The subject of economics is an extremely difficult one to make understandable, partly because there is enough official mumbo-jumbo to confuse anyone and partly because our economists are full of vague ideas of how things work, one contradicting the next. Surely enough to make anyone throw the towel and "leave it to the experts".
Unfortunately, as long as we do so, we will be completely at the effect end of the scale. We will be constrained by our financial system to abandon creative activity and get down to "making money". The necessities of life seem to require it.
For those courageous enough to take a look, I recommend the excellent article by John Turmel, who explains economics and money in engineering terms. From that vantage point, some of the mysteries of money become quite simple to understand, and what's best, there is a solution. John tells us what the solution would be and how easily it could be brought about today, using the electronics at our disposal.
A quote from the book
GRACE AND MORTGAGE by Bishop Peter Selby, Bishop of Worcester, ISBN 0-232-52170-0, page 116:
As Galbraith remarks, higher interest rates, it is hoped, "will curb inflation." These comments of Galbraith illustrate why, although the raising of interest rates is the weapon against inflation chosen by those who profit by it, it is also clear that as a method it cannot finally work. John Turmel, a Canadian civil engineer and campaigner against usury, has in two long articles brought algebra, plumbing and poetry to bear on the task."
Says John Turmel: This is the Big Lie of Economics based upon the assumption that inflation is more money chasing the same goods, Shift A, whereas I've proven that it is actually the same money chasign less goods after foreclosure, Shift B. Shift B inflation is unknown in economics but the following analysis explains why inflation in Argentina went from 1000% down to 36% after several provinces instituted local provincial LETS bond currencies.
The problem of exponential growth of debt is created within the banking system and therefore a thorough understanding of the banking system is helpful. The money system is the only mechanical system which is under the jurisdiction of economists, not engineers. Improvements are taking place in all system areas except the financial system. It's time engineers turn their attention to this errant system from which come all the financial woes of the world.
As an electrical engineer to have specialized in banking systems, I will endeavor to explain the inner workings of this mysterious system and its effects on users and debt. Though this might sound daunting, I think I can present an easy way of handling subjects such as:
- plumbing modeling of flows of money with pipes
- simple algebra
- exponential functions
- differential equations
- Taylor Series
- Laurent Series
- Laplace transformations
- control system circuitry
The two Big Double-thinks of Economics are that:
1) Banks lend their depositors' savings.
2) Interest rates fight inflation;
Banks do not lend out their depositors' funds, they lend out brand new money. Interest does not fight inflation, it causes it.
To read the whole article, which has some simple charts and designs to help understand the flows, you will have to go to John's site at this address.
Solarclarity: The Ecology of Money
"From coin to paper currency, and from currency to credit card there is a steady progression toward commercial exchange as the movement of information itself. This trend toward an inclusive information is the kind of image represented by the credit card, and approaches once more the character of tribal money. For tribal society, not knowing the specialisms of job or of work, does not specialize money either. Its money can be eaten, drunk, or worn like the new space ships that are now designed to be edible. "Work," however, does not exist in a nonliterate world. The primitive hunter or fisherman did no work, any more than does the poet, painter, or thinker today. Where the whole man is involved there is no work."
From Marshall McLuhan, Understanding Media, p. 137-8.
posted by Sepp Hasslberger on Wednesday June 25 2003
updated on Tuesday December 21 2010
URL of this article:
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