# Philosophy of Local Time

Let us hypothesize on the notion of local time.

Existence of temporal order: For each concrete basic thing x ∈ Θ, there exist a single ordering relation between their states ≤.

We now give a name to this ordering relation:

Denotation of temporal order: The set of lawful states of x is temporally ordered by the ≤ relation.

The above is a partial order relation: there are pairs of states that are not ordered by ≤; e.g. given an initial condition (x0,v0) for a moving particle, there are states (x1,v1) that are not visited by the particle.

Proper history: A totally order set of states of x is called a proper history of x.

The axiomatics do not guarantee the existence of a single proper history: they allow many of them, as in “The garden of forking paths”. The following axiom forbids such possibility.

Unicity of proper history: Each thing has one and only one proper history.

Arrow of time: The axiomatics describe a kind of “arrow of time”, although it is not related to irreversibility.

A proper history is also an ontological history. The parameter t ∈ M has not to be continuous. The following axiom, a very strong version of Heraclitus’ hypothesis Panta rhei, states that every thing is changing continuously:

Continuity: If the entire set of states of an ontological history is divided in two subsets hp and hf such that every state in hp temporally precedes any state in hf, then there exists one and only one state s0 such that s1 ≤ s0 ≤ s2, where s1 ∈ hp and s2 ∈ hf.

The axiom of continuity is stated in the Dedekind form.

Continuity in quantum mechanics: Although quantum mechanical “changes of state” are usually considered “instantaneous”, theory shows that probabilities change in a continuous way. The finite width of spectral lines also shows a continuous change in time.

Real representation: Given a unit change (s0, s1) there exists a bijection T : h ↔ R such that

h1 = {s(τ)|τ ∈ R} —– (1)
s0 = s(0) —– (2)
s1 = s(1) —– (3)

Local time: The function T is called local time. The unit change (s0, s1) is arbitary. It defines an arbitrary “unit of local time”.

The above theory of local time has an important philosophical consequence: becoming, which is usually conceived as evolution in time, is here more fundamental than time. The latter is constructed as an emergent property of a changing (i.e. a becoming) thing.

# Fractional Reserve Banking. An Attempt at Demystifying.

FRB is a technique where a bank can lend more money than it has itself available (‘deposited’ by clients). Normally, a ratio is 9:1 is used, money lent vs. the base product of banking.

This base product used to be gold. So, a bank could issue 9 times more ‘bank notes’ (‘rights to gold’) than it had gold in its vault. Imagine, a person comes with a sack of 1 kilo of gold. This person gets a note from the bank saying “you have deposited 1 kilo of gold in my bank. This note can be exchanged for that 1 kilo of gold any time you want”. But it can legally give this same note to 8 more people! 9 notes that promise 1 kilo of gold for every kilo of gold deposited. Banks are masters of promising things they in no way whatsoever can ever fulfill. And, everybody knows it. And, still we trust the banks. It is an amazing mass denial effect. We trust it, because it gives us wealth. This confidence in the system is what is, actually, essential in the economy. Our civilization depends on the low-morality of the system and our unwavering confidence in it. You are allowed to lie even if the lie is totally and utterly obvious and undeniably without a shred of doubt a lie.

In modern times, the gold standard has been abandoned, because it limits the game. Countries with the most advanced financial structures are the richest. Abandoning the gold standard creates enormous wealth. Rich, advanced nations, therefore, have abandoned the gold standard. In modern banks, no longer gold, but money itself is the base. That is, the promissory notes promise promissory notes. It is completely air. Yet, it works, because everybody trusts it’ll work.

Moreover, banks no longer issue bank notes themselves, except the central bank. The ‘real’ money of the central bank is called ‘base money’ (M0 or ‘Tier 1’) and serves as ‘gold’ in modern banks. The ‘bank notes’ from the bank promise bank notes from the central bank.

Banks use this base money no longer to directly print money (bank notes), but something that is equivalent, namely to lend money to their clients by just adding a number on their account. This, once again, works because everybody trusts it works. But is has become even thinner than air. It is equal to vacuum. There is no physical difference whatsoever anymore between having money and not having it. If I have 0 on my account, or 10000000000000000 rupees, I have the same size information on the computer of my bank. The same number of bytes (however many they may be). I just hope that one day a tiny random fluctuation occurs in their computer and sets me the first bit to a ‘1’ (unless it is the ‘sign’ bit, of course!). Nobody would notice, since there is nowhere money disappearing in the world. Simply more vacuum has been created.

But, it gets even worse. This newly created ‘money’ (the number on an account of bank A) can be deposited in other banks (write a cheque, deposit it, or make a bank transfer to bank B). In this other bank B, it can again be used as a base for creating money by adding a number to peoples’ bank account. As long as a certain amount of base money (M0, or ‘Tier 1’) is maintained. As a side mark, note that bankers do not understand the commotion of the people in calling their rewards astronomical, since they know – in contrast to the people that think that money represents earning based on hard work – that money is vacuum. Giving a bonus to the manager in the form of adding a couple of zeros to her account in her own bank is nothing but air. The most flagrant case of self-referential emptiness is the bank that was bought with its own money.

In this way, the money circulating in the economy can be much larger than the base money (of the central bank). And, all this money is completely air. The amount of money in the world is utterly baseless. Since it is air, moreover an air-system that is invented to facilitate the creation of wealth, we can intervene in the system in any way we want, if we see that this intervention is needed to optimize the creation of wealth. Think of it like this: the money and the money system was invented to enable our trade to take place. If we see that money no longer serves us (but we, instead, seem to serve the money) and decide to organize this trade in another way, we can do so without remorse. If we want to confiscate money and redistribute it, this is morally justified if that is what it takes to enable the creation of wealth.

Especially since, as will be shown, there is no justice in the distribution. It is not as if we were going to take away hard-earned money from someone. The money is just accumulated on a big pile. Intervention is adequate, required and justified. Not intervening makes things much worse for everybody.

Important to make this observation: All money thus circulating in the world is borrowed money. Money is nothing less and nothing more than debt. Without lending and borrowing, there is no debt and there is no money. Without money, there is no trade and no economy. Without debt, the economy collapses. The more debt, the bigger the economy. If everybody were to pay back his/her debt, the system would crash.

Anyway, it is technically not possible to pay back the money borrowed. Why? Because of the interest rates.

Interest is the phenomenon that somebody who lends money – or actually whatever other thing – to somebody that borrows it, wants more money back than it gave. This is impossible.

To give you an example. Imagine we have a library, and this library is the only entity in the world that can print books. Imagine it lends books to its customers and after one week, for every book that it lent out, it wants two back. For some customers it may still be possible. I may have somehow got the book from my neighbor (traded it for a DVD movie?), and I can give the two books the library demands for my one book borrowed. But that would just be passing the buck around; now my neighbor has to give back to the library two books, where he has none. This is how our economy works. And, to explain you what the current solution is of our society is that the library says “You don’t have two books? Don’t worry. We make it a new loan. Two books now. Next week you can give us four”. This is the system we have. Printing money (‘books’) is limited to banks (‘libraries’). The rest borrow the money and in no way whatsoever – absolutely out of the question, fat chance, don’t even think about it – is it possible to give back the money borrowed plus the interest, because this extra money simply does not exist, nor can it be created by the borrowers, because that is reserved to the lenders only. Bankrupt, unless these lenders refinance our loans by new loans.

When explaining this to people, they nearly always fervently oppose this idea, because they think that with money new wealth can be created, and thus the loan can be paid back including the interest, namely with the newly created wealth. This, however, is wrong thinking, because wealth and the commodity used in the loan are different things.
Imagine it like this: Imagine I lend society 100 rupees from my bank with 3% interest. The only rupees in circulation, since I am the only bank. Society invests it in tools for mining with which they find a mother lode with 200 million tons of gold. Yet, after one year, I want 103 rupees back. I don’t want gold. I want money! If they cannot give me my rightful money, I will confiscate everything they own. I will offer 2 rupees for all their possessions (do they have a better offer somewhere?!). I’ll just print 2 extra rupees and that’s it. Actually it is not even needed to print new money. I get everything. At the end of the year, I get my 100 rupees back, I get the gold and mining equipment, and they still keep a debt of 1 rupee.

A loan can only be paid back if the borrower can somehow produce the same (!) commodity that is used in the loan, so that it can give back the loan plus the interest. If gold is lent, and the borrower cannot produce gold, he cannot give back the gold plus interest. The borrower will go bankrupt. If, on the other hand, chickens or sacks of grain are borrowed, these chickens or grain can be given back with interest.

Banks are the only ones that can produce money, therefore the borrowers will go bankrupt. Full stop.

To say it in another way. If we have a system where interest is charged on debt, no way whatsoever can all borrowers pay back the money. Somebody has to go bankrupt, unless the game of refinancing goes on forever. This game of state financing can go on forever as long as the economy is growing exponentially. That is, it is growing with constant percentage. The national debt, in terms of a percentage of the gross domestic product (GDP) remains constant, if we continuously refinance and increase the debt, as long as the economy GDP grows steadily too. The moment the economy stagnates, it is game over! Debt will rise quickly. Countries will go bankrupt. (Note that increasing debt is thus the result of a stagnating economy and not the other way around!).

The way the system decides who is going bankrupt, is decided by a feed-back system. The first one that seems to be in trouble has more difficulty refinancing its loans (”You have low credit rating. I fear you will not give me back my books. I want a better risk reward. It is now three books for every book borrowed. Take it or leave it! If you don’t like it, you can always decide to give me my books now and we’ll call it even”).

Thus, some countries will go bankrupt, unless they are allowed to let the debt grow infinitely. If not, sooner or later one of them will go bankrupt. In other words, the average interest rate is always zero. One way or another. If x% interest is charged, about x% go bankrupt. To be more precise, y% of the borrowed money is never returned, compensating for the (100 − y%) that do return it with x% profit. In a mathematical formula: (1 − y/100) × (1 + x/100) = 1, or y = 100x/(100 + x). This percentage goes bankrupt. For example, if 100% interest is charged, 50% goes bankrupt.

To take it to the extreme. If the market is cautious – full of responsible investors – and decides to lend money only to ‘stable’ countries, like Germany, which lately (times are changing indeed) has a very good credit rating from the financial speculators, even these ‘stable’ countries go bankrupt. That is, the weakest of these stable countries. If only money is borrowed to Germany, Germany goes bankrupt. Apart from the technical mathematical certainty that a country can only have a positive trade balance – essential in getting a good credit rating – if another country has a negative trade balance (the sum, being a balance, is always zero). Germany needs countries like Greece as much as it despises them.

Well, in fact, this is not true. A country does not – nay, it cannot – go bankrupt for money borrowing. Not if it is an isolated country with its own currency, being also the currency in which the money is borrowed. It can simply print money. That is because the money is their own currency based on their own economy!!!

# Deleuzian Grounds. Thought of the Day 42.0

With difference or intensity instead of identity as the ultimate philosophical one could  arrive at the crux of Deleuze’s use of the Principle of Sufficient Reason in Difference and Repetition. At the beginning of the first chapter, he defines the quadruple yoke of conceptual representation identity, analogy, opposition, resemblance in correspondence with the four principle aspects of the Principle of Sufficient Reason: the form of the undetermined concept, the relation between ultimate determinable concepts, the relation between determinations within concepts, and the determined object of the concept itself. In other words, sufficient reason according to Deleuze is the very medium of representation, the element in which identity is conceptually determined. In itself, however, this medium or element remains different or unformed (albeit not formless): Difference is the state in which one can speak of determination as such, i.e. determination in its occurrent quality of a difference being made, or rather making itself in the sense of a unilateral distinction. It is with the event of difference that what appears to be a breakdown of representational reason is also a breakthrough of the rumbling ground as differential element of determination (or individuation). Deleuze illustrates this with an example borrowed from Nietzsche:

Instead of something distinguished from something else, imagine something which distinguishes itself and yet that from which it distinguishes itself, does not distinguish itself from it. Lightning, for example, distinguishes itself from the black sky but must also trail behind it . It is as if the ground rose to the surface without ceasing to be the ground.

Between the abyss of the indeterminate and the superficiality of the determined, there thus appears an intermediate element, a field potential or intensive depth, which perhaps in a way exceeds sufficient reason itself. This is a depth which Deleuze finds prefigured in Schelling’s and Schopenhauer’s differend conceptualization of the ground (Grund) as both ground (fond) and grounding (fondement). The ground attains an autonomous power that exceeds classical sufficient reason by including the grounding moment of sufficient reason for itself. Because this self-grounding ground remains groundless (sans-fond) in itself, however, Hegel famously ridiculed Schelling’s ground as the indeterminate night in which all cows are black. He opposed it to the surface of determined identities that are only negatively correlated to each other. By contrast, Deleuze interprets the self-grounding ground through Nietzsche’s eternal return of the same. Whereas the passive syntheses of habit (connective series) and memory (conjunctions of connective series) are the processes by which representational reason grounds itself in time, the eternal return (disjunctive synthesis of series) ungrounds (effonde) this ground by introducing the necessity of future becomings, i.e. of difference as ongoing differentiation. Far from being a denial of the Principle of Sufficient Reason, this threefold process of self-(un)grounding constitutes the positive, relational system that brings difference out of the night of the Identical, and with finer, more varied and more terrifying flashes of lightning than those of contradiction: progressivity.

The breakthrough of the ground in the process of ungrounding itself in sheer distinction-production of the multiple against the indistinguishable is what Deleuze calls violence or cruelty, as it determines being or nature in a necessary system of asymmetric relations of intensity by the acausal action of chance, like an ontological game in which the throw of the dice is the only rule or principle. But it is also the vigil, the insomnia of thought, since it is here that reason or thought achieves its highest power of determination. It becomes a pure creativity or virtuality in which no well-founded identity (God, World, Self) remains: [T]hought is that moment in which determination makes itself one, by virtue of maintaining a unilateral and precise relation to the indeterminate. Since it produces differential events without subjective or objective remainder, however, Deleuze argues that thought belongs to the pure and empty form of time, a time that is no longer subordinate to (cosmological, psychological, eternal) movement in space. Time qua form of transcendental synthesis is the ultimate ground of everything that is, reasons and acts. It is the formal element of multiple becoming, no longer in the sense of finite a priori conditioning, but in the sense of a transfinite a posteriori synthesizer: an empt interiority in ongoing formation and materialization. As Deleuze and Guattari define synthesizer in A Thousand Plateaus: The synthesizer, with its operation of consistency, has taken the place of the ground in a priori synthetic judgment: its synthesis is of the molecular and the cosmic, material and force, not form and matter, Grund and territory.

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