Albert Edwards On Terminal Competitive Devaluation, The Nuclear Option, And How The Fed's Policies May Start An All Out War

Tyler Durden's picture

The recent intervention by the BOJ has quickly become the most contentious decision in global economic circles, with many wondering now that the world economy is off on a course of radical currency devaluation, who will be next, and how far will this game continue? If Albert Edwards, whose latest piece rhetorically asks (and answers) "what do devaluation, high unemployment, inequality and food prices spell?  C-H-A-O-S" is correct, this could be the beginning of a rapid descent in which central banks around the world are all forced to use the nuclear option: ceaseless FX devaluation, but one coupled with an endless increase in the money supply a process which can only have one outcome - that predicted recently by Eric Sprott when he said that "we are now paying for the funeral of Keynesian theory." However, the biggest threat is that this most recent invocation of the nuclear option is coming at a time when the world is least prepared to handle it - social imbalances are at unprecedented levels, and if, as many predict, the price of key food products is about to surge (courtesy precisely of these failed central bank policies) to a point where the great unwashed end up on the wrong side of hungry, from there, to armed conflict, the line is very, very thin.

Edwards looks first at the immediate reasons that prompted Shirakawa to do what he did.

Since 2009 a cyclical recovery has been met with further yen appreciation which has been tolerated by the Japanese authorities. But with the leading indicators now topping out, yen strength is no longer tolerable (see chart above) - commentators who rightly point out that the real trade-weighted yen is not that strong have missed the point. It is the change in the currency as well as its level that helps determine export growth. A rise in an undervalued currency to a less undervalued level will still hit exports and can cause a recession.

The Japanese economy is decelerating. The PMI usually proves to be quite a good early warning of changes in the cyclical wind and it has begun to turn down decisively. (The current downturn may look moderate compared to 2008, but remember GDP contracted peak to trough by 8% during this period, one of the worst GDP declines of any industrialized nation.) The current downturn in the PMI is sufficiently bad to start ringing alarm bells - see chart below.

As expected, Japan is merely the beginning, however in a non-zero sum world of competitive currency devaluation. And because he is right, and fiat is all relative to itself, except to absolutes such as gold, those calling for a local peak in gold prices may want to reevaluate their assumptions.

Our economists made a very interesting point in the Economic News,17 Sept. They believe the BoJ?s actions may be the start of a more general period of competitive devaluation; with the US authorities tacitly allowing the US dollar to decline in an environment of QE2 (no wonder gold looks so perky!). The good news is that this is not the zero sum gain that most commentators suppose. For if all central banks are printing money to drive their currencies downward, exchange rates may not change, but the money supply does. It is easier for the US to ?guide? down the dollar with its burgeoning current account deficit, and to the extent bond yields rise as foreigners back away, the Fed will just keep printing money to hold them down!

Looking at history, the one most prominent example of coordinated devaluation was during the Great Depression, which was accompanied by the confiscation of gold. Arguably, back then it kinda, sorta worked in principle (for other reasons) if not in theory, with the argument being that devaluation can prevent deflation.

This may or may not stimulate economic activity ? I do not have the certainty of Mervyn King. But one key lesson from the 1930?s was that raising interest rates to stay on the gold standard was a mugs game (see chart below). The UK quickly came off gold, devalued and enjoyed a shallower depression than most other industrialized nations. The US followed shortly after.

Edwards takes a critical detour into a topic well-known to Zero Hedge readers: the Fed's free range authority to buy not only dometic but foreign debt (who needs FX swaps when the Fed can buy Irish debt). At least we have Ben on record telling Ron Paul he has not done so... yet.

Apparently devaluation works to head off deflation. No less than Ben Bernanke told us so in his Nov 2002 speech Deflation: Making Sure "It" Doesn't Happen Here - link. He said “The Fed can inject money into the economy in still other ways. For example, the Fed has the authority to buy foreign government debt, as well as domestic government debt. Potentially, this class of assets offers huge scope for Fed operations, as the quantity of foreign assets eligible for purchase by the Fed is several times the stock of U.S. government debt.

“I need to tread carefully here. Because the economy is a complex and interconnected system, Fed purchases of the liabilities of foreign governments have the potential to affect a number of financial markets, including the market for foreign exchange…Although a policy of intervening to affect the exchange value of the dollar is nowhere on the horizon today, it's worth noting that there have been times when exchange rate policy has been an effective weapon against deflation. A striking example from U.S. history is Franklin Roosevelt's 40 percent devaluation of the dollar against gold in 1933-34, enforced by a program of gold purchases and domestic money creation. The devaluation and the rapid increase in money supply it permitted ended the U.S. deflation remarkably quickly. US CPI inflation went from -10.3% in 1932 to -5.1% in 1933 to +3.4% in 1934. The economy grew strongly, and by the way, 1934 was one of the best years of the century for the stock market. If nothing else, the episode illustrates that monetary actions can have powerful effects on the economy, even when the nominal interest rate is at or near zero, as was the case at the time of Roosevelt's devaluation.”

Hence Bernanke openly stated back in 2002 that the end game, especially when all else fails (fiscal deficit too high and QE shown to be impotent), is to print money to drive down the dollar. This is default in all but name. Investors ignore this at their peril.

All deflationists especially those with blogs and audiences - please, please read this very carefully. It tells you the blueprint for the endgame word for word.

Next, Edwards confirms what many suspect: that Japan was merely a victim of China's cunning policy to get Japan to intervene due to its own inability to devalue its currency without angering the US.

But back to the current BoJ intervention: our Chief Economist, Michala Marcussen, thinks that the Chinese, in starting to buy Japanese assets, have pushed up the yen and effectively forced the BoJ to intervene. She writes, “China may thus be the big winner from Japan’s intervention; winning on three levels (1) diversifying reserves (albeit still only a small amount) and reducing its exposure to the US dollar, (2) escaping the title of currency manipulator, and (3) placing Japan in the hot seat ahead of the G20, thus detracting attention away from itself." -? link.

I would contend that China is now playing a very, very dangerous game. With the US trade deficit deteriorating again (see top right-hand chart above), and ? much to my surprise - the Chinese trade surplus widening, patience is rapidly running out in the US with China?s currency policies. I believe we are now nearer to an outbreak of trade war than at any time since the 1930s. Any downturn in the global economy back into recession would almost certainly guarantee such a result, as the political pressure to do something mounts.

Yet even without a trade war or competitive devaluation, any descent back into outright recession will result in intolerable social stress. We had previously highlighted the extreme levels of income inequality that prevailed even before this crisis.

In addition to the inequality, absolute levels of poverty have been exacerbated by this recession. The US Census Bureau last week published a report showing that 43.6 million people were living below the poverty line, a 50-year high- link.

For those curious why we posted the BIS report on core differences between Japanese and US households, hopefully this explains it (and those who wish to reread it, may do so here). Going into a double dip, a redepression, or a brand new recession, whatever the semantics, with the current level of developed world inequality is recipe for social disaster, and possible civil war.

Inequality, unemployment and poverty are all at crisis levels in the immediate aftermath of this financial and economic debacle. To put it into a human context, one snippet caught my eye. David Rosenberg of Gluskin Sheff believes conditions now are so bad that they can be reasonably described as a depression. He reported a few weeks back that “In a depression, radical changes occur in terms of social norms and spending behavior. In recessions people don’t cancel their life insurance policies – as one example. But in a depression, tragically, this is what happens – almost 35 million Americans (a third of US households) now have no such coverage, up from 24 million five years ago. This reflects the focus by households to pay down debts at all costs and how companies have bolstered profits, by eliminating benefits (see ?More Go Without Life Insurance’ ? WSJ 29 Aug -? link)."

Many commentators, including myself, believe it is no accident that before this crisis inequality in the US and the UK reached extreme levels. Many believe there is a causal relationship from extreme levels of inequality to the crisis. How? Central bankers, by pursuing policies thatallowed the middle classes to borrow against rising asset prices, kept them consuming despite the stagnation of their incomes and hence disguised the effect of government policies that allowed the rich to acquire virtually all of the gains in GDP growth. - link.

Additionally, this is not merely a horizontal event, but a vertical one, as one class steals from the future of all other classes.

And in the process of ?robbing? the middle classes and now still attempting to keep asset prices artificially high, they are also robbing our children of the ability to buy a house at an affordable price. Yet central bankers still see QE as key to maintaining the illusion of prosperity and stoking consumer spending! I will write more about the role of high levels of inequality in causing the recent crisis in a future paper (James Montier has passed me some interesting papers). But with youth unemployment rocketing in recent years (can you believe it is 40% in Spain), policymakers had better start manning the barricades for the backlash. For as my mother used to say "?the devil makes work for idle hands”.

Lastly, to provide all the ingredients for social upheaval, not only is social inequality at all time records, but soon, courtesy of the very same policies adopted by the central banks, the great unwashed mass may soon have little if anything to eat.

For one idea of what might drive the poor to breaking point in the coming years, read my colleague Dylan Grice?s excellent report on the likelihood that we will see a structural spike in higher grain prices from these already high levels - link! For he notes that the grain markets today are at a very similar level of tightness to the oil market in the early 1970?s when the US turned into a substantial oil importer. This made the market very vulnerable to a supply shock (such as the 1973 Arab embargo), in a way that it wasn?t in 1967. China is in that same situation today for grains (see chart below). If the devil makes work for idle hands, history is full of examples of what happens when those same hands are owned by the poor and hungry.

So for all those who have been wondering if Mike Krieger, and recently Nic Lenoir's anger at visualizing precisely the scenario where the Fed's ongoing disastrous policies result in social and/or global war are overblown, the answer is no. We are getting to the point where absent a dramatic intervention in the Fed's all or nothing gamble on preserving Keynesianism will almost certainly result in armed conflict. And if those who know and understand this do not act, nobody else will. The ability to postpone that most critical intervention in this generation's lifetime is ending. Very soon we will have only ourselves to blame for not having done the right thing. We hope by then it is not too late.



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doolittlegeorge's picture

we're already at war.  and have been for some time.  please specify because while i'm not too picky when it comes to stocks ("you mean you're suppose to pick these things?") i sure am when it comes to war.  i'm on the fence when it comes to women, however.  isn't it suppose to be the other way around when it comes to "the W."

themosmitsos's picture

WW III. Bring it. We NEED it. Whole planet is full of worthless people that feel they're entitled to all kinds of things, as a basic matter of fact. Everyone's special. War. Bring it.



WaterWings's picture

Funny-bone reality is that mass starvation will once again be the norm.

Hard-core history loses to slick mass-media.


The potential of dying of an empty stomach just isn't on the mind of the Western world these days.


That that wheel must be reinvented.   

bigkahuna's picture

Most people in the US have no concept of going hungry or thirsty. If it ever happens, I guarantee the affected people will never forget it if they survive. It is a life changer.

kinetik's picture

I read that as Eddie Albert, stupid song... can't get it out of my head. ....Grreeeeeen Acres is the place for me

cossack55's picture

Even so, Eddie was a decorated war hero for his actions at Tarawa.  I still enjoy that show.

Gully Foyle's picture


Prior to World War II, and before his film career, Albert had toured Mexico as a clown and high-wire artist with the Escalante Brothers Circus, but secretly worked for U.S. Army intelligence, photographing German U-boats in Mexican harbors.[3] On September 9, 1942, Albert enlisted in the United States Navy and was discharged in 1943 to accept an appointment as a lieutenant in the U.S. Naval Reserve. A genuine war hero, he was awarded the Bronze Star with Combat "V" for his actions during the invasion of Tarawa in November, 1943, when, as the pilot of a U.S. Coast Guard landing craft, he rescued 47 Marines who were stranded offshore (and supervised the rescue of 30 others), while under heavy enemy machine-gun fire.[4]


Albert was active in social and environmental causes especially from 1970s onward. Beginning in the 1940s, his Eddie Albert Productions produced films for various U.S. corporations, as well as documentaries such as Human Beginnings (a for-its-time controversial sex education film) and Human Growth.[7] Albert also narrated and starred in a 1970 film promoting views of the Weyerhaeuser company, a major international logging concern.[8][9][10]

He was special envoy for Meals for Millions and consultant for the World Hunger Conference.[11] He joined Albert Schweitzer in a documentary about African malnutrition [12][13] and fought agricultural and industrial pollution, particularly DDT.[11] Albert promoted organic gardening and founded City Children's Farms for inner-city children,[14] while supporting eco-farming and tree planting.[15] He was national chairman for the Boy Scouts of America's conservation program and founded the "Eddie Albert World Trees Foundation." Albert was a trustee of the National Recreation and Park Association and a member of the U.S. Department of Energy's advisory board. This notable activism led TV Guide magazine to call him "an ecological Paul Revere."[16]

Albert was also a director of the U.S. Council on Refugees[17][18] and participated in the creation of Earth Day and spoke at its inaugural ceremony in 1970.[11] (Despite rumors that Earth Day was designated to occur on Albert's birthday, April 22, sources suggest that the date was coincidental.)

Drinking bird is for sale here

Apparently the Edmund Scientific Catalog trivia section credits Eddie Albert, of Green Acres fame, for inventing this item. They are 2 for $7.95 at this site. It works because the weight is distributed perfectly to allow the bird to swing to and fro. The glass bottom gives the impression of it "drinking" as it bobs forward and the fluid goes up it's neck, then back again. The force of the fluid moving is enough to keep the bird moving.



El Hosel's picture

Thanks Gully,

   What a life... Fine example of a man during the Greatest Generation.


 Now back to the Greatest Degeneration,  Nancy P, Al G, GW, Barry O, Barny F, Bill and Hill. WTF!


cossack55's picture

Twas all so much easier than robbing trains and blowing safes.  Not nearly the fun though.

Atomizer's picture

Just like Fannie Mae and Freddie Mac and Ginnie Mae, you have to go down the rabbit hole a bit further.

Today's FOMC report will require you to start with FRED®. FRED will tell you to speak with ALFRED®, ALFRED will tell you to speak with FRASER®.


Study the charts. Begin with 2001 shaded FRED area. Chart recession vs money injection. It only takes one line to distinguish the cover up & lies.

Let's use 1961 for example


Carl Marks's picture

The end game is war. Iraq and Afghanistan were trial runs for the big one. When all else fails you swing for fences.

Spalding_Smailes's picture

"I speak in the name of the entire German people when I assure the world that we all share the honest wish to eliminate the enmity that brings far more costs than any possible benefits... It would be a wonderful thing for all of humanity if both peoples would renounce force against each other forever. The German people are ready to make such a pledge."

Adolf Hitler - 14th October 1933

Bob's picture

Great article!  It's good to see an appreciation for the Chinese skill in the game. 

Regarding "social imbalances are at unprecedented levels, and if, as many predict, the price of key food products is about to surge (courtesy precisely of these failed central bank policies) to a point where the great unwashed end up on the wrong side of hungry, from there, to armed conflict, the line is very, very thin," it's tempting to see this primarily as a threat within EM and third world countries, but they've been through it many times before. 

We, on the other hand, have not.  I would strongly advise that TPTB keep those unemployment checks coming. 


flacon's picture

I would strongly advise that TPTB keep those unemployment checks coming.


Why? So that even more people will starve? If we had the crash way back in the '90's it would have been bad but not as bad as if we had the crash in 2001, which would have been horrible but not as bad as if we had the crash in the mid 2000's which would have been terrible but not as bad as if we would have had the crash in 2007-8 which would have been devistating but not as bad as if we have the crash in 2010 which would not be as bad as if we wait ANY LONGER. The crash will CLEANSE the system, but the more we put it off the more people will die. 


The unemployment cheques should have stopped way back in 1971. 

Chump's picture

+ a lot

But this collapse isn't going to clean anything, imho.  Just going to usher in martial law.  Feeling cynical today.

hedgeless_horseman's picture imbalances are at unprecedented levels...

You think?

BELL, Calif. — The investigators from the district attorney’s office showed up at the mayor’s house early Tuesday morning, arrest warrant and battering ram in hand, banging on the door. When the mayor, Oscar Hernandez, ignored their shouts — “Come out!” and “Put your hands up!” — they rammed down the door and arrested Mr. Hernandez on charges of looting the treasury of his own city to enrich himself.


The officials were accused, in effect, of turning this city into their personal piggy bank: misappropriating $5.5 million in city money to enrich themselves with pumped-up salaries, illicit loans and big payments to attend committee meetings that lasted just a few minutes, if they were held at all. 

Seer's picture

$5.5 million!  Geez, almost as much as the banksters walked away with (and no battering rams have appeared on Their doorsteps!).

WaterWings's picture

Remember: the relevancy of mass media news is inversely proportional to the interests of a free society.

doggings's picture

$5.5 million? chump change for bankstas.

shoe shine money.

AnAnonymous's picture

Great article? Stupid article you should say. Where is the continuity? Not so long ago, an article by a top guy was published claiming that the success of the US was the result of having the highest GINI vs income ratio.

Here, you get the reverse that the inequality in revenues is the source of the disease.

An incredible mish potatoe by the way. The guy wrote that the bankers have been stealing from the middle class by allowing them to consume beyond their capacity. Stunning.

There will be no war. Keeping to depict China as the source of the disease when actually it is only the expansion policy led by the West that is going to its natural course end, well, that is keeping attention out of the real issue.

Waterfallsparkles's picture

One needs a Masters Degree in Quantam Physics to invest in this Market.  With a Minor Master Degree in World Ecomonics.  No wonder why every one is withdrawing their money.

espirit's picture

"One needs a Masters Degree in Quantum Physics to invest in this Market.  With a Minor Master Degree in World Economics.  No wonder why every one is withdrawing their money."

I dissagree with this. Surely you realize that you need an inside man to know where the daily dollah game and the direction of the Pomo Pump are headed.

For me, PM's (all I can carry) are becoming the surest way to retain wealth.

Voluntary Exchange's picture


It's called organized crime. Don't buy your adjudication and protection services from a monopoly provider (called the "state"-- stop paying all taxes) and don't use monopoly money. Use anything of value but not their instruments of fraud and control. Don't play their game. Unite and get your protection services ready for when they attack you, as the criminal parasites that they are they cannot tolerate an honest voluntary exchange as no one would "buy" their so called "services".

Atomizer's picture

Did you folks forget about the Davos meeting?

Davos Annual Meeting 2010 - From Copenhagen to Mexico

Nevermind, I forgot that your suppose to forget.

Dr. Sandi's picture

Did you folks forget about the Davos meeting?

Damn that Davros! Just when you think he's dead and out of the picture, the Daleks revive him. Then he starts his mischief all over again. And I don't think the New Doctor is tough enough to handle him if he starts messing with the economy.

The Disappointed's picture

EXTERMINATE! <bzzzzzz>

But really, that's a great idea! Send Daleks to Davos!

knukles's picture

Not intending to date myself but.........

The classic historical paradigm pf endless round robin beggar thy neighbours devaluation is pre-Euro Europe.  Policies of continual devaluationsby governments with the explicit intention of stimulating economic activity through increased exports by making them cheaper and thus more attractive for foreign buyers were the actions du jour.  (Along with the Unintended Consequence of significantly higher domestic inflation caused by additional monetary creation and increased import prices.)

Now, during those same times, European partner central banks rarely participated actively in another's devaluation as such would create populist backlash for their respective political class.  So, essentially the same monetary/export driven phenomenona as is being presently pursued globally and the outcry against recent unilateral Japanese actions.

Moreover, the European economies at that time and carrying over to the present, have tended to experience higher marginal tax rates, greater share of GDP's subsumed by their governments and greater regulatory burdens, which all together generated the persistent Eurosclerosis of Stag-Flation.

I draw no intended parallel to the US's present situation, for at the moment enough excess reserves populate the banking system so as to make Zimbabwe look prudent, and should "V" (velocity of money as in MV=PT) recover, which it will some day, then our current overall measuredlevels of inflation will reverse quickly and mightily.

Spalding_Smailes's picture

$100 Trillion Dollar Bill from Zimbabwe

Sincet the inflation rate of Zimbabwe exceeded 231,000,000% (that was the official rate, some economists believe that it was actually 89,700,000,000,000,000,000,000%), the country had been issuing $100 trillion dollar bills! Therefore, if you own one of these bills, you are technically a trillionaire (in Zimbabwe dollars). These bills from would make great Birthday Card or Christmas Card stuffers. Turn your friends and relatives into trillionaires! Since the government of Zimbabwe has now allowed the use of international currencies, including the US Dollar, they are no longer printing the $100 trillion banknote. Get these now while you still can.

rosiescenario's picture

...along these lines...when I was growing up I remember a friend's parents papering their downstairs half bath with German left a lasting impression on me...the people who bought those bonds originally thought they were as good as gold...after all, they were backed by the German government.

Bose Einstein OracIe's picture

10 bucks for one sheet of toilet paper??!

Waterfallsparkles's picture

My Mother said that there would eventually be no Middle Class. Interesting she died in 1989.

I believed her and worked very hard, saved, lived under my means to built up my reserves so that my Children would not be the ones that were poor.  Built up assests that would be passed on to them so they could build on them.  I cannot tell you how glad I listened to her.  Well, I am not Rich, Rich but I am not poor.  I guess the lesson is listen to your Mother.

Caviar Emptor's picture

Your mom was wise. That is the inevitable outcome of unregulated capitalism. Wealth (and power) only gets more concentrated, not evenly spread. The process was interdicted several times during US history through political force to re-establish equilibrium (Jefferson, Jackson, T. Roosevelt, F. Roosevelt). In between there are long periods of laissez faire where the middle class disintegrates and the ranks of the extremely wealthy and poor swell. We're fast reaching terminal stages of the process right now. Solutions have not been forthcoming yet. 

Chump's picture

Yeah American capitalism is just so darn unregulated these days!

What we're approaching the end of is the welfare state and government-corporate collusion, a perversion of capitalism with the misnomer "crony-capitalism".

Your homework is to outline the "long periods of laissez faire" capitalism this country experienced.

Virginian's picture

Who, exactly, should regulate my right to conduct my own own economic affairs?  Whose business is it how I - or anyone else for that matter - deploy my own capital?  Capitalism is nothing more than the God-given freedom to exercise one's own economic prerogitives as one chooses.  Be VERY CAREFUL when you suggest that the rights to private property (i.e., capital) are subject to the whims and regulations of others - it leads invariably to totalitarianism.  To paraphrase Winston Churchill, "capitalism is the worst of all economic systems...except for all the others."

Seer's picture

And, sadly, it leads to what we're now seeing.  Concentration of wealth needs protection, enter fascism...

All of this is meaningless in the face of diminishing resources and increasing population.  It's the Olduvai Theory (Duncan) materializing.

TBT or not TBT's picture

Fascism is always and everwhere an outgrowth of socialism with demagogical(or nationalistic) twist.    Think socialist nationalism, or national socialism, or Nazi for short.   You might want to come up with a different name for what you think ails us.    The current bunch in Washington are up to instrumentalising private property, confiscating large parts of the economy in all except formalities, to their whims.   Whim A being consolidating their power.   Whim B being to impose their la-la land, detached from reality, academicoid sense of social justice, and similar such murderous goals.    Yeah, murderous.

bigkahuna's picture

Without the internet, I would have been subject to local propaganda regarding our economic situation. Now that the internet is here, I can go and get a decent approximation of what is happening and attempt to make a comparison to the past. Well, FDR had a propaganda machine in place to tell we the people what was going on--and we believed it--FDR wrote history as he wanted it to appear. Before that they had telegraphs and the pony express in place-so you can imagine that the view of history we get from back then is as scewed as the writers were dishonest (we hope they were honest). Now, the internet will give you almost every possible view of an event in almost real time. The same BS that our government has pulled in the past and then glosed it over will not work today. There will now ALWAYS be at least a considerable segment of people that see through it. Facism will not work without purges today. No one is going to buy the BS. Comparisons to the old dead presidents or old dead chancellors for that matter-to today is just going to cause confusion. Our presidents today are impotent compared to those guys. The only person of any circumstance today that seems to be a throwback to the old days is Putin. Watch out for him-he could actually get an effective nationalistic movement with world wide consequences started. The rest of the leaders are either impotent or inconsequential (Kim jung-Il).

Chump's picture

And so we see why regulation of the internet is such a hot topic these days...

Implicit simplicit's picture

Moms are smart;>} Working hard was a way to get out of poverty for both my immigrant parents. This was the promise America offerred, and it was true. They taught by example, and we learned.

Seer's picture

Not exactly...  Working hard is working HARD.  Working Smart is smart!

Poverty, the appearance of it anyway, was escaped because there was excess.  Has nothing to do with how hard one works: I've seen a ton of hard-working poverty-stricken people in Manila; the chances of them escaping poverty is just shy of zero (that's why many become second-class people in other countries eeking out a bit of extra money [to send back home]).

The hard-work-will-give-rewards is a myth that TPTB perpetuate, kind of like fairy tales about  kissing frogs.  Trickle-down has been around for a LONG, LONG time...

TBT or not TBT's picture

"Poverty, the appearance of it anyway, was escaped because there was excess.  "

Excess occurs when people specialize, say in shoe making only, and thus produce a LOT more shoes than they need themselves, and generally more efficiently and with better results than when each family cobbles together its own shoes.   Anyway, their whole idea is to sell their extra shoes in exchange for the ability to barter (or buy) things and services made by others who also chosen to specialize.   The cobbler gets efficiently made bread of better quality and lower cost because he supplies the bread maker shoes of lower cost and higher quality. 

But you are trying to tell us poverty is escaped "because there was excess."   Hell no.   It happened because everyone was working in their own interests, marshalling their own skills and resources more efficiently, and TRADING their ever more efficiently produced goods and services(your "excess").   The concept extends to whole countries...see Smith, Adam "The Wealth of Nations."    The less dampened this process is, by regulation, taxation, and especially outright confiscation, the more and better "excess" gets produced, and the cost of acheiving a particular degree of lifestyle ease reduces over time.   Simple.  

Note that poverty and inequality are much now worse in America after four years of Pelosi/Reid, and two with their lapdog in the white house signing every insane interference program they come up with.    That's what happens when government interferes with the people.

jmc8888's picture

Impeach or resign Obama

Glass/Steagall or die

North American Water And Power Act

Four Powers Plan for CREDIT SYSTEM, not MONETARY system

It's really that simple.  Then we can get started on >10,000 Nuclear power plants/Fusion research, REAL SPACE PROGRAM, h3 on moon

Fusion know so you can reassemble matter on the atomic scale and realistically turn Hydrogen into Steel, or Uraniuml, or GOLD ha ha.  ALL in our future.  No need to fight over declining reserves when you can CREATE YOUR OWN.  Remember folks ~99.9% percent of what's in the Universe is HYDROGEN.  No need to run out. That is if we don't let wall street, big corporations, and the Queen of England want to CONTINUE to keep us down and strangle the supply from everyone for EARTH'S bullshit sake. 

Impeach Nero, laugh at the republicans for their never ending idiocy, and fix this damn mess.  

This economic down turn was 100 percent planned.  Why? The 100 percent solutions were on their desks, and they CHOSE not to use them.  Solutions on the desk of congress since 2007, and none are being done, even now three years and the truth readily apparent to everybody.  They still won't do the EASY, right thing.  Want to stop this collapse? Pass the bills in congress since BEFORE IT HAPPENED.  Demand it.  Because they are sitting there.  Better hurry, because the dipshit republicans will never do them.  (thus a recovery will never happen under ANY republican NON-leadership)

Fix the system, it's EASY.  Or die, which is permanent.  Your choice.  Make the right one.  (or be forever labelled amongst the biggest fucking idiots EVER).  All of this is 100 percent true, don't blame me if you've been brainwashed into complete idiocy.  Fascism is here, has been for a while (brought to you by the Republican party), and is about to get much, much worse (brought to you by BOTH the republican and now DEMOCRAT party). 

Cancel the bailouts, use the money to build REAL WEALTH. 


Some good reading....

How Adam Smith fooled you suckers!:


FDR vs. The Futurists: The Future of Libraries


It was no conspiracy! MACARTHUR & EISENHOWER


Lyndon LaRouche Address to Summer Shields Campaign Four Powers Conference


Want to see a real candidate address some issues, plus some other video footage of the dem(republican)ocrat party?  These are the types of people we need in office.  Not the retards in both party that suck each others cocks non-stop in a circle jerk resembling hands across america.

Wake up people, or die.  Your choice, and one you'll make whether you stick your head in the sand or not.

Of course it's easier to just to go here...bookmark the below, and add to your daily reading.


One final thing from a week or so ago

The takedown of Glass/Steagall



Dr. Sandi's picture

Politicians are like spark plugs. You can only replace them with something nearly identical or the engine stops working.



Vote again!

merehuman's picture

it stretches credibility when all links are from same source. What ever, its too late, the cake was left out in the rain and the "fat lady is singing now." The other shoe is about to drop and be the straw that broke the camels back leaving us all up a creek witout a paddle.


Spalding_Smailes's picture

Lyndon LaDouche' is a commy pinko' lil' Bitch'e Boo


He's dressed up his website trying to grab market share from the sheeple ... he might pull 1,000 vote across this country, not bad ...

Spalding_Smailes's picture

Some good reading....

How Adam Smith fooled you suckers!:


FDR vs. The Futurists: The Future of Libraries


It was no conspiracy! MACARTHUR & EISENHOWER


Lyndon LaRouche Address to Summer Shields Campaign Four Powers Conference


Want to see a real candidate address some issues, plus some other video footage of the dem(republican)ocrat party?  These are the types of people we need in office.  Not the retards in both party that suck each others cocks non-stop in a circle jerk resembling hands across america.

Wake up people, or die.  Your choice, and one you'll make whether you stick your head in the sand or not.

Of course it's easier to just to go here...bookmark the below, and add to your daily reading.


One final thing from a week or so ago

The takedown of Glass/Steagall




Thankyou, I just printed all that out and now I have something to line my bird cage with, cheers!!!