Croesus Economics

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Man Bites Man! Rich as Croesus Economics?
There will never be enough gold to secure the value of the credit contracts we invoke in our
economic efforts to make revenue streams flow. If the venture does not seem planned to succeed
there will be trouble with the undue credit as was extended to support the economic activity the
trading connections are vested. Credit is an essential concept in market activity whether in terms
of "murder him now and I will pay you later" in Aigisthos’ criminal enterprise, or, as means to
amplify others resources with money fitted to any ethical enterprise making it go forward.
The agreements we make are larger, than the currency "greasing the rails" of their passing to
completion. We are each a trading connection in making such agreements, many are written.
Silver coinage is supposed invented by Argos’ tyrant Pheidon after 700 BC, half millennium
after events told in Homer's tales, and still more than a century after written. Such coins first
appeared and raced as new invention throughout the known world, from Mediterranean to China
Seas, as far as trading then extended by Silk Road and sail. Mid-sized trading agreements no
longer required the cost of scribes and courts, coins sufficed where Maldives cowry shells had
done for millennia in small trade.
The scheme to murder Odysseus is of larger value than those nuggets of vague purity. One needs
to note also that Aigisthos’ scheme as was the entire invasion of Troy all compounded before
coins were invented. It was of a time when “in-kind” trade was the restrictive norm in both high
value-added and low. King Croesus is supposed the originator first minting gold coins of purity
and weight more than two centuries after Homer wrote out those tales of Troy.
Gold is no solution to the hangover problems of drunken credit contracts national economies are
recovering from. The privilege of bankers was abused as agents of awarding credit. The moral
hazard for gain they engaged without their risk, only ours. Undue extension of credit was theirs.
Gold standard debate exists as an aberration of latent merchanitilist policy. Easily understood
rhetoric lays in its deceits, seen as useful tools to office. Truth is far removed from its arguments.
That is why Socrates resigned to drinking their hemlock. The rhetoric of his opponents he had
shamed in reason was of greater political utility than his finding truth. Socrates was charged with
heresy for his artful and profound seeking of truth exposing their oxymoronic orthodoxies.
Doubts emerged of gold’s actual function following the broad use of distributed paper bank notes
that had been invoked by needs of financing the Napoleonic wars. What Tooke underlines is
agreement primary function for industrial age commerce, even as new Bank Reforms were
formulated concurrent with the creation of the modern corporation legislation. The political
"when undue extension of credit, and its consequent revulsion, would be the correct description
of the facts of the case." Thomas Tooke, 1844
"Aigisthos the traitor promised him two nuggets of gold as a wage" - Homer, Odysseus, 850 BC?
“Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate.” - Andrew Mellon, Secretary
of the Treasury 1929-1933

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rhetoric confuses by a substitution of gold for what it represents, as fetish. The hobby horse is a
representation for the child, of its horse, no longer a mop. Gold can control where agreement will
be reached becoming restraint on transactions increasing the social cost of trade. The outcome of
metallism applied to credit contracts was in ruined farms, mines and enterprises, the storm
shadow on America Frank Baum exposed in The Wizard of Oz, resides in Mellon’s dictum.
As the political seasons wax to full strident volume the canards are sent quacking onto the stage,
about gold standards and fiat money restraint. One tide came with the kickoffs of GOP
candidates repartee. Jekyll Island references revived with the entire entrenched scare mongering
of Mr Hyde residing on Constitution Avenue. Metallism is an aberration having caused more
havouc than salve. It is the vif-gage of corporate revenue streams that will ease undue credit
loses bankers made; ring-fenced and mutualised by CDO’s to infect the real world economy.
Be assured there was no gold involved in the clearing of malarial swamps for the Panama Canal
or its recent widening. Paper money was used as referenced in contracts. Contracts of agreement
in exchange long existed before coin arose as cypher for them. Cuneiform tablets record these
contracts. The biblical shekel is reference to a weight of wheat not the coin of much later
invention. The majority of surviving papyri in monasteries recorded such contracts, as did most
surviving late Roman papyri; many fewer were poetry and learning of the ancients.
The abbots of monasteries were the largest preserves of medieval wealth arising from tithe. They
practised loans at higher rates than merchant usurers as these papyri are records. They did not
charge heretical interest however, but vif-gage, these 66-75% revenue shares of the land in life
secured these loans until the coins or in-kind were returned. Nobility chose more often to engage
the credit of the merchant usurer, at lower rates, where Jubilee was also available and practised.
The metallism debate is a formal wrestling of Sumos over a tortoise that survived the Napoleonic
Wars. Superpack sumo tortoises have indeed taken the stage. Without gold-bar tortoises "all the
way down" supporting the world they claim there will be inflation. The gold coin was debased
by tyrants as they imposed wage and price controls throughout its history, a most detailed
scheme devised by the Ptolemies of Egypt intrigued Caesar Augustus noting its ring-fencing
foreign currency trade to ensure exacting heavy tax. Such is practiced by prince and nations
since. Neither as “token of account” “medium of exchange” nor mining cost as commodity has
the value ever been stable, but arbitrary as governing has always needed. Every occasion of price
fixing induces a windfall for someone as the band of tropes start marching the political stage.
Gold standard monetary control is a call for price fixing. Sanguine calls for gold, like Mellon’s
choleric calls for liquidating the real economy, will ensure real economy value trickles down into
gold holders’ coffers. The value added by our social altruism participating in economic life of
corporations is called-on to selfish accounting, a harvest feast for gold holders, as income
streams of the real economy are pinched for plunder, just as gold standard has always done.
The debate for the gold standard question is current again. Supply and demand, paper and gold,
rentier and labour, communist and capitalist all are reductions to dualist irrelevancy when they

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are closely examined. Economics as science has its laws, derived like those of history; they are
highly selected rhetoric to fit intended purpose. A close and clear study of
history reveals strident bias for the elite tolling the labours of others,
preferably slaves, infests their rhetoric in debate from the time of
Hellenic first household formulations of oikonomia, "management of a
household, administration". Nations are collections of households but
such aggregates are much greater than their parts. The Greeks also used
conquest to cancel their credit agreements, trashing democracy to plunder by “noble” tyrant.
These economic laws are orthodox pretentions. Just as all sciences do have them, or just, because
of Platonic rhetoric subterfuge as science? That is a genuine question. Just as why gold and silver
commodity based money fetish intrudes when ancient trading peoples were perfectly content to
agree on cowry shells, or threaded abalone shell wampum working as fiat tokens of account, so
as to facilitate their trading? A slave purchased in Mali encumbered 60,000 shells until 1910.
Traders had simply invoked by mutual agreement means to facilitate their needs for reducing
large transaction costs. Smaller trades required smaller denominations which coins suited.
Otherwise there is no need for metal coin though numismatic art has its own attractions. Art is a
value added, expensively certifying the origin and authenticity needed. Art as money has worked
very well, as have credit contracts. Though effective and pervasive artifact, the credit contract
has been excluded in discussions of money and inflation, a real history left unexamined.
Doubts emerged of gold’s actual function following the broad use of distributed paper bank notes
that had been invoked by needs of Napoleonic Wars and industrial age commerce, even as new
Bank Reforms were formulated concurrent with the creation of the modern corporation
legislation. This confusion arises by a substitution of gold for what it represents. The hobby
horse is a representation for the child, of its horse, no longer a mop. Midas fetish prevails.
Confirmed delusions have continued and inspire a most unfortunate pursuit of economic theory
by rhetoric substituting for science. The factual issue of gold in history undermines supply and
demand models among many others and those fallacies root into the foundations of economic
thought from the Physiocrats forward through Walras and Mises to even Minsky. They have all
been fed on the bias historians spread and derived their patterns and understanding accordingly.
Rhetoric left real questions unasked. “We want to know how the Romans avoided that condition
[20th cent inflation] for so long without knowing any of our modern economic rules.1
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Seemingly the Cato Institute has not read Plutarch's Lives. Cato’s self disembowelling suicide
did not pose defeat of a tyrant. War-making seemed necessary resort to defend from self-serving
elite claiming their rule as democratic over a 75% slave population whose economic output they
reaped. “The problem of wealth and poverty was regarded by philosophers as a question of
1
Peter Temin, MIT 2009, points out careful history exposes Roman “rampant inflation” actually was 1.16% rate over 400 years
only in times of plague and wars briefly reached 3.6%. Gold coins went from 8 to 4 grams and silver was heavily debased.

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personal morals,2
” in the Hellenic World. It is on that same note of ethics Adam Smith started his
parable of the Invisible Hand, in Moral Sentiments, not “greed is good” of Gordon Geko rhetoric
that has overtaken banking business ethos in our world. Socrates suffered such ethics. Rule of
law depends on ethics. Adam Smith was deeply concerned with the ‘agency problem’ on similar
grounds of ethics and morality being pressured by temptation of transferring risk to others for
personal gain. The driving force of economics is social, as the argument of transaction costs, and
balance sheet value of trading connections lays in the belief in a warranted extension of credit the
trading connections are willingly making in their belief in the company enterprise.
There in is found the necessary altruism referenced in E. O. Wilson, and the heuristics building
that decision referenced in System One of Kahnemann. The Modal Geometry traces that building
of value added by that real economic process. The credit contract in all its forms is the key to
building or destroying the value intrinsic in the company, or any collective human course.
History refers to these credit agreements existing even before there were coins of silver or gold.
There is greater wisdom shown when mothers tell their children to “play nice, now.” When the
trading connections of any corporate enterprise agree to "play nice" together, and then do, that
entire body politic achieves power far beyond its sum of force. It creates greater value than the
sum of its parts. Canals are built to humbly pass pyramids, conquer malarial swamps, and
"railroads" will be made to span planets.
Fundamentally trading connections have been unreferenced in economic theory. Though, their
connectivity is essential basis of all trading. Economics orthodoxy remains ignorant without
query into the subject. Our Modal Geometry is the first to succeed in equating this fundamental
power to the real firm and the real economy. In creating our real tools out of the “risk price” of
equities we reasonably discern the “likeables” that behave quite well, the best investors hope for.
Our reasons for having any equity in our portfolios are clear, concise and consistent. The equities
we hold are “likeables” tending to gain 67% of the time. We do not make stock prices but can
reasonably respond to stock price tendencies, by our knowing the price of risk, the downside, and
buying and holding accordingly. That is new fundamentals from theory we have put into policy
obtaining 29% IRR average. Know What You Have. Have What You Know
Our view is risk averse. Of course we require a fee for doing that. Mail us for our help.
Ernst and Hans Goetze,
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2
M Rostovtzeff, Greece, A History of the Ancient World, 1921, translated 1963

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