Market makers: How do you extract energy from the economy?

How do you as a market maker extract energy from the political economy? First, under your role within the State. You are the State. Bankers, lawyers, traders, and commodities owners and producers are the State. Within this group is held the philosophy and narrative for the extortion of the underlying political economy.

When I say extortion, I don’t mean to qualify it in a negative way unlike the woke squad on the political left. Extort is what it is: the ability to get the most out of a system or process at as a low a cost as possible avoiding or mitigating any restrictions. This ability to extort in the least restrictive environment is the lynchpin that ties statism to anarchy. Where nothing is above the State is an environment of optimal anarchy.

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Below the anarchist-statist space lies the environment where the market maker optimizes extortion. It is from this space that the market maker extracts energy by diverting money from producers, converting it to State currency and exchanging it between traders in the form of bonds and derivatives. The primary tool for facilitating this conversion is government.

Govern equals rule. Ment equals mind. Mind governance agents (politicians, elected officials, agency directors) are put in place to carry out the following:

1. To create strategies for implementing the philosophy and narrative that society should follow.
2. To create an executive or administration that maintains law and order via executive orders and coercion.
3. To create a legislature that writes broad facets of code.
4. To create a judiciary whose purpose is to settle controversy over how executive orders and legislation is to be interpreted.

The executive, legislative, and judicial branches are the three branches of mind governance that facilitate a transactional political economy from which energy can be extracted from the consumer-taxpayers.

In the political environment, there are two strategic positions that the market maker should occupy. First, the market maker should look like the “bad guy”; the dark knight who is held culpable for the ills of the political economy. It is best that the market maker appears regulated by government rather than an architect of government.

Should the majority of voters conclude that an allegedly democratically elected government is actually one in which decisions are centralized in a smaller amount of hands dominated by market makers, the system would crumble. To avoid this scenario, the market maker must every now and then be sacrificed on the altar of political convenience.

Second, although the market maker must suffer the designation as the “bad guy”, she mitigates this label by maintaining a firewall between her trading desks and the mind governance agents. Markets do need to be regulated to the extent that its participants have a degree of certainty as to the rules. This, in my opinion, is the role of the “fourth branch”; the administrative state.

Independent agencies that regulate exchanges keep the grubby hands of mind governance agents off of the price mechanisms that help move commodities, bonds, and currencies. Political candidates such as Vivek Ramaswamy deride these agencies as “deep state”, as unconstitutional, unelected entities that dilute democracy.

Diluting democracy is a moot point. Since the United States is not a democracy, there is no democracy to dilute. Just see Article IV, Section IV of the U.S. Constitution. But while not a branch of mind governance, administrative agencies do serve the State by keeping the barbarians at the gate and away from the market price making mechanism.

To extract energy from the political economy, market makers need a strategy in place that deflects attention away from them which may include looking like the bad guy even though their role is crucial to the flow of capital.

Alton Drew

15 October 2023

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