The Pentagong Show

The Pentagong Show
United State of Terror: Is Drone War Fair?

Tuesday, June 17, 2014

The Flapping Gums of Augurs.

100,000 Cambodians are fleeing across the border with Thailand as its new military junta threatens them with execution, even as the ISIS performs the same function in Iraq and Syria and Ukrainians blow each others' heads off in concert. The eschatological reverberations of such confluence of events is mind-numbing in its proximity to such an important event as the firing of the guns of August, and yet, a mere 2 months form the anniversary of said event one hears nothing of it as a portent for things to come.

But the blindness to what's right in front of our eyes is as prevalent today as it was then, and the manner in which we peasants are once again making it way too easy for them to entrap us into embroiling each other in another gruesome spasm of barbarity is alarmingly similar in that we are walking right into it.

Meanwhile the USA's War on the Dollar continues apace. One of its effects is illuminated by the LATimes article on SDI spending that they bemoan as it has rocketed past the $40 Billion mark, with no discernible progress, asking how much better it would be if that money were spent on, I don't know, schools, or paying teachers that teach in those schools. But this logic fails to understand the way that the Fed has, by the sheer scale of its interventions, rendered such common-sense arguments moot. If every fortnight for more than  a year, the Fed creates, magically, a $45 billion infusion of cash into the economy, what could possibly be so outrageous about $40 billion spent on research and padding the bottom lines of both Raytheon and Boeing with Federal dollars for which they do nothing nor really ever need to produce anything that actually does anything, over a period of the same duration, making the $1billion dollar annual outlay seem like a pittance instead of the outrageous boondoggle the LATimes is attempting to portray it as?

And what does that $45 billion get spent on ? Resources, infrastructure retooling, paying down the enormous National Debt? Well, no, of course not, that would cause deflation, which would be a boon to the economy and low-wage workers and bad for the banks and the ideology of Corporatism for whom the Fed exists to serve. It therefore goes into buying MBS that are so sketchy that even Fannie Mae, Freddy Mac and the FHA won't touch them.

Then since this is by its very definition turning the liability of Treasury debt (another $45bil is "produced" to buy US government bonds, so as to keep the interest rate on that debt from rising and attracting all that capital pouring into "emerging Market" economies (what exactly they're emerging from is never actually made clear)) into an asset of the same government (although it's supposedly a private institution, or quasi-government, the fallacy of that appellation was made crystal clear by the GSE's, which shared the same nomenclature, when their liabilities had to be assumed by the taxpayer, in the same way, the Fed's liabilities belong, as do all the banks' liabilities, as we were also shown during the 2008 unpleasantness, to the taxpayers only the profits and benefits unavailable to real private citizens belong to the banksters), that claims it as a liability, and then rehypothecating that asset as if it were worth what is on its face value, setting innumerable timebombs in the economy in the same manner in which it allowed the myriad of crooks that blossomed like mushrooms in a damp cellar, in the runup to the last financial imbroglio.

This could actually be for the better, since, as in China, where warehoused copper and other commodities have been rehypothected so many times, someone forgot to check to see if the collateral was actually there, which, as it turned out, unsurprisingly to some, it wasn't, in the US, the banks that use the federal debt as collateral know that although it'll never be paid back, it doesn't have to be since the government will just borrow some more it also can't pay back to pay them back, and really, what else really matters as long as you get yours, right?

And this is the reason that printing money isn't the same as electronic money and the two regimes of paper and gold-backed vs. electronic money show their irreconcilable differences: there's never any accounting for the shimmering quantum quantities of electronical valence money.

Instead of any accountancy, electronic money operates in the quasi-world of network architecture and bandwidth allocation algorithms that dominate telephony and the internet. In these vast hypothetical domains, the carriers can oversubscribe their links in the assurance that at any one point in time, all of their users will not access the network at the same time. If they were to try to do so, it would crash the network, as it hasn't close to the carrying capacity necessary to honor such a plethora of Service Requests.

Banking is of the same type of network, as made clear by any explanation of a bank run.This is why cell phones are actually a boon to network designers, as they go one step beyond the touchtone phones. These marvels that replaced rotary dial still had the time lag while you punch in those numbers, that was still a vast improvement over the old system where, once you pick up the receiver, you are sending an off hook signal to the network that then enables your circuit, and takes up precious network resources while your rotary dial slowly, mechanically, churns out the numbers you program into it to make your desired connection.

It is easy to see how much better a touchtone phone was, it not only didn't need the mechanics at the central office, it improved by a remarkable time, the pause between off hook and the time you were connected to your party. Cell phones go them one better by not allowing you access to the network until after you've already programmed in the address you're interested in connecting to, which then gets downloaded to the network at computer speed, not human speed.

Similarly, banking has a built in desire to continually throw blockages in the way as too many people try to access what are the banks' assets (just as in telephony, the resources belong to the bank, not to you; you are just a subscriber) and just as in telephony, those with largest balances, or higher subscription fees, are stamped with a higher priority, and the queues, being comprised of micro-second timestamps, are invisible to the end users.

So your paycheck never actually materializes, but is a transformation of carbohydrate-generated energy into electrostatic energy and pumped into the banking system which is a form of capacitance for short-term fluctuations, and batteries for long-term deposits such as CD's. This changes the nature of banking  the way the internet changes the nature of a PC, such that without the Cloud, the individual PC is just a rock, without the network, a bank, having little in the nature of actual physical money with which to carry out its transactions, means that the power grid and the banking system are no longer two separate entities, but are one. If the electirickety goes out, the bank is just a pile of rocks.

Because of this, there are no other real currencies in the world, there is only the dollar, and that is why the Fed is in constant War against it, because as the only real currency, the only one that is backed by anything real, which it has been made manifest, although it was in actuality always true, is not the productivity of the American Economy, which, like every other economy on the globe has been so jerry-rigged and its real value obfuscated in so many myriad ways as to make its actual  output all but indecipherable, has its only status as world reserve currency maintained by its main output of any import: its military. So that when world events portend calamity, the Uber Classes and there acolytes rush into the safe haven of the dollar because they know a bank that is having a run on it is only a bank if it has an armed guard out front, otherwise its panicked depositors would literally pull their money out.

But this would make the value of the dollar astronomically high against all those other pseudo-currencies, so it has to be managed to maintain its valuation in that Goldilocks realm where its not so high as to make US exports prohibitive, but not driven too low by complete disregard for the debt burden an overreaching Congress might impose on it.

This is currently being made manifest in the Ukraine's not-so-civil war, where ethnic differences and geopolitical strife are being blamed as they are the most overt reasons and can easily be digested by a world pumped up in Nationalistic fervor by the same hysteria that brought us WW1, but the actual reasons are more obscure, but just as simple: a bank run on the entire economy because the oligarchic criminals running the joint have stolen all the cash, siphoning it into non-blocked western banks, unlike the Russians who have their deposits in dollars frozen by sanctions for trying to collect on the money owed them, leaving the country unable to pay its most important bill: its energy bill to its major supplier, Russia.

But the energy must be allowed to flow, whether Ukraine can pay or not, because, just as in any network there are chokepoints that because of constraints that prevent there being alternate routing available, or simply bad design, a failure in one part of the system puts unbearable strain on other parts that can easily result in concatenated failure and collapse.

And just as 100 years ago, those making the decisions as to whether to put their citizens in harms ways are completely, thanks to the remarkable nature of The End of History, divorced from them to such an extent that they are now back to their 19'th century status of mere subjects, pawns easily inflamed to violence and easily convinced their problems are caused by their brothers they see as "others" in another country rather than the evil men, who look like them, they've voted for in an election and put in charge of their affairs. And so they will, just as sheeplike as the doughboys, lineup for the slaughter their "betters" have planned for them.

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