The Disinflationary Phase

The false peak-oil price driven by leverage finance, deflating the world's economy, reliably resulted in the phase of the business cycle we are now in: the disinflationary phase.

Classically, the phase results from overproduction as buying power is reduced by a consolidation of capital on a limited supply of money. A distribution of that value must occur in order to pull the economy out of recession (liquidity) to produce more wealth and, at the same time, preventing an overaccumulation of retributive value that could result in a complete recapitulation of the value and the power it inherits.

The neo-classical measures to prevent recapitulation of capital, and power, by increasing the supply of money (the coordinated effort we see now of central bankers to recapitalize financial markets with electronic credits in addition to the capital consolidated and illiquid) is, of course, inflationary. It allows the gain from the loss to be consolidated with minimal retribution (repayment), and that includes a regressive tax burden that finances the increased money supply by borrowing it from the wealthy and repaid by the not-wealthy in the form of the public debt, conserving the proportional zero-sum gain and distribution.

So, at this point of the cycle, the capital consolidated was neo-classically "free" to massively move into (liquidate) the equities market today for a record one-day inflation of prices and, of course, the price of oil, the primary means of causing the deflationary trend through leverage finance (futures contracts volume), also increased.

The volume of The People's capital that was sold off in a panic will now be enticed to chase the value. When there is sufficient volume to achieve a substantial capital gain, at a favorable tax rate, the volume will be massively sold off for another loss and gain (market volatility that indicates "the bottom" or the level at which the distribution must occur). The micro-cycle of accumulation and distribution is repeated until the volume of non-elit net worth has been maximally consolidated to be retailed to its rightful owner for a profit, completing the macro cycle of loss and gain, and that will be called economic growth.

The process can hardly be characterized as an abstraction of value lost and gained, as our Ivy League experts maintain. It is a real zero-sum game. The loss is not a figment of The People's arbitrary and capricious imagination.

While disinflation is charaterisitic of a free and unconsolidated organization of economy, it does not necessarily indicate proof of a free market, as argued by pop economists.

Disinflation can be a positive or negative effect depending on the organizational model. It indicates affordability of maximum supply at minimal price when there is a pluralist operational model; maximum price on a minimal supply, or unaffordability, with an elitist, command model.

The disinflation we have now is the result of economic activity that has dispossessed the vast majority of The People. Not only has the capital been organized (consolidated) to devalue The People's buying power (recession), but net worth (savings, the distribution of capital). The loss is not an abstract value of perceived worth, it is a real devaluation, a loss, that has been gained (consolidated) into a privately-owned capital called "private equity" and falsely justified by means of a free enterprise.

This redistribution of savings valuation, net worth, is in keeping with the Hamiltonian model that capital should be managed (owned) by the elite, and there is no better way to ensure its most efficient management for society than to rig the financial system, and the economy, to ensure elite ownership of capital in priority (primarily a regressive tax code). That is what has transpired--trickle-down economics--and it is a verifiable failure, once again!

Hamiltonian propenents must, however, maintain a pluralistic, free enterprise, legitimacy--a product of the collective will (an agreement between buyers and sellers of what to produce at what price) that defines a self-determined General Welfare. While the legitimacy is partially fulfilled with what to produce, the price, and the profit, is illegitmately determined largely by elite control (by means of organized consolidation in priority). While it may be "enterprising," it is hardly "free." President Bush, for example, today spoke of the rescue effort as a confidence in free markets to technically (naturally) correct for what was a willfully determined, fully intended, organized elitist outcome in which he is chief executive.

A free market economy is self-correcting if it is ensured (willfully determined) in priority--just exactly the opposite of what Bush and John McCain advocate in both theory and practice (trickle-down economics).

Bush, and McCain, extolling the value of free markets is like having a pyromaniac fire chief. The fire department shows up with inadequate liquidity, and the liquidity it has is applied in all the wrong places.

The disinflationary trend we see in fuel prices indicates a stop-and-reversal in the deflationary trend caused by the application of a highly consolidated capital (the problem) in a high-profit,low-growth strategy that feeds on a limited supply with minimal competition (low growth) while falsely arguing a peak-demand fundamental price (a fraud in the marketplace).

There is nothing free market about the cyclical trend we are experiencing. It is not the collective self-determination, the legitimate collective will, of The People. Rather, it is the product of a command economy with a false pluralisitic legitimacy (a false free-market economics). It is the Hamiltonian model of finance, and the administration of power, in peak form. It is a practical model being applied by neo-conservatives with the tools of neo-classical economics, like the economic stabilization legislation and bureaucratic action we have now, to be asserted as the pinnacle of socio-economic organization into the 21st Century.

What we see is a paroxysm of elitist power as a new century heralds in the hope of a new age of progressive change. The regressive tendencies of taxing and spending that secures a stable maldistribution of the costs and benefits of political-economic organization are clearly outmoded with tired. disconfirmed legitimacies that indicate change long overdue.

The neo-conservative proponents of pop media analysis are desperate to defend policies and programs that are nothing but a complete failure by the most casual observation. They are clamoring to disparage the Obama/Biden economic agenda of late. That agenda indicates a deconsolidating of the capital, not just a deleveraging of the capital that causes crisis.

The Obama/Biden plan sets us on the road to realizing the fundaments of freedom genuinely idicated by full-employment with low inflation (positive disinflation).

A business cycle of economic growth in which disinflation is a sign of a healthy pluralism of the marketplace is entirely possible instead of a malignant phase of a deflationary trend designed to dispossess The People of value that rightfully belongs to them if properly organized for a true, legitimate, self-determination.

The Obama/Biden economic plan will restore The People's value and build on it. A vote for Obama/Biden will yield the very highest return for everybody. It is Strong Pareto Optimal.

An Obama/Biden executive is a strong buy signal! The value of your productivity will not be securitized into a worhtless debt, but into a genuine confidence of an easily verifiable legitimacy with an easily executable and exacting accountability of a free market economics.

Wishing us all the very best!