Introduction

Introduction

 

There is a secret.

This secret puts us in a ‘Matrix’ world, where something hidden from our sight controls the way our world works.

We are like sleep-walkers dreaming on, while reality lies hidden in the shadows.

Every now and again, there is a great perturbation in the system and a reset of our dream.

  • Our politicians promise us better health, education and jobs for all.
  • The bankers promise that they can provide money for our needs, and keep control of it by adjusting their interest rates.
  • The economists explain that they know how it all works, and they can provide good advice to our leaders, so that we can live happy and prosperous lives.

But still countries have major problems, and cannot seem to get it right.

Do these players know the secret, and use it to their advantage and to our disadvantage?

Maybe some of them do indeed know the secret, but say nothing about it. Some may suspect, but do nothing.

But they all act as if there is no secret. And they make decisions as if this secret did not exist.

Our leaders tell us that they can control our economy, so that they can meet our desires.

But they always fail.

Orwell

Sometimes things go well for a while. But we still always get these strange times, when money just disappears and leaves many destitute.

In New Zealand, we have the share market crash, the property market crash, and the finance house crash. In America, the dot.com  crash, the housing crash and the ‘sub-prime’ crash. And the same across Europe.

Cyprus crashed, and the government took money from people’s bank accounts to pay for the mess.

All across the world we have a job market crash, where up to 50% of the people cannot get a job. In Greece some people kept on working in their jobs, but they didn’t get paid – even after many months.

Our news media report our economic numbers, which always seem encouraging or perhaps slightly cautious. But the numbers don’t seem to change very much across good and bad times.

We always expect GDP to come in around 2%, and some times it is 1.7%, and other times it is 2.3%. And it doesn’t ever seem to matter very much to us.

In 2014, the GDP for Italy looked like coming in too low. So the economists changed the way they calculated GDP, so that they could have a
better number.

And this seemed to be a way of solving the problem. They found a way to estimate the amount of money spent on drugs and prostitution, and that gave them the boost they needed.

Are they collecting taxes on this money? If not, then how can it be included in the GDP number?

Can we fix an economic problem by adjusting the statistics?

The UK decided to do the same as the Italians. So I guess that they do think that producing better statistics is the same as fixing the basic cause of their problem.

We now classify unemployed people into three categories:

  • unemployed
  • jobless
  • those who have given up.

So the new ‘unemployed’ number is much smaller than the old one.

Sometimes the newspapers report on the jobless, and sometimes they talk about the unemployed. I have yet to see them add all the numbers together to give a total!

Professor Ben Bernanke was Chairman of the US Federal Banking system when the Great Financial Crash occurred in 2008. And his solution to helping his debt-ridden economy was to raise trillions of dollars of more debt to lend to the very big banks that were failing.

Well, to most of them.

few were left to go bankrupt, along with General Motors, the most powerful company in the world for most of the 20th century.

And this was followed soon after with the bankruptcy of Detroit. Half of suburbia disappeared, as all services failed. 

Nothing like this had happened since the Crash of 1929. And Bernanke was determined to make sure that America did not experience another Great Depression, like that which occupied all of the 1930s.

His solution was Keynes on steroids.

He reasoned that since the Keynesian method of solving the 1930s depression by borrowing more money into existence to increase the spending power of the population failed to work back then, it must have been because Keynes did not create enough new money.

So Bernanke determined to borrow into existence much, much more money.

By the time he left the job at the beginning of 2014 (six years later), his efforts hadn’t made much difference.

This is hardly surprising, as Japan had the same problem 25 years ago, and has been printing up trillions of yen ever since.

Just recently, they have initiated ‘Abenomics’ and created a super-sized amount of newly created money. And still it seems to be making no difference to the Japanese economy at all.

The Japanese experiment should have been a big clue about the effectiveness of money printing as a solution for too much debt in the economy. Simple common sense would encourage people to consider the possibility that creating more debt money would just create an even bigger debt problem.

What is the secret behind their thinking? Can banks really just create money at will out of nothing?

Does this solve the problem?

The mainstream media report well known economists and politicians, who are sure that the problem is fixed, and if we wait a bit longer we will see the improvements for sure.

A few other politicians and economists writing blogs on the net tell a different story.

Obviously both can’t be right.

The big central bankers agree with Bernanke. We may have majority rule in democracies, but when it comes time to look at scientific questions we decide who is right by finding out what is true, and discarding what is not true.

Is it possible to look at the subject of economics in a scientific way?

The economists use mathematics in economics, and call that econometrics.

So maybe there is a clear answer after all.

And maybe a scientific approach might shed some light on the secret behind our Dream-time
Economies.