Money is essentially an abstraction and not constrained by the laws within which material and energy systems must operate. In fact money grows exponentially by the rule of compound interest. Growth based models in finite spaces will fail by definition. They will become canabilistic and unstable before collapse.
A monetary system based on infitite debt growth is not rational. Not even in the ball park.
The invisible hand is a silly superstition on par with santa clause.
Gold is a human abstraction just as fiat, it requiries faith to work. Natural resources do not. Anything in reality would be better than what we use. The rest of the world is already planning on it.
The relationship between prices and natural resources is nonlinear. In other words, the market does not reflect long-term declines in natural resources such as oil. The market is like the float in a carburetor: as the engine demands more gas, the float falls and allows more gas to flow in from the tank. But the float has no information concerning the amount of gas left in the tank until the fuel line is unable to keep up with demand.
The members of the American economics profession performed a vital practical role in maintaining this unique system of corporate socialism American style. It was their role to prevent the American public from achieving a correct understanding of the actual workings of the American economic system. Economists instead were assigned the task to dispense priestly blessings that would allow business to operate independent of damaging political manipulation. They accomplished this task by means of their message of ‘laissez faire religion, based on a conception of a society composed of competing individuals.’ However false as a description of the actual U.S. economy, this vision in the mind of the American public was in practice ‘transferred automatically to industrial organizations with nation-wide power and dictatorial forms of government.’ Even though the arguments of economists were misleading and largely fictional, the practical — and beneficial — result of their deception was to throw a ‘mantle of protection … over corporate government’ from various forms of outside interference. Admittedly, as the economic ‘symbolism got farther and farther from reality, it required more and more ceremony to keep it up.’ But as long as this arrangement worked and there could be maintained ‘the little pictures in the back of the head of the ordinary man,’ the effect was salutary — ‘the great [corporate] organization was secure in its freedom and independence.’
Bernake should just break out a ouija board and wear a red robe. Economic dogma meet thermodynamics.
