Explaining the human energy extraction system, also bonus “Armed Conflicts” Question (with pictures)

Explaining the human energy extraction system, also “Armed Conflicts” in that system (with pictures)

alice03a

By Kolin Evans

Introduction

Lets zip right into it.

This document is for learning, I also implore anyone reading to consult the most “intelligent” economist you know and come back and make any of this look silly.

So I’m arrogantly saying I’m more “intelligent” than the smartest economist you know alive, so please link me to contradictory evidence that makes me look stupid.

first we are going to have to accept that some people outright do not believe that the current human configuration  system (1890~2015~) is an energy extraction system.

as much as that actually amazes me, I have met some of these people on various social media, and I can only put this down to some sort of  information disturbance or willful “hopefulness”?

regardless this document will still be of use to you as a interesting curiosity that you won’t be able to explain, like one of those images that seem to have no start or end to the illusion.

 

The “Capitalism” human energy extraction configuration system. (broad overview)

Please observe the first picture, corresponding images will further explain.

capitalism_WP_circled

The Image is pretty self descriptive:

  • The corporate issuer issues energy tokens, sometimes called “Money”
  • This issuance is a Debt (as we will see in the next simple images)
  • The issuance is in the form initially as a “Reserve Ratio” or “Open Market Operation” “monetized” issuance of a Bond.
  • Then the humans in he configuration system “self manage” (the market system) the energy tokens.

Important parts to NOTE/Learn –

  1. you will notice a theme throughout, the more economic activity = more energy extraction, this is a growth % system. 
  2. Humans self manage the energy tokens, they have freedom to buy sell or conduct business this is complementary to the system.

 

Reserve Ratio multiplication.

observe Image “B” below.

_BProofofDebtThis image shows you the Reserve ratio version of debt issuance ( a simplified scenario) now please note:

  • The key interest rate from the FRB to the “Key Reserve Multiplier Institutions”  these institutions may be termed as “Commercial banks”
  • In this image it is just 1% – however this is the “Interbank rate” in the “Reserve Ratio”
  • Note that actuall “reserve” images as this image:

reserve

  • So stay with me here, this is a very simple system, the “Reserve ratio” “Reserve” is just a token that is then multiplied by market demand at a certain ratio.
  • In this scenario it is for {10x} so it is a {1:10} ratio of multiplication – observe this in the image above.
  • The key point to remember is that this first issuance reserve for the “Reserve ratio” is a loan with an “interbank interest rate”
  • The shareholders of the “FRB” are usually cross majority shareholders of the “Reserve Multiplier Institutions” so everything that is extracted from the money supply is “profit”

Pause – Right now some individuals are going to ask a question here – and say “but a deposit can be added to reserve ratio” exactly right, however, don’t get too excited, that deposit was a debt issuance from a corresponding “Reserve Multiplier Institution”  i.e if you have “money” it was primarily only issued in one of two ways, if you deposit that “money” it goes to reserve, you earn a rate this is because you are adding to economic activity, so you can see if you simplify the process there is a reserve ratio on a % this means in a sense “the bigger the better” however the issuance reserve came from the issuer AND the key point (look at the picture) this issuance has an interest rate attached, it is a loan, so any “Reserve” regardless of where it came from is subject to this rate.

The only possible scenario where a deposit would not be subject to the Reserve Ratio interbank interest rate is if say institutions took deposits of gold at 0% interest rate and used these as reserve, but even then they would multiple that by the reserve ration and earn “interest” (real work capacity) on that reserve, this net unlikely effect would just cut the “top” off the pyramid, however majority shareholders are cross owning both sets of institutions.*

* I’m only talking about this to try to make clearer that deposit that add to reserve ratio come from somewhere not suggesting this as any sort of alternative.

 

The end of the document?

Realistically this should be the end of the document, there is not much more the say, however I have some more information that is relevant and important, so i will add to this document and seek to explore some other important aspects, any intelligent functioning person should be able to work out from the proceeding that the issuance is in effect a “extracted % on any economic activity”, however lets look at some very important aspects of the human energy extraction system.

 

Proof of Human Energy.

observe the image below, like to call this “Proof of human energy” because of the nice link to Cryptocurrency.

Sumary_ProofofDebt

Proof of human energy principal.

  • At the human level there needs to be demand for energy tokens so that the “multiplier institutions” can multiply them from the “Reserve” they have.
  • The proof that this demand is associated to human energy occurs though the “proof of human energy” system.
  • I define “human level” in the same way I define “human energy” so this will encompass human companies and corporations, any derivative of human energy, up until a company is fully robot and non human, managed from concept and inception this definition is relevant.
  • The Proof of energy return principal is a key aspect to credit creation of energy tokens, without which, there is no proof of human energy for the energy tokens, humans must mark a document and go though a process to prove the ability to repay the energy tokens with human energy + interest and to prove that the energy tokens are going to humans with human energy to repay the issuance.
  • It is important to note that this signature proves that human energy has been associated with the energy token loan, and proves that the human states they are able to repay the human energy + interest.
  • This human proof (commonly a human signature) is the the Proof of human energy principal.
  • Without this, new energy tokens could not be loaned into existence. (in theory)

Points to Learn – Human demand for energy token “Money” debt is what causes multiplication of the key reserve (which is also a loan.)

The frequency of energy token issuance (micro)

Another important aspect is “Frequency” of issuance and economic activity.

Sawtooth_Wave_issuance

  • When a human signs a human signature or otherwise proves that there is human energy present this allows new energy tokens to be issued as a loan.
  • This loan is over a “time period” i.e it is to be paid in ongoing terms to the future.
  • In the “future” and in an ongoing way the principal is returned + interest, So for example it could be issued in “seconds” and paid back over “years”.
  • If we undertake a basic analysis of the way in which energy tokens are issued and subsequently returned, it is a basic “Sawtooth” Frequency pattern.
  • Notice in the above image the quick issuance then the return over a period of time, this of course can be non linear so the “Sawtooth” can have a different “shape” however this is the basic frequency.
  • We presume and as history shows that “Capitalism” is a “successful” way to issue self managed energy tokens, so therefore many of these issuance frequency waves go out into the “Capitalist” society of humans and the energy is paid back in a free flowing way as humans self manage the resulting energy tokens.

Points to learn: This occurs in a “free market” way based on demand, also key multiplier institution are in a mild “free market” competition.

 

Introduction to the Larger Macro frequency of energy extraction.

alice04a

wavezoomin

How Reserve availability to key multiplier institutions effects lending of energy tokens into existence.

  • The key to reserve availability is the interest rate of return that the Federal Reserve Bank (FRB) demands in its loan to the “multiplier institutions” this is also the key to the availability of energy token lending, it’s sometimes called the “interbank rate” it is the rate of return on the reserve that defines the “Reserve Ratio”
  • To explain the larger wave pattern cycle we need to go back to how energy token reserve is issued from the Federal Reserve Bank (FRB)
  • The FRB issues the master reserve to the “key multiplier institutions” (sometimes called “Commercial banks”) , these institutions then multiply that reserve of energy tokens to the people based on demand, with proof of energy return (usually a signature for a loan)
  • The key to reserve availability is the interest rate of return that the “Federal Reserve Bank” (the issuer) demands on its loan to the multiplier institutions, this is also the key to the availability of energy token lending.

FRB_wavecycle

Analysis of the above image notes that the interest rate displayed is the rate that the Federal Reserve Bank (FRB) is giving to the key multiplier institutions.

The institutions are represented here as just the reserve symbol:
reserve

The reserve that the multiplier institutions hold is in effect what allows them to make loans, by multiplying this reserve based on human demand.

In the most basic terms the process transpires as such:

Less energy tokens “Money” available scenario:

  • The “FRB” (issuer) demands a higher interest rate of return back from the key institutional multipliers on their loaned reserve.
  • This effects the amount of available reserve the institutional multipliers have.
  • Then there less ability to multiply from their reserve.
  • in effect there is less ability to lend energy tokens, as they “pass on” this rate and it stems economic activity due to higher extraction.
  • Observe the Image of this, 5% rate of return and the wave cycle at a contraction.

More energy tokens “Money” available scenario:

  • If the “FRB” (issuer) lowers the interest rate of return to the multiplier institutions, less reserve goes back to the “FRB”*
  • This means there is more available reserve.
  • Then this allows the institution to multiple this reserve allowing for more lending of energy tokens based on demand at a lower rate, pushing economic activity due to much lower extraction.
  • these are “good times”
  • Observe the Image of this, 1% interest rate of return and wave cycle fully extended.

*Note – as you will see a lower rate means more activity, so you will see how this balances the extraction system, remember the ratio is a ratio of % so less % on more activity is roughly = to higher % return on lower activity, if you can understand this.
So it is an accurate statement to say in effect:

  • Lower interest rate of return from the FRB = more available reserve for lending.
  • Higher interest rate of return from the FRB = less available reserve for lending.

(all lending is based on human demand)

 

The “Business cycle”

FRB_wavecycle_econ_activity

Observe this simple image and note:

  • “Capitalism” works on many dynamic vectors though the “self management” of human energy where it can occur.
  • Once energy tokes are issued through these many small frequency loans, the energy tokens can be put to work, invested, re-lent etc, it is essentially a “free market” however, this is a free market controlled by its issuance.
  • In effect if there is less issuance then there is less human energy activity, if there is more issuance there is more human energy activity.
  • In the time when there is more energy activity there is more human development and the opposing force is also true.

however it is important that development outside this system of control/extraction does not occur.

 

Introduction to human energy extraction methods.

1book28

 

The Two (2) primary vectors that drives energy accumulation to the issuers in “Capitalism” with “energy tokens”

 

Vector One (1) for energy accumulation “Interest.” (working energy)

FRB_wavecycle_interest

  • “Energy tokens” in the “Capitalism” Configuration are exclusively loaned into existence. (as we have learned)
  • When the “Federal Reserve Bank” (issuer) adjusts interest rates (on the reserve) to its key institutional multipliers, that effects the volume and velocity of energy tokens as are loaned into the system, simply because they have to “return more” of the “reserve” and the higher or lower passed on rate of return lowers or raises direct human energy extraction.
  • At a low interest rate, in a system that is functioning, there is generally more loans and more activity and interest generated.

This interest on the energy token supply of the whole configuration flows back to the institutional multipliers and then onto shareholders at the FRB Federal Reserve Bank, which are usually shareholders of both institutions, also the direct “interbank” rate is passed onto the central issuer.

Things to learn  – Observe the image:

In the “Good times” of more energy token loans, there is increased volume and velocity and consequently also a ratio of more concentration of energy flow back to the source of issuance, this is specifically in the form of interest.

 

Vector Two (2) of energy accumulation “Asset acquisition.” (packaged energy)

FRB_wavecycle_assests

 

When there is more ability to lend energy tokens under a functioning system, there is more volume and velocity of energy tokens flowing, consequently some of that human energy goes into the expansion and creation of packaged energy goods.

examples of packaged energy:

  • Durable goods auto transportation.
  • Human creative ideas, new interventions, products.
  • Property new built houses.
  • New production centers.

All these packaged energy assets come as a direct result of humans being able to access and self manage their own energy tokens.
Then as the FRB “Winds in” rates to its reserve multiplier institutions, consequently less energy tokens flow into the system, due to the drop in lending and the growth that was sustained dries up.
This is due to the “burst” “bust” nature of the energy token loan system, really a consequence of the larger wave frequency.
The resulting “bust” means that key institutions that issued the energy tokens can make direct claims on the packaged energy that resulted from the contract and loan. (see proof of human energy)
The energy loans were “secured” by the packaged energy assets in many cases.
So the key institutions take ownership of the packaged energy assets and either “sells” them for energy tokens (as a more liquid profit) or controls these packaged assets if they are deemed useful.

Some readers may contest that claimed assets are not always “profitable”, I’d suggest thinking about the difference in the interest rate given on reserve and the fact that reserve multipliers are in effect creating energy tokens, the result is everything above the initial rate on the reserve “interbank rate” is profit for the “reserve multiplier institutions ” and  so analyze that aspect and re run the analysis in your mind.

 

A question; Did armed conflicts or different systems ever threaten our human energy extraction system, also do the energy extractors have to “pay” for the war, is war a cost for the issuers?

Someone recently asked, do armed conflicts and wars cause a loss to the issuer?

for example are wars a direct “cost” to the issuers and energy extractors of our human configuration system?

The answer is really in the information above -and can best be summarized like this:

the energy extraction system works by extracting a certain % of energy on all economic activity.

War if it generates “economic activity” and a bonus “government debt” is not exempt the only time that a war could be negative to this human configuration system is if it threatened the configuration system itself, and the only way this could happen is through internal restructure of human configuration systems.

in the case where a defeated nation can not “pay” they have assets seized.

The only conflicts that i know of that were of possible threat to the configuration system is the Second world war, eventually Nazi Germany would have put in place a different system, but likely it would have worked in a very similar fashion to “Communism” in that it would probably been a mix of energy tokens and extraction, who knows we can only conjecture.

Soviet Russia used an alternative extraction system which was the “Pull keep” method  that did not use energy tokens and was not “self managed” but more centrally directed so this is an example of a system that is different to the today still prevailing extraction system, however there is conjecture that the Soviet system was also having its links to many similar friends of “Capitalism” so it was just a different form of energy extraction ( all be it , less complex and more direct or “honest”) (if there is such a thing as a “honest energy extraction system”)

in other words if you really want to be clear on this question,  look upon the larger wave cycle system image under the heading “the business cycle” a war, a real conflict in effects shifts this cycle.

That is all that occurs, because the resulting debt burden might effect economic activity which has to be then “offset” by lower rates, which is an attempt to keep the extraction system viable, and this has always been successful.

So the answer is a most certain and definite “no” no cost to the issuer and extractor (so far), all wars are “paid in full” by the citizens of the society, the debt if it is a “government debt” gets added to the “government ledger” and has to be repaid though Tax or other means, there is no cost what so ever to the issuers, in fact the issuers garner their normal % off this “debt” so in effect war is mildly profitable to them (all be it potentially slightly risky) the only way it could potentially effect the energy extraction system is if the burden of that eventual debilitating debt  causes the host nation to implode socially or seek alternatives.

however you need only observe human social behavior to see humans are robustly resilient in their ignorance and information control, so this burden can be quite high with no negative effect on the extraction system.

 

 

 

 

 

 

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