Who demands deflation, anyway?
(Sounds nihilistic to me!)
It’s an indicator of unassumed risk and, but of course, it sort of just happens. Deflation occurs because we naturally save to have more for less–it’s the paradox of thrift. Naturally, the people who are naturally selected to manage financial risk save (hoard) a lot of money at the top (forming the capital) so we all have more for less, on demand.
The demand-deflation indicator is what hurts–it measures probable pain and, at the same time, the probable gain. It’s a public menace, yet it is highly beneficial if you have a lot of cash to buy distressed properties, like Berkshire Hathaway now selling foreclosed homes (what the deflator predicts or signals) at a profit.
Consolidation of assets (demand-deflation, which is the result of “natural monopolies”) is supposed to improve market efficiency (storing up value), but it’s also a public menace. Consolidation of financial markets (being TBTF, which is supposed to protect us from the risk) resulted in the Great Recession. Distressed property is then confiscated at demand-deflated prices and resold to speculators (like Berkshire) at a profit. Remember that Bank of America shares were bought by Berkshire Hathaway to help bail it out. When BOA sells its confiscated property to Berkshire its like selling it to yourself (the Enron model), which establishes support against the on-demand resistance. The price gets support when it is really being resisted on demand. It looks like economic growth but, really, it’s being resisted. It’s really a fraud, and fraud is criminal conduct–a public menace!
A public menace demands containment. It’s not a commandment. It’s an on-demand attribute.
We choose the measures to counter the treat (a method yield), which means that the menace takes on the measure–the attributes–of an intended rate (economic growth indicators, for example) that demands accountability.
Demand-deflation is not a problem that results from the paradox of thrift. It’s an organizational problem.
Ironically, to contain the risk, our financial system has all these menacing attributes that make it too big to fail, yet it is prone to failure. What, then, is the on-demand attribution? What is the proper measure of accountability? Do we just let nature take its course and see what happens…see who survives…or do we utilize the risk to self-determine fate at an intended rate?
Again, it’s a measure of tolerance. How much harm is unacceptable? The answer depends on how it is measured, and if it is organized to produce fraudulent measures with hidden risks (requiring the secret knowledge of the organized psychopathy to read the signs), then we have an organizational problem that tolerates unacceptable amounts of harm.
Structured to exist with an intending (and thus fully accountable) on-demand legitimacy, what supports the tolerance for the menace is naturally resisted, which means measures must be taken to counter the resistance. It is necessary to make the detriment look like a benefit–a public good. It is necessary to “win the argument” of yielding to the greatest utility by means of self-determination, which determines the propriety of risk.