Brad DeLong — THE MUST-READ OF MUST-READS on the links between behavioral finance and macro

THE MUST-READ OF MUST-READS on the links between behavioral finance and macro: John Maynard Keynes (1936): The State of Long-Term Expectation: The General Theory of Employment, Interest and Money: Chapter 12: "If I may be allowed to appropriate the term _speculation for the activity of forecasting the psychology of the market, and the term enterprise for the activity of forecasting the prospective yield of assets over their whole life, it is by no means always the case that speculation predominates over enterprise. As the organisation of investment markets improves, the risk of the predominance of speculation does, however, increase...

Grasping Reality
THE MUST-READ OF MUST-READS on the links between behavioral finance and macro
Brad DeLong | Professor of Economics, UCAL Berkeley

Kimball Corson — A Note on Liquidity Preference

Short summary of the liquidity trap.

Wandering the Oceans: SailBlogs
A Note on Liquidity Preference
Kimball Corson

David Glasner — There Is No Intertemporal Budget Constraint

Somewhat wonkish, but if you have been following the debate that Nick Rowe started, you may find it interesting.

Uneasy Money

There Is No Intertemporal Budget Constraint

David Glasner | Economist at the Federal Trade Commission

Brian Romanchuk — Money Hoarding Versus Saving, And Economic Growth

Brian digs into the implications of the saving versus hoarding distinction.

Bond Economics
Money Hoarding Versus Saving, And Economic Growth
Brian Romanchuk

Ramanan — Nick ROKE, Thrift, And Hoarding

On the difference between saving and hoarding.

The Case for Concerted Action
Nick ROKE, Thrift, And Hoarding
V. Ramanan

Brad DeLong — John Maynard Keynes Getting One Very Right: There Is No Medium-Run Full-Employment Sheet-Anchor for the Economy

Keynes quote from General Theory.

This, expressed in a very general way, is my theory of the rate of interest.

WCEG — The Equitablog
John Maynard Keynes Getting One Very Right: There Is No Medium-Run Full-Employment Sheet-Anchor for the Economy
Brad DeLong

Translation For J&J Sixpack: "No, Really. You're Better Off If You Let Us Rich Control Frauds Own Everything. Trust Us. YOU Don't Know How To Manage Your Country Anyway."

   (Commentary posted by Roger Erickson)

I just received this brazen propaganda by email. It's so breathtakingly revealing that it's worth sharing, with in-line commentary. It's also nearly too cruel and mean to observe, without coming to tears. These people don't seem to think that J&J Sixpack are very intelligent. Where do we find obsessive, compulsive "advisors" like this? Under a crock?

Michael Likosky via cmail2.com
to rge 

I want to pass along a quick update and a piece that I just published in the NY Times (see below). 

A China-led Infrastructure Bank is being created to promote private investment by Europeans and others into the Asia region.
The type of thing that we've been doing globally for a couple decades.
Those private investments have produced pretty good results, lots of quality infrastructure and many countries now giving us a run for our money as a result. Investors have gotten good returns as a result of the successes of these competitors.

While a lot of exciting stuff is happening right now at home - I will send a note on that soon - we are still having trouble figuring out whether to let private investors get some of our infrastructure built. Is American infrastructure a good investment for our pension funds, or is the future of Asia a better bet.
I include here a piece that I just published in the New York Times, related.
(clipped in below my signature)
More soon on progress happening.
- Michael

[RGE: Smooth, sweet, soothing ... just like strychnine-laced saccharine. :(  Since we trusted them on tax policy, why not trust them on ownership of The Commons too? ps: Michael somehow forgot to include this old image.]  

 So of course:

Taxpayers Benefit If Investors Absorb Risks of Infrastructure Projects

[RGE: Come again? Wow! If anyone believes this, I've got some Medieval Futility in the Dark Ages to sell to them. What's that old quote about the bigger the lie, the easier it is to get the naive to swallow? This is a double-blind test, America. Just how naive ARE you? And please note that an invisible government doesn't require an outright conspiracy. An expanding lobby of avaricious fools can easily lead a trusting aggregate astray, purely by blind drift alone. Speaking of which .... ]

Michael Likosky is the co-head of infrastructure at 32 Advisors. 

Few would dispute that America faces an infrastructure crisis as cities, states and the nation remain cash-strapped. Just look at the pending transportation bill, which would vastly underfund our needs, to see how low a priority infrastructure is in Washington. 

[RGE: Ooh, he's good! Note the classic propaganda technique. Baldly mingle an obvious truth linked directly to the biggest lie, and all IN THE OPENING SENTENCE! Then the reader is half accomplice, and playing his own devils advocate, as the price for reading the rest of the bullshit. Once they continue past the 1st line, the rest is downhill for the reader. Who knew that "32 Advisors" was a euphemism for "30 pieces of silver?"]

But investors see opportunities to finance the difference between what we need and what we can afford to pay by, say, upgrading a port and being repaid by fees from shippers. 

This is distinct from traditionally financed projects in that the investor can only recoup costs, and profit, as long as the port performs well. And the investor would only pay contractors when the job is done to spec. The contractor would have to cover any cost overruns themselves, rather than going back to the government for pay to complete a project. Ultimately, the private investor, not taxpayers, would bear the risk of poor performance or unexpected delays.
America's infrastructure needs vary greatly from project to project. Different investors have grown up to finance distinct needs. Private investment can present a genuine opportunity for governments and communities as long as both sides are attuned to the needs and requirements of the other and the right match is made. 

Some want only mature infrastructure assets that they can fix up and sell. Some pursue high risk/high return projects in which they will get paid only if their projections are realized and, if not, the government gets a cost-free project. A pension fund, for instance, might be willing to build a project from scratch even if they don't realize their return for a number of years. Other investors may agree to invest in infrastructure unable to be supported from user fees such as structurally deficient bridges, in exchange for regular payments from government over a period of time. 

Solving our infrastructure crisis can be as much about politics as about money, though. Labor groups might be wary of privately financed projects that pay lower wages than the ones several generations of workers have fought to gain. Rural communities might want water, but not if investors demand a high rate of return. 

But is being locked in a fight with no winner worth being passed over for investment that supports our economic competitiveness, growth and basic health? We do not simply need more money in the system, but more targeted investment opportunities where the key stakeholders, including financiers, are also willing to think innovatively and work through challenges that often derail projects.



BIO
Michael Likosky is the co-Head of Infrastructure at 32 Advisors. He has over fifteen years of experience providing advice to many of our nation's leaders and acting as an expert in infrastructure and public and private partnerships. 

Likosky holds a JD and DPhil (Oxford Law). He is an expert on infrastructure, oil and gas, mining, free zones, human rights, foreign investment, and high technology growth strategies. He has published five books in these areas including three with Cambridge University Press. His most recent book, Obama's Bank: Financing a Durable New Deal, looks at the Obama Administration's approach to public-private partnerships. His other books are: Law, Infrastructure and Human Rights; Privatizing Development; Transnational Legal Processes; and The Silicon Empire. 

Likosky is an Expert to the Clinton Global Initiative, the OECD, and the United Nations Conference on Trade and Development. He co-chaired California Governor Edmund Brown Jr's Task Force to Modernize the CA Infrastructure and Economic Development Bank, the country's oldest infrastructure bank with over thirty-two billion dollars lent out to-date. Likosky is a regular contributor to the World Investment Reports, Oxford Amnesty Lectures, and Trade and Development Report. 

Likosky's work has been supported by Ford Foundation, Rockefeller Foundation, Arts and Humanities Research Board, Surdna Foundation, Markle Foundation, Chatham House, and others. 

He advises public officials, private investors, pension plans, and inter-governmental organizations. Likosky has advised US Treasury; US Senators John Kerry (then), Charles Schumer, Kirsten Gillibrand, Cory Booker and Bill Nelson; US Representative Rosa De Lauro; California Governor Edmund Brown Jr.; New York State Empire State Development Corporation; CA Business Transportation and Housing Agency; CA State Infrastructure and Economic Development Bank; the cities of Chicago and Newark; D. E. Shaw; Deutsche Bank; Credit Suisse, McKinsey; Goldman Sachs; Standard and Poor's; broadcasters (ABC, CBS, NBC, ESPN), International Development Law Organization; the capital stewardship programs of SEIU, AFT, UFCW, and LiUNA, and others. 

He has published opinion pieces and appeared in outlets such as New York Times, New York Times Deal Book, Wall Street Journal, CNN Money, Bloomberg, Associated Press, Reuters, Bond Buyer, American Banker, Institutional Investing in Infrastructure, Infrastructure Journal, PPP Bulletin, Engineering News-Record, Africa Investor, and elsewhere. 

Likosky has delivered keynote and featured talks to Project Finance International (Master Class), Bond Buyer's Annual Transportation P3 event, American Society of Civil Engineers, the US Chamber of Commerce; State Chief Financial Officers Roundtable, Oxford Law, Harvard Law School, Columbia Law School, Max Planck-Halle, and elsewhere. 

He founded and directed NYU's Center on Law and Public Finance and was a Senior Fellow at the Institute for Public Knowledge, was Professor of International Economic Law at the School of Oriental and African Studies, University of London, and has held fellowships and visiting posts at Oxford Law, NYU Law, Fordham Law, Wisconsin Law, and the University of Bonn. 

Since 2008, Likosky has convened the Reinvesting in America Series often in partnership with OECD, Partnership for NYC, Clinton Global Initiative, Citizens Budget Commission, Debevoise & Plimpton, Shearman Sterling, British Telecom, and Hogan Lovells. It features members of Congress; public officials from US Treasury, Defense, Transportation and Commerce; as well as state officials. The series includes small off-the-record discussions and large public events. It alternates between New York and Washington DC.

Damn! That's a very long-winded way of saying he's sold out to the best of the best of the worst ... if you follow my semantics. How many keynotes did Judas (or Quisling) make, before, during & after getting their 30 pieces of silver?

ps: He's also saying that China's Asian Development Bank is not competing with the remnants of England's East India Corp, or the G7's World Bank and IMF. No, he's saying that the 1% everywhere have teamed up, to own & hoard The Commons worldwide.

What's not to like?

What we've got here is failure to communicate .... honestly. (Blam!) You do have to admit that they have a relentless, killer-drone instinct.

For anyone who's ever taken biology-101, this is a mundane and boring replication of an age-old pattern, since the dawn of life on planet Earth. It goes like this. In any and all growing aggregates - even gas clouds pre biology - observers will notice that those components that CAN scavenge & hoard new surplus resources ... will. It's the straightforward statistics of of any recombination process, in any aggregate. Biology is just organized to find shortcuts, faster than thermodynamics alone. Either way, you eventually get some of every possible permutation of characteristics which support further recombination, in succeeding populations of components. That's what recombination produces ... whether molecular, sexual, behavioral or cultural recombination.

Yet hoarders never know what to do with said resources, any more than any other components. None of us is ever as smart as all of us working together, with all components adequately PROVISIONED! So the inevitable next step - among survivors, that is - after the inevitable blind hoarding reflex, is to re-distribute provisions in a way that enables the aggregate to invade new niches beyond the imagination of any of it's components. Hoarding is just a useless bit of noise in the ongoing recombination statistics. Discerning signal from noise always shows the path to progress. If we don't need hoarding, and can dispense with it, or repurpose it, then all the better.

It's called evolution. Get over it. It's happened. Countless times. And rest assured that it will happen again. One tombstone at a time. It's only a question of whether the next arrays of tombstones have to mark the graves of countless wasted human lives, or just mark the timely, graceful passing of their naive ideas about obsolete hoarding. As Wallace & Darwin implied, it's far more valuable to hoard and lust for Aggregate Adaptive Rate, rather than to be a dumb, King Midas member of the 1% - and be  merely statistical noise slowing down evolution.

In the history of planet Earth, subsequent aggregates always appear, slightly more able to hoard coordination methods on a new level, not just crude resources. That's how army ants evolved past snails, and how homo fiaticus will evolve past homo neoconinsis. It'll happen again, when we quit conning ourselves in neo ways.

Do we HAVE to subject another 7 generations of humans to yet another cycle of producing/hoarding/dying/evolving? Or can we just do it all virtually, right now, and just SAY we did it the hard way? Are we really fascinated with Grand Theft Culture, or can we just make an app for the 1%, and let them pretend to uselessly hoard real resources?

ps: Let's not hate Michael Likosky too much. Like Smedley Butler, he may yet realize that he's been a "high class muscle man for Big Business, for Wall Street and the bankers," and then seek more meaning in his life. If he's intelligent enough. It takes a culture to train a citizen. Likely, he's just had too little feedback to fully grasp the implications of what he's doing.

"The Merchant of Avarice"

   (Commentary posted by Roger Erickson)

Start Putting Human Sub-Species On The Endangered Species List? 

That May Be Our Most Viable Option At This Point!

Some candidates. The Middle Class? India's Girl-Child class? Women everywhere? Not to mention non-billionaire voters. Et tu college students?

Seriously. Getting EPA protection, stateside or in Europe, may be the quickest way to get protection legislated soon enough to matter. That means soon enough to prevent ourselves from lopping off too many parts that "WE" can't survive without. Even German voters care more about saving bumblebees than about saving the citizens throughout southern Europe, although they admit both acts are for the same, aggregate purpose. Huh?? Regardless. Show me another way to get the entire 28-nation block to make remedial adjustments that quickly!

You couldn't make this level of stupidity up.

In a cut-throat race to hoard "fiat" - and defer it's use to supposedly more important times - we may literally end up cutting one too many of the key cultural arteries that supply infrastructure supporting each of the competitive lobbies wielding an economic knife. If Shakespeare were still around, he'd have to re-write some themes, including coming up with "The Merchant of Avarice" - about an idiot intent on repeatedly cutting off a pound of his OWN flesh, to reduce expenses and thereby pay off old debts to himself. Doh!

Yet is that the ONLY way to stem the growing stupidity? 

Wouldn't establishing some simple tolerance limits on EVERY process be far simpler than clumsy, self-assisted suicide? 

We've already made mico/macro self-assisted suicide illegal, but like other declared wars, our avowed efforts expand the exact entity we purport to squash, thereby calling into question the very axioms we're using to shape our efforts.

Perhaps a bit more balanced thinking would do wonders?

To try that out, do we have to put quality of distributed decision-making on the endangered species list too?

They're A Bit More Honest In Canada? Maybe ETI Will Contact Them First?

(commentary posted by Roger Erickson)

Generation Screwed: Youth [have no purpose] struggle for jobs, home ownership

That's telling it like it is. Luddites are winning? Winning what?

Nevertheless, even Canadians are only a bit more honest than us here in the states. After all, what kinds of "experts" totally miss the point like the experts quoted in the next newsline from Canada?

BMO job cuts have little to do with sky-high profits
"Technology, sluggish economy mean job losses would occur despite how much banks make, experts say."

Huh?

Translation: We're squeezing water from a stone ... because we don't know what else to do with our citizens and nation. Might as well extract rising rents from our own citizens .. until our nation withers and dies. Our mantra is to do ANYTHING EXCEPT set new goals worthy of re-dedicating our nation, culture and populous to.

Why?

Is there a endgame plan at work here, even by default? I mean, other than parasites consuming the host they THINK they own? That's a dead-end game, not an endgame leading to expanding options. What on Earth has happened to homo sapiens? They used to be a social species, but seem to be reverting to hermit, cultural cannibals before our very eyes. Maybe we're lacking a cultural mirror ... more than any other missing piece of technology? Maybe banksters could hire all those citizens they deem "useless" to work on a cultural mirror system, and thereby help us regain group intelligence?

Until then, we'll continue with unchecked, purposeless rent extraction? Simply because we can? What is the Desired Outcome behind that?

That kind of pea brain outlook is equivalent to a parent saying they ate half the neighborhood children because technology made it possible ... and because they couldn't imagine any other options.

A little more imagination might be called for?

Personally, I'm sure that youth of this age have plenty of imagination - since they always have had, or else evolution wouldn't have occurred. Just because you CAN do things, that doesn't mean you SHOULD. Imagine being more adaptively selective! Isn't that what homo sapiens was named for? Are homo sapiens being replaced by NeoLiberals, or just stuck, temporarily in the no-evolution land between feudalism and further evolution? Growing an Output Gap for three thirds of us doesn't seem like much of a "way."

Adequate youthful imagination would likely be expressed quickly enough, as further cultural evolution ... if only the old farts would quit trying to hoard REAL national options that they can't take with them to the grave? Ya think? These are our kids, grandkids and great-grandkids we're talking about here. Why aren't we managing THEIR options, instead of uselessly trying to constrain OUR current fiat?

What kinds of "experts" miss that point? Those designing their own extinction? Like dinosaurs? Perhaps the kind that never interacted enough with their own kids to notice that there's no adaptive point in economic cannibalism?

We haven't seen such an anal, "bankster" outlook this widespread since ... well, really, since the pre-Christian era in Europe, or the pre-Buddhist & pre-Jain era in Asia. Certainly not since the Reformation and Renaissance. The bankster mentality has degenerated all the way back to class war and the culture of class-based vs nation-based mercantilism. Do we really want to return to squabbling subunits that pit "our" classes, clans, castes and tribes against all others ... INSTEAD of at least sticking together by national allegiance, reaping the insane return-on-coordination, assimilating all citizens, and creating even more, newer cultures, more ethnic diversity and more, newer mythologies?

Sure, we may envision a time when there is once again guaranteed mobility, at least for honest, non-toxic individuals & sub-groups whose negative reputations don't precede them. But do we really want to let a tiny cabal of existing uber-merchants (instead of Communists) Centrally Plan and rush this transition, without more careful consideration? Are we to trust Merchant Central Planners, just because they claim to be OUR central planners? Something seems amiss in the message they promote. Every prior rush to deregulate without re-regulating even more productively - by decentralized consensus - has only ushered in a chaotic period of rampant looting by whomever can get away with the initial deregulation. Somehow the CP-deregulators themselves never get around to decentralized re-regulation again. By definition, it's beyond them. It's simply not in their repertoire.

Well, gag me with a Luddite and call me stupid! 'Cuz I don't see the point in being NON-SELECTIVE about deregulation. At all. We're throwing our entire next generation out with the nominal, fiat bathwater this time. Tune the damn system, carefully, rather than just looting components willy nilly?

There is no way to hoard static assets without growing a group Output Gap.

And tempo matters. 50% cultural degradation this year is FAR, FAR worse than 100% cultural growth next year.

Why? Because the evolutionary value of Dynamic Assets leaves the value of Static Assets in the dust. That's why social species succeed, and why homo sapien cultures outstripped other primate species. It's far smarter to stay fully invested in growing dynamic assets, than to stupidly hoard static assets. That means investing in Democracy, NOT just in personal ownership of more static assets. The whole strategy of social species is 2-stage optimization: keep the components alive AND grow the system (faster than either can grow when working at cross purposes). Instead, humans in NeoLiberal regimes are reverting to negative rates of interest in expanding group intelligence.

"Banksterism AND Busted Evolution" - that's become our motto. Some twisted minds even posit that as doing the work of one or more gods. SETI results are suggesting otherwise.

1% Pulling Cash From Denmark & Switzerland?

commentary by Roger Erickson

The only thing worse would be mathematicians pulling numerals from the Strategic Numeral Reserve. :)  Don't think we have one?  Ask the NSA & CIA which specific Fed accounts they pull their cash from.

BNY Mellon Helps Clients Pull Cash From Denmark, Switzerland

Surreal. We're trying to reduce ourselves to the madness of hoarding fiat while wasting coordination. That's far, far worse than mixing up pennies & dollars.  The onset of virtual psychosis can be even faster and just as bad as organic psychosis.

What's the opposite of a tax haven?  A tax ogre?   The impact of currency-tax ogres? Warren Mosler suggests that "they probably go to actual vault cash."

There are 3 sides visible in this process. One side involves those few bankers who are just trying to do their job - and are not yet crooks. Another side involves the 1% of people who mindlessly sequester fiat currency from their communities, and hoard it. The 3rd side involves all the rest of us citizens, letting such silliness persist.

Personally, it's staggering to think that there actually are a fair # of people who literally have more currency than they know what to do with. So they hire personal bank advisors, to avoid losing 0.02 % of what they'll never use anyway.

Yet which of these 3 sides is more stupid?  The situation is rather like that involving a deranged mathematician, who has to hire people to hoard his stash of numerals for him. That alone is a bit comical.  Yet something that stupid wouldn't matter if the rest of us weren't dumb enough to believe there aren't other sources of and pathways for expressing "fiat."  If you, yourself had to put 2 + 2 together, would YOU go complain to that mathematician, saying "Look here, sir.  It's fine for YOU to hoard, but out here, we're running out of numerals!"  At that point, just who is kidding whom?

How much longer can this madness go on?  If we let the 1% employ bankers & politicians the same way they do gardeners, maids & nannies ... are we all doomed?

Currency can't become more important than the real assets and the clever transactions which currency denominates, when used at will by smart people. The scale, alone of modern fiat currency, after all, increasingly makes it only virtual record keeping. How did we get to the surreal state where transaction records became more important than the real transactions being tracked, and the people making those transactions?  Why are we still stuck trying to yoke our necessarily dynamic currency supply to static assets, instead of yoking it to the dynamic value of our own level of coordination ... i.e., to our organizational state, and hence to our adaptive rate?

Fiat currency value has to float, and depreciate, if a populous with increasing capabilities is going to accelerate the rate of pursuing their growing options ... not just hoard the virtual unit of exchange. One analogy would be the day when carpenters quit building houses, and instead only hoard tape measures - or "inches" themselves.  At this rate, someday we'll have a war over the exchange rate between inches and centimeters!

If a nation viewing emerging options waits for someone to tell 'em who "owns" the virtual methods for exploring those options ... it'll be too late.  They won't even get the license # of the real truck that drives off with their former options.

What part of "quality [including tempo]" of distributed decision-making don't hoarders understand? You can't hoard group agility, or adaptive rate.

We can hoard coordination capabilities ... but precisely by hoarding it distributed throughout our communities, not under the micro-management of any arbitrary subgroup.

Michael Hudson: Great Points, Some Still Missing

Michael Hudson on Fictitious Capital

We need more people capable of rethinking the processes they're trying to scale up, and actually exploring indirect methods that will scale ... because our current practices won't.

Michael makes many great points - except his suggestion that we do not want other countries to industrialize doesn't ring true. Since WWII we've consistently gone to great lengths to make China and many other countries into industrial, exporting powers. Are we changing our minds? Doubtful.  That would be schizophrenic.

The bigger issue that we're finally failing at is making our own population able to buy & utilize everything that we AND the rest of the world can produce. Not only that, we're failing to keep our group intelligence growing fast enough to demand insanely useful products, instead of cheap, intoxicating distractions ... including most of the trinkets sold at WalMart.  Not only are we voluntarily utilizing less, our remaining selections are declining in quality.

Did our form of national schizophrenia manifest post-WWII, with the assumption that we could ALWAYS utilize everything the entire world produced, while completely neglecting our responsibility to manage and scale up our own utilization rates?  Is it that simple?

We have the whole world making whatever they can for us to utilize, and willing to export whatever we ask them to.  So what are we DOING with our historic opportunity?  With all our extra time and options?  It's handed to us on a silver platter ... and we're failing to take the ball and run with it?  How long can we keep doing that, and why would we even start the habit of sitting idle, neglecting continuous mobilization?  Nothing is stopping us from being all that we can be ... except our own, collective policy choice.

Michael's also got it wrong about foreign countries lending us "money" by buying treasuries.  Pervasive confusion over that simple yet key point seems to be one of the main reasons we decline to seize our opportunities.

Yet he is right that other countries purposely depreciate their currencies in order to maintain exports to the USA.  However, the only connection between that decision and their own development is conscious policy. It's not an obligatory relationship. Buying our T-bonds is completely separable from both issues.

Other countries could all make more effort to develop their own ability to consume what they produce.  The only impediment to that is class-based hoarding in all those countries.

We really do have to save the entire world from it's own useless misers, who are distributed throughout all countries as the mindlessly-hoarding 1%.  The BEST way to do that is by setting an example of how to do so, by first saving ourselves from our own useless misers.  Methods drive results.

It boils down to the 99% everywhere allowing a tiny minority to wage a class war against humanity.  That small fraction are ignorant "traders" that don't understand they needn't even wage their war of suppression & hoarding.  There are even better ways for traders to benefit all, while also delivering even more real benefits to themselves than they can presently imagine. Their mercantile thinking is holding us all back, keeping us from being anywhere near what we could be.   Plus, we - the 99% - are the ones passively letting their trade lobbies get in the way of our own national aspirations.  It's our own fault.  If we're going to pursue democracy, we have to start acting like co-owners.

If there is intelligent life elsewhere in the universe, I hope they don't contact us until we sort this out. It's embarrassing. We can do so many amazing things, but we can't organize our efforts to increase our own adaptive rate? Seems hard to believe.

Wealth Doesn't Trickle Down – It's Hoarded Offshore, as Fiat Currency Credits

Wealth doesn't trickle down – it just floods offshore

So? As usual, the adaptive path is indirect. It's about neither curtailing currency hoarding, nor attempting to stabilize the value of currencies whose Fx & buying power must float. More directly, it's really about maintaining adequately distributed buying power for all citizens.

There are 2 approaches to solving this, and we're stuck in gridlock on the first one.

1) Stop the useless hoarding of currency that's already fiat? How?
(We've been at that for 100 years. Existing regulatory costs BY THEMSELVES don't scale, so we keep returning to the lunacy of suggesting no regulation at all! Something additional is called for. Besides, it's a bit silly to worry about running out of fiat. Which matters more, how much fiat someone steals, or what they can buy with it?)

2) Stop letting currency hoarders scare everyone into not replacing needed currency when & an as needed.
Those hoarding fiat are the same people who lobby most strongly to NOT let the buying power of their hoarded currency fall. They are the "Deficit Terrorists." In contrast, if enough buying power was always distributed so as to let workers efficiently consume what they are capable of producing, then:

a) excessive hoarding of currency would be self defeating;
(peak value would be in hoarding coordination capabilities, not depreciating paper;
hoard access to dynamic, not static value)
b) unemployment would not be a factor;
c) entire populations could continuously explore their options, instead of stagnating;
d) we would divert less attention to investigating, prosecuting & incarcerating currency hoarders.

If a bunch of dumb cells can make a functioning human body, then why can't a bunch of supposedly smart humans make a functioning national economy?

This ain't rocket science, by any stretch of the imagination. It's simple system dynamics.

Any systems or circuit engineer could make it work - if given a chance.

Why, in this day & age, Can't ALL Citizens See the Utter Futility in Our Aggregate Policy?

“I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. Corporations have been enthroned, an era of corruption in high places will follow, and the money-power of the country will endeavor to prolong it’s reign by working upon the prejudices of the people until the wealth is aggregated in a few hands and the Republic is destroyed.”
..., (attributed to) USA President Abraham Lincoln, 1863

That was in a day when wealth was still mostly perceived as static assets to be hoarded.

Few saw the timeless & complete dominance of dynamic value over supposed static value.

Today, people have explicitly written for decades about cost-of-coordination being the highest cost, and the implicitly obvious corollary, that return-on-coordination is the highest return.

Aka, teamwork easily trumps any amount of individual hoarding. Well Duh!

Given that coordination cannot be hoarded by individuals, only by aggregates, why on earth is our electorate so stubbornly ignorant about the ramifications of this simple conclusion? Why do we keep training & rewarding individuals to hoard negligible commodity value, while doing so inadvertently starves their aggregate of the insanely great return on coordination?  Our best & brightest know the present course won't work, and say so.

"Success follows the quality [& tempo] of distributed decision-making"

"We generate tempo by decentralizing decision-making"

So why don't we just teach that in Kindergarten?

It's one thing to be ignorant. To wilfully insist on remaining ignorant defines stupidity.

American's didn't use to be this stupid. Recognizing the obvious is taking too long. Have we quit looking?

Given our population density, we're in the process of a permanent transition from dominance of personal hoarding of assets, to aggregate hoarding of coordination capabilities.  That's always been true, since the dawn of life on this planet.  Yet it's 2012, and most of our population does not adequately grasp this simple truth.

In fact, our population is mostly still mystified by dynamic semantics, and the concurrent manifestations of density.  A confluence of densities is not funny.

Ponzicrats: What you Get When You Cross Gold + Melamine + Plutocrats

China Purchases A Record 100 Tons Of Gold In April From Hong Kong

Good luck with that. May be getting desperate, as they run out of ideas?

Gold may be seen as a good personal hoarding strategy for some, but only for local reasons that are always bad for the aggregate. It's basically giving into to private paranoia that further coordination won't be possible.  For aggregates, it's better - by far - to hoard coordination capabilities.

Aka, Chinese economy in the final stages of the largest Ponzi scheme ever devised

Conclusion? There's evidence that it's been 3.5 billion years since life appeared upon planet Earth, and "2 steps forward, 1 step back" is still the reality.

China will be fine, eventually, but ONLY after all the Benedict Arnold Plutocrats run off to Switzerland with all the gold. Then the serfs can get on with organizing on a larger scale.

Hoarding Humor

The funniest comic strip I know of is Zero Hedge. Here is a post that is particularly hilarious.

How To Hide Your Gold: A Bloomberg Primer