June 8, 2012


Credit trade arbitraging 
Money and finance  are twin face of an economy –a basis of development in modern societies .Not many  knew an economy is subdivided into two based on this  dual purpose category  .This subdivision in the long run  gives birth to dual macroeconomics .This comprises of monetary and credit system .Redistributionism  believed since they play a different role but similar objectives facilitating economic development  , they should each be given their separate autonomy inasmuch as we have recognized their separate but complimentary role strictly for ease of quality discharge of their obligation .

Though money and finance are strategic twin  faces of an economy ,truly speaking they do not reason the same due to the nature of risk transaction involved .The modern societies have not come to term  with it and the least they can do is to virtually reform everything and how viable will they be? A monetary system and a credit  system should operate differently .But because almost every economic agents that are involved in the monetary system have also been caught in the web transaction of credit system buying and selling   debt to either  prosecute or bail out marginal project depending on timely investment decision   .Along the line , due to lack of effective model and poor perusal of change cycle,  this dual purpose or twin faces were complicated  together in modern society as the financial system even though have mingled for millennia .This was instrumental to unprecedented human prosperity and also tussled with  re-emergence of boom and burst cycles in an economy has proved otherwise .
Initially , the dual nature of an economy had long been recognized long before the merging bias by modern economists because credit and money grew slowly with the first civilization in whatever form they might be and the  first generation whose cradle arts and crafts  were instrumental to later development  .This changing motive was dictated by moral precedence of economists and policy habits later disputed by successive rationalist economists .The dual model purpose still today has long been neglected  .It is true that if we subject our financial system in to intensive study perhaps by public commissions seeking to ascertain  the quality in the discharge of their obligation ,we would however found them wanton with this original device. Economic crisis everywhere is a proof   .This requires not regulatory changes really per say since its abets inflation should be deemphasized , without a perusal of its effect on inflation nor does it require a reform really but systemic changes not reforms needed to put back the financial system on track.
The persistent modification in structure and the very objectives of this volume stresses  vital reform not needed but rather systemic changes motivated to reposition the financial system fairly well as the common asset of the public .We have come to believe that the merging bias might not be the problem really but insensitive pawn brokers and the  economic vampires who spill blood of the poor and constitute social threat to economic growth . The inherent inequality of wealth that Marxism admits is the fundamental erosion of social sanity is also the  very primogeniture and everlasting patrimony of business cycles .  Revamping the financial system models and modeling character is central to effective resolution of man ’s greatest economic challenges . Nothing can be compared to efficient financial system in which everyone is represented not one yoked by the repressionists avoiding a large scale operation and undue patronage of ponzi scheme popularly regarded as the financial system being run today is a task that must be done for the problem not to persist and heavily curtailed even beyond the confines of mainstream banking for the good of unsafe  posterity  wherein we are headed .
The primordial role of microfinance is simply to strangulate and possibly eradicate the credit trade arbitraging a worst form of development arbitraging ever noted bud nipping its syndrome and banish this arbitraging noted in modern societies .Those marginalized  from formal sector yoked with high indebtedness need not  have the same mentality as those who profited heavily from the ponzi scheme  .
                                    Merging Bias : Credit Trade Arbitraging ( CETARB)
The dual face of an economy however from the antiquity to the modern times basically shares this linkage .Credit income which is to draw from surplus[savings ]  mobilized is the super structural  linkage of the two faces but the system of national credit income account  (SONACA)  hardly exist and has not been considered even for once in the much same way in which we have recognized system of national  income account  .In America , Simon Kuznets  opened the way and gave us the latter .Who will bail us out of this knowledge theft haunting humanity and humiliating economists worldwide ? Hence all economic crisis can be resolved . This neglected system is the most important resource and the final arbiter to bridge inequality of wealth existing in human society  .That is the original intention of market redistribututionism  .
A sound financial system rests largely on both legs but not so with the whole [dual system]  jumbled together today  .It can not be ignored that both legs occupy the same level of importance to human body .An amputated financial system whose credit economy is strictly cut off to be dominated by inefficient banks can never avoid business cycles .The financial system worldwide is resting on only one pony trick and the capacity of an amputee is at best inadequate to support the level of market activity vital to ensure   desired growth of an economy  protruding from actual growth of a nation ..To boost desired growth not volatile  GDP growth and bridge against this arbitraging which ordinarily occurred as a result of lack of  effective dual macroeconomics model  , we must perfect the  system of national credit income account [SONACA] first and its GAP[GDP] co-efficients bridging Kuznets missing link [KML] , for a sound deregulated  financial system which deals with circular flows of fund in a redistribututionist economy  as opposed to non-redistributionist economy to be harnessed  to serve as the common property of all a sundry .The perfection would give us a robust credit economy and therefore the attainment of dual macroeconomic stability is possible to effectively counter business cycles for universal development not arbitraged development .
At the time the monetary and credit systems were lumped together the pawn brokers and the usurers who have taken over the domains of the fraudulent system  totally failed to accommodate the unbankables and marginal borrowers not because of lack of credit history  or something but due to  poor banking model whereas the marginalized segment that control the  population base which is the real wealth and not the capital base controlled by wealthy class which is the nominal wealth have refused largely to relinquish their hold having  profited largely from the arbitraging trauma that supplanted the system which is the fundamental causes of economic crisis in all of human antecedence .There is no alternative unless those excluded from mainstream white bowl of porridges to be eaten and consumed by all  be fairly accommodated .That both must be capitalists and owners and workers is the sole essence of a neomarxist era  .These porridges provided by nature must be consumed by all humanity not for capitalist prosperity but for  universal or equalitarian prosperity .
To restart free market economy all over again ,  which presently does not exist , we must go back to the basic and create capacity for the two legs of macroeconomic body  each with its own autonomy and ethonomy to walk effectively  and perfectly well and not like an amputee whose life dreams were long truncated by terrible landmines – Then it cannot only crawl but walk , stroll, then  jog and later run like a gazelle or greyhound ,slow down when it pleases and then speed up .Right now has not yet started to crawl let alone adjust to walk  and the entire flexibility isn’t just there and a major reason behind intermittent financial turbulence  that comes not once again every century , with the emergence of the great depression of the 1930s to occur  twice or thrice even in a decade .Rampant economic crisis  shall be a thing of history when every one else  eats from this bowl of porridge .
This remains the fundamental aim of neomarxist era to be maneuvered through the instrumentality of market redistributionism and microfinance .To redistribute wealth in this context , we can crush the arbitraging mendacity that separates indigent men from development market and the inequalities that causes inflation –a fundamental economic problem .This is a new dawn in the history of macroeconomic study and of mankind making the world a safer and a friendlier world to live .Here , we have come ,  the intention of the book is known , let us now begin from the scratch .
Next article - THE  NATURE  OF MONEY

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