Macro Trend of Accumulated Risk

Deflation is an accumulated risk that presents with a macro trend.

Progression of the deflationary trend has been tracked in these articles. The indicators mix and match with changing investment vehicles, but the effect is essentially the same.

Neo-classical means operate to a classical effect. The result is a deflationary trend that eventually confirms a clear presence of value.

The "de-risking" analysts refer to is the emerging salience of a macro-risk ontology classically referred to as the declining rate of profit. It is a risk to the present value of the capital accumulated that reduces to the value of the risk.

Accumulation of risk into a gamma proportion tends to be resisted by the underlying alpha risk.

Since fundamental risk cannot be avoided, only averted, displaced in time and space with derivative vehicles of investment, including provision of public goods like bailout funds, the value of the risk goes beta (the uncertainty of government policy within the economic space valued with the presence of time).

To conserve the value of the risk with a predictable presence of value, the rate of profit in decline will be offset by unemployment and consolidation of declining asset valuations, confirming the classical model of capitalism. That confirmation dominates the policy space, giving "the risk" a certain presence of value that is, at this point, shammed with beta volatility to suggest the operation of a free-market ontology. That legitimacy of the risk is false.

The false free-market legitimacy has to be supported by management of the gamma risk. The value of the risk is conserved by a bureaucratic model of power, operationalized into a predictable macro ontology that transforms alpha into gamma risk.

As the chairman of The Federal Reserve today described the present value of the risk, for example, he very clearly defined that value with sustained unemployment. Describing the conservation of the value as "painful," that pain, that sacrifice, is cast in the light of a free-market legitimacy. No one person or cohort decided who will experience the pain and make the sacrifice. The implication is that the market decides, and the risk of liability to the reward is "decidedly" none. The value of the risk is conserved with a macro ontology derived from the fundament.

Being derived from the fundament, the risk to the accumulated value is forever present. Despite the derivative presence of value, risk to the future accumulation of value is, however, virtually none, resulting in accumulation of gamma risk.

Accumulation of gamma risk results in catastrophic events. In the past, world war revanched accumulation, reducing accumulation of risk to an alpha-risk ontology on a macro scale. With the emergence of the bureaucratic model of power, the revanche is methodically slower, but allows for an accumulated value of the risk nevertheless.

There is an attempt to technically quantify the accumulated value into an empirical (predictable) macro ontology in which micro trends predictably derive. As we have seen again and again, attempts to transfer accumulated risk to the future in order to secure short-term value will fail. It will result in catastrophic devaluation and devolution of the risk.

Consolidation of power into centralized management of gamma risk will devalue the risk, but it will not be devolved. Such a triumph will result in tragedy, much as Hegal described it, with the value of the risk equilibriating whether we like it or not.

Nature is indifferent to the delusions of our grandeur and the value will revanche into an historically proper proportion.

If we do not "choose" to manage the macro trend "at" the fundament, rather than accumulatively derived "from" the fundament, nature will very painfully make that correction for us.

Catastrophic reduction to the fundamental value of the risk is both inevitable and avoidable. It is a persistent paradox perennially present in its fundamental valuation. That value reduces to a moral intelligence, defining us as a species. Are we economic animals guided only by basic, emotive instinct, like fear and greed, or the motive of recognizable freedom reflected in the ensured processes of an alpha risk ontology?

Security will not be found by consolidating risk into a too-big-to-fail organizational ontology. Economies of scale are not the solution, but the problem, reducing the risk of liability to a drawn-out, tiresome debate, slowly digested within the bowels of government authority rather than resolved with the immediate influence of an alpha-risk accountability.

The immediate presence of value appears to be no choice. Accepting an economy of scale appears to be a necessary condition for taking the risk. Debate over the limits to the liability of BP's Deep Water Horizon well, for example, reduces to the value of an economic efficiency that is too big to fail. If the disaster is confirmation of that hypothesis, what incentive is there to avert disaster without the operation of fundamental, alpha risk (not being too big to fail)?

While we are focused on the liability in a specific case, we fail to recognize the liability of the general case.

We do have a choice in the macro-ontological case. An economy of scale is not a given modality of efficiency endowed by nature. It is a choice made to accomplish a task in every specific case--to limit liability and conserve the valuation of accumulated risk.

In the case of BP, the retributive value of the accumulated risk has become apparent. That value will be externalized into a macro-trend that is directed to prevent the declining rate of profit (deflation) rather than internalized into an alpha-risk proportion because BP is too big to fail.

The problem is not dependance on fossil fuel or the need to drill in risky places, it is the organizational size of the firm.

The size of the firm critically affects all the other risk variables, like the risk of inflation due to dependance on one source of energy, which results in a deflationary accumulation of value (increased macro risk). That risk does not warrant consolidation, but deconsolidation.

The inflationary value of economies of scale (pricing power) increase the deflationary value of the risk by reducing its disinflationary value (the alpha ontology).

Reducing the detrimental value of the risk requires revaluation with an alpha risk, macro ontology. The risk of cyclical trending will redefine with the certain value of a popular consent. Liability will be limited only by the valued efficiency of that immediate and proper consent supported by maximum plurality, rather than consolidation, of industry and markets.