Economist’s inexact models exactly defective 05
(Robert Mundell)
Understanding the misunderstandings of the undercurrents of currencies
The ‘gold standard’ was not understood, nor was the chaos of the 20th Century – gross misdirection towards the ‘Euro’, and towards a common global currency – the importance of the undercurrents of currencies are entirely misunderstood.
Why are so many defective economics models emanating from Columbia University?, the USA?
Engineering is entirely absent from economists’ inexact-science models – it is why economies are crashing;
Global credit crash stems from defective economy system structures & defective controls.
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It is recommended that you read the previous papers in this series – click on ‘view now’ Historical Archives (lhs panel).
This series highlights the gross defectiveness of Economic Scientist’s models that are causing gross injustices & instabilities throughout the world. The previous papers concern:-
1. Milton Friedman, Lucas, Aumann
2. John Nash (portrayed in Beautiful Mind by Russell Crowe)
3 & 4. Edmund Phelps
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Robert Mundell is the 1999 laureate for the Bank of Sweden Prize in Economic Sciences in memory of Alfred Nobel. (Scan nobelprize.org, economics, prize lectures).
emails to Robert Mundell & Columbia University remain unanswered.
Columbia & other leading Universities refuse to engage honestly & transparently – these include: Canadian Institute for Advanced Research, Harvard, Yale, London, Cape Town, Witwatersrand, and many others in Europe, UK, USA.
Governments in UK, USA, SA, Ireland also refuse to engage honestly & transparently.
Columbia University:
Robert Mundell (212) 854-3669, (212) 854-3680 Admin, 212-854-4520 Janet Currie, 212-854-6369 Pierre-Andre Chiappori, 212-854-8059 (Susan Elmes),
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Robert Mundell’s Nobel Prize was awarded, partly if not mainly, for his work in establishing the Euro currency; BUT, thought about this, and from an engineering perspective, show that this was a destructive shift.
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To briefly recap from previous papers in this series:–
Milton Friedman developed the view that Economics was on a par with science; the first paper in this series acknowledges that Friedman was being reserved and that because of greater complexities economics is in fact an ‘inexact’ science requiring far greater skills to master than ‘exact’ sciences which can ignore, in the main, human anomalies.
Unfortunately the observation by Friedman brought about a flurry of (uncontrolled?) activity of economists trying to ‘force-fit’ exact mathematics & science models to ‘answer’ a whole host of economics problems that faced the world. The result was that defective economics models emerged, but were undetected as being defective because engineering & proper testing was entirely absent. But, these defective models found their way into governments & corporates and were taken up as foundation stones for the making & steering of policy decisions.
The outcomes of those policies have been disastrous – and there are many more difficulties still to surface.
The approach by CDADD, in pioneering engineering into social/economy/business/finance/legal (SEBFL) environments, has been to bridge the massive chasm that exists between the engineering & commercial worlds, but those in the commercial world have great difficulty, if not impossibility, of understanding engineering, and engineers have a reluctance to cross into the commercial world except for a minority drawn by the temptation of more money, but this is at the expense of surrendering their engineering integrity.
Thus the chasm has remained wide & deep. And it is into this chasm that defective models within the SEBFL environments have fallen but with parties on either side of the chasm not recognising this.
The models that Robert Mundell has developed, part of which ‘justified’ the launch of the Euro, are sitting in this chasm.
The purpose of this paper is to give perspective as to why this is so.
A number of attempts have been made to contact Robert Mundell, and with other Nobel Prize Winners such as John Nash & Edmund Phelps, and also with Jeffrey Sachs (MDG Goal – Earth Institute) and other senior staffers, at Columbia University but they all refuse to engage transparently & honestly.
The integrity of the Nobel Prize, not only for Economics even though it is in fact a Bank of Sweden Prize, but also for all other Prize categories, is at stake.
Decisions about future recipients are very much swayed by existing Prize Winners, and if these Prize Winners are not being forthright then the integrity of the Prize, in toto, collapses.
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To understand why the Euro was a bad policy decision we need to get some perspective of the errors in Robert Mundell’s interpretation of the 20th Century as set out in his Prize Lecture. (Note: this does not mean to say that the Euro should be scrapped)
As with any engineering system/component one can structure simple GO/NO-GO tests to determine whether any particular component meets design tolerances. If a component fails to pass either the GO or NO-GO tests it is rejected as being outside of tolerance, if it passes the NO-GO and also passes the GO test it is accepted as being within tolerance – i.e. it is an acceptable component.
Assume an aircraft experiences an extremely heavy landing, a number of critical tests/inspections would be performed. If, say, 5 critical defects were detected then the plane would be grounded not because of 5 cumulative defects but because of any one defect.
When we consider the proposal by Robert Mundell for a common currency and, as a forerunner, a common Euro in the EU we find that there a number of critical defects and any one of them, had they been correctly understood at the time, would have justified the scrapping of the Euro project.
A complex system has many components; if stability is sought then each component has to be correctly engineered & controlled. If even one component is unstable or incorrectly controlled then the entire system will be unstable.
The reason that the world’s economy system is unstable is because ALL of its separate components are incorrectly engineered, and ALL are incorrectly controlled.
We need to understand why this is so, which will give understanding as to why the Euro was a bad decision.
It is important to realise that population growth diminishes as social development increases – it only requires for the ‘spark of life’ to be reignited in impoverished regions for a marked decline in population growth.
oOo
Robert Mundell’s Prize Lecture splits the 20th Century into 3 phases:-
# 1900–1933 – gold standard, breakdown, restoration & demise – Mundell’s subsection is entitled ‘I Mismanagement of the Gold Standard
# 1934-1971 – dollar devaluation, $35 gold price, and finally dollar off gold – subsection entitled ‘II Policy Mix under the Dollar Standard’
# 1972-1999 – collapse into flexible exchange rates, outbreak of massive inflation & stagnation in 70s, supply-side economics in 80s, return to monetary stability on 90s. – subsection entitled ‘III Inflation and Supply-side economics’
For those that have kept up with developments & revelations at this website you will probably be recognising that Mundell’s statements are ‘pre-loaded’ biases.
oOo
Consider:
Helios Airways Flight 522 from Lanarca, Cyprus crashed by Athens in 2005.
It is believed that loss of cabin pressure resulted in the pilots becoming unconscious due to hypoxia, and eventually the plane running out of fuel.
Whatever the actual cause of this particular tragedy the point to be analogised with Robert Mundell’s work is that:- in climbing an aircraft enters rapidly lowering atmospheric pressure regions. If the aircraft is not able to maintain internal pressure a warning is given and, automatically, oxygen masks are dropped. BUT, it then requires that the pilots take responsive action – BUT, with a loss of pressure and with hypoxia setting in the ability of the pilots to react correctly rapidly diminishes, and, as appears in the Helios 522, unconsciousness comes about – i.e. rational control is lost.
Despite the plane being on autocontrol the autocontrol was only part-rational until the plane ran out of fuel.
In a similar way the world’s financial/economy systems have reached super-altitudes in which internal pressure changes have been volatile & wide. But instead of sensible, rational, control taking over the opposite has happened, a sense of ‘unconsciousness’, of ‘hypoxiated’ mindlessness, has occurred and increasingly irrational actions have been taken. The launch of the Euro is one result.
Now, depending on whether you are one of the very few fat-cats or one of the hugely many non-fat-cats determines your sense of satisfaction with the Euro. BUT, the point is that very little is understood of the potential problems with the Euro and there is very little experience of handling problems as-and-when they will arise; and what little experience has been had has resulted in disastrous outcomes (witness: gold standard, 1929 crash, Word War I & II, 1980 crash, 2001/2 crash, 2007 credit crash, etc. etc. etc.).
In short, because economists could not figure out the financial collapses of the 20th century it was considered appropriate to aim toward a global currency (the euro being a test currency en route) – and the rapid growth of USA & Japan had much to do with this direction of thinking. But in so doing the effect was to switch off ‘pressure’ warnings & to disable pressure ‘relief valves’.
From an engineering perspective this is disastrous, and we are seeing the effects of defective SEBFL environment systems & controls.
If a hi-tech plane can crash with its multitudes of engineering inputs then it is easy to understand why economies repeatedly crash with no engineering inputs.
Let’s consider some deductions that Robert Mundell raises …………
oOo
Gold Standard:
Robert Mundell argues in part I that the Gold standard was mismanaged – this presumes that the gold standard was a sound system with sound controls..
There was no mismanagement, as such, of the gold-standard; it was in fact an entirely defective system that would defeat ANY & ALL management attempts, even today, and probably more so due to the massively-destructive super-escalated speculative-demand trading & unitary-model interest rate control.
What Mundell interprets as ‘comparative stability’ (especially with regard the gold system) in the first 1/3rd of the 20th Century was in fact a transitionary phase between periods of utter chaos; with WWI being the termination of this so-called stable period.
We can see that there was absolutely NO possibility of stability under a gold-standard - there are simple reasons to support this, including but not limited to:
- both the inter & intra national monetary systems had no sensible structure or controls (see papers: Interest Rates & Loans)
- Gold was a commodity in itself and not simply a standard.
- Gold stocks & supplies and the distribution of stocks & supplies were, and still are, indeterminate & entirely flexible depending upon the whims of any one nation.
- But, most importantly, the ability to mine gold was based upon slave labour.
[William Wilberforce, in truth, did not abolish slavery - he simply changed the legality from forced (work or be flogged) unpaid labour to forced (work or starve) low-paid labour within the visible bounds – and those that work today are simply the lucky ones amongst billions that are starving = free competition but entirely immoral. But outside of the visible bounds resources & products obtained from forced unpaid labour remained acceptable; and still remains acceptable today. ‘Open global economy’ & ‘free markets’ allow for these slave & near-slave conditions to prevail.
Token ventures such as Fairtrade ply on tossing a few extra peanuts to source employees but remain non-transparent entities milking profits in the supply chain.
Near-slavery is as immoral as slavery, there is essentially no difference (hereon slave will mean both components)
It is not possible for impoverished countries to lift themselves out of slavery whilst they have grossly defective western SEBFL systems & controls imposed upon them.
The reality is that slave labour was very much the labour source in the various European colonies, and in addition slave labour was, and still is, very much active in Asian & African countries, including South Africa.
The gold price was under threat from any source that chose to destabilise gold simply through its ability to dump gold from slave mined sources. Just as we are seeing massive disruptions with cheap sweat-shop, slave, products being dumped into developed western countries, so too the gold could be dumped which would create chaos.]
On top of that there were growing stocks of gold in developed & undeveloped countries (owned by developed colonials) and any shift of internal pressures from derived-demand could sway a shift in gold price, and any speculative-demand shift would have had far greater (multiplier) impact.
It is impossible to consider that gold ever had a ‘standard’ or was ever stable.
And remember it only required a small amount of trading of ‘under-priced’ gold to shift the perceived value of the total stock. Compare this to what we see with massively destructive speculative trading on markets today – siphoning & churning of money in bonds & marginal trades on stocks cause chaos because stock markets are not correctly engineered. (see paper ‘SA Bonds – churning & siphoning investors monies).
At the end of the day – it was purely perceived confidence in a system that caused any degree of perceived transient ‘stability’ whilst societies were moving from one period of chaos to another.
It was/is IMPOSSIBLE to attain any gold standard with underlying economy systems & controls incorrectly structured.
Further still, and most IMPORTANTLY, had it been possible to attain a standard it would have had the effect of creating a uniform currency. BUT, because it was not possible to attain a gold standard, it follows that it was/still is IMPOSSIBLE to attain a uniform currency (the implication of a uniform currency being that it would lead to stability amongst participating members). Yet, that is what Mundell has proposed for the world, and with the Euro as the guinea-pig for same.
This is not unlike the Wright brothers, in attempting to fly, determining by experiment that a particular design has failed, BUT therefore deducing that an alternative (& untested) design will therefore work. This would be a false deduction.
No matter how much one might manipulate mathematics to ‘prove’ a defective design the real test is when it is put to flight.
Similarly the test of a gold standard failed, and, hence, since stability was unattainable it cannot be attained by simply forcing a common currency - no matter how much one engages distorted mathematics.
It is important to realise that a workable gold-standard (if indeed one is achievable) is EXACTLY IDENTICAL to fixed exchange rates which is EXACTLY IDENTICAL to stable, static, free-floating currencies.
THINK ABOUT THIS!!!
Consequently Mundell’s argument for a global currency is entirely wrong, just as for the Euro, whilst unstable free-floating currencies prevail – this is intuitive because by observation there is clear instability.
And the reason that free-floating currencies are not stable is because the internal system structures & controls of participating nations are defective and are irrationally applied (Note: these are two distinctly separate issues)
An important comparison between a gold standard and a common currency is that the volume of gold in circulation is determined by the prevailing stocks and the gold still to be mined - there was even then a saturation of gold.
The comparison with a common currency is simply the printing presses and who owns & effectively controls them.
An unknown quantity of gold is identical to an unknown quantity of money off the press - oversupply/undersupply distorts economies because internal pressures are not identified against which to react, and also there are no correct controls to react with should pressures be identified.
Note also that ‘saturation’ means an excess that cannot be absorbed AT THAT TIME.
Gold was simply a transmission component within a particular transmission system – if stability had been achievable it would have resulted in gold being a constant multiplier between each of the various currencies.
But gold was not stable because it was not stable in itself and also the respective economies were not stable.
The most credible statement that Mundell makes in his paper is acknowledging that from the 1929 crash & 30s depression that ‘the massive literature on the subject has brought on more heat than light.’
Unfortunately Mundell’s paper simply adds massive heat and with no light – because Mundell, and his colleagues at Columbia are closed to rational thinking, closed to honesty & transparency, and closed to accepting that engineering is entirely absent from the SEBFL environments and from their models.
BUT, what is even more IMPORTANT to understand is that a uniform currency is entirely destructive whilst internal systems & controls are incorrect. Why is this??? ……
oOo
Free Floating Currencies:
Until such time as a specific state of stability with free-floating currencies is achieved there can be NO justification for a uniform currency. And that specific state of free-floating currencies, to justify a shift to a uniform currency, is at that point when the world has displayed consistency & stability at any particular level of free-floating state. i.e. until such time as free-floating has achieved a constancy then there can be no justification for a uniform (fixed) currency.
THINK ABOUT THIS!!!!
Imagine a number of pressure vessels with temperature gauges and relief valves all interconnected by equalising pipes. Heat is applied to each vessel and independently controlled, the controller (assuming rational) of each vessel will regulate the heat according to a predetermined temperature; but fluctuations occur and hence flows will occur between respective interconnected vessels to equalise differences.
Imagine now that the temperature gauges are all blanked off and all the pressure relief valves disabled – the removal of control information & safety devices DOES NOT mean that the pressure is no longer there, it is very much there and if irrational control takes over then the heat will increase, hence the pressure will increase, and it will look for some weak point to eventually break out, with explosive force.
In a nutshell this is what has happened with the common currency, the Euro – the temperature gauges & pressure relief valves have been removed – that doesn’t mean that pressures are no longer there, they are very much there, and in a predominantly speculative demand market the heat is being irrationally & massively applied – the pressures are rapidly increasing and seeking ways to get out.
What we are observing today are numerous anomalies that are simply symptoms of increased pressure seeking weak points to break out, and it will be explosive.
The rumblings in the countryside over inflated rural house prices are a minor issue, but the causes are no different to those which caused Zimbabwe to collapse.
The EU has achieved its ‘successes’ regard the Euro on the basis of cheap Asian sweat-shop consumption at the expense of destroying its own internal self-sustaining industries, which is modelling the USA’s growth on slave resources.
Mundell’s recent comment regarding China’s stockpile of bras & the threat to western industries destroys the adage – ‘a breast in the hand is worth two in the bra’.
Look at what is really happening in the EU with the Euro – the only way minor members are moving forward is because of:- massive injections of cash which is saturating their respective economies & creating price instabilities; and reliance upon cheap sweat-shop imports.
The source of these cash injections are from EU development that is geared to expanding speculative demand and from a consequent rush of speculative money.
A higher standard of living is achieved by pumping in cheap Asian sweat-shop imports, which is forcing local businesses to close reducing its ability to self-sustain and thus increasing dependency upon externalities.
This is a recipe for disaster which is currently unfolding. Government response is that as long as growth is maintained then all will be well, but that brings us back to the mindless flies-in-bottle scenario and catastrophe.
Stability & Equilibrium:
Robert Mundell erroneously uses ‘stability’ in a comparative sense in his opening sentences.
It is important to understand what stability is.
In fluctuating systems one can apply superposition techniques to separate out various components that when added together gives the total. These display periodic cycles.
For example – the electrical supply from your socket outlet oscillates at 50 cycles per second. It is rational oscillation, it is designed to do that, hence it is stable oscillations.
If you now put a faulty, shorted, device into the socket a surge is experienced with a bang & smoke – that is an unstable oscillation.
However these oscillations are miniscule in time cycles. With economy systems time cycles run into many months, and years; it is therefore important to understands that a transitory movement through what appears to be a stable level can in fact, and usually is, merely a transition from one extreme to another which in itself is a grossly unstable shift.
Mundell’s comment of ‘comparative stability’ post WWII was in fact a transitory shift, about a level considered to be a point of stability, within a grossly unstable oscillation. How that any position, shortly after the carnage of WWII, can be considered ‘comparatively stable’ completely misses the point that the ‘stability’ was in fact a massive daze resulting from gross shellshock.
A further point to clarify – that Helios 522 was on autopilot and flying steadily did not mean that the flight was stable, it was simply in a transitory phase, of perceived stability, before the inevitable & tragic crash.
Equilibrium cannot be achieved without stability – simply because equilibrium is never attainable in an unstable system; and a system can never be stable if it is not correctly structured & controlled.
oOo
Micro confused with Macro:
If you plug a kettle into your socket outlet, say 2.2kilowatts at 220 volts you will draw around 10 amp.
But if I plug that kettle onto the national grid at, say, 660KV I am going to blow myself & the kettle up – because the POTENTIAL of the national grid is 3000 times greater than the domestic supply at home.
A component drawing 10 amps on the domestic electricity supply is not the same as a high-voltage component drawing 10 amps on the national grid, the energy/power behind it is far, far, greater. Although they are both drawing 10 amps the two separate 10 amps are ENTIRELY DIFFERENT – one is a macro the other a micro environment term, the same word but different terms. (There are other differences such as skin-effect issues, electro-magnetics, and so one – but that is pure technical stuff beyond the point to be made here that one cannot interchange terms between different scales of systems).
But, one might argue, if everyone plugs in their kettle simultaneously then it does become a macro issue – yes, marginally, but mainly no.
We can see this more clearly by considering the effects of half time during a world cup final – people rush to switch on kettles, and the supply authorities will be prepared for this surge – but this surge is not in itself what determines the size of the supply network, it is the overall, macro, requirements of a region/city/town.
The electrical national grid is separated from your domestic outlet by many sets of devices that reduce the voltage potential, and protect against surges & faults.
Series of transformers allows the voltage to be stepped down from the national grid potential to your domestic 220 volts.
In economic/finance terms the equivalent of a transformer is the exchange rate.
(Ironically the free floating exchange rate system allows any currency to connect direct to the global network of currencies which is far more efficient than a series of transformers to step in stages from anything up to around 765 Kilovolts down to 220V.)
In turn, the individual currencies that EU members previously had free-floating gave both warning signals & pressure relief for EU members before they converted to the Euro - the shift to Euro has defeated/removed these safety protections.
Just as plugging a kettle onto the national grid is massively destructive so too is connecting the national grid direct to your socket. And this, analogously, is the effect of creating the common Euro currency – it is a case of connecting major economy grids (France, Germany) onto minor economy grids (Ireland, East Germany, Poland, etc.)
One cannot ‘plug’ micro-economy models into national ‘macro-economy’ networks just as you can’t plug your kettle into the national grid – it doesn’t work, BECAUSE the potential is thousands of times greater.
BUT, this is what happened.
The shift to the Euro was twenty-dozen backward steps in solving inequalities/disparities.
Had Robert Mundell considered the USA’s position more closely & had engineering within the SEBFL been developed earlier by CDADD in the late 90’s then Mundell would have had better understanding of the real reasons as to why the US has achieved phenomenal growth.
The USA’s growth stems from an increasing reliance upon & consumption of both slave & unpaid imports; this has allowed regions to prosper that otherwise would not have. Had those imports been protected against it would have highlighted the various internal regional needs that would have had to be addressed, and which needs would have been influenced negatively by a common dollar currency.
Unfortunately consumerism coupled with a belief of divine rights tended to steer the USA towards gluttony – at the same time it covered up a whole host of subtle signals that would otherwise have been present, and from which important lessons could have been learnt.
People are easily confused/misled by financial/economic ‘experts’ into believing that common terms within both micro & macro economic environments imply the same things – they do not.
oOo
Open global economy – its destructiveness:
We can see through further analogies that an open global economy would be destructive because of the unregulated & destructive ‘speculative demand’ trading that is rampant – the current credit crash is just one symptom.
Imagine being on a roundabout and circling at a comfortable speed. Someone induces those onboard to move closer to the centre – the effect of this is identical to that of a ballerina doing a pirouette, moving the weight (moment of inertia) inwards causes the roundabout to accelerate (to maintain constant torque forces) and go faster.
Imagine now that ‘experts’ are inducing others to get on, and are also applying power impulses to make it go faster & faster – eventually chaos catches up and, like a tornado, spirals everything in its path & within it into destruction – people get ‘wiped out’.
In a similar way ‘financial experts’ are simply accelerating economies and chucking on more money to saturate economies which results in massive destructive chaos.
Compare now the roundabout to another similar device, an old wind up record player – this has a ‘damping’ control/regulator which opposes the force of the spring that drives the record table (hence record) in circles – if the speed is constant and constructive then one hears music, if the damping is removed the record speeds up and music becomes noise.
Once a roundabout has reached a destructive level of speed it is extremely difficult to stop it in a controlled manner – it causes just as much destruction in slowing it down as it did in speeding it up.
One can obtain reams of data about a system that has exceeded its limitations, but the most important point is that it is far more relevant that one understands that the limitations have been far exceeded and react to that rather than pontificating over piles of worthless data of a mangled system, as economists are doing.
Reams of data are spewed out daily, hourly, regarding economic, finance, business issues – they are simply recording a system which is operating beyond its limitations and which is unstable – the analyses that we see from universities have entirely missed the point that the systems & controls are defective, and that is what needs to be developed/engineered.
And it is why the Euro is not working (except for those who are in the upper 5 or 10 percentile in the world).
It is far easier to cause destruction when the pressure gauges & relief valves are removed because the undercurrents cannot be detected or protected against. The undercurrents of currencies are VITALLY important if any attempt to create a stable global economy is intended.
oOo
Growth under dominant currencies.
The shift to Euro has created three dominant currencies (yen, dollar, euro); and the 3 countries (USA, Japan, EU) behind these currencies create the illusion of having achieved phenomenal successes.
However, it doesn’t require too much scratching of the surface to realise that growth has been possible because of reliance upon slave resources – i.e. from Asian cheap-labour sweat-shops, African mines, etc..
Cheap imports have bolstered consumption expansion whilst holding down total consumption spend, on top of that, and certainly with the USA, trade deficits have rocketed.
An expansion of trade deficit is effectively an expansion of money stock - an increase in the saturation of money.
The effect of this is that internal infrastructures have suffered - industries, business & jobs have been lost due to the unfair & destructive competition from unregulated cheap import products. Marginal nations in the EU feel this the most because they are far more sensitive to job losses, and you can see the effects clearly in Ireland. You can also see that Germany (the largest economy in the EU) is now experiencing increasing social pressures from these financial distortions.
And this is not purely from the global credit problem, nor from the destructive ‘solution’ of pumping more money into money-saturated economies. And nor from destructive tax-break ‘solutions’ which simply reduce treasury inflows which are now diverted to bank coffers, just as happened when Ronald Reagan used the same defective tactic – enriched the banks, impoverished the treasury, and crashed the economy.
The problems stem from systemic & systematic destruction of internal infrastructure because of the loss of PROTECTIONS (Recall: a PROTECTION is a BARRIER, but a BARRIER has invariably NOT been a PROTECTION – see paper: Poverty, Disparity, Unfair Rules).
What has happened is that decades of social development, in advanced countries, that brought about these safety standards have been wiped out due to warped thinking over ‘open global economy’ and ‘common global currency’ – which has been forced by unscrupulous financial players.
(We can see repercussions against the Chinese toy industry because their products not meeting safety standards because quality controls & safety issues are present in China, we also see consumers questioning the destructive impact of imports upon local economies – this shows that economists models are not taking correct cognisance of consumer power.
But these repercussions are far too little & far too late & far too unfocussed.)
oOo
Interest Rates:
One key reason why the gold-standard could not work, and which also is why we do not have stable free-floating currencies, is because the internal system structure & controls of money are entirely defective.
The unitary-model Interest Rate control-device is massively destructive because it is irrationally structured & irrationally used. They way it is used is much as we saw with someone trying to stop an overspinning roundabout. (see papers: Interest Rates & Loans)
The multi-component model developed by CDADD gives componental control, provides ‘feedback’ control, stabilises the currency, reduces inflation pressures, enhances social upliftment, reinforces confidence, and most importantly is a rational control-device.
The latest credit crash crisis is proof once again that the unitary-model is entirely irrational, crazy.
And the tax breaks given by President Bush will be just as disastrous as it was for Ronald Reagan.
oOo
It is clear from the aforegoing that the Euro (and the US dollar) have failed the ‘common currency’ GO/NO-GO tests.
If an aircraft had failed on just one critical test it would have been scrapped.
But, Airplanes USA, EU, UK, Japan etc. are able to continue ‘flying’ despite the destructive wake they leave behind them, because they are all-powerful and can dictate the terms regardless of the hundreds of millions of people their destructive systems are starving & enslaving.
Airplane Iraq was deemed to be unairworthy and its pilot was lynched for considerably lesser destruction than the mass starvation that western economies have forced upon the rest of the world.
oOo
One can quickly scan through Robert Mundell’s Prize Lecture to pick up some other key errors:
# Pg 233 – ‘Until the 1960’s, US macroeconomic policy was based more on closed economy principles than on the requirements of an International monetary system.’
The world is ‘closed’, therefore to argue/imply that the US being closed was a short-sighted perspective is grossly wrong. If the US cannot solve its internal systems & controls difficulties then simply expanding ‘internationally’ will not solve it either. It simply means that when (if) the world were to get to similar levels of economic activity that the same problems that the US experienced in the 20th Century would now surface but on a global basis. i.e. the US cannot argue that by opening up internationally that it will solve their internal problems.
# Pg 234 – ‘… Kennedy administration …. The wrong policy mix had disequilibrating effects: steel strike, stock market crash, stagnation.’
Equilibrium could not be achieved under an unstable system, therefore to argue disequilibrating is incorrect because it implies a prior equilibrium (which there wasn’t).
#Pg 234 – ‘The adoption of my (Mundell’s) policy mix helped the US to achieve rapid growth with stability.’
Rapid growth cannot be argued! But with stability? – Not a chance!!!! – not for no reason did Osama plan the flying of planes into Twin Towers, Pentagon, etc. – it was unstable over-pressure that generated intense anger & which has gradually built up over decades and then, understandably, exploded
One cannot argue stability whilst slave imports bolster an economy, whilst internal controls are defective, and whilst destructive speculative-trading occurs.
#Pg 235 – ‘But floating (exchange rates) made the embryonic plans just forming for European monetary integration more difficult.’
As discussed already, covering up ‘pressure gauges’ and disabling ‘relief valves’ does not make a system more stable – the underlying problems with the Euro launch were present from outset, regardless.
#Pg 236 – ‘Fixed exchange rate systems work better among friends than rivals or enemies.’
The US’s internal turbulences do not suggest that the US has solved its widening internal disparity problems – and the credit crash is just one cause of it widening further – Uncle Sam is fast losing his own people as friends
And so on, and so on – there really is little point in examining Mundell’s paper further because the underlying models that Mundell is advising on are entirely defective – it has failed the GO/NO-GO tests.
oOo
The defectiveness of the Euro can be seen with the disparities between France & Germany and Ireland, Poland, etc. – cost of living differs vastly as do the incomes, and the disposable income gap is far wider, also the cost of identical goods differs vastly between Germany & Ireland hence Germany’s wider disposable-income gap goes much further, hence the standard of living is multiples greater.
Houses in Ireland are more than double the price in Germany, and less than half the quality - !!!!!!!!!
Food/Household is probably double between Ireland & Germany.
And social health is rapidly declining in Ireland.
- similarly with other minor EU states.
It cannot be argued that the ‘weight’ of the Euro gives better trade negotiability amongst member states because the wide difference in cost of products within Euro-nations proves the opposite.
One can argue that nett transfers offsets these differences but they cannot offset the destructive undercurrents even though they are being masked by these transfers & mass slave imports that supplement living standards throughout the EU; similarly within the US.
Masking undercurrents does not remove them.
As stated earlier it is important to understand the misunderstandings of the undercurrents of currencies because it is the only way to be able to develop sound engineered solutions to both intra & inter national economy systems & controls issues.
Now that pioneered engineering into the SEBFL environments has enabled this reality to be understood it is entirely immoral for western/developed nations to continue with such defective policies – such as reliance upon slave imports, destructive unitary-model interest rate control, speculative-demand trading, and so on.
BUT, there is a blanket refusal by governments & universities to change to honesty & transparency to solve these critical problems, there is a refusal to correctly fund/reward those that are bringing real research & development value in pioneering of engineering into SEBFL environments.
We can see other real world effects of these defective SEBFL models:
Vlad is getting mad, and no one is seeking genuinely to help him solve Russia’s problems.
Compare this current situation with the delegation of international economists to South Africa in 2005, for the CHAMSA Economics for Prosperity Conference, they simply told the disadvantaged blacks to solve their own problems, and now too they are simply telling Vlad to solve his problems himself.
And Vlad’s problems are essentially that he is faced with global financial powers that he has no control over, BECAUSE the western world governments are under the control of these minority financial power-players, and western governments provide the missiles, bombs & bullets behind which these unscrupulous financial-powers can hide. And Russia, like Africa, and the billions elsewhere are faced with dictatorial forces from these financial powers.
BUT – Vlad, as with black South Africa, has not the qualifications or experience within ‘free’ economies to solve the numerous complex problems. So, with the ‘western’ world fobbing-off the issues by telling them to solve it themselves they are creating a potential for an ‘explosion’ – because Russia is not going to simply sit back and allow ‘free world’ financial-power bigots to enslave Russia – that is why there is a real threat of Vlad simply putting up the iron curtain again, as a protection, which will inevitably become a boundary for hot conflicts to arise
For arise they definitely will, as the indications already show;
Economies are controlled, wrongly, by financial power-players because governments are swayed by money not by electoral mandates. And prosecuting authorities are also controlled by these same financial powers - which is why both the UK’s Metropolitan Police & Crown Prosecution Service have covered up the cash-for-honours issue.
Thus money continues to be siphoned & churned, and fictitiously created by these financial-powers and used to destructively accelerate economies.
Saturated money + slave labour = Disparity Gap widens - it is what has enabled South Africa to expand its minority Have’s wealth, but the gap between majority Have-Nots has widened greatly.
The AsgiSA project aimed to shrink this gap was based upon CDADD’s Intellectual Property but stolen by the Deputy-President (Mlambo-Ncguka) who thought that commercialists could develop & implement this. It has failed because the Dep-Pres and her team do not understand engineering within the SEBFL environments, nor engineering at all.
In SA, as with UK’s rural towns, Zimbabwe, Russia, the anger is increasing
One can argue that investigative reports such as the Kroll report on Kenya’s Daniel Arap Moi brings a degree of protection, but it is always AFTER the roundabout has reached catastrophic velocity and destroyed much in its path. With all the sophistication of communications technology the fraud scams being perpetrated today by Richard Branson, Donald Gordon, Lord Levy, or by South Africa’s government and ex-Robben Eilanders, all remain covered up. And Nelson Mandela, who has cashed in his retirement policy, continues to cover up these massive fraud scams & destructive money-saturations into South Africa.
It is ironic that Nelson Mandela is honoured before John Paul II & Ghandi, both of whom are light-years in front of Mandela.
The majority (over 80%) of people in the world live in, at best, marginal economies, and the majority (over 80%) of the other 20%, those in developed countries, live under marginal economic conditions.
An open global economy initiative simply connects the national grids of major economies onto marginal local networks = explosive mix. It won’t work.
The anger within rural towns (e.g. towards Jamie Oliver), and the anger within Zimbabwe (toward Robert Mugabe) and the anger within Russia (toward western world), all have common source – incorrectly engineered economy systems & controls which allows destructive financial-tornados to wipe out local marginal economies.
oOo
Why are these economy-systems components so totally defective?
Why are so many defective models from economists at Columbia University being honoured with Nobel Prizes?
As set out in the Introduction – economists engaged in a flurry of activity in force-fitting mathematical & exact-science models into the inexact-science of economics; they failed to engage with engineers and consequently ‘advised’ governments incorrectly with defective untested models.
oOo
What then the Euro? …………..
…………… from the aforegoing one might deduce - scrap the Euro!
The proposal herein is not for any immediate policy shift, but for engagement of engineering into the SEBFL environments so as to determine a sound engineered policy shift.
Regardless of any particular position, the correct way to move forward is by correct engineering, and correct engineering implies proper investigations, considerations, developments & designs.
The problem, however, is that engineering is ENTIRELY absent from the SEBFL environments BECAUSE governments are listening to inexact-scientists with their exactly defective models rather than with engineers that have proven their abilities to pioneer sound engineered developments into the SEBFL environments.
BUT governments are also controlled by financial-power players - thus irrational systems & controls perpetuate instabilities.
It is imperative that honesty & transparency comes to the fore and that engineering is correctly funded to pursue these critical issues to bring about full understanding of the misunderstandings of the undercurrents of currencies, & other SEBFL issues.
Chris Addington Pr.Eng.
(Under enforced exile from South Africa due to ANC government’s oppressive XDR-nazi system and oppressive economic isolation by corporate & academic world’s.)
(Emails to Robert Mundell - Nil response to date)
-------- Original Message --------
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Subject: |
[Fwd: Re: request for email copies of papers] |
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Date: |
Mon, 10 Sep 2007 16:28:30 +0100 |
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From: |
Chris Addington |
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To: |
Columbia <This email address is being protected from spambots. You need JavaScript enabled to view it.;, Columbia <This email address is being protected from spambots. You need JavaScript enabled to view it.;, "Columbia (Janet Currie)" <This email address is being protected from spambots. You need JavaScript enabled to view it.;, "Columbia (Pierre-Andre Chiappori)" <This email address is being protected from spambots. You need JavaScript enabled to view it.;, "Columbia (Susan Elmes)" <This email address is being protected from spambots. You need JavaScript enabled to view it.;, Columbia University <This email address is being protected from spambots. You need JavaScript enabled to view it.;, "Columbia University (Bus Mngr Loyd Griffin)" <This email address is being protected from spambots. You need JavaScript enabled to view it.;, "Columbia University (Economics)" <This email address is being protected from spambots. You need JavaScript enabled to view it.;, "Columbia University (Robert Mundell)" <This email address is being protected from spambots. You need JavaScript enabled to view it.;, "Columbia (Edmund Phelps)" <This email address is being protected from spambots. You need JavaScript enabled to view it.;, "Columbia Univ (Angela Reid)" <This email address is being protected from spambots. You need JavaScript enabled to view it.;, "Columbia Univ (Jeffrey Sachs)" <This email address is being protected from spambots. You need JavaScript enabled to view it.;, "Columbia Univ (Samuel Freeman)" <This email address is being protected from spambots. You need JavaScript enabled to view it.;, "Columbia University (Jill Parchuck)" <This email address is being protected from spambots. You need JavaScript enabled to view it.;, "Joseph Stiglitz (Columbia Univ Economics)" <This email address is being protected from spambots. You need JavaScript enabled to view it.;, "This email address is being protected from spambots. You need JavaScript enabled to view it." <This email address is being protected from spambots. You need JavaScript enabled to view it.; |
Good Afternoon
I reiterate my request, below, for assistance in obtaining copies of
Robert Mundell's research papers
Universities are supposed to be engaged in 'seeking the truth' but the
opposite is happening
sincerely
Chris Addington Pr.Eng.
Good morning
i've been trying to contact Robert Mundell re copies of his research papers, there is no response from his email or telephone - your assistance would be appreciated for copies of his papers
thankyou
sincerely
Chris Addington Pr.Eng.
Chris Addington wrote:
Good Morning
please see earlier email, below, thankyou
sincerely
Chris Addington Pr.Eng.
Chris Addington wrote:
To Robert Mundell
From Chris Addington Pr.Eng.
Good Morning
I read an article in an Irish newspaper last sunday re your comments on Chinese bras, plus i am perusing your Nobel lecture.
I would appreciate it if you would send email copies of your papers that support/propose the move to a single EU currency, and supporting papers of yours as indexed in the Nobel lecture.
thankyou
sincerely
Chris Addington Pr.Eng.