Musings on the global economic crisis ….and the rise of fractionated banking
The instability in the current global economic system driving stock market drops is suddenly a topic of great concern. What’s going on here? Clearly the selling is driven to some extent by computer-generated investment models, but is also a function of fundamental confusion in the minds of investors and consumers alike. Perhaps we have it wrong. Maybe computers are not the dominant form of market-based discipline.Maybe it’s time for a model that combines both the requirements for analytics, but also a central, governed network based on shared understanding, monitored and managed through a centralized system of analytics.
Here I’m stretching my thinking from prior work on supply chain risk… computer robotics are only a function of human programming and assumptions – and many of the “black swans” encountered in global supply chain situations are not readily manageable by computer programs. As such, a centralized analytics system is the nucleus for human decision-making, which relies on automation for data collection and synthesis. Analytics provide a basis for rational decisions based on information from many sectors. In effect, there is a need for a data “mash-up” from many different sources that provide a multi-dimensional view of what is happening, coupled with “street knowledge” arising from individuals who are seeing what is happening in their local geography. The military understands this.
Only through this type of system can networked then continue to manage and eventually dominate the global flow of “real money” – products, services, commodities, and human intellectual capital. As my friend Marek points out, supply chains will eventually become the new form of government, and governments will rely on them to provide the response capabilities to national emergencies, pandemics, and disaster response.
He also believes that many of our problems may have their roots in the system of fractional reserve banking….where problems started due to the inability to define what money actually represents. The problem originally started after the Civil War when the North had to print paper money to get out of the deficit war spending that had occurred. Later, the paper money supply was out of control due to the extreme growth and poor communication system. Things escalated when the Agri system began to interfere with the flow of money into the stock market after the turn of the century, at which time the Rothschilds were called in to organize the US Fed with its charter of 1912. The original task of the Fed was maintaining the supply chain of paper money via “algorithmic fractional reserve banking”….a counterintuitive concept, since this confronts/manipulates the meaning of money.
This leads us to the situation today….what is the meaning of money anymore? We are in unchartered waters when downgrades occur based on rounding errors of trillions of dollars….what is measurable anymore when it comes to money?
