Here's my Top 10 links from around the Internet at 2.30 pm in association with NZ Mint.
I welcome your additions in the comments below or via email to bernard.hickey@interest.co.nz.
I'll pop the extras into the comment stream. See all previous Top 10s here.
My must read today is #3 from Steve Keen.
1. Smelly money - The Telegraph reports Italians are smuggling cash into San Marino in their underwear and shoes to beat the tax man.
Sounds to me like Italians are also a tad worried about what might happen if the euro was ever to collapse.
The Greeks have been ferretting cash out for a couple of years now.
Ultimately, cash is king and a devaluation will not be small, neat or painless.
We will see much more of this sort of thing in Europe before it is all over.
Border guards may make themselves an awful lot before it's finished.
Border guards of the miniature republic, including the city of San Marino which lies six miles from the Adriatic Sea in north-east Italy, have reported a sharp increase in the number of Italian men trying to smuggle in money in their shoes, while women have been caught with wads of notes stashed in their underwear.
Others are even bicycling across the border with money hidden in their water bottles. Last month a cyclist was caught with €10,000 stuffed into a plastic drinks flask.
2. Very good (and pungent) advice - Here's Hong Kong resident corporate lawyer Cactus Kate (Cathy Odgers) with 10 useful tips via a post at NBR for New Zealanders wanting to do business in China.
Well worth a click. Here's a sample:
1. Any Westerner or even Chinese person who claims to be an expert in doing business in China, is not. The experts are already rich and they don't like sharing. Every part of China is different, every industry and every person has different morals, ethics and way of doing things. Just like back home.
2. Cash is not only King it is Queen and the Prince. Limit allowing Chinese to run up credit. Cash upfront, especially on volume deals where they've offered to buy 100x of a product. Tomorrow usually never comes.
3. The age of leverage - Australian economist Steve Keen is an excellent and sceptical observer of the global economics and banking professions.
Here's his analysis via Business Spectator:
The 'Global Financial Crisis', which began in late 2007, marked a turning point in the nature of market economies. Their performance from at least the mid-1960s had been underwritten by a faster growth of private debt than of GDP: this was the 'Age of Leverage'. In late 2007, the growth rate of private debt fell, and since then we have been in the Age of Deleveraging.
As we enter this Age of Deleveraging, the worst thing we can do is apply policies that appeared to work during the preceding Age of Leverage – but were in fact predicated on ever-rising private sector indebtedness. Politicians should be sceptical of conventional economic advice at this time; it would be much wiser to study the history of the 1930s instead.
Capitalism became a world-beater in the 1800’s, when it developed capabilities for endemic innovation. Societies that adopted the capitalist system gained unrivaled prosperity, enjoyed widespread job satisfaction, obtained productivity growth that was the marvel of the world and ended mass privation.
Now the capitalist system has been corrupted. The managerial state has assumed responsibility for looking after everything from the incomes of the middle class to the profitability of large corporations to industrial advancement. This system, however, is not capitalism, but rather an economic order that harks back to Bismarck in the late nineteenth century and Mussolini in the twentieth: corporatism.
In various ways, corporatism chokes off the dynamism that makes for engaging work, faster economic growth, and greater opportunity and inclusiveness. It maintains lethargic, wasteful, unproductive, and well-connected firms at the expense of dynamic newcomers and outsiders, and favors declared goals such as industrialization, economic development, and national greatness over individuals’ economic freedom and responsibility. Today, airlines, auto manufacturers, agricultural companies, media, investment banks, hedge funds, and much more has at some point been deemed too important to weather the free market on its own, receiving a helping hand from government in the name of the “public good.”
6. Insatiable consumers and investors - Robert Reich captures quite nicely the Catch 22 now at the heart of our modern form of globalised capitalism where everything gets cheaper to make, profits get bigger, fewer workers receive ever-lower pay and the system grinds to a halt under the weight of too much stuff, not enough jobs, too much debt and too much cash hoarded by too few people in government bonds.
Who or what is the economy for? Surely not just for a few at the top, and not just big corporations and their CEOs. Nor can the success of the economy be measured by how fast the GDP is growing, or how high the Dow Jones Industrial Average is rising, or whether average incomes are turning upward.
The crisis of American capitalism marks the triumph of consumers and investors over workers and citizens. And since most of us occupy all four roles – even though the lion’s share of consuming and investing is done by the wealthy – the real crisis centers on the increasing efficiency by which all of us as consumers and investors can get great deals, and our declining capacity to be heard as workers and citizens.
7. How Norway and Sweden did it - George Lakey writes at BusinessInsider about how Sweden and Norway overthrew a dominant 1% in the 1930s. A good history lesson I hadn't heard before.
Sweden and Norway, for example, both experienced a major power shift in the 1930s after prolonged nonviolent struggle. They “fired” the top 1 percent of people who set the direction for society and created the basis for something different.
Both countries had a history of horrendous poverty. When the 1 percent was in charge, hundreds of thousands of people emigrated to avoid starvation. Under the leadership of the working class, however, both countries built robust and successful economies that nearly eliminated poverty, expanded free university education, abolished slums, provided excellent health care available to all as a matter of right and created a system of full employment. Unlike the Norwegians, the Swedes didn’t find oil, but that didn’t stop them from building what the latest CIA World Factbook calls “an enviable standard of living.”
8. This excellent graphic showing the amount of cash lent by banks and others to European governments is worth a click - There's a lot of trucks. HT SirWB via Twitter.
9. Trapped in a mattress - PIMCO's Bill Gross does a great job here explaining why 0% interest rates aren't always a good thing...
They create liquidity traps where lots of money is stuck in government bonds and bills.
Zero-bound interest rates do not always and necessarily force investors to take more risk by purchasing stocks or real estate, to cite the classic central bank thesis. First of all, when rational or irrational fear persuades an investor to be more concerned about the return of her money than on her money then liquidity can be trapped in a mattress, a bank account or a five basis point Treasury bill.
10. Totally Jon Stewart on Mitt Romney's Private Equity investing skills (ie gearing up with lots of debt, sacking a bunch of people and making out like bandits).
Stewart does a great job of explaining private equity tactics.
62 Comments
Yep, cant wait 'till PIMCO starts it's own Gold Fund.
From the same article.
Where else can one go, however? We can’t put $100 trillion of credit in a system-wide mattress, can we? Of course not, but we can move in that direction by delevering and refusing to extend maturities and duration.
It may as well, induce inflationary distortions that give a rise to commodities and gold as store of value alternatives when there is little value left in paper.
Top that off with the US Super Committee calling for and end to the zero bound, to allow for negative yields.
The Committee unanimously recommended that the Treasury Department allow for negative yield auction results as soon as logistically practical."
"Supercommittee That Runs America" Urges End To The "Zero Bound", Demands Issuance Of Negative Yield Bonds
Right then, with real inflation in the US running around the 10% mark - based on the 1980 method of calculation (reversing out the all the manipulation) that will give a guaranteed loss of purchasing power over 10% or more then for bond holders.... oh well it could be worse - it could be 20%
I'm most curious about the extent to which you have critically appraised Steve Keen's proposals. He has an entire manifesto on Debtwatch and we don't really seem to have any such political force working here, although Gareth Morgan (and quite a few others) would seem to have come to many similar conclusions.
It's especially interesting to me since these proposals are not new in NZ, Social Credit ran this kind of line for many decades. It got quite a high level of popular support, but under FPP got very little representation.
I recently found out my grandparents on both sides were supporters of it, despite one side being working class, and the other side being a wealthy property developer. It seems that their demise carries in it a lot of lessons about the politicization of this kind of viewpoint, that whatever pitfalls they fell into could be avoided this time. Indeed, I'm yet to hear Keen even mention them, probably because they had a really bad name in Australia, on account of powerful antisemitic views. Here, they managed to avoid that taint, but they still disappeared completely in the 80s. In Canada, they actually managed to get power in Alberta right back in the 30s, but were blocked from their monetary reforms by the central government of Canada.
Perhaps the wisest course is to pretend they never existed, so as not to catch the racist taint. But it's inevitable, I think, if the ideas get traction, that a link will be made, and cries of "Funny Money" will be sufficient to keep the bulk of people unconvinced. Keen seems to want to put enormous hard yards into firming up the underlying theory, so that it has sufficient depth to challenge "neoclassical economics". Big ask, I'd say.
The founder, C. H. Douglas, apparently, was very much undecided about whether to pursue his ideas directly with political parties, or as a pressure group. I don't know either, but it seems like the idea of winning the economists over first is very much about the pressure group angle rather than trying to win popular support. Perhaps this under-rates the population, particularly now, when banks are in such ill repute.
"Critically appraised", Ive done the best I can in making a judgemnt call for quality of info and lack of politics for my own course....So,
manifesto? there is no politics on Steve Keen's site....If anybody thinks so, well take your blinkers off IMHO, or not and bet as you see it happeneing......it wont be long before we see if SK is right, or not......Im betting on him being right....
I think the system we had/have would have worked as well as most others and better than a lot....its just got abused...I would take some convincing that socail credit couldnt be and worse or easier to change ot it rather tahn fix what we have.
Its just another way to slice the cake.....from now on the cake will be getting smaller....
regards
@steven, one Debtwatch the second tab at the top is the manifesto, here's the link: http://www.debtdeflation.com/blogs/manifesto/
This contains policy proposals of Keen's, which of course he has to put in there if he really wants to criticize neoclassical economics credibly. If he doesn't have an alternative, it's pretty much "Yeah, but so what, Keenie?".
These proposals are ways in which to avoid some of his direst predictions which, as a humanist, he does not actually want to happen.
I'm not saying Keen is wrong, far from it. I'm just really keen to hear from people who have neoclassical training (I'm not an economist myself) and how they respond to the views of Keen, which definitely are very much opposed to mainstream economic thinking and particularly current economic policy. So far, I haven't been able to dig much up, but it's not my field so I'm not sure what to look for. Perhaps the neoclassical response is entirely dismissive.
>Its just another way to slice the cake.....from now on the cake will be getting smaller....
Not necessarily. If you fundamentally change the economics of our system, you could find productivity increasing, on things that are really of value. In other words real wealth could increase and the ridiculous industrial byproducts we are addicted to, like endless consumer gadgets and weak entertainment, could stop being the focus of so much of our human endeavour.
For instance, we could improve our housing affordability without the slightest need to consider imports and exports - houses are by and large made entirely by local labour for local consumption. Education is a similar matter. We could actually teach our kids without being held down by what our teachers are worth on an international labour market. Food is something that NZ makes with extreme efficiency, so it's crazy that it's one of the least affordable places for food in the industrialized world. These 3 factors are driving real poverty into NZ, and they needn't be allowed to.
And a great deal of work is done in society that simply passes under the economic radar altogether. Much of it is the most important work that we ever do, our child rearing, our art, music and philosophy. Making things for ourselves with our own hands. Maybe these things being crushed by poverty isn't inevitable at all.
Keen's book Debunking Economics is a relatively easy read (he lets you skip the mathmatically dense bits) and is a compelling and systematic dismatling of the logic and the maths that underlie classical or neo liberal economic theory, what Michael Hudson calls "junk economics". He exposes the stuff 90% of economists believe in and are taught in the universities as more akin to a religious cult than a serious science. All the models mainstream economists use are static not dynamic and rely on such a narrow range of parameters and assumptions that none of them can stand the test of real life.
His recent support for a debt jubilee and public credit is interesting. Like many I found the idea repugnant because of the moral hazard of rewarding irresponsible borrowers while many of us have not gorged on debt and watched the last decade aghast. But Keen gets around this by giving everyone, debtors and non debtors alike the same lump sum. The proviso is that those with debt, mortgage, student, consumer et al have to apply their money to their outstanding debt. Their money is therefore not inflationary as it is retiring debt and reducing the money supply (seen as 99% comes into being as interest bearing credit)
Taking the idea further is that you have a national reset point. To prevent the money of the non debtors becoming inflationary new regulations and a reformed tax system would have to come into effect simultaneously to discourage speculation in property and other assets and preventing the same massive build up in debt we have seen in the last 30 years. For example a property tax and very high LVR's, a return to high bank reserve ratios and capital requirements (say over 50%), the banning of non residents from buying land, removal of income and company tax in favour of consumption taxes and maybe a pollution tax on those producers that externalise their environmental costs onto the rest of us. A financial transaction tax could see the hot money exit the kiwi dollar and sharemarket and find their fundemental value rather than their speculative value. No complicated taxes, no depreciation, no need for accountants and lawyers, all collected electronically.
There are all sorts of complications and the idea would be incredibly disruptive to the status quo and very scary to most but it seems a better idea than facing the Greek type scenario with incredible hardship and still owing the debt. Better to have a disclocation and an unsettling period of transition but for the economy to be free from most of its choking debt.
Of all the suggestions I've ever seen here, that's the best yet.
But we have some followers of a doomed ideology - hear English using Hattie to justify slashing teacher numbers tonight? - in power at the moment, and it'll be too late by the time they're gone. It would have to happen globally, in any case.
There was a fair discussion of debt-forgiveness in Peak Oil circles, a few years ago, as folk worked out what was ahead. You might be able to ask Nicole Foss - I think she's coming to NZ soon.
I'm assuming someone thinking like you has read Daly, and his 'steady state'?
Cheers wtf, I've got the book coming to me from the library right now, and will have a look. But I'm still not an economist. My question was really directed at Bernard Hickey, about whether he or anyone he knows of has put seriously hard yards into debunking Keen, and what he thinks of those arguments. So far as I can tell, Hickey comes from the neoclassical school, but for whatever reason (and I'd love to know the reasons, even hear the story told at length) he had a change of mind about that school. He's not the only one, but he's one that writes a lot about it in ways that are accessible, often for some of the most influential media outlets in the country.
I doubt this would put him at odds with Keen at all, indeed it's a vital part of developing a new theory that it gets a thorough thrashing by people with the training to deal such a thrashing. And some of the solutions do sound "too good to be true", which means that selling them at large is very difficult. This was always Social Credit's main difficulty, that their alternative really did sound too easy. To me, it seems likely that in the long history of that movement, most of the main arguments against it must have been touched upon. Certainly Keynes was aware of the works of Douglas. I'd like to hear some clear explanations of how it was that Keynes convinced economists that the ideas couldn't work.
Also, I think by making an enemy of the banking sector, Social Credit fell into a trap, a very serious trap that it would be good to avoid if we want to learn from history and change the future. That trap is to personalize the evil to society of the sector, and to rail against greed and corruption in it. That led, and could easily lead again, to antisemitism, something that is easily hooked into by just the wrong kinds of people, who propose just the wrong kinds of solution. Bankers do not need to be lined up and shot, that won't solve a damned thing. It's important that the problem is simply seen as, as Socrates would have said, the evil of ignorance rather than malice. That way it becomes the responsibility of the whole of society to make themselves more informed about what the real causes of the current stupidity are. I'm not blameless myself - a banker lent me money, but also, I borrowed money. Bankers may have profited most out of the neoclassical economic cult, but it's on the whole of society to reject the cult, rather than just scapegoat the bankers and put new ones in to make all the same mistakes again.
In other words, I think that cult war is not the answer - the answer is knowledge, more of it, and that grows through putting ideas like Keens through rigorous testing, and it grows by spreading the true ideas, by people becoming informed enough to convince other people of both the problem and the solution. Occupy has it wrong to say that they are the 99%. They are setting up an us-vs-them, and they actually don't have 99% support because they don't have 99% understanding of what they are about. Until they have a clear solution in mind, they will never get more than a few percent support, really.
You don't need to be an economist Ben to follow Keen's arguements. Many of them involve simple logic and human psychology. As he points out the economic profession, partly out of self interest, partly out of ignorance, has tried to baffle the public with models, graphs, equations etc that mystify economic processes and make lay people uncomfortable about challenging them ie they have made themselves high priests who are the only ones who can interpret the scriptures.
Agree about Social Credit. From what I remember the association with Douglas and his other political beliefs left it open to derision. In NZ Muldoon labeled them the "funny money" party I think, a catchy label that was hard to shake.
Still trying to get my head around how you would control public credit but it does seem ridiculous to allow private banks to issue credit but not the government, especially if as Iain Parker suggests it is spent rather than lent into the economy, without interest attached.
The whole monetary system was designed to create inequality. Without doubt or question there is no way you can have equality in a monetary system. You need poor people, otherwise how can you measure wealth? As Jesus said "I'm going, but you're always gonna have poor people".
Civilisation and technology has long ago moved past the need for a monetary system, yet we persist in maintaining the status quo. An interest free monetary system does not address inequality, what it does is create a more sustainable way to measure success in terms of income, and wealth.
But Steven, the problem with our current debt based system is that it is inherently unsustainable. Even if it was managed as well as it possibly can, it will come to an end, as all ponzi schemes do, just perhaps it might take a bit longer. Such is the inevitability of usury, or compounding interest.
I the best the wizards can hope for in managing the economy is allowing us to get further into debt just enough to not allow inflation taking off or falling into a debt liquidity spiral, all the while becoming all the more precarious and volatile as it approaches ever closer point of no return.
The system we have has the mathematical certainty of a collapse, whereas at least with a non-interest bearing public credit system or commodity based honest monetary system at least there is the theoretically the possibility for it to carry on forever in a sustainable way, notwithstanding all the other external factors that play a factor (population growth, energy availability/demand, etc...).
(Sorry I can’t quite understand what you have written in your third paragraph above)
Yep. The problem with the monetarists is that they think the quantity of money (or in our debt system where all 'money' is actually credit/debt - the quantity of credit) is important. However in a fiat system none of them can adequately define what 'money' actually is. Even so they try and focus on different forms of credit in the system (m1.m2,m3 etc) and try and control the quanity and flow of that...(which is why a central banks wants to fix the base interest rate)... So they are trying to control the quanity and speed of something they can not even define. On top of that, monetary policy has a 12 to 18 month time lag... so they are setting policy for something they can't define for a target over a year away in the future for the purpose of influencing peoples spending/saving/borrowing decisions which is why they often get it wrong and it ends up counterproductive and causes booms and busts. Thats also why they can print lots of money into the system and it doesn't cause inflation, as the printing of money doesn't cause inflation until it gets out in the economy - (spent or borrowed).... which takes months and its effect depends on various factors including bank reserves and leverage and how and where it is borrowed and spent etc ... Hyperinflation isn't caused so much by the printing of money but by people loosing confidence in the value of money therefore passing it on like a hot potato therefore greatly increasing the velocity credit/money is flowing though the system which in turn creates even more credit in the system and so on. So the monetariest need to also esitmate the velocity of credit in 12-18 months time from when they make their decisions... of course in history this never works and the system eventually crashes but then they say... don't worry - trust us ... we know what we are doing now... we are clever and have found the holy grail of monetarism... we will be good and not print too much, you can trust us!... and they do the whole thing again...and then again... and then again...
Actually it's the value of money that's important, not the quanity.... which is why a true gold standard has always produced relative peace, stability and prosperity and why we don't need a central bank nor people who play around with the money supply only to blow it up while enriching themselves in the process (which is exactly what Wall Street is doing). The usury system we have just serves to enrich a very select financial elect, who always end up crashing the system but make themselves very rich in the process (more wealth than they can spend or use in a lifetime). However as a fiat based system empowers governments with virtually unlimited spending power via the endless creation of more paper credit it's a cosy relationship between the banking powers and the government, neither of which want to change it. The trick is for the financial elect to convert their paper - created from nothing - into real assets and buy countries, like....ah....Greece.... including its people as endless debt slaves... anybody who challenges their system gets clobbered - like Libya, Iraq, and later on Iran.... the pattern is the same...
However this time around they have worked out that it's taxes that really give fiat paper backing and thus value... so to bring in a new global currency/reserve the will try and back it with ETS ...ah I meant global tax... of course whenthe planet is full of carbon based life forms this is a great tax - and once more you many will complain that its not high enough as the planet needs to be saved from global warming.... ah hang on... I mean climate change...as the earth is now cooling... unfortunately for them people are just waking up - like Iceland and Greece and just saying no - we will just default on your paper - (of which - as long as they can always print more - they really loose nothing)... and most people are conned... they vaguely feel something is very wrong (like Occupy) but they can't quite put their finger on it...and the game continues...without most people even knowiung what's being done to them, why and how... gold is the protector of freedom in the monetary system..
...well maybe its because he is obsorbed with todays current news and he hasn't got the bigger picture yet?... they can only pull this trick once in a lifetime as it takes time to line up the dominos and people suffer from the normalcy bias - their point of reference is only what they themselves have lived through....before this whole thing is over though more and more people will get 'it'... at present most are more interested in what Paris Hilton is wearing or who will be the next AB coach...this time around they are going for the whole jackpot - all or nothing - if they can get Europe and the US the rest will just have to follow along... its not really about stealing wealth anymore as much as it is about gaining direct control over everything...
For the third time I post this article by Howard Buffet for anyone who is listening - its 50 years ahead of its time:
http://www.fame.org/pdf/buffet3.pdf
Bernard wouldn't write something like this in an article, because he doesn't like looking like a complete idiot.
"The problem with the monetarists is that they think the quantity of money (or in our debt system where all 'money' is actually credit/debt - the quantity of credit) is important."
Thats because it is, as evidence it is well known that Spain suffered massive inflation after they imported (a.k.a pillaged) large amounts of gold into their monetary system.
"However in a fiat system none of them can adequately define what 'money' actually is."
The author now fabricates the straw man, monetarists are confused about what money is. During our previous discussion I was more than clear however, money is exactly what every central bank in the world says it is all of M0, M1, M2, M3.
"Even so they try and focus on different forms of credit in the system (m1.m2,m3 etc) and try and control the quanity and flow of that...(which is why a central banks wants to fix the base interest rate)... So they are trying to control the quanity and speed of something they can not even define. "
Straw man defeated, a resounding victory. Although this statement is in fact self contradictary, claiming they can't define the M0, M1, M2, M3 which they do in fact define as money (M being an abbreviation for Money). Author 1, straw man 0.
"On top of that, monetary policy has a 12 to 18 month time lag... so they are setting policy for something they can't define for a target over a year away in the future for the purpose of influencing peoples spending/saving/borrowing decisions which is why they often get it wrong and it ends up counterproductive and causes booms and busts. "
At this point the author 'uses' his complete and exhaustive knowledge of managing monetary policy, both claiming that every central bank in the world are incompetent fools at doing so and that to him its trivial to understand the 12 to 18 month time lag in monetary policy. Since this is so obvious to the author the actual evidence for this such as factual statement is omitted as an exercise for the reader. At this point the author skirts close to the borders of pointing out that predicting peoples spending/saving/borrowing decisions might be quite difficult, and might in fact be an un-reasonable expectation of any organisation or individual (though presumably not the author), but its only a near miss. In 'fact' since the central banks monetary policy is done for the purpose of influencing peoples spending/saving/borrowing decisions it is quite reasonable to expect them to always get it right, maybe the author should be applying to be reserve bank governor he certainly seems to know what they were doing wrong. Utilising the benefit of hindsight it is clear that central banks could have influenced monetary policy Author 2, straw man 0.
N.B, in fact the OCR appears to follow the 90-day bank bills market very closely http://www.rbnz.govt.nz/keygraphs/Fig7.html, there is little evidence of a 12-18 month cycle in here.
"Thats also why they can print lots of money into the system and it doesn't cause inflation, as the printing of money doesn't cause inflation until it gets out in the economy - (spent or borrowed).... which takes months and its effect depends on various factors including bank reserves and leverage and how and where it is borrowed and spent etc ... "
At this point the article takes a tack towards something like reality. QE, (the Fed doubling of the monetary base) has not yet caused massive inflation. While this should indicate that any central bank has only very limited control over inflation/deflation, because they can't influence the total money supply. Don't worry the authors point is coming, he is trying to form a basis for why the central bank is not acting on the 'obvious' 12-18 months lag which both makes it reasonable to assume that while the central bank could be expected to set correct monetary policy they are failing to do so due to short cited ness.
"Hyperinflation isn't caused so much by the printing of money but by people loosing confidence in the value of money therefore passing it on like a hot potato therefore greatly increasing the velocitycredit/money is flowing though the system which in turn creates even more credit in the system and so on. "
Ahh, well its obvious now the author is losing confidence in the value of money and you should too, scary stuff though to label this scare mongering is rather last week, I prefer to call it gold spruking. Obviously the only rational thing to do when you lose confidence in money is to chuck it around like a hot potato (I am not in anyway endoursing the projectile use of the much maligned potato).
"So the monetariest need to also esitmate the velocity of credit in 12-18 months time from when they make their decisions... of course in history this never works and the system eventually crashes but then they say... don't worry - trust us ...we know what we are doing now... we are clever and have found the holy grail of monetarism... we will be good and not print too much, you can trust us!... and they do the whole thing again...and then again... and then again..."
Fabricating the second straw man, the entire fabric of the monetary system depends on forecasting the future 12-18 months time in the future. If the central bank doesn't get this right (and you know they have made mistakes in the past) then the monetary system will hyperinflate itself to death because everybody just loses confidence in their money. Of course there it is victory number 2, straw man duely defeated. Forecasting the future is really hard, any monetary system built on these premises is sure to fail, Author 3, straw man 0.
I think at this point we should wait, maybe 12-18 months. When the US monetary system doesn't hyperinflate itself to death, then we maybe can revise the lag 18-24 months, 24-30 months, 30-36 months? Well lets not do the disservice of putting words into the authors mouth (something he is more than happy to do for others) and allow him to state the expiration date for his own dooms day hyper-inflation expectations. My advice would be, stop hyperventilating by all means but don't hold your breath waiting for it to happen.
Lets go further through the looking glass land into this bizare fantasy, "Actually it's the value of money that's important, not the quanity.... " Actually the argument is and has always been that the quantity effects the value, but if you want to avoid certain self contradictions then its necessary to gloss over this point.
"which is why a true gold standard has always produced relative peace, stability and prosperity and why we don't need a central bank nor people who play around with the money supply only to blow it up while enriching themselves in the process (which is exactly what Wall Street is doing). "
Well you should not let history get in the way of a good premise,
http://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States
"The usury system we have just serves to enrich a very select financial elect, who always end up crashing the system but make themselves very rich in the process (more wealth than they can spend or use in a lifetime). However as a fiat based system empowers governments with virtually unlimited spending power via the endless creation of more paper credit it's a cosy relationship between the banking powers and the government, neither of which want to change it. "
It may be that the financial system is maintained for the benefit of an elite few, a gold standard does precisely nothing to change that, it might only change the usurers who are in charge. In particular by hampering government expenditure the only potentially democratic representative is effectively handcuffed. Removing public representatation from the field is hardly going to increase public participation in the financial system.
"The trick is for the financial elect to convert their paper - created from nothing - into real assets and buy countries, like....ah....Greece.... including its people as endless debt slaves... anybody who challenges their system gets clobbered - like Libya, Iraq, and later on Iran.... the pattern is the same..."
Many of the above countries have expended significant government expendature towards programs to help their own poor at one time or another. Its difficult to see how removing government representation from the fiancial sector is going to improve democratic representation in financial matters, in fact it would quite clearly make the financial system less attentive to the 'debt slaves'.
In previous conversation the author has also expressed devout hatred of the IMF and what they have done in Greece. But he has also claims that the only way out of the crisis is to implement austerity programs, very closely equivalent to the IMF programs imposed on Greece. In fact his proposals appear to indicate that the people of Greece should have less influence over their finances than the marginal voice they already have.
"However this time around they have worked out that it's taxes that really give fiat paper backing and thus value..."
Another rather strange claim. This one contradicts previous statements about money and value, surely if this were true then the government could increase investment by increasing the tax rate. Citizens in Greece recently experienced several tax hikes but do not appear to be keen to invest. In fact, tax is just another form of payment, though in this case government mandated payment.
"so to bring in a new global currency/reserve the will try and back it with ETS ...ah I meant global tax..."
Well actually the acronym is not Emissions Tax Scheme, its Emissions Trading Scheme. The difference being that serious environmentalists wanted an emissions tax scheme put on polluters, which would be used to reduce global carbon emissions. The financial sectors decided that it would be good if they had a piece of that action.
"of course whenthe planet is full of carbon based life forms this is a great tax - and once more you many will complain that its not high enough as the planet needs to be saved from global warming.... ah hang on... I mean climate change...as the earth is now cooling... unfortunately for them people are just waking up"
The authors belief in a conspiracy involving the government and climate scientists says a lot more about the author (and his other conspiracy oriented beliefs) than it does about the science. Unfortunately, any study which truely measured a global cooling would be a huge relief, but there is zero unfabricated and un-cherry picked evidence to suggest this.
"- like Iceland and Greece and just saying no - we will just default on your paper - (of which - as long as they can always print more - they really loose nothing)... and most people are conned..."
An interesting segue, but in fact there is no link between Greece and Icelands economic problems, Icelands default on government bond payments, and a rejection of climate change consensus by their governments.
" they vaguely feel something is very wrong (like Occupy) but they can't quite put their finger on it...and the game continues...without most people even knowiung what's being done to them, why and how...",
there is nothing vague about what the Occupy movement wants, they want democratic political reform, followed by the implementation of democratically selected reforms
http://coupmedia.org/occupywallstreet/occupy-wall-street-official-demands-2009
certainly the author has not made anything more clear by miss representing all of other groups ideas, research and history.
"gold is the protector of freedom in the monetary system.."
At this point I think it would be quite reasonable to say there has been more than enough freedom in the monetary system already, what society (and especially democracy) wants is freedom from the monetary system.
Holy cow Nic, you been up all night writing a responce to ecomomist's post! I thought the author pretty much nailed it.
Author was I think saying the system is f@#ked and no amount of tweeking is going to solve it, we are approching the hocky stick moment.
It looks like to me that you have a completly different view I would call the "mainstream" or "establishment" view.
The way I see it; one either understands the finite nature of the system (if on accepts this then it is just a matter of talking about the timeframe of a collapse, restructure or reset, and how to protect ones self), or if not (stuck in the matrix, or swallowed the koolaid)
With a mainstream worldview its easy to be stuck in the woods without seeing the big picture. Paper money is just abstract and is prome to going "pooff" and vanishing leaving only the real world.
The author said a lot of things, many of them incorrect. If you read his post carefully he also said that the beginning of the end is scheduled 12-18 months from (being generous) the end of QE. But I will not be holding my breath, and I expect he will still be preaching to the choir at that time about the impending great hyperinflation.
I did not say that at all Nic... I don't know what you are smoking?... I said that monetary policy takes 12-18 months to take effect - (that was my point - meaning - making it virtually impossible for central banks to get it right as they are really just guessing).... I said nothing about that being 'the end'.... nor did I say that QE in itself causes hyperflation... I did say hyperinflation is not really even caused by QE - but by people loosing confidence in the currency. Why don't you go and read the post????
I would go through and easily rebuff all your points as false and misleading and outright incorrect...but I guess you just want to twist what I am saying around anyway?.... but as to the conclusion in point about freedom which is really important.... governments by borrowing and spending don't protect the 'democartic freedom of the people' as you put it but infact steal it through the process of inflation - which is primarily a tax on the most vunerable - the poor - any even main line economists wil tell you that...
...no mention by you of the great depression being caused by the same monetarists because they created more than they had gold to back it in the US creating a credit boom in the 1920s - the US which was not on a full enforced gold standard at the time - it did not want the disciplne of such, only its appearance for reasons of credibility - THAT IS WHY THE GOVERNMENT - who you say are the democratic protector of freedom - CONFISCATED THE GOLD belonging to the people - made it ILLEGAL FOR THEM TO OWN IT and increased the price to $35/oz (only after they collected it in of course at a much lower rate). Those den of thieves... of course if you made milk illegal for most people to own - would the price be set lower or higher? Lower of course - given the same supply.... but you don't think about such things.... are you a disinformation agent for NWO?
First of all your claim of a 12-18 month lag in monetary policy is just that, a claim which has absolutely no evidence to support it. I am pretty happy that I didn't twist anything you said out of context, all I am claiming is that your statements convay no insight into anything, and you provide zero evidence for any of your claims.
I am more than comfortable with the statement that you want to impose IMF style policies onto NZ, because you keep claiming that the only way out is for the government to reduce public expenditure.
http://en.wikipedia.org/wiki/Globalization_and_Its_Discontents
"The theories which guide the IMF's policies are empirically flawed. Free market, neoclassical, and neoliberal are all essentially euphemisms for the disastrous laissez-faire economics of the late 19th century. This approach seeks to minimize the role of government—arguing that lower wages solve problems of unemployment, and relying upon trickle-down economics (the belief that growth and wealth will trickle down to all segments of society) to address poverty. Stiglitz finds no evidence to support this belief, and considers the 'Washington Consensus' policy of free markets to be a blend of ideology and bad science"
This is exactly what the IMF has implemented in East Asia,
http://en.wikipedia.org/wiki/East_Asian_financial_crisis
And in Argentina
http://en.wikipedia.org/wiki/Argentine_economic_crisis
And in Russia
http://en.wikipedia.org/wiki/Economy_of_Russia
And is now being done in Ireland and Greece.
The phrases 'democartic freedom of the people', is yours. I am not claiming that democratic representatives have implemented policies for which they had a mandate. In fact QE was clearly a bailout for the financial institutions whose speculative lending decisions and failure to collectively understand the macro economic consequences of their lending decisions effectively caused the crisis. You don't change any of that by taking the main representative of the people out of the game.
If you are going to continue with the line of reasoning that only the government can cause significant inflation, (on which any argument that its the government which should be the focus depends) then you should provide an argument for this. The argument should clearly take into accout that the government has lower total debt than the private sector in every economy, and finances it at lower interest rates, and the government borrows it from exactly the same institutions which finance the rest of the economy.
In the end your position comes down to absolving blame for the crisis away from the institutions which are clearly responsible and the economic theories policies which have created it (and putting blame onto the government) this is not going to lead to reform of anything or help any democracy become more functional, its just going to lead to another repeat.
and yes, everybody who disagrees with you does so because they work for the NWO.
Oh come on Nicos, the number of ways you misrepresent economists views in this thread is just too numerous to mention. I am sure someone has warned me to not keep feeding the troll, however just in your above comment, these are ways you have misrepresented eco's point of view as I see it;
"you want to impose IMF style policies onto NZ" Where did you get that idea from what eco said? Quite clearly eco has a problem IMF style policies “The usury system we have just serves to enrich a very select financial elect,” going on to say “The trick is for the financial elect to convert their paper - created from nothing - into real assets and buy countries, like....ah....Greece.... including its people as endless debt slaves... anybody who challenges their system gets clobbered - like Libya, Iraq, and later on Iran.... the pattern is the same...” Eco is advocating the opposite, not participating in their usury system. Common sense suggests the best way to prevent one becoming debt slaves is to stop borrowing from the money changers to begin with. (i.e. balance the budget and live within our means) .
"you keep claiming that the only way out is for the government to reduce public expenditure" Quite plainly that is not the only way eco also suggests “just saying no - we will just default on your paper” that is the only way out ultimately.
"arguing that lower wages solve problems of unemployment" Eco did not make any reference to wages, a complete fabrication. What on earth made you think eco endorses trickledown economics?
"relying upon trickle-down economics." There is nothing in the posts that can possibly lead you to think eco holds that position, where do you get these ideas from?
"only the government can cause significant inflation" Eco explicitly said “Hyperinflation isn't caused so much by the printing of money but by people loosing confidence in the value of money”, so clearly eco doesn't think that only government can cause significant inflation, that was you stuffing your words in eco’s mouth.
"your position comes down to absolving blame for the crisis away from the institutions which are clearly responsible" I heard eco suggest default to be a solution, that is precisely letting the institutions who created and control the mess take the responsibility of the consequence.
"everybody who disagrees with you does so because they work for the NWO" Once again, a complete false statement, eco didn't say that. Just asking you if you are an agent for them, obvious question given you are defending their agenda!
But seriously Nic, insted of twisting and fighting other views, perhaps try stepping into their ideas for a while, you may come around?
Yes thanks bb that's exactly what I meant you've nailed it..... this isn't the first time this guy has fabricated his ridiculous assumptions... let it go.... you can't reason with him - in the end any sane reader will see it for what it is ... he just wants to waste time arguing something he doesn't even remotely grasp....
Really, you think economist has significantly different views to the IMF?
This is a perl of wisdom from economist.
"No #8 you do realise you are saying in effect that government deficits don't matter? and that they can just borrow their way out of the GFC by creating more debt? What???"
and of course EU and IMF insist that EU countries stick to 3% government deficits or less. This is, of course, driving Greece and Ireland towards bond defaults
This is a perl of wisdom from economist.
"1. Get ride of the department of womens afairs (we don't have one for mens affairs)
2. Ring fence investment property losses, people will only invest to in the end make a profit, not to pay less tax.
3. Lift the retirement age to gradually to 67 (but keep access to kiwisaver accounts at 65).
4. Open up the 0.7% of conservation land that has over 100 billion of minerals sitting in it for mining, average mining salary 80-90,000, average retail salary $30-38,000.
5. Cut the amount of MPs back to 99 (we are only a country of 4 million)."
I removed a 6th post from this because it was later retracted.
Why the department of womens affairs is singled out is unclear, but of course the IMF discourages all kinds of representation of the public in setting policy. The most shocking being their recent installment of unelected prime ministers in Greece and Italy. Similar things are indicated by the apparant need to restrict the number of MPs.
Policy number 2 might well be a more fair tax policy, and the IMF has insisted that the main problems in Greece and Italy are because they don't collect tax effectively.The IMF is increasing the retirement age exactly from 65 to 67 in Italy. Similar changes have been made in every economy under threat of default in the EU.
There have not been any big discoveries of minerals in the EU recently, but similar policies were followed by the IMF in Russia, Chile and Africa.
Are you seriously trying to suggest NZ government should default on its next bond payment because there is no other way out eventually? Me and economist had this debate before, and I claimed you can't get a democratic mandate for that until nearly everybody agrees the balance in their bank accounts is worthless, and there is absolutely no evidence to support your view that this is inevitable. NZ should do something constructive now, rather than waiting for the apparantly 'inevitable' default, or following IMF style policies which all evidence points at causing a default.
This inevitability appears to hang on two claims
1) there is a 12-18 month lag in government policy.
2) hyper-inflation is caused by a lack of faith in money.
You present zero evidence for either of these claims, and economist makes claims in the way typical of a fact totum. Claiming simply that anything he says has full cridentials and any other claims are false and any other evidence illigitimate.
Frankly both of these 'statements of fact' are ridiculus. The many many examples of people spending simply enormous sums of money during a hyper-inflation points to their continued faith in money.
Its also absolutely transparant why this 'fabrication of reality' is necessary. Its because literally anybody would concur with the monetarist argument, that the quantity of money effects its value. The fabrication being necessary because this elementary fact had been 'defeated' in the authors eyes, by first making fabricating the monetarist position into ludicrus claims and then duely knocking them off.
Wake up Nic,
The IMF is there to represent the interest of the banksters not general citizens.
The inevitability hangs on the claim that, a system that borrows money into existence with interest attached is a ponzi scheme.
Hyperinflation is precisly that, loss in confidence in the currency, and in the many many examples of people spending simply enormous sums of money during a hyper-inflation makes the point, people don't want it. They are trying to exchange it as quickly as they can before it sheads any more of its value.
You are getting worse and worse at this bro.
You are at it again!! Totally misrepresenting others views!!
Pretty much ALL parties endorse IMF policies!
Ron Paul is one of the few exceptions. Just for you to be clear on his views.
http://www.youtube.com/watch?v=uuwdyNlQEmw
http://www.youtube.com/watch?v=dsGSWw15LOQ (firsr couple of minutes)
http://www.youtube.com/watch?v=fPyzNH-JcEc this is how the IMF works very interesting.
It is extremely sad that you are so beaten about the head with propaganda that you can't understand the obvious effects of free-market policies.
What the people in Jamaca want is free-dom. Freedom for the people to set their own government policy, to structure their own markets as their government see's fit, and to control their own destiny.
The implementation of free-market policies is not something Jamacans have or would select for themselves. This is abundantly clear from the attitudes of all of the speakers in the IMF video. They know what the free-market means for them, and for their society, and they don't want or endourse it.
Further more a free-market policy is fundamentally a deference of policy to the market. What the market determines to be price and policy no government has any choice in this matter, the price is fixed. There can not be a democratic selection of policy under a free-market, because there is no selection of policy under a free-market.
In NZ we are better educated than in Jamaca, and because of we know better what is expected of us, and so of course we select free-market policies all by ourselves. Don't you feel cleaver and independent now, you are allowed to determine your own fate. Of course you make one significant mistake in your thinking that free-markets are well received. Almost none of the voters think they are a good idea. Most voters are fearful of Roger Douglas and Ruth Richardson and the potential that they or someone similar might get into government again.
Nic, your comments are so off the wall I wonder if you know anything about economics at all?.... are you just making this stuff up as you go? I could go through and debunk virtually everything you say which is just more monetariest propoganda dogma - I doubt it is even worth giving it the decency of a response, especially given your self-righteous tone. I would be embarressed if I were you to post such dribble.
But I am trying to be patient and kind with you because I see you certainly don't have a degree in economics - that's for certain. So you think you have already given me a definition of money do you in a previous post? And I told you that's not correct - without going into detail....So not so fast little arrogant paper bug on that scrore card...
Not even Alan Greenspan (previous Fed chairman) can define fiat money... your definition is oversimplicist and shows your complete ignornace of money, central banking and even what the whole fiat system is. But you still don't get it...Watch the below clip of Alan Greenspan's testimony before the congressional sub-commitee maybe you might start to actually get what I am actually saying (so far you are on another planet entirely);
http://www.youtube.com/watch?v=i2AqGQirW1Y
So that's actually arrogant paper bug 0, me 1.
I suggest you actually go and do a degree in economics before you go posting comments about issues you have no understanding or conception of Nic. Shame on you.
Also while we are on the subject of previous posts - you still haven't answered my questions - which you conviently ignore -
1. Why does the IMF ban member countries from attaching their currency to gold? (yet is more than happy to accept repayments of debt in gold). Sure you are aware of this clause in the legislation - being such an informed monetary finance professional - not. Your previous answer is obviously wrong... anyone can work that out by thinking about it.
2. Secondly and this is the third time I've asked this of you, you say it's obvious gold is just being bought out of fear - really? how many years have you studied the gold market then? - what exactly is it then central banks (who are major buyers) are afraid of?
Monetarists always wreck all fiat systems 100% of the time. As long as they can create 'money' from essentially nothing that's going to continue. Gold money doesn't enrich the bankers as you don't need central banks or even banks as we know it today even...
I would love to just rip apout your whole anaysis and leave it bear for all the world to see - but don't want to waste my time responding to waffly dribble - and the answers you can get for yourself - I suggest you start by getting yourself the book 'The Creature from Jekyll Island - a second look at the Federal Reserve' by G Edward Giffen and actually do read it, (now in its 32nd printing), it's in simple plain language. While it doesn't conclude with a gold standard, it will educate you and you will see how ludicously hollow your waffle and wrong assumptions are to anyone who, like myself, is actually a real finance professional.
As for the 12-18 month time lag with monetary policy any central bank governor can tell you that. Try calling Don Brash why don't you? as he is the one who stated this fact to me. But this is common knowledge to anyone remotely in the industry.... which you are clearly not.
yeh... I've come across him before... exactly the same problems.... his comments are completely off the wall and more like someone who has come off their medicine too early... I would go through and correct all his points - like you just did on many - but I don't think he even cares... he just invents others and it's goes on and on and on and on... maybe some lonely school kid looking for an argument? who knows? real questions and debate/comments I'll always try to respond, no worries... his certainly are not... they just look foolish as you have already noticed... not worth it...
Thanks for the video link, I had seen this before, but I didn't know as much then as I do now and it is very interesting to review. There is quite a lot going on in this exchange between Paul and Greenspan, but it doesn't contradict my understanding of their belief systems.
First of all both Paul and Greenspan clearly agree with the monetarist idea, the relative quantity of goods to money is what matters. This determines inflation and deflation, what they disagree on however is what money is. Paul says the base is money, Greenspan defines money in terms of prices.
Pauls set of beliefs lead to the conclusion that if you set the base and then are consistent, making the base is relatively stable. Then eventually this will result in stability in the spending power in the economy, no excess monetary instability. I think economist would own to such a statement of his beliefs. This understanding however must be premised on the belief that the financial system can not create or remove spending power in the economy, at least over the long term. So to put the US onto a Gold Standard you replace some monetary base with Gold.
Greenspan takes a different, but related position. He defines money in terms of spending power and then attempts to measure it (at least its stability) by measuring price inflation and deflation. At the time he expects there will be a proxy for it, somewhere in the monetary aggregates. He actually says pretty clearly the changing monetary aggregates like M1 has not been shown to be correlated to inflation / deflation in spending power so I think it would be obvious to Greenspan that a gold standard is not going to lead to kill off inflation and deflation. He does however agree with Paul, that the financial system can not create or remove spending power in the economy, at least over the long term, so the proxy (which he assumes exists) must exist but is a lower measurement than M3. Of course should such a proxy for money exist there might be a lag between it and the economy, the infamous 12-18 month lag.
But I have to disagree with both of them on a key point. The financial system in and of itself does add and remove spending power. This has been shown by multiple empirical studies of the monetary system. Unfortunately economics does not tend to behave in a very scientific way so basically such studies have been ignored, rather than challenged or integrated into economic theory. If this is true then in fact what Greenspan is looking for among monetary statistics doesn't exist, and setting monetary aggregates to anything is not going to lead to price stability, or kill off boom and bust cycles.
In fact the best we can reasonably of a central bank in these circumstances is to full fill a role of stability, avoiding bank runs, a role they accomplish quite well. Beyond that any stability is down to either aggregate financial institution behaviour or government regulation to enforce 'good' behaviour.
Please try to avoid integrating ridiculus conspiracy theories into your response, because I will always take them to retract credibility from the underlying argument.
Without the consideration of these following points, Ron Paul's view and other Free Market or Austrian views will be completely lost on you.
- Gold itself is money
- The currency we use nowadays is created through a process that favors those that issue and control its supply, and all their friends, not the wider population.
- A currency system that works in this way theoretically ends where one outfit owns all the money and all the assets like a game of monopoly, of course in reality it wouldn't get to that point it all falls apart well before then
- Currency is an abstract illusion that can only exist when there is full faith in it by those that use it.
They generally advocate:
- That the market alone must be allowed to set the value of money, that is do away with a central bank which sets the value of the currency.
- Those banks and other lending institutions may only lend out money they have on hand, and not be allowed to extend credit out of thin air.
Not to be confused with the Chicago or Monetarist point of view which Ron Paul certainly does not suscribe to, they believe in regulating the economy through the manipulation of interest rates and money supply.
hahahaha ..well you did feed the troll bb... the same troll who sent me an obsecure link to answer my point that occupy was vague in what they actually were wanting - a link that suggested one of their demands was to give wall street a $ billion for the FED (whom wall street run) to switch to Washington (who wall street also run) and who claims the ETS, - because T standing for 'trading' is not actually a tax (actually anybody can see its a tax/subsidy scheme (ie redistribution of income - which is what all taxes are really - even the hidden tax of inflation - and if the banksters can get into the act they will trade it like any currency and make billions...). That's classic misdirection for you bb, when all that really needs to be done is for congress to ad the ammendment 'we hereby recide the federal reserve act 1913' - not that that would solve really anything.... I mean a billion dollars???? what cr*p... at the end of the day bb - anyone can see the posts for what they are - and you already have....
Sadly BB I think your've been played. Nic is not residing in NZ and I suspect he's not even a kiwi at all. What I said in jest before is probably accurate, thus his trying to discredit me as my original post exactly hits the nail. That would explain why you'll not get anywhere with him - truth is not his agenda, disinformation and distortion is. My two questions he conventiently ignores.
Anyone reading these posts will see his credibility is in the toliet. He's supporting NWO policy straight down the line... especially as he advocates huge increases in government (taxpayer) debts - 'making the borrower a servant to the leader'...
Welcome to the war effort my friend...
yeh he is taking what I am saying then twisting it around to mean the opposite.... I think he has been up to far to late and doesn't make any any real sense at all... as I've told him before - Greece should just default on its debt - all of it - and tell the IMF to go away... but he doesn't listen...
Forget global warming - its a complete scam; - global temperatures have actually been dropping since 1997
Of course Nic doesn't worry about such facts as 30,000 MET measuring stations he is too wrapped up pushing blindly the proporganda of the NWO.... Shame on him
Hi Bernard
here is a good piece about how the IPO is gonig to change Facebook - with some cruchy bits on "The System" in general - well written....
http://edition.cnn.com/2012/01/31/opinion/rushkoff-facebook-ipo/index.html
Here is some slightly less sell side bias assesment of Facebook and IPO's in general;
http://www.zerohedge.com/news/facebook-files-ipo-prospectus
http://www.zerohedge.com/news/facebook-ipo-because-time-its-different
http://www.zerohedge.com/news/0014-ad-ctr-facebooks-weakest-link
http://www.telegraph.co.uk/finance/financialcrisis/9055142/Bundesbank-s…
As a German, I started to read foreign press, ideally British press like the Telegraph, because, essentially, here in Germany my fellow countrymen are by and large lied to by the press, and way too many details like this fall under the carpet.
For me the entire ongoings in Europe are horrible. What few people outside Germany realize is, how bad the financial situation of Germany itself really is. While the companies and stockholders in Germany may get rich with the booming exports, the German state is highly in debt himself, many of the German states (Bundesländer) are close to bankrupt, and this news just adds to it. It is highly unfortunate that the German goverment has lost every reason. Most Germans fail to see how the entire Euro concept creates the very thing it was meant to reduce: it creates more and new hate between people and nations. Demading souvreign contries to cease its autonomy, setting ultimatums! So far has our politics come to! What horrible days to live in.
But it looks like a fast train hellbent to wreck, and no one seems to have any reason or will to stop the coming catastrophe. Now as it is we will either see the very death of Democracy in a Euro Goverment in the long term; and already people are in power in the EU who NOBODY elected, who nobody knows and who never can be voted out by the people! Or we see a giant economic breakdown. This entire EU and Euro project is a gaint catastrophe. Cooperation and peace between nations is a noble goal, but it was built on the ignorance of every reasonable concept, like souvernity of the nations of people, democracy and leaving people their economic autonomy! It was the diversity of the European nations which was our strength, not forcing them all into a corset! I fear this hubris of politicians will all cost us much in every country of the EU.
I really respect and envy the UK for having kept their souvrenity.
he went on to say;
Elikal
I have a question for you. I am very curious to know why Europeans do not realise that the UK fights so hard to keep it's democracy and freedom because we have had to fight so hard to attain it in the first place. Why do they not realise, that a people who have been free for a thousand years are not likely to roll over and allow someone else to take it from them? Why do they belittle us for it? I just don't understand. Because no disrespect to anyone, but twice in one hundred years this country has fought itself to the brink of bankruptcy and exhaustion to give the people of Europe the gift of freedom and, in our eyes at least, they just throw it away at the first opportunity as though it is worth less than nothing. Why?
-
I can only try to answer as best as I see it. And keep in mind, it is only one man's observation. But here goes:
For most Germans, the events of our history are very present. Believe it or not, but the German history of 20th century is VERY present, in school, TV documentaries asf. After WW2 a left intellectual caste came to rise, especially after the 1960ies, which heavily influenced education, media and politics here. For them, the main demon was "nationalism", which was equaled to nations per se. So while I profoundly hate them, being conservative myself, I do not think it was malevolence. If you tell Germans they want to dominate Europe, most would get a heart attack, because they can't imagine that! They blamed all evil on the very idea of nations, and after WW2 the leftish thinkers got to power. They dominate all politics.
The result is, in our parliament, ALL political parties are pro-EURO and pro-EU. The only anti-EURO and anti-EU parties are 1% or so. Most Germans don't reflect that, but for them, cooperating in the EU is a dream, like getting rid of what they think was the root of evil, the nation states. That is how many here think. They do not understand that other people have other cultures, other ways to do politics and economy, because we here are manipulated by these leftish intellecutals for dedaces. Germans today love compromise and cooperation. The ideal government in the mind of most Germans is, where all parties work together, and all mayor political parties here differ only in very small things. Ironically only the former communist party from the GDR, the "Left party" (Die Linke), is somewhat EU sceptic.
Germans are quite dominated by angst, fear, and always have been. If you promise them safety and welfare, you can always make many here accept fewer liberties. Also a historical result, given how the economic breakdown in 1920ies -30 resulted in the Nazi rise. So keeping economic stability is a prime topic here, always overshadowing every other issue. For many Germans, liberties and rights are some rather abstract, while money and economic saftey (a warm home and a meal on the table) are more real. Many here were so lulled into believing Europe is the savior, it is now hard to make them see the truth, how it ruins democracy and how only national states and independent people can be a guarantee of democracy and transparency. I am vividly against the EU, simply because even with ideal politicians it would destroy the diverse cultures of politics, undermine the bonus of diverse economies and it would be WAY too intransparent. See USA, Russia or China. Such super giantic states never work really well.
It's a complex topic and hard to explain in a short answer. I hope it helped a bit to understand. ^^
That truck graphic truly invokes the Holy Shit Quotient.
I am reminded of the 'Banking Gone Wild' flower graph from 2009 - the Banking sector is geometrically longer than all the other industries combined. The first word that came to mind when I saw that graph was 'Tulipmania'. The 2nd, 3rd and 4th were "law unto themselves".
Bernard, thanks for 7 on how Norway and Sweden did it. We certainly could learn a lot from them and I liked this bit especially,
Labor stepped in, seized the three largest banks, fired the top management, left the stockholders without a dime and refused to bail out any of the smaller banks. The well-purged Norwegian financial sector was not one of those countries that lurched into crisis in 2008; carefully regulated and much of it publicly owned, the sector was solid.
Co-operation and public ownership is the key here, not relying on the 1% to pull us through.
Here come de game changer...
."China’s economy is headed for a “hard landing” this year as weaker demand overseas chokes off exports, said Gary Shilling, who correctly forecast the U.S. recession that began in December 2007".
Explains why Westpac is shedding staff in aus...send work to India....great aussie bank not.
Meanwhile the great farce is falling apart:
Re:
2. Very good (and pungent) advice - Here's Hong Kong resident corporate lawyer Cactus Kate (Cathy Odgers) with 10 useful tips via a post at NBR for New Zealanders wanting to do business in China.
Several points.
1. Probably best to stay away from NBR on so many levels
2. Try substituting China for any other country you may struggle with. My favourite difficult country isSwistzerland. So i substituted Switzerland into each statement and it pretty much works just as well, even the food comment.
3. Do not go and checkout her blog. That is such a strange personal space, It is best not to devl ino other peoples minds and here is the proof.
4. Admission, I have in my time fallen for most things on her list in various countries. So I think it is more of a global guide.
OH MY GOD
Just Look At #5
"Capitalism became a world-beater in the 1800’s,..........Societies that adopted the capitalist system gained unrivaled prosperity, enjoyed widespread job satisfaction, obtained productivity growth that was the marvel of the world and ended mass privation."
And i thought the 1800's was when they had a British Empire that raped and pillaged the third world,
And i thought the 1800's was when most people did'nt get a vote,
And i thought the 1800, was when they kidnapped the darkies in Africa and shipped them in chains to be sold as slaves,
And i thought the 1800's was the world of Oliver Twist,
OH MY GOD, how wrong i was. Fancy believing all those lies
As a matter of interest. If you visit one of those old English country homes you will see they have a seat outside the masters room. This is for the servant to sit on, as he waits on the masters call. Sometimes they would have to sit there for hours and would fall asleep. To stop this appauling behavior the master had the seat of the chair built on a slope and made the servant keep it highly polished. Then if the servant fell asleep he would slide off the chair. this made it imposible to fall asleep on the job.
Boy i can't wait to become a slave. Sounds really good, dosen't it Bernard?
In the year 2964.....!
"Things are so bad according to one study I've seen, that at the current birth rate the last Japanese person will be born 953 years from now. "
Re 1. Smelly Money - I visited San Marino recently. I am quite certain that border between Italy and San Marino is not guarded at all. It could be the case of The Telegraph’s literal freedom but suggesting that Italians are smuggling money in underwear is quite ludicrous.
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10783229
Key bats away talk of cronyismJK really does not seem to want to understand anything. The cronyism is political cronyism in general. Why should Cullen get his job at NZ Post- what does he know about it- nothing. Why should politicians in general get jobs for which they have no experience or relevant skills- cronyism.
Am I the only one who thinks John Roughan at the herald is a bit of a twit?
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10783280
pretty economically illiterate IMHO, he seems incredulous that the economic malaise continues.
He clearly has a very poor understanding of the debt ridden mess we got in, and how the western world is now entering a Japan style hangover. He seems to long for - and expect- the unsustainable boom times to return
Please, John, don't write about economics
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