Monday, December 16, 2013

What's Real? What's Fake?

Is the unemployment rate real or fake? It is obviously fake, but we want to believe the fake is real for a variety of reasons.

We like to think we know the difference between what's real and what's fake. When we're fooled by a fake Rolex watch purchased for $20 on some humid Asian street corner, we shrug it off: it's no big deal because the fake isn't harming anyone.

And when it's difficult to discern the fake from the legitimate, as in fine art paintings and financial policy, we rely on experts to differentiate between the two.

But what if the "experts" are as clueless as the rest of us? What if they've been corrupted by easy money to authenticate the fake as legitimate? Consider ObamaCare, an extraordinarily complex policy that "experts" assure us is a phenomenal advancement that is "working well."

But what if ObamaCare is a fake? What if it is really not insurance at all, but a giant skimming machine designed to enrich and solidify the power of the state-cartel that operates the sickcare system?

"Experts" (PhDs and Federal Reserve economists) assure us our financial system is the core engine of "growth" in our economy. But what if this assertion is simply a useful illusion, and the reality is that the U.S. financial system is a giant skimming operation that harvests immense profits off the real economy to the benefit of the few, the financial cartels and their lapdogs in the Central State?

"Experts" in the Federal government assure us the unemployment rate is 7%. But if we include the 91.5 million people of working age who could be working (and would be working in a work-fare economy), then the real unemployment rate is double the official rate: 14% or even higher.

Is the unemployment rate real or fake? It is obviously fake, but we want to believe the fake is real for a variety of reasons.

The 1974 Orson Welles documentary (recommended by correspondent K.K.) F For Fake helps elucidate this peculiar dynamic of human nature.

The master art forger who plays a central role in F For Fake noted (self-servingly, but amusingly so) that his addition of a few fake Modigliani paintings into the world's collections did no damage to Modigliani (long since deceased) or the collectors, who benefited from the opportunity buy a Modigliani masterpiece.

We want to believe the fake unemployment rate of 7% rather than the real rate of 14+% because the officially sanctioned forgery feeds our belief that our bloated, corrupt Empire of Debt is sustainable, fair and working well. To accept that we've been bamboozled, ripped off, taken advantage of and ultimately cheated out of an authentic economy and life by swindlers is too painful.

How is the Federal Reserve's creation of money out of thin air not officially sanctioned forgery, a forgery we accept because we are like the collectors who are willing to buy forgeries as masterpieces, as long as they're good forgeries, rather than forego the joy of owning a masterpiece?

Just as the belief in the provenance of a masterpiece creates its value in the marketplace, so it is with money: if it is created by a central bank and ultimately backed by the State's right to tax its citizenry, we consider it legitimate, even though it is clearly an intrinsically worthless forgery of real value (i.e. gold, silver, land, cans of beans, machine tools, etc.).

And just as the value of a masterpiece is shattered by the loss of faith in its value, so it is with money: should the belief that creates the value fade, so to will the practical utility of the money.

Any doubts about the value of the euro, yuan, yen or dollar are dismissed by the mainstream as the confused ravings of a lunatic fringe, because maintaining the faith in the provenance of paper money is essential to the power created by financial engineering. But it's worth keeping in mind that this belief in the value of money created out of thin air by the conjurer's wand is just that, a belief.


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The Nearly Free University and The Emerging Economy:
The Revolution in Higher Education

Reconnecting higher education, livelihoods and the economyWith the soaring cost of higher education, has the value a college degree been turned upside down? College tuition and fees are up 1000% since 1980. Half of all recent college graduates are jobless or underemployed, revealing a deep disconnect between higher education and the job market.

It is no surprise everyone is asking: Where is the return on investment? Is the assumption that higher education returns greater prosperity no longer true? And if this is the case, how does this impact you, your children and grandchildren?

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We must thoroughly understand the twin revolutions now fundamentally changing our world: The true cost of higher education and an economy that seems to re-shape itself minute to minute.

The Nearly Free University and the Emerging Economy clearly describes the underlying dynamics at work - and, more importantly, lays out a new low-cost model for higher education: how digital technology is enabling a revolution in higher education that dramatically lowers costs while expanding the opportunities for students of all ages.

The Nearly Free University and the Emerging Economy provides clarity and optimism in a period of the greatest change our educational systems and society have seen, and offers everyone the tools needed to prosper in the Emerging Economy.

Read the Foreword, first section and the Table of Contents.

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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. We will cover the five core reasons why things are falling apart:

go to print edition1. Debt and financialization
2. Crony capitalism
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. Once we accept responsibility, we become powerful.
Kindle: $9.95       print: $24 



Thank you, Mike G. ($60), for your phenomenally generous contribution to this site-- I am greatly honored by your steadfast support and readership.


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