected date of maturity.

We will be forced to face the fact that there is no “money” in monetary policy. The elasticity of the U$ dollar is an open question. Is the elasticity of the U$ dollar a relative measure of:

• Fed Funds Target?


• Which short maturity US Treasury bill?


• Which short maturity LIBOR rate??????

Or can one now say the U$ dollar is no longer allow to float? In fact, can this statement also be true to the other so call “Free Market” countries?

The dollar index no longer reflects the value of the U$ dollar with respect to other currencies, but the value of countries’ economic respective policies. The up shot of this “new” world order is the fact that China and Japan can dump their horde of U$ dollar$ on to the market, to pay for their respective economic policies, and it will take a long time before the currency market reacts.

The “math” of this prediction is based on the usage of marginal probability in a decision making process and on the “Axiom of Choice“ [due to axiom theory's use of some sort of maximum likelihood]. The decision making process and the “Axiom of Choice” require the use of Independent, Identical Probablity Distributions (iids). There are two ways one can get an iid in economic theory:

• Allow the two systems to interact accordingly to the convolution theory of work force and hence the convolution theory of Neoclassic Theory’s Return to Scale”. (see Neoclassical Theory of Production: Using Arbitrage Labor Inputs for details)


• Change the regulatory rules such that iid’s are “Book Kept” phenomenons.

Wall Street is signaling it wants a “Book Keeping” economy.

The yield curve is signaling the smart money to bail out of anything that relies on long term debt. Examples are Insurance companies, fixed income debt holders such as PIMCO (Their revenue stream is based on the US government guaranty of their GSE holdings), all banks and all long term debt of governments’.

Viva La Résistance Toward Government Bailout Without Full Accountability!!!

Viva La Revolucion!!!!