Misallocation previously showed up as a misspelling in auto-spellcheckers, now only malinvestment does so. That too will change in time.
Lacy Hunt uses the term misallocation here.
Misallocation in investment is say, building too much sewage processing capacity for a city. If the city needs a bridge, but the money is allocated to more sewage capacity than necessary, we have misallocation. Now, someday the city will grow and use the sewage processing capacity, but in the meantime we are short a bridge and processing plant sits idle.
Malinvestment is more controversial, for it is someone's pet project. Obviously those bridges to nowhere are malinvestment, they will never be used, those cities built in China that remain empty, or a $10,000 hot tub set-up used three times and abandoned in the back yard is malinvestment. Malinvestment is still rated "no such word" in English, even though the Anglo world has mastered the process.
Now, above I stated "the money is allocated to"... and this is where it gets tricky. No money is ever involved. The cost of the projects either way is underwritten by asset managers (managers of tallies ascribed to others.) For example, CALPERS is the California Public Employees Retirement System. CALPERS has putatively $300 billion dollars in asset values.
OK, but dollars are tallies, not money. As those "public employees" have tallies ascribed to their accounts for services rendered every two weeks, the CALPERS nominal value tallied ever rises. CALPERS then invests these tallies by trading the tallies for assets such as skyscrapers in downtown San Francisco. A nominal $100 million in tallies is passed to developers and Calpers owns the building and gets the rents, hoping for a gain.
All is well and good until the building begins to reflect market values, that is gets "marked to market" a market clearing step not allowed in 2008 and not allowed to this day. Accounting rules were changed to hide the facts, and so it is now far worse than 2008. Eventually there are cascading cross defaults wherein everyone gets creamed in their balance sheets.
Hapless retirees have pieces of paper with amazing numbers on them, but they are pretty much worthless, all of that "land-banked" real estate comes back on the market and valuations drop, rents drop (yippee for the self-employed!) yet the landlords are still taxed, because those do not drop, and paychecks get further hammered by new taxes and wages begin to drop or unemployment is expanded.
This all comes from lending money at interest, or on steroids, lending credit at interest. Simply delegitimize it. Like a gambling debt. The hegemon has no interest if it is paid or not. And who should go first, except the hegemon, for who is the biggest game in usury?
Feel free to forward this by email to three of your friends.
Lacy Hunt uses the term misallocation here.
Misallocation in investment is say, building too much sewage processing capacity for a city. If the city needs a bridge, but the money is allocated to more sewage capacity than necessary, we have misallocation. Now, someday the city will grow and use the sewage processing capacity, but in the meantime we are short a bridge and processing plant sits idle.
Malinvestment is more controversial, for it is someone's pet project. Obviously those bridges to nowhere are malinvestment, they will never be used, those cities built in China that remain empty, or a $10,000 hot tub set-up used three times and abandoned in the back yard is malinvestment. Malinvestment is still rated "no such word" in English, even though the Anglo world has mastered the process.
Now, above I stated "the money is allocated to"... and this is where it gets tricky. No money is ever involved. The cost of the projects either way is underwritten by asset managers (managers of tallies ascribed to others.) For example, CALPERS is the California Public Employees Retirement System. CALPERS has putatively $300 billion dollars in asset values.
OK, but dollars are tallies, not money. As those "public employees" have tallies ascribed to their accounts for services rendered every two weeks, the CALPERS nominal value tallied ever rises. CALPERS then invests these tallies by trading the tallies for assets such as skyscrapers in downtown San Francisco. A nominal $100 million in tallies is passed to developers and Calpers owns the building and gets the rents, hoping for a gain.
All is well and good until the building begins to reflect market values, that is gets "marked to market" a market clearing step not allowed in 2008 and not allowed to this day. Accounting rules were changed to hide the facts, and so it is now far worse than 2008. Eventually there are cascading cross defaults wherein everyone gets creamed in their balance sheets.
Hapless retirees have pieces of paper with amazing numbers on them, but they are pretty much worthless, all of that "land-banked" real estate comes back on the market and valuations drop, rents drop (yippee for the self-employed!) yet the landlords are still taxed, because those do not drop, and paychecks get further hammered by new taxes and wages begin to drop or unemployment is expanded.
This all comes from lending money at interest, or on steroids, lending credit at interest. Simply delegitimize it. Like a gambling debt. The hegemon has no interest if it is paid or not. And who should go first, except the hegemon, for who is the biggest game in usury?
Feel free to forward this by email to three of your friends.
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