Reciprocal System #575 "The Road to Permanent Prosperuty" ch23-Boom Dampeners A [Thomas Newsome]

Transcript

all right hello everyone and welcome to my channel this channel is for educational purposes and we generally look at uh great theories of everything cosmologies all-encompassing theories and uh try to give you a sense of what they're all about and how to use them in your life to you know extent uate your experience especially in terms of your Paradigm shifting your Awakening to 5D Consciousness and your formation of a holistic worldview today is our 575th video that we've done on the reciprocal system of theory from Dewey B Larson and dwey B Larson articulated the essence of the reciprocal system of theory in 1959 when he proposed his two fundamental postulates about how he believed the universe was constructed the first part uh the first postulate um is the more important uh the more original and that is that the universe is composed entirely of one component motion existing in three dimensions in discrete units and with two reciprocal aspects space and time and um the second postulate is just that the Universe conforms to the relations of ordinary commutative mathematics its primary magnitudes are absolute and its geometry is ukian so it's kind of like that first postulate is more qualitative and the second is more quantitative and um they go together uh Larson put them together and uh through a process of deduction arrived at a theoretical Universe uh what Larson's Universe would look like if his postulates were correct and then he compared his theoretical Universe with the actual universe or the empirical Universe of modern science uh for example Larson uh wrote a book on chemistry called basic properties of matter where he looks at uh many of the basic properties of matter like the melting point or the compressibility or the specific specific heat and arrives at uh equations for those various properties and Compares his um results with the uh standard tables the uh scientific tables that have been compiled previously Larsson also um deres a uh version of the periodic table from his um postulates from his theoretical universe that is very very similar to the Periodic Table of Mev and modern science um but Larson also has books on physics and chemistry and uh physics and astronomy and he also has uh his final book is on metaphysics uh including psychology religion philosophy y biology and then he also has two books on economics and uh we're checking out one of those books today that is called the road to permanent Prosperity the other one is called the road to Full Employment and um we're about to start chapter 23 of that book The Road to permanent prosperity it's called boom dampener and Larson's basic approach is one of scientists he uh recoils against the sociological approach of the E uh the economists who uh attempt to impose their uh philosophical or political viewpoints on their economic system and Larson states that you know regardless of what whether you like it or not uh this is how the economic system operates and you can either be in harmony with it or you will have an economic system that fails uh just like if you are uh building a house or something um if it doesn't comply with the laws of physics it's going to collapse regardless of how many good intentions you put into it first it has to comply with the laws and then you can start worrying about the ideological stuff um and uh where Larson uh the way Larson attempts to form a uh road to permanent Prosperity is through a judicious um regulation of the reservoirs of the economic system this the uh storage especially the storage of money and by um regulating that and keeping it to a kind of a a minimum a low amplitude um because the cycle of Economics uh the economic system gives you a boom and bust cycle and when you have uh booms things are fine or whatever but with the bus you can get into depressions and even uh recessions and depressions but if you can lower the amplitude of that uh boom and bus cycle then you can have an economic system that's humming that's always you know um you know efficient always working um Larson arrives uh uses the principles of the universe of motion and uh the econ it's an Dynamic economic system in motion there's really two forms of motion um one is a circular and one is a straight line or you know a um a unidirectional motion and um the two reciprocal aspects of this economic system are production and consumption uh which result in purchasing power and goods and um Larson arrives at about 17 different principles that he uh describes as being econom um uh mathematically exact and not subject to uh any type of um judgment or um I guess wiggle room these are um Iron laws the first Iron law of econom Economics for him is work or starve and um it all goes from there so uh if you'd like a little bit more a lot more detail uh go back about 7 weeks in the archives and start from chapter 1 and um you can move all the way up here to chapter 23 um if you don't want to do that you can just stick around and uh we'll get into chapter 23 Larson explains himself pretty well and you probably be able to pick up the pieces uh if you'd like more of an explanation of larsson's reciprocal system as a whole uh check out any or many of my first 474 videos that I've did that I've done on this subject uh where I describe the reciprocal system at least in a little bit of detail with uh some description of of the consequences and ramifications and the offshoots and um the postulates the uh you know what what exactly are the postulates saying and some of the history involved and so on but for now I'm going to just start up with uh chapter 23 which is called boom dampeners in some respects the problems involved in setting up a control over the economic mechanism are similar to those encountered in heating a building perhaps when we start to survey the heating problem we will find that our walls are thin the doors and windows are closely are Loosely fitted and an undue proportion of our heat escapes through the ceiling we could still do a reasonably good job of heating if we install a large enough furnace but under the circumstances it may very well be desirable to put on some additional side sheeting weather strip uh the doors and windows and invest in some install insulation this will cut down the load on the heating system and will simplify the adjustment of temperature in different parts of the building similarly we could go ahead on the basis of the information as to how the economic system operates that has been set forth in the preceding pages and devise a set of controls that will handle the business Cycles just as we find them and if our program is sound and our control facilities are sufficiently powerful the results will be satisfactory but here again we can simplify our problem quite materially by first taking some steps to plug the worst holes and dampen the cyclical movements to keep them within reasonable limits this will reduce the task of the control system and will enable the use of milder methods of control than would otherwise be required it will be important however to make certain that the dampeners that are utilized are actually capable of accomplishing the desired results and that they do not have any detrimental collateral effects on the economic situation the various measures of this type that have been here for proposed or are suggested by the results of the present analysis will now be taken up individually and analyzed from these standpoints we have found in our analysis is that the business cycle is simply an alternation of money inflation and deflation unemployment being only a conspicuous side effect with no necessary or direct relation to the cycle it therefore follows that the measures appropriate for the control of the business cycle are not those which deal with employment but those which deal with money inflation proposals aimed at countering inflation have been advanced in great numbers since this problem first became a matter of General concern but most of them are merely variations of a few basic types of action these proposals can be grouped into two general classes in the first class are those which if each operates as effectively as anticipated by its Advocates will be sufficiently powerful and sufficiently responsive to purposeful manipulation to actually control the cycle these will be discussed in chapters 24 and 25 the second category the one to which this chapter is devoted can be further subdivided into two groups one measures which are wholly ineffective and two measures which have some anti-inflationary effects um and which therefore serve the purpose of dampening the cyclical fluctuations if they are properly applied but which do not qualify as controls generally because they do not have any direct and certain connection with the flow of purchasing power we will Begin by considering group one the ineffective measures okay now this first section is called restraint and self-discipline the call for restraint and self-discipline on the part of individual citizens and economic groups which come so frequently from public officials the Jawbone technique as it is often called is nothing more than a gesture if adequate methods of control are put into effect such self-denying policies are unnecessary if no controls are applied all attempts to deal with the cycle by means of restraint Etc are futile the two actions that provoke most of the calls for restraint price increases by business firms and demands for wage increases by labor unions have no effect on the business cycle as individual price increases do not change the general price level and wage increases inflate prices equally at the two ends of the economic mechanism this section is called increased productivity lowering costs by increasing productivity is just as in effective in counteracting money inflation as blocking price or wage increases but here again the economic profession is prevented from recognizing the true situation by reason of their repudiation of s law without the benefit of this important principle they are unable to see that any change in production price whether it be upward or downward is promptly reflected in market price and therefore has no effect on the type of inflation that is responsible for the business cycle mdal for example contended that quote higher capacity utilization following a more rapid growth will tend to lower costs which should count counteract inflationary Tendencies end quote of course higher productivity is a desirable end in itself and it tends to offset some of the price effects of wage increases but it has no bearing at all on the type of inflation we are now discussing it therefore contributes nothing toward the business stabilization that we want to accomplish uh the section is called investment control proposals which are based on erroneous economic theories are equally futile prominent in this category especially because of its status as one of K's principal conclusions is the belief that the level of business activity and employment can be manipulated by controlling the volume of investment the supporters of this proposal have convinced themselves that the level of investment is the key to the business situation the main topic in the theory of the business cycle says rco Matthew Matthews is the explanation of fluctuations in investment end quote and one of the suggestions included in the anti-inflation ideas Advanced after the 19 1930s experience was to quote reduce the volume of industrial spending for capital goods the fallacy underlying this line of thought has already been pointed out in detail and for present purposes it should be sufficient to reemphasize the fact that all goods are alike so far as the general operation of the economic mechanism is concerned shifting purchases from capital goods to consumer goods or vice versa has no more effect on inflation of the general price level than buying margarine instead of butter okay this section is called control of the volume of money as might be expected from the WID spread adherence to some kind of a quantity theory of money the idea of controlling money volume as a means of regulating the business cycle has a great deal of support and this idea is prominent in the background of much of the manipulation that is currently being undertaken by the monetary authorities in view of the confused and contradictory status of the quantity Theory no one seems to have a very clear picture of just what this manipulation is supposed to accomplish and the only thing on which practically all of the concerned are agreed is that something better than the present system ought to be devised quote two kinds of suggestions pointing in different directions for reducing the possibility of error in a stabilizing money policy are now current Stein and Dennis that's quote Stein and Dennison said in a 1980 1960 report quote one would prescribe a rule requiring that the supply of money grow at a steady rate year in and year out the other would ask the monetary authorities to base their actions more on their forecast of the future and less on present conditions end quote the foggy state of thinking on this subject is demonstrated by the comments that follow the forgoing statement uh the comments that follow the foregoing statement quote each of these suggestions has some attraction but it is not clear that either would yield better results than recent practice probably the most one can hope is that the increase of economic knowledge through research and experience will permit Improvement of monetary policy end quote whenever the specialists in any branch of knowledge overcome their strong reluctance to admit ignorance and concede that they will have to wait for an increase of knowledge before they can suggest how to improve existing conditions it is evident that current thought is in a bad state of confusion in the light of the facts brought out in the preceding Pages the quote increase in knowledge achieved by the use of scientific methods the reason for the confusion is obvious it is not possible to arrive at any clear idea as to how the business cycle can be controlled by managing the money supply when in reality the quantity of money in the system has no effect on the cycle uh that is principle 15 the method of increasing or decreasing the money supply may have an effect but this is an entirely independent consideration the actual quantity of money in existence at any particular time is completely Irrelevant this section is called managed currency in addition to the proposals which contemplate manipulating the quantity of money for control purposes there are others which Envision manipulation of the value of the currency as usual The Advocates of such plans are divided as to what direction the control measures should take and we find two different groups proposing to reach the same objective by diametrically opposite routes one group takes the stand that the money values should be made more flexible and subject to more frequent adjustment the adherence of this school of thought had an opportunity to see their program actually put into operation in the United States in 1933 largely as a result of advice from Professor GF Warren the administration increased the legal price of gold to $35 per ounce from the longstanding value of 35 um of $20 um yeah I'm sorry there's an extra line of text here anytime this text goes into start talking about money then all the spaces go away and it becomes really hard to read and it starts repeating itself I'm not sure why that happens but anyway back to the text the avowed object of the move was to devalue the currency and thereby raise the general price level by its Advocates it was conceived as the first of a continuous series of adjustments that would stabilize prices by juggling currency values the president with his usual buoyant faith in his convictions of the moment flatly proclaimed it as a permanent policy and the first step toward a managed currency but as in so many other New Deal experience exps actual results did not conform to The Rosy expectations and the presidential powers of managing the currency have not been exercised since the first attempt the reason for the failure of this program to accomplish its objectives is not hard to find so far as the domestic economy is concerned the goods price level at any particular stage of the business cycle is not determined by the official price of gold but by the cost of production of goods which in turn depends mainly on the wage rate per unit of output if the average wage rate prior to devaluation was dollars uh $20.67 uh originally I said just $20 apparently 20 67 and the average Goods price level was dollar uh 2067 standard then the devaluation reduced the wage level rate uh the wage rate to X $35 standard but the goods price level did not remain unchanged as expected by the Waring group as required by The General economic equation it had to fall to Y doll to maintain the equilibrium between production price and market price from the standpoint of the consumers no change at all had occurred if everything had remain unchanged in the rest of the world the net effect would have been a deep devaluation of the dollar in foreign exchange but the foreign currencies would then have been grossly undervalued with respect to the true value of the dollar its buying power since the dollar was not overvalued to begin with this would have created an intolerable trade situation the foreign governments therefore accommodated themselves to the American action by altering their own gold prices within a short time everything was back where it started except that the worldwide price of monetary gold was higher an increase that had no economic significance since as pointed out in chapter 15 the price of gold is now arbitrary the prices of some Commodities are determined in the international markets and during the interim period before the necessary adjustments were completed there was some increase in the prices of these Commodities the general belief in economic circles was and still is that an increase in the price of some Goods has a tendency to be communicated to others and thus exerts an influence toward raising the prices of all Goods it was therefore thought that these price increases in the goods affected by the international markets would cause a rise in the domestic price level but the rise never materialized the analysis of the economic system in terms of purchasing power shows that the expected result is possible as long as the average raate wage rate in terms of US currency is not altered any rise in the price of one commodity must result in a decrease in the average of all other prices not an increase in as much as a constant wage rate under the short-term condition of unchanged productivity means a constant Total Money perchas ing power when production volume and Total Money purchasing power remain constant average market price the quotient of these two quantities also remains constant and any increases in the prices of individual items must be counterbalanced by corresponding decreases in the prices of other items the actual EXP experience with devaluation in terms of gold which was so contrary to what its sponsors expected was therefore exactly in accord with what the theory outlined in the earlier pages of this work predicts okay this section is called return to the gold standard there is still a substantial amount of support particularly among politicians and supply side economic uh economists for a return to the gold standard uh this is just the reverse of what the managed currency Advocates want to do it is a return to a more rigid monetary standard rather than a change to a more flexible one as brought out in chapter 15 however the gold standard has no significance in application to One Nation alone and it is no longer possible for more than one nation to maintain free convertibility at fixed rates as matters now stand therefore the suggestion of a return to the gold standard is only a nostalgic dream interesting okay uh this section is called 100% Bank Reserves another proposal is based on the assumption that bank credit is the cause of economic instability it proposes to eliminate inflationary Bank credit by requiring the banks to maintain 100% reserves against demand deposits at all times the objective of this plan says RP Kent quote is to strip the commercial Banks of their power of money creation with such a plan in effect the monetary authorities would have direct and complete power to determine what changes in the volume of money should be permitted for the commercial Banks would no longer be able to blow up a dollar of reserves into several dollars of deposit money as explained in chapter 15 the pyramiding of credit that this plan is intended to prevent is wholly elusory the reserves can be blown up into demand deposits to be sure but this means nothing as the economic effect of the loans that create the deposits is opposite to that of the deposit and these effects uh cancel each other I think um right out of time so we will start uh this paragraph again tomorrow when we we resume and um we'll move along with this chapter so thanks for tuning in today and have a great day