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Understanding our Electronic/Cyber Markets – Part II

May 20, 2017

All our trading markets are now electronic and all these markets now operate within cyberspace. This situation allows our central planners to create markets which are controlled, manipulated, and monitored by centralized computerized trading strategies. The rules established by our central planners provides for a system where everyone is at the mercy of the insiders who run our global cyber markets. Can these types of markets create any real prosperity and growth for our growing interconnected societies? When I look at a market like Venezuela, I notice that their stock exchange (called Caracas) has increased exponentially these past 90 days even as their general economy has imploded. Why is this situation dire for the prosperity of the people?

Currently, the Caracas index is at 71,626, an increase of some 35,000 points within the last 90 days. In the past year this index of Venezuelan wealth (as measured in Bolivars) has increased some 450% while the general economy has declined precipitously. Venezuela remains mired in a deep economic crisis according to the World Economic Outlook published by the International Monetary Fund. Unemployment is at 25%, inflation is over 450%, and the IMF forecasts a recession for this country until 2019 or later. The people are angry as the wealth is diverted mostly to the powerful who run the country.

The Venezuelan currency, called the Bolivar, has declined relative to the dollar to the point where one dollar can now be exchanged for 9,974 Bolivars (a 750% increase in the past year). Prices continue to increase and the supply of consumer goods continues to dwindle. Yet, the stock market produces continuing increases as select traders bid up the market for select elites. Prosperity accrues to the 1% as the 99% grows poorer. This reveals that our electronic/cyber stock markets do not reflect reality when it comes to the health of this economy. The rich acquire more Bolivar wealth as the general economy implodes and the people suffer from a dysfunctional system.

I thought that our index stock exchanges were suppose to reflect what is happening within the general economy? This, however, is not the case today in many of our markets. Our electronic/cyber stock exchanges are mostly divorced from the realities of real growth in goods and basic services. This situation reveals that our cyber investing does not necessarily create new prosperity for the general economy. People suffer as a few powerful bankers, corporations, and politicians accumulate more currency wealth for their personal accounts. What a shame on our economics profession this situation reveals.

Wealth is supposed to reflect growth in real goods and manufacturing so that the general economy prospers. But today we measure wealth in currencies which are mostly divorced from the realities of production. Traders click their computer mouse to buy and sell their symbols. But the symbols are all imaginary virtual concepts which are divorced from our real production. This means that real physical wealth often does not follow from gains in the stock exchanges and trading profits. Venezuela is a great example of dysfunctional trading and collapsing prosperity for the general public. We need to change our measuring system so that prosperity and the growth of real wealth is measured concurrently.

The core problem today is that our money unit is an illusion and this unit has no tie to material reality. Traders click their mouse to gain currency profits but growth in real wealth (goods) does not always follow. This means that the general economy suffers as select elites (say the 1%) gain huge trading profits for their personal accounts.The rich get richer as the general populace suffers with a stagnating economy. The purpose of money is to serve as a proxy for growth in real wealth (value). Today, this is a problem that is getting worse for all economies. What we need is an immediate reset and a new system for the planet. Give this situation some reflection. I am:

Some images to consider:

Image result for venezuelan economy

A nation of 32 million people suffering from a corrupt economic system and corrupt power brokers!

Image result for caracas stock exchange

Notice the huge difference between the Russell and the Caracas markets. Today, this situation is much worse! The Caracas markets do not reflect the realities of the general economy!

Image result for venezuelan economy

The stock exchange goes up and up as real production goes down!

Image result for venezuelan economy

Image result for venezuelan economy

Image result for venezuelan economy

Image result for venezuelan economy, people suffer and riot

Venezuelan people cry for food and basic goods! The Caracas stock exchange goes exponential concurrently with growing poverty! Why do our stock exchanges not ‘measure’ real wealth? Think on this! What is the problem?

Image result for venezuelan economy, people suffer and riot

Underlying the problem is an economics profession which lives with illusions and myths! The System is the problem and few desire to change the System!

Image result for venezuelan economy, people suffer and riot

Image result for venezuelan economy, people suffer as the rich get richer

Our corrupted markets help to create dysfunction for the common people! The system is the problem and few seem to desire to change the SYSTEM. Money rules this planet and those in power refuse to give up their privileges!


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