Keynes and the Chinese (government) speculator
By Forex Arena on 03/16/2010 – 5:35 am PDTOne Comment
Keynes quite convincingly describes the horror of speculation (although he did not write about their own actions in the currency markets). He is right, but the current attacks on speculators are driven by the French and the Greeks, and suggest that the movement of the markets in the state, will be good. However, it is not.
We reached the third level, where we spend the intellectual resources of the assumption regarding the average expectations of the average outcome of events. However, I believe that there are those who are in the fourth, fifth, etc. stages.
Today, trading in the third stage is carried out computers with the help of specialists at exchange analysis, which calculates the average expectation. Traders engaged in credit default swaps – an excellent example of Keynes’ point of view: they traded swaps and put on the bonds, based on its assessment of the average expectations of the average outcome of events. Only the bank, in effect, acts as a market maker CDS, while at one stage away from the “socially useful” trade, so beloved regulators.
The arguments of Keynes, as usual, are still valid today, and stand for the majority of attacks on markets:
Common assessment, which came as the result of the mass psychology of a large number of ignorant, heavily dependent on the swings of public opinion with regard to factors which do not really play a big role for future profits. In hard times, particularly when the assumption that the current situation will remain the same as the least likely, the market will be subject to waves of optimism and pessimism, even though such sentiments are unreasonable and do not have a sound basis for a reasonable calculation.
And:
A professional investor and speculator, in fact, not at all interested beyond the reach of long-term projections of likely returns on investment during the whole period of their existence, and in anticipation of changes in the basal short-evaluate the behavior of the masses.
Finally:
Among the principles of orthodox finance no more antisocial than the fetish of liquidity. This principle makes one forget that there is no such determination, as the liquidity of investment for society as a whole. The actual, private goal for most investors today is “premature start,” as Americans like to say, in order to outwit the crowd, and give the wicked, the depreciation of half a crown to his companion.
Thus, short-term speculation subordinates all short-term circumstances, and focuses on the general opinion, instead of common approaches to value, because the general opinion, and moves the market.
In general, he’s right. Market fundamentalists are wrong, that has already been proven many times. But this does not mean that there is a better system. Keynes concludes his chapter on the assumption that the state, “which is able to calculate the marginal productivity of capital assets over the long term and based on the fundamental social benefits will play a much more significant role.
Extremes that could be a disaster, we saw in Soviet Russia. Central planning does not work. I do not think that Keynes believed these extremes, but China, which is now so admired its mix of state planning and capitalism, shows the danger of a strong government hand in the allocation of capital.
LA Times tells of one example of excessive investment, notably the airport for $ 57 million with 50 employees, through which passed 151 people over the past few years (yes, they all could fit in a Boeing 737)
We reached the third level, where we spend the intellectual resources of the assumption regarding the average expectations of the average outcome of events. However, I believe that there are those who are in the fourth, fifth, etc. stages.
Today, trading in the third stage is carried out computers with the help of specialists at exchange analysis, which calculates the average expectation. Traders engaged in credit default swaps – an excellent example of Keynes’ point of view: they traded swaps and put on the bonds, based on its assessment of the average expectations of the average outcome of events. Only the bank, in effect, acts as a market maker CDS, while at one stage away from the “socially useful” trade, so beloved regulators.
The arguments of Keynes, as usual, are still valid today, and stand for the majority of attacks on markets:
Common assessment, which came as the result of the mass psychology of a large number of ignorant, heavily dependent on the swings of public opinion with regard to factors which do not really play a big role for future profits. In hard times, particularly when the assumption that the current situation will remain the same as the least likely, the market will be subject to waves of optimism and pessimism, even though such sentiments are unreasonable and do not have a sound basis for a reasonable calculation.
And:
A professional investor and speculator, in fact, not at all interested beyond the reach of long-term projections of likely returns on investment during the whole period of their existence, and in anticipation of changes in the basal short-evaluate the behavior of the masses.
Finally:
Among the principles of orthodox finance no more antisocial than the fetish of liquidity. This principle makes one forget that there is no such determination, as the liquidity of investment for society as a whole. The actual, private goal for most investors today is “premature start,” as Americans like to say, in order to outwit the crowd, and give the wicked, the depreciation of half a crown to his companion.
Thus, short-term speculation subordinates all short-term circumstances, and focuses on the general opinion, instead of common approaches to value, because the general opinion, and moves the market.
In general, he’s right. Market fundamentalists are wrong, that has already been proven many times. But this does not mean that there is a better system. Keynes concludes his chapter on the assumption that the state, “which is able to calculate the marginal productivity of capital assets over the long term and based on the fundamental social benefits will play a much more significant role.
Extremes that could be a disaster, we saw in Soviet Russia. Central planning does not work. I do not think that Keynes believed these extremes, but China, which is now so admired its mix of state planning and capitalism, shows the danger of a strong government hand in the allocation of capital.
LA Times tells of one example of excessive investment, notably the airport for $ 57 million with 50 employees, through which passed 151 people over the past few years (yes, they all could fit in a Boeing 737)
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Hi
You DO see the pyramid scheme symbol on the back of the USA one dollar bill, right? You DO see the servitude infestation in capitalism, right? And do you see the “pay up or lose your wellbeing” Chicago mob-like felony extortion widespread within capitalism? Do you see the “join or starve” felony extortion done to the 18 year olds… by this ugly competer’s church called capitalism? See how forcing competer’s religions onto 18 year olds… kills membership in the cooperator’s church (Christianity/socialism)?? Do you understand that AmWay (American Way) (New World Order) got “the exclusive” (legal tender) on the TYPE of survival coupons (money) accepted in supply depots (stores) and leverages 18 year olds into the organization via that felony activity as well? (It puts AmWay-coupon slaving requirements called price tags… on all the survival goods). Do you understand how farmyard pyramids work… from your childhood?? Remember?? Upper 1/3 are “heads in the clouds” while the kids on the bottom ALWAYS GET HURT from the weight of the world’s knees in their backs? Still with me? Do you see anything illegal, immoral, or just plain sick… in any of this pyramid scheme’s activities?
Us American Christian socialists are still patiently awaiting the natural fall of the pyramid-o-servitude, or the busting of the free marketeers felony… by the USA Dept of Justice. Us Christians are VERY CLOSE to issuing a cease and desist order until the servitude and inequality goes away… which means it turns into a commune. Commune is a word we LOVE when used in the word “community”… but its one the caps HATE when used in the term “commune-ism”. Go fig. PROGRAMMED!!
Do a Google IMAGE SEARCH for ‘pyramid of capitalist’ to see a full color picture made way back in 1911, when capitalism was first discovered to be a con/sham instigated by the Free Masons/Illuminati. Folks sure bought into the thing… hook, line, and sinker just the same. The caps didn’t even check if a string was attached! Now THAT’S easy fishing, eh?
Time to level the felony pyramid scheme called capitalism. Abolish economies and ownershipism worldwide, and hurry. Economies just cause rat-racing, and rat-racing causes felony pyramiding. BUST IT, America! Look to the USA military supply/survival system… (and the USA public library system) for socialism and morals done right. Equal, owner-less, money-less, bill-less, timecard-less, and concerned with growth of value-criteria OTHER THAN money-value. Quit doing monetary discrimination immediately, and make it illegal. There are MANY measurement criteria of “value”… not just dollars. Try morals, efficiency, discrimination-levels, repairability, etc etc. Economies are cancerous tumors, and to cheer for their growth… is just insane. Profiting causes inflation, so if caps LIKE inflation, and if they LIKE a terrible time in afterlife when they meet the planet’s ORIGINAL OWNER before caps tried to squat it all with ownershipism, then keep it up with the felony pyramiding. I dare you. While us Christians are finally bulldozing that pyramid scheme back to level, lets make servitude and “join or starve” (get a job or die) illegal in the USA, and lets level the architecture seen in USA courtrooms, too. Right now, USA courtrooms are church simulators or “fear chambers”, by special design. Sick.
Isn’t that back-of-the-dollar pyramid… a Columbian freemason symbol? And WHERE is the USA gov located? District of Columbia? (Not even part of the USA!) How much more blatant can ya get? The “Fed” runs a pyramid scheme called the free marketeers. If you’re using the “federal reserve note” certificates, or using no-other-living-thing-on-the-planet entitles of ownership, you’re bought into a servitude/slavery con/sham… called capitalism. Pyramiding 101.
Larry “Wingnut” Wendlandt
MaStars – Mothers Against Stuff That Ain’t Right
(anti-capitalism-ists)
Bessemer MI USA