The Great Bush Conspiracy - OK and tell Santa I want new boots

All this talk about China losing money, Russia government destabilization due to oil prices and the collapse of the US stock market - certainly Tony you are not saying... the 'C' word. No I am not saying it was a conscience conspiracy. If you have not read my blog from when I started talking about the market and stump burning then this next piece may be difficult to understand.

Why is a book or a movie popular? It becomes a block buster because it is popular. Nothing more and really nothing less. It is because it is. A very Zen approach to understanding. Let's use some logic. Let's start by saying I am wrong. I have no idea what I am talking about. Let us assume for a moment there is actually a way to measure movie popularity. Many in the industry think there is. When a movie is going to cost $100 million to produce a tremendous amount of vetting goes into the movie premise before it is begun. Focus groups are assembled. The exact correct star and location is identified. Then the movie is produced. If this method is such a science then why is it not repeatable. Consider for a moment any major failure in a movie - Rocky V or Cleopatra something of this nature. Why? Why, with all the preparation did the movie fail. Then take into consideration something like Napoleon Dynamite or the Blair Witch Project. Two movies created on a whim with low budgets. They had cult like followings. Was there a conspiracy? I do not think so.

Here is where it gets difficult. Classical thinking of the world around us suggests that if we place a sphere on a ramp it will roll down the hill. This is mostly true. But I think we miss a critical component to this problem. I am not trying to redefine Physics but maybe I am. At the quantum level there is a constant in which things happen. This constant is called Planks Constant. This constant defines ultimately how small something can be before it can be no smaller. Let us assume that this constant is true for us who measure the object. In other words, by allowing us to measure the constant we actually bias the constant. A sort of relativity not of speed or gravity, but a relativity of size and measures. What if we were the size of a brain neuron. Would we experience the same Planks constant as we do as humans? And if we were a planet, would we experience the same sense of measure as we currently do. In essence if Jupiter had thought, would it see me as a quantum participant on earth? Tony, Tony, Tony.... Jupiter does not think.... Good point, but systems are divisible and living systems do respond.

So let's go back to the stumps. Assume for a minute that I have a large number of very small sticks surrounding the stump. This sticks are pieces of limbs that have fallen from the limbs that I had burned. How long and how much energy do I expend placing these items on the fire. As opposed how long does it take me to place a limb of equal mass on the fire. Time and energy are not separable from the mass because there must be coherent placement of the sticks in order to exert flame on the stump. Both the small sticks and limbs are critical to the burning of the stump at least in the beginning because the fire has not yet begun. And the critical piece to the puzzle is actually the amassing of the little sticks in the right time interval to start the fire. Once the fire is going, adding or subtracting large logs will determine the fire to some degree. But a many small sticks can continue to do the same thing.

So how does this apply to the crisis. For many years the US amassed many small sticks. The US did not intentionally sell too many T-bonds to the Chinese. The US did not with intention define the price of oil based on the dollar. It was the repetitive purchase of oil with dollars that allowed others to accept the de facto standard. Russia will argue in russiatoday.com that nationalization of the oil fields was critical to control monopolistic behavior of individuals. What they did was create an even bigger log to burn. This fire does not effect the one individual but rather the entire country now. China spent tremendous energy keeping its currency low to boost foreign trade. Because of this behavior China held a large number of US dollars.

So what was it that Bush did that allowed the financial storm to ensue. NOTHING. Yes there was little to no effort on the US to stop the behavior. Bush and Bernanke effectively allowed the invisible hand of capitalism to guide the market.

OK once again Tony you are wrong. There was a concerted plan to make all this happen. Think about this statement. The next thing you are going to tell me is that is because of these concerted efforts that people around the world hate us. Here is where you need only read russiatoday.com for a moment. Russia works diligently in their own interest. Their actions are presented in the best interest of the world, but never are their actions in opposition to the Russian position. Consider that, everything the US does is in the interest of the US. Everything that Russia does is in the interest of the rest of the world and not to just the benefit of Russia. How egalitarian of them.

So how is this for an answer instead. As humans we measure the macro level of the economies and have only the power to manipulate the largest of conditions. Whereas the real functions of the system occur at the quantum level. In other words, the market is driven because a mother buys a pet rock for a popular kid at school. That kid happens to think it is cool and takes it to school, in which all the kids start getting the pet rock. Lo and behold the event because a media showcase and the pet rock becomes a national sensation. This is scary to many people to believe. This means things are beyond control. Try as we might we may at best bias conditions but we do not control them. If we do not control them then we can only predict them to a limited degree. This knowledge goes back to even the Bible. Consider the Jews in Egypt. Why were they freed? Because the king heard of the prophecy, he acted by having first born sons killed. That policy in turn resulted in Moses being reared as part of the Pharaoh court. So the very policy that was implemented to control the liberation of the Jews actually created the situation that allowed the Jews to be liberated. It is a Bible story but I think we all get the point.