Hi, my name is D and this is my writings on subjects. I'm no rapscallion or anything at all. If you want to you can read my writings on subjects if you have free time. If you want to argue with me or call me names then please comment. Negative feedback is very welcome...I love dat shit. Me? I'm not even a noun, I'm a fucking verb, dude.

Wednesday, September 28, 2011

My Mind on Economy and Economy on My Mind

The economy is pretty bad right now, in fact it's the worst it has been in a very long time. What's up economy? What's your deal anyway?

My Economy Teacher
This is going to sound stupid, but my foremost understanding of the Economy is not from the Macro and Micro classes I took in school but from an old Super Nintendo game called Uncharted Waters 2: New Horizons. I used to play this addictive Koei game in my halcyon days as a human youth and I can straight up assure you that I learned more about how the global economy works from this game than I did from school. I played the game as a young Turk named Ali Vezas living in the 16th century, me and Ali bought a beat up ship with our best friend Salim and proceeded to sail around the world and become gazillionaires.

We talk about the term "globalization" as if it's something new, but the economy has been globalized since we invented ocean-faring vessels. We still to this day ship goods by boat, nothing has changed since the 16th century. The boats got bigger and faster, but aside from that nothing is different from the times when me and Ali conquered the world together.

Koei's simulation of the global economy of the era was quite interesting. To keep you a bit more on your toes they wrote an algorithm into the game which fluctuated the price index at all port cities, but not at random, it fluctuated by how much money was coming in and out of the port. So me and Ali came up with this great idea, what we did was:

1. We Bought all the goods at one port city (call it Port A) in order to put money into that port and strengthen its economy. Now, since more money was in the port (currency used in this era was silver ingots), naturally money was worth less at this port (experts call this "inflation").

2. So then we sold all that shit we bought in Port A into another port city (let's call it Port B) and we didn't even really care if we made a profit on it. All we cared about was that this city now has spent money to buy the goods and that its currency is now more scarce then it previously was (i.e. their money is worth more).

3. Now we kept doing this over and over ad nauseum until Port A's currency was rock bottom and Port B's currency was through the roof. Then we just bought all the cheap goods from Port B (who's money was still worth something and sold their goods cheap) and sold them to Port A (who's money was as plentiful as water and would pay through the teeth for goods because you can't eat/drink/do-anything with a stupid thing like money) and we made a KILLING!

Three easy steps to motherfuckin' success! Me and Ali were buying Art from the port in Athens and selling it to the port in Istanbul, then bought carpets with the profit and sold them into Athens' now saturated market. We were swimming in dough, it was really sweet!

So there we were bustin' around Istanbul flashing our coins around town and bragging about how we discovered Lake Titicaca, when the great Sultan of the Ottoman Empire, Mr. Suleiman himself, hears about how chill and rich we are and calls us up to this palace. He's all like:



Sultan: "Yo bros! You're stinking rich! That's sick son!

Us: "Ya guy! We're buying all this faggy Art shit from Greece and selling it to the hip cats here!

Sultan: Sick!

Us: Ya!

Sultan: But yo, check it. Why even buy that Art fag shit for? Why not just give Athens money for free!?

Us: What?

Sultan: Yo, they'll have so much money in the port that it won't be worth anything at some point.

Us: ?????

Sultan: Dude! If you just dump money into the port it'll completely saturate their economy, get it?


Us: That's a brilliant idea guy! Let's just give them money for free! Sick! Dude, you're the smartest guy.


Sultan: Straight up. Here take 100 silver ingots and go dump them in there and other ports. For real gangstas!


Us: Thanks man!

Over 2000!?
Why didn't we think of that? Our goal is just to drive down their currency, so why even bother buying their dumb art garbage for? Let's just throw money at them for free until their price index collapses and they start paying through the teeth for any commodity. Seriously, what are they gonna do with a bunch of money? You can't eat money or do anything with money. Plus, because we were giving these people money for free they loved us and even gave us tax free permits to trade with their port without even paying taxes to their local government.

At this point we were selling Athens (or you could do it with any two ports in the game really, Athens and Instanbul were just near where they start Ali Vezas) Carpets from Instanbul at insanely high mercantilistic prices. They had more money than water...the trouble is...it wasn't worth diddley squat.

Then we thought...why not do this all over the globe at every fucking port and just leave a few ports unsaturated to buy cheap goods from? Every port (except a select random few who's currency was kept strong so we could buy cheap goods) was saturated with currency overkill and would pay us insane sums of money for our cheap goods. Needless to say, me and Ali were literally gazillionaires.

I paid Luka 10 pennies per year


Then Ali's like, "yo, guy...what do we do with all this fucking money 'scro?". Good question, what do we do with a ridiculous amount of money like this? We can buy whatever cheap shit we need whenever we want because commodities are cheap. We can pay anybody we want to work for us for table scraps because many ports are so saturated that they'll work for anything (we were paying our crew in bread and water and our captains 10 gold pieces per year). I concluded that we should put all this money into a bank in one of the ports and let it grow interest so we can keep watching the numbers get higher and higher. Do you know how much interest 10% of a gazillion is?

Basically, we globally crashed the entire economy then took all the money back and let it sit in a bank just to watch it grow for no other reason than some sick numeric fetish to see how big the number could get.

To buy a bag of peanuts...
How 'Bout in Real Life?

Could something as deranged as that be occurring in real life? Currency is a human made invention and runs on algorithms just as the one used by Koei to simulate a world economy. Are real world humans trying desperately to find little loopholes in the system that will make them rich?

A great historic example (this one had no evil motive behind though) of a market being ruined simply by adding money to it is the case of King Mansa Musa of Mali. Old Mansy took a trip down to Mecca to get down with the Islam in 1324 and brought a few too many gifts from Mali with him,


Ingots
"Mansa Musa organized a massive pilgrimage to Mecca in 1324. Included in his large entourage were hundreds of servants, thousands of soldiers, and eighty camels bearing twenty four thousand pounds of gold. Most of which he gave away to strangers in Mecca and Medina. In Cairo he gave every officer of the court a large amount of gold, causing acute inflation in the Cairo market. It took twelve years before the gold market recovered."

-http://www.kurahulanda.com/west-african-kingdoms/west-african


The currency system was designed to help people coexist, to improve the barter system and let people with different specialized jobs create something and then trade their extra stuff for other things from other folks with different specialized jobs. Has the currency system become nothing more than a giant mess of loopholes being exploited and then re-exploited for the sole reason of watching numbers get bigger in a bank account? Is most of the money that exists in the system (the life blood of the economy) sitting in some bank somewhere?

You ever looked at how the Commodity Exchange works? Basically,

1. A farmer makes a smooth batch of corn
2. Around 12 to 1000 people buy and sell this corn back-and-forth from their computer terminals
3. Finally the guy who really wants the corn to use it to make something purchases it and receives the corn.

The second step of the process is where guys like me and Ali pull all sorts of shtick and exploit so many silly loopholes in the system. It's completely unnecessary in the process but it gives people the chance to make a profit or at least saturate or de-saturate a market.

What about the stock markets? Well since they got them all over and in different time zones the traders can play the games 3 times in one day,


1. They open the NYSE in the morning and millions of traders buy low and sell high.
2. Then they open the LSE and the same money from the same traders is used over again for another round.
3. Next they open the Tokyo Stock Exchange and they play with the same money again.
4. When the millions of traders had enough they put that money back in its coffin...the limitless Swiss Bank Accounts in everyone's favorite "neutral" country...where it rests until the next day of trading.

It's not just one person exploiting the loopholes in the current system that causes all the problems in the world. There are millions of Ali Vezas's all over the globe in every city exploiting loopholes and together they literally ruin the world. I'd say 99.5% of people in the world today are Luka Ullmans, having to work all year for pennies just to buy overpriced goods they farmed/created/manufactured themselves to begin with.



Luka sailed through Africa and fought Moquele Mubembe with his bare hands to make 10 bones.
Is Moquele the myth? Or is "Economy" the REAL MYTH? Am I Right?

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