Legitimate Economics — “The [Old] Law of Convolution” versus “The [New] Law of Transparency”.

I’m an #Economist. So are you. Anyone can be an Economist. Anyone. They don’t know or do anything ‘valuable’, yet they get paid for it. They run around printing little charts about things that happened yesterday, based on ‘fake’ numbers they seemingly got from television or dreamed up; and they never predict the future. Or never accurately. Because they claim this is ‘impossible’. “Economics is extremely useful as a form of employment for economists.John Kenneth Galbraith a Neo-Classical Economist.

Why then do we need economists to report on ex-post affairs and be remunerated highly for it?

It’s because they serve a purposeful mass hypnosis.

Surely economists are prima facie redundant ab initio? People titled and employed as “Economists” know very much more than a little less than you or I of the real world. So indeed, I wish I were not an economist. So I decided to spend the past 9 years unraveling my education in Economics and Investment Finance and wanted to show to you the remnants and entropy of this profound unveiling. “We really can’t forecast all that well, and yet we pretend that we can, but we really can’t.” Alan Greenspan [3]

To ‘Backtrack’ Slightly.

Indeed Neo-Classical Economics is a superfluous ‘body of work’ — compiled over the past some 107 years — by an elite “world-agenda body and system of academics and their scripted narratives’ and which, it can be said….”states the obvious, in an obvious way, obviously oblivious to obviating realities, thereby obstructing cogent and cohesive understandings of the creation, velocity and general movement of money chasing domestically or internationally produced goods or services from one factor of production to the next…”

Seemingly economics was a rather childish and churlish hoax perpetrated upon the world. Certainly ‘Monetarism’ anyway.

And to extenuate this folly ‘ Economists’ — certainly peddlers of a ‘ mist’ of some sort — utilised oftentimes sublime ‘assumptions’ and strict ‘modelling’ to ‘prove’ their stupendous theses and theorems could predict how and when, when it comes to money and the production of goods and services, people actually behaved. (The only decent protagonists that challenged this preposterous lexicon were “The Austrians”.) “The only function of economic forecasting is to make astrology look respectable.” John Kenneth Galbraith.

A World ‘Agenda’ of Archetypal ‘Systems’ and their associated ‘Academics’ (and Media).

(To elucidate further, there exists a ‘World-Agenda’ of ‘systems’ and their ‘academics’, where specifically five main ‘controlled worldwide ‘industries’/’institutions’ were perpetrated to ensure that certain outcomes from collective human behaviour are certainly realised. They created an entire academic protocol designed to be studied and assimilated by unassuming and ‘un-thinking soppy practitioners’ to ensure predictable human behavioural outcomes would be realised by the purposeful actions of said trained practitioners in those industries and whom all would essentially serve the ‘invisible hand of their creation’.

These ‘archetypal’ industries are 1. Economics/Bankers, 2. the Courts and the Legal System and Legal practitioners 3. Medicine and Doctors and medical practitioners as well as all Pharmaceutical disciplines and 4. the Political systems and public servants, and lastly 5. Academia and the lecturers completely atrophied by their knowledge believing what they are teaching is true and valuable. There are more, but others are really ‘2nd or 3rd’ derivative systems coerced from ‘above’ by these four ‘Archetypal Systems’ and their supporting network of ‘Institutions’.)

Copious amounts of money, human energy and media is expended annually to ensure vis a vis these five pillars of ‘atrophied and dishonest’ society that humans are lectured, jostled and hypnotised into place to serve the ‘invisible hand’ and for excess profit extraction. “Under capitalism, man exploits man. Under communism, it’s just the opposite.” John Kenneth Galbraith

Folly Indeed.

“….But back to Economics….”

Indeed from ‘Macro to Micro’, to theories of “Supply and Demand” and Surplus and Deficit, to ‘Elasticity of Demand’, to ‘Monetary Theory’ (it’s Creation and the Perception of Money), to the ‘Laws of Diminishing Returns’, to the ‘Factors of Production’, to ‘Fixed Capital Formation’, to ‘Marginal Utility’, to ‘Opportunity Costs’ economics filled textbooks and students minds with folly. All these theories are practically second nature and can be assimilated as false or misleading by any 12 year old.

The Big Change — AI and IoT and the ‘Unveiling’.

These aforementioned ‘four archetypal pillars’ have been the cause of all and every damage to our world society and are now on the brink of challenge and dissolution.

Indeed after deconstructing the academics and the ‘knowledge system’ it was easy to settle upon a premise that with the speed of new technologies and the advancements in Artificial intelligence (AI) (such as crypto currencies, ‘blockchain’, ‘distributed ledgers’, IoT, and Bots etc.), Economics, including these other archetypal pillars, are set to be radically overhauled if not entirely neutered — even eradicated — from our immediate future.

Sterile Neo-Classical economic theory and it’s economic assumptions bear no meaning or reality vis a vis contemporary business cycles or to the means and methods of production and consumption. Furthermore, everyday a larger percentage of the worlds revenue now arises out of current or future accelerating technologically based interactions where excess profits are being summarily extracted. [1]

Excess Economic Profit — The ‘Outgoing’ Law of Convolution.

The more convoluted or contrived a product or service is, and the deeper it’s hypnotic marketing campaign, the higher the excess profit exists for the purveyor thereof. Excess profit here is defined as ‘stupid profit’…the cost of the ‘emptor being dumb’.

Normally accounting Profit = Sales less Cost of Sale. And if the cost of sales can be manipulated excess profit results. However if cost of sale cannot be massaged then to achieve excess economic profit, then 1. the characteristics of the product or 2. it’s utility must be massaged instead. Most economic profit thus arises out of the ‘confusion’ created by the pricing and production of a good or service, and the degree of excess economic profit earned from such is directly dependent upon their ‘intrinsic convoluted and dishonest construct’ applicable to selling or marketing of them.

Producing a carton of milk is not a convoluted process. Barriers to entry and profits are normalised in the competition process. Thus excess profits are normalised and rendered zero or reasonable. But producing a complex financial product or service, comprising of “synthetic collateralised instruments, or interest rate swaps collars, or multi-manager assurance wrappers” is a convoluted product, where excess profits can easily be realised.

By way of example Diamonds are not scarce at all. Diamonds are a perfect example of a contrived market where complete excess profits are earned. In fact they can be manufactured by technologists. Indeed diamonds are abundant yet they sell for ridiculous prices as the hypnosis and marketing is so effective on the unassuming. Try to approach a jeweler to sell your expensive diamond back to them — one is sure to be shocked? Conversely Ruby’s are scarce. Emeralds are scarce; but are not marketed nearly as much because if people were to focus on ‘scarcity or preciousness’ no one would purchase diamonds and the stupendous profits — derived by way of the ‘Law of Convolution’ — would evaporate. Ironically scarcity is not where excess profits are extracted. Excess profits are extracted specifically where the product or service is definitively not scarce and abundant. [2]

‘Excess Profits’ are Omnipresent — Until they aren’t.

In South Africa recently a company called Sygnia Asset Management stepped out of the closet to disclose the asinine degree of how product fees charged by asset management companies effected investors’ portfolios, and they subsequently dropped their fees dramatically much to the chagrin of their competitors all still hellbent on extracting maximum fat from clients. Are financial markets, their practitioners and all purveyors of convoluted financial products and services ready for this transformation? Are stock markets ready to have their ‘excess profit teats’ removed?

Similarly, Pharmaceuticals (like exorbitant and ‘un-corelated’ costs of medication). Similarly Legal Services (like courts or their lawyers billing expensive hours for less than 23% of legal remedy being achieved in courtrooms). Similarly Medical Services (like Chemo Therapy being ineffective for cancer treatment, but very effective for medical practitioners’ bank accounts). Similarly the useless but expensive and wasteful ‘social output’ from Politicians and public servants. Similarly Academia and academic institutions that purvey many a ‘lexicon of convolution’ and ‘agenda’ to perpetrate a cause (like the Astrological, ‘Newtonian vs Quantum’ Physics’ and other ‘Scientific’ theses)

Financial services and products are most intentionally contrived and convoluted to extract maximum fees and thus maximum excess profit from unassuming investors or consumers of financial products; seemingly seduced and coerced by the financial marketing and peddling. (Let alone the risks associated with financial market cycles where market crashes and capital loss are oftentimes sold as a vagary of the industry whilst most are engineered’.) Usury creates money from nothing and charges a yield from it’s utility. This is perfect excess profit extraction. “Money for nothing”. So most investors would be better served managing their own portfolios. As discussion abounds with respect to passive management outperforming active management, most financial and investment products and services can be forgone saving the associated costs to the client, and thus denying the excess profits to their purveyors. “I guess I should warn you, if I turn out to be particularly clear, you’ve probably misunderstood what I’ve said.” Alan Greenspan

The [New] Economy — The Incoming “Law of Transparency”.

AI and IoT is about to change the world of excess profit forever. Not so much according to the hype, but definitely according to an unveiling of where excess economic profits are hitherto enjoyed by any ‘archetypal industries and their spawned allied cohorts’.

Transparency, and the eradication of excess profits is about to become a force for change in the way humans are treated, mistreated, coerced and fleeced by purveyors of products and services most do not or should need or desire — had the details been fully disclosed.

“New Economics” in the era of augmented AI and IoT involves also the eradication of products and services including whole industries where excess economic profits were earned via the insidious ‘Law of Convolution’. By eliminating the ability to earn these excess economic profits pecuniary savings to societies will be readily seen. Naturally the decline in excess profits will also heavily impact the four archetypal industries largely implying their profitability will be radical impacted. Their product mixes will be changed dramatically. In some cases class-action legal dynamics will be introduced to recover excess profits from persons radically effected by ‘convolution or patent seeming dishonesty’. (One example could be Alan Greenspan manipulating long term US Interest Rates artificially lower to bolster the failing US Economic system but specifically to decrease — unfairly —the social security benefits payable to the poor, the elderly, and US veterans. Is it possible ’35 million Americans’ can litigate the US Federal Reserve for an artificially low rate of income thrust upon them unilaterally and unduly?) “To manipulate people effectively, one must make them believe they are not being manipulated.” John Kenneth Galbraith

The “Law of Transparency” is the only economics one should be required to assimilate in college or in life.

“In Economics, the majority is always wrong.” John Kenneth Galbraith.

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Darren Bayett is an ‘Alpha’ Derivative Trader, a 20 year veteran Macro Asset Allocation Specialist, Investment Banker, Corporate and Change Strategist, “Quantum Dynamicist’ and Abstract Artist.

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[1] http://indiafacts.org/economist-explanation-rooted-hubris-hinduphobia/

[2] https://www.pinterest.com/mvyas91/chartjunk/

[3] https://www.pinterest.com/pin/2533343513694681/

[4] title diagram — https://www.pinterest.com/pin/526780487639976947/

Originally published at https://www.linkedin.com on June 9, 2017.

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