Submitted by Jeff Harding of Minyanville
In George Orwell’s brilliant novel Nineteen Eighty-Four, one of the characters, Syme, in discussing the nature of Newspeak, says “It’s a beautiful thing, the destruction of words.” Newspeak was a systematic attempt by the dictators of Oceania, a totalitarian society eerily similar to North Korea, to control thought by eliminating words that gave rise to ideas they disapproved. What Syme and Orwell are talking about is that the destruction of words is the destruction of ideas.
There
is a parallel to this in contemporary economic thought. Mainstream
economists, Keynesians, Neo-Keynesians, and Neoclassicists, would have
you believe that what common sense would call “good” is now “bad.”
Conversely, “bad” is the new “good.” I don’t mean to suggest that the US
is heading toward becoming a North Korea. My point is that that the
experts seem to abandon common sense and yet most people instinctively
understand that good is good.
Common sense is the crux of
Austrian theory economics. Austrians look at how individuals act, not
how "economies" or "nations" act or behave. Ludwig von Mises, the
greatest Austrian thinker, and in my opinion the greatest economist,
entitled his great work, Human Action not National Action.
The Austrian School was referred to by the Germans as the Psychological
School because its analysis started with individual action and how
those actions would either attain or fail to attain the goals sought by
individuals. In other words, it involves a lot of the "common sense"
that guides human behavior most of the time. It's comforting to know
there's a philosophy of economics that conforms to what human beings
actually do rather than how some economist thinks we ought to behave.
Examples of economic Newspeak flourish, especially if you listen to
President Obama’s economic team. My favorite example is the present
conflict between consumer spending and consumer saving. Since the crash,
consumers have cut back on spending and are increasing their savings.
Most economists are saying this is bad for the economy; they urge us to spend, spend, spend to save the economy.
Actually, it's just the opposite: Saving is the road to recovery.
It
seems rather obvious that during a downturn of the economy it would be
natural for people to save more and spend less: They're uncertain about
their jobs; the values of their homes have plummeted (about 30% since
the peak in 2006); their stocks have declined, and their debts are high. Isn’t it common sense that people are doing the rational
thing by saving? This is something our parents and grandparents
understood well.
Yet Keynesian economists, the dominant economic
theory today, tell us that consumers should be spending rather than
saving. “Don’t you realize,” they say, “that 70% of our economy is based
on consumer spending. Why do you think we have all that unemployment?
We won’t recover until we can get people to starting buying stuff
again!” Since we aren’t spending they've got the government to do our
spending for us. Paying one man to dig a hole and paying another man to
fill it is, under Keynesian theory, the path to recovery.
According
to their logic, we had the biggest financial bust in world history
because consumers wrongfully just stopped spending. If that was the
case, it’s funny we didn’t hear these people warn us about too much consumer spending during the housing bubble.
To
explain why saving is good and why economists are wrong, we have to ask
why we keep having these boom-bust cycles. Here's where common sense
really has been thrown out the window by mainstream economists. Almost
all economists believe that you can make the economy prosper by printing
huge amounts of new money and throwing it at the economy to make it
grow.
Does it make sense that by printing more pieces of impressive looking
green paper that you can create wealth? If that were the case, why
aren’t the Zimbabweans the richest people on the planet? Yet, this is
what economists believe and this is what the Fed practices.
To
cut this short, this is exactly what the Federal Reserve did starting in
2001. Over a five-year period, the Fed reduced its federal funds rate
from 6% to 1%. Money flooded the economy. Housing projects that made no
sense but for the cheap money and the false appearance of paper
prosperity, were hugely over produced. When the Fed stopped the gusher
of money in 2006, the whole thing collapsed and pulled the economy down
in the biggest bust the world has ever experienced.
Consumers, as we're referred to by economists, lost $10 trillion
of wealth in the bust, and were left with huge debts from their wild
spending. We borrowed against the value of our homes, we borrowed on our credit cards, and we borrowed to buy big new cars. Now about 25% of Americans have more debt on their homes than the homes are worth.
So
what would you do in those circumstances? Spend more? I don’t think so.
And that's why consumers are saving. Yes, it reduces consumer spending,
but how else are we going to save when unemployment is high and wages
are stagnant? Savers are making rational, informed choices and
economists just can’t see that.
There are two major benefits from
savings. You could say that reduced spending doesn’t boost the economy
and it causes housing and other asset values to decline. But that
ignores a critical point, and one that's hindering recovery: How else
are you going to get rid of the homes and commercial real estate that were overproduced during the fake boom? This really is simple
economics -- supply and demand. As prices fall, buyers will be attracted
to the market, and gradually the excess disappears. The longer those
assets and their related debts hang around, the longer this recession
will last. This, I believe, is the most critical issue in the economy
right now; by letting the economy solve the problem of all these
overproduced assets, credit will start flowing again.
Another critical benefit is that new savings build up capital for future
expansion. In addition to the $10 trillion lost by us consumers, the
entire wealth of this country was reduced by maybe another $30 to $50
trillion (these numbers are hard to pin down). With all that capital
wiped out, you may ask where the capital will come from to finance a
revival of the economy once the dead wood is cleared away. We already
know that it can’t be done by printing money. It can only be done by
savings.
I say, “Thank you my fellow Americans for doing the
right thing to help our economy recover. Please ignore the economists.
Take care of yourselves and you’ll be taking care of the economy.” Good
is good. Bad is bad.
nice, but wordy
The article is stupid the author has absolutely no sense of how the system operates.
The system is based on creating more and more credit... what happens when you fail to create the needed credit? Collapse then liquidation.
This is what happens when you attach interest to your medium of exchange. THERE IS NO OUT once you go down this road.
Why don't you shut your diehole, Mako?
Let savers save and let spenders spend and let printers print. We'll see who comes out ahead in the end.
Really.
Sounds like he is up to his eyeballs in debt
"The prisoner's dilemma is a fundamental problem in game theory that demonstrates why two people might not cooperate even if it is in both their best interests to do so..."
In the case of the American economy would we be better off if we cooperate? It sounds like author is advocating non-cooperation. What do those in the Austrian school say about this?
http://en.wikipedia.org/wiki/Prisoner's_dilemma
I think one might learn how to apply noncooperative gaming to a basic economic problem before one starts citing Wikipedia. We need more savings like we need a hole in the head. More savings simply allows the system as it is structured to survive. More savings is what the elites want because that savings must go immediately to pay the crooks on Wall Street for the massive debt cluster f*ck they created. That they should be in jail for creating.
So, let me ask you a hypothetical question. Let's say you are unemployed. Can you tell me how you would save more and how that would solve the crisis we face? Just curious. Now, apply this to forty million people on food stamps and the other thirty million who probably should be on food stamps. Now, tell me, how does saving more solve our economic problems? We need to invest more. Savings are to pay the bankers. Investing creates jobs. F8Ck savings. Let the banks go under for their criminal behavior.
Sorry for the delayed response, I guess I need to turn on some sort of reply notifications.
I never advocated more savings, I think that I am at least partially in agreement with you. The author of the article said, "Please ignore the economists. Take care of yourselves and you’ll be taking care of the economy." Since he advocated selfishness (and saving) I countered by vaguely arguing for cooperation (not saving).
But, I don't think that investing is automatically the right answer either, depending upon your definition. I think that if there is no existing excess capacity inside of the US then we should invest in creating capacity inside the US in order to create jobs.
You won't get anywhere by shooting people who are on your side.
Read Thomas Sowell's Basic Economics. That book will give you a good idea of how the system actually operates.
I have a 150 iq, and here is my take on all this stuff, since you all asked for it. The current monetary system is a stupid joke. Many of you are keenly aware of this. But it is more than a stupid joke. It is a deathly stupid, so very very very stupid joke... disarmingly stupid, inhumanly stupid. To come up with an analogy, its like a hypothetical plumbing system in a high-rise, where everyone sh*ts and pi*ses in a funnel that has a tube below it that empties into your neighbor-below's funnel... so that no feces or urine ever makes it down to the ground level within the week... over time though, particles of urine and feces find their way to a middle class individual's mouth, which is positioned in the basement, at the bottom of the 1st floors tube. So the main problem with this hypothetical plumbing system is that if you and your neighbor above are defecating at the same time, his feces will land on ur head, or splatter on your shoulder etc etc. The building's engineers have thought of this structural fault of their design-- to correct it they have cleverly designed a string that is strung from the top floor straight through to the basement (unlike the toilet tubes- which let out about six-feet in the air to the apartment below you-- to hopefully catch your waste in funnel positioned in the apartment below). (notice the wisdom of the engineers-- they didnt have a hole straight through each floor so ur waste could sail through from the 20th to the basement. They designed a brilliant funnel and tube system instead.) In any case, the string running to the basement is tied around the middle class gentleman's ear. So basically if your neighbors sh*ts on your head, you tug the string , and the guy at the bottom comes up and wipes the sh*t off you. He comes armed with a pistol too though, to shoot you with, so that you have a more difficult time interrupting the free and easy flow of credi-- errr sh*t-- from one floor to another the next time. This individual usually doesnt survive more than a couple of months, from the rinsing and spitting of so much waste matter, and the attacks made on him/her in the first few days when he goes to shoot the people who have been crapped on. In any case, he or she is usually so sickly after a couple of weeks that he only manages to fire off a few shots at some of the lower floor defecators (they are obviously crapped on the most). Various tenants who have somewhat more sound judgment begin to pick up on the inefficiencies and deficiencies of the system after a while. These individuals are in the minority though. They write books and have cult followings, and rail at the engineers of the plumbing system. No one stops to say, though, that the whole system, in addition to being very bad, very corrupt, very conducive to further corruption and all manner of injustices large and small, very stupid, riddled with fraud- on its face, and in its hidden details... no one stops to say that the system it is inhumanly stupid and ungodly-perverse, and that it is very possibly on the path towards corraling the species into a lower subspecies - 'homo mesasapiens', if you will, 'man half-thinking' (if i have my guesswork in latin correct there) ...
... so when i read these various critiques of the Fed and the monetary systems, keynesians, various govt policies--- it occurs to me that it is almost an offense to take exception to this or that policy, and even to generally criticize the whole of it, in more or less strongly worded terms--- without first and foremost questioning whether the whole structure of the debate is not mired in a new subhuman cognitive substratum that did perhaps not exist in centuries prior (in that mankind seems to be more refined and more stupid at the same time, if you follow me)... i mean, do pardon me, but the discourse on the whole thing is so horridly stupid--- YES it is a house of sh*t collapsing on itself, while spectators argue and criticize it while simultaneously getting splashed in the face and bemoaning it, but moments later taking the mishap apart piecemeal, and thinking of ways to avoid it in the future.... GO GO! rid urselves of everything... ZIRP is a funnel splattering waste onto everyone and then you are turned around and shot in the face by a sickly individual with a mouthful of crap... YES! it is so horribly horribly subhuman! and any discussion of it tragically is mired in this subhumanity, until there is a new system
Do you guys get a sense of how 1) stupid the system is and 2) how stupid even the critiques of the system are? -- in the sense that YES the system, and allowing it to exist, is inhumanly stupid!
too many words there buddy, need some constructive 'destruction of words' there
btw can your 150 IQ think of a better system??????
Over qualified plumbers have no use for paragraphs ;-)
Most plumbers are pretty bright people,in fact if the world was run by em the world wouldn,t be as shitty as it is now.Fact is you can only eat so much food in a day,only live in one property at a time,fornicate so many times a day,etc.The current system is built on control and greed,the elites want more for what to spend,hoard,etc, the simple answer is control.Years ago stability appeared to exist,maybe it was an illusion,who knows,but you had two generations who had fought world wars around,and when push came to shove they didn,t take any shit and let those in authority know things had to change.Who is around today to look up to,politicians,billionaires who asset strip for profit,organisational chiefs,in short hardly anyone.Our kids have no role models to look up to,they see a world thats corrupt and greedy and they think if I,m not like that they,ll get nowhere so they become that,instead of sticking together and demanding a better world.
See new paragraph,hope you like it and yes I am a Plumber and Gas Engineer.While modern medicine has saved many lives,good sanitation has saved countless more.Maybe I,m overqualified.
Leonard Susskind was a plumber before becoming a physicist noted for his string theory research, especially as it relates to Black Holes and the information paradox.
Oh no you've discovered my personal Black Swan event!
"Fact is you can only...fornicate so many times a day."
GB,
I was critiquing his writing style.
I too believe we need more plumbers, electricians, carpenters etc. instead of lawyers as our politicians.
Lighten up...I've washed dishes, been a fry cook, a plumber, and an electrician.
What I do now, I'm not at liberty to say...but I can assure you...even though my collar is white, my neck is still red ;-)
"I have a 150 iq"
That is like walking into a bar and announcing to all the ladies you have a 6" dick.
Probably worse.
Doesn't Ben Shalom have a 150 also? I think Ted Bundy's was very high, too. High IQ doesn't correlate well to common sense or sociopathy.
Well I supposedly have a 140ish IQ and I also think the monetary system is stupid but that guy's message still got lost in the middle of what looks like rambling.
Unfortunately, I haven't really thought of a better system either, other than "people shouldn't be such short-sighted assholes." Enforcing that would probably take an authoritatian state of some sort (preferably a benevolent dictator, but what're the chances?) and I don't want to live in one of those. It's frustrating that you seemingly either submit to a police state, which is crushing in almost every instance throughout history, or you let the ultra rich and connected run roughshod over everyone else.
Makes you wonder what the point is.
why so small?
Your name and announcement of your 15 iq must be meant as a joke. It sure doesn't add credibility to your argument. It's all stupid to us but a grand scam for the people of importance.
"I have a 150 iq, and here is my take on all this stuff, since you all asked for it."
I stopped right there. I've had enough of pretentiousness. "I" did not ask of you anything.
Colorful without the annoying aftertaste of enlightment. With only a 150 IQ, you probably shouldn't even be in here.
But yeah, it's possible that a couple of us here have figured out that the system is fucked like a recycled sex doll.
What do I save? FRN's/gold/silver/Tbond's/Cd's? Already know the answer-do you??
Indeed. Recovery will require redefining what "money" is.
All the gold and silver is already saved.
The system will not survive by saving, it survives by the stupid lemmings creating more and more credit... unfortunately, eventually they are tapped out.
GAME OVER.
The system will not survive by saving, it survives by the stupid lemmings creating more and more credit... unfortunately, eventually they are tapped out. GAME OVER.
I could summarise a baseball game the exact same way, then walk out in the middle of the second inning. Why don't you elaborate your thoughts and submit it to the Zeroes? You just seem to be in the stands yelling that the teams are idiots.
Shit, I been stockpiling those "free" packets of Horsey sauce from Arby's. I bet I got 8,700 of 'em now.
Will you trade some of your horsey sauces for some of my taco bell collection (mild, hot, and fire)? The latinos around me don't seem to care for it. I thought taco bell was authentic! No? ;-)
AMEN TD, Amen.
John the-raper-and-mutilator-of-wealth-and-destroyer-of-humanity Mynard Keynes HATED "private capital formation" (which is why Keynesians are attempting to annihilate it right now) because it give power to the people and reduces the need for Keynes' "The Total State".
I approve of this post.
Human Action is nearly impossible to read unless you are Einstein.
For a much easier read that explains EVERYTHING in Human Action, read Rothbard's Man Economy and State.
Available here, free of charge, in its full 1500 page glory:
http://mises.org/books/mespm.pdf
Mises also sells a hardbound version for 40 bucks. This book should be on every investors bookshelf. It is a complete treatise on Austrian economic theory.
Is there an audio version of this book?
Here is Man, Economy and State in an epub, pdf, and text format.
http://mises.org/rothbard/mes.asp
Unfortunately there is no audio book for this particular text (at least not a free one that I could find). However, I have a bajillion videos and other audio lectures on the subject for you to listen to.
Go here for tons of video and audio:
http://fascistsoup.com/suede-college-of-austrian-economics/
Thanks! I'm a huge audio-book person. I bought a GPS with an mp3/audible player so I can read while driving to work. I already booked marked your site! TONS of great info!
I read Mises "Economic Calculation in the Socialist commonwealth" and found it to be very good, but the English was so advanced/technical it was challenging to comprehend at times. But nothing like reading Keynes who had no idea what he was saying but said it in perfect King James English.
"Economics In One Lesson" is a fantastic read/listen. Thomas Sowell has a lot of good economics books too. Don't know if you have heard of him.
Michael,
When for the people who have become so dependant on audio and video that they can't read, there is no hope anyway because given the correct approach, they won't be able to make it work.
Hey, I hate reading books.
I choke down the ones I have to.
Obviously I enjoy reading though. I just like my reading to be dramatic, angry, and short - like most Zero Hedge blog posts.
Video and audio is a great way to suck down Austrian economics because Austrian theory doesn't rely heavily on mathematical modeling. You can get it by listening to it, and the stuff they do model is basic econ 101 that everyone already knows so it doesn't matter if you can see it or not.
Some people drive to work and it's better to listen to a book than listen to NPR! :)
I could not have said it better myself....Really, I couldn't. Much talent there!!!! I was thinking it really loud.
Cognitive stream---that can be a bitter pill to swallow. But, but CITI said it was priceless.
There are lots of terms that need redefining that have made their way into 'newspeak'. Here are a few I have been working on for a while:
http://willanystand.blogspot.com/2010/09/redefining-terms.html
Here's how they have redefined terms for the public:
Disinflation = Inflation
Negative Growth = Shrinkage/Loss
Unusually Uncertain = I-know-how-bad-it-is-but-I-ain't-gonna-say-because-we-are-so-F$#@#%ED
Deflation = Deflation
Strong Dollar Policy = Hyperinflation
Spending = Joe Biden: "We have to go spend more so we don't go bankrupt"
Pull Forward Demand = Credit Card balance transfer by signing up for a bunch more credit cards
Jump-Start-the-Economy = closing your mouth when you need to vomit
Stimulus = Drinking oneself sober
Saving = Hoarding = making everyone else with debt go bankrupt
Private Capital Formation = the ultimate form of greed
Better-than-expected = the raping is not as bad as it was about 10 minutes ago
Growth = a slow down in decline
Gold = Money...errr.... "The Barbarous Relic"
LOL, excelente flacon!
+ $1250
Or, people could default on their debts, thus punishing bubble investors, not workers and consumers.
One person's debt is another person's wealth and vice versa.If you save more, you lend more, meaning you borrow more.
Misesians dream that societies build wealth by burying shiny rocks in the ground, but this is nonsense.
The reason you worry about maintaining consumption is to make sure that suppliers don't reign in their plans for the future too much.
Right, and the reason you put the cart before the horse is so he knows which way to go.
"Misesians dream that societies build wealth by burying shiny rocks in the ground, but this is nonsense. "
What le fluck are you talking about? Get a clue.
"Misesians dream that societies build wealth by burying shiny rocks in the ground, but this is nonsense."
Please, if you are ANOTHER pay-for-post troll, learn to compose your statements so as to present them as lucid, NOT ludicrous!
Also, just up the page from your post, is a link to Rothbard's "Man, Economy, and State" read that as you can, for if you are not a troll, you need to at least try to absorb the Mises/Rothbard/Paul/Rockwell "arm" of Austrian Economics (sic).
Misesians dream that societies build wealth by using money which can't be printed ad nauseum by political entities, but this is nonsense (as political entities will never allow it).
There, I fixed it for you.
You mean buying a bunch of unnecessary crap from China won't bring us happiness? That don't sound right.
So it will bring us happiness if goods sit in warehouses?
It's a damn good start!
Surplus...what a concept.
You are suggesting that consumers must buy goods aimlessly in order to keep useless business operating as they desire so they can live in the manner they are accustomed to.
How about consumers buy what they choose, as every free society allows, and if a company collapses they collapse because they were mismanaged and made too much?
Why not just have the government buy things to keep businesses afloat as that is the people's money anyway...oh wait that is what is happening now.
I need my plastic trinkets dammit!
Hmmmm. Sounds strangely familiar.....
A bank run started on Tuesday in Afghanistan at the country's largest bank. This bank supposedly has huge liquid reserves in relation to deposits.
"Mahmoud Karzai, the CIA's, drug-running brother of the Afghan president and a major shareholder in beleaguered Kabul Bank called for intervention by the United States to head off a financial meltdown".
"Oh yes, the U.S. ... even though broke should guarantee everything... even in illegally occupied countries. The U.S. set the banking system up 9 years ago so Mr. Karzai might have some standing here.
This information is not directly related to the U.S. financial system...yet... but it does illustrate how quickly a bank run can start and maybe spread.
It also illustrates how quickly a run on the metals will be once it gets started.
This Afghan bank has limited withdrawals to $1,000, imagine the panic when a U.S. bank runs into this same problem?
Can you imagine metal custodians saying "you are limited to withdrawing One ounce of Your Gold?
Think about this for a moment. How valuable do you think Dollar bills in hand are right now in Afghanistan?
Now go one step further...how valuable will "ounces in hand" be when people discover that their "safe" and so called vaulted metal doesn't exist?
The point is this, possible bank runs in the U.S. where the Dollar becomes temporarily more valuable, but Uncle Ben and the boys can do fly-bys dropping Dollars out of "thin air" to rectify the 'temporary problem' .
What will happen when the 'bullion custodians' are discovered as frauds that they are?
Gold and Silver will skyrocket in price with no one or any entity able to fix the problem with a printing press. The metals will explode and their prices will not come back down to Earth because it's a permanent, structural problem.
This is the ultimate game of musical chairs, when the music stops either have metal in hand or you will not get any. In other words you will have wealth or not.
"I don't need no stinkin' metal" JohnnyBravo says?
Oh yeah...that's right: a $1 Million sitting in the bank so you should be good to go ... huh?
You will be smart enough and fast enough to withdraw it all and put it under your mattress the day before a run starts right?
Has no one figured out that the solution to saving the banks in a run scenario is the recipe to destroy what value is left in the Dollar?
Do the math, holding physical metal outside of the "the system" is your only means of protecting your liquid wealth AND retaining it's purchasing power!
Mr. Karzai should have said "send us some Gold" as that would surely calm down panicky withdrawals. The problem is where would this Gold come from?
This is the question that will be on many, many minds in the very near future!
And when the people who have metal want currency to, you know, buy things, but find that there are no buyers of their metal at the price they expect?
What then?
Oh, I forgot, the price of gold can never go down because it's made of magic.
What do you suggest I keep my money in, FRNs that go down 5% a year compounding? Bits of paper have never retained value other than as collector items from by-gone eras.
If all the economy's wealth was converted to shiny rocks and buried in the ground, what would happen?
Misesian model says: "no problem"
Reality says: "Dark Ages".
Instead of worrying about "retaining" or "storing" value, why don't you concentrate on creating value?
Well you seem to be missing the point. Not everyone wants to commit 100% of their capital to entrepenurial activity at any given time. And the alternatives to equities are dollars (T-bills, deposits, etc) and gold. How does me losing wealth through dollar inflation help anyone other than a bloated and corrupt Federal government? If I save in gold, I can build up enough capital to either A) retire B) consume or C) invest in capital goods and begin production of something useful. If I save in dollars, i slowly lose that ability.
If the other models allowed wealth to be created without stealing some of it - then you would have a point, but the only model that allows wealth to be created without wasting some/all of that wealth is the shiny rocks in the ground model.
Either way, you still need to eliminate fraud - shiny rocks in the ground with fraud in check has created more wealth than all of your other models combined.
In a severe deflation (where the people can't get access to FRNs) mankind will make up their OWN money, whether it be sea-shells, tally sticks, trading their time, etc, until they discover that GOLD/SILVER works better than the other methods.
In a severe inflation (where the FRNs continue to loose value over night) mankind will ABANDON their paper and make up their OWN money, whether it be sea-shells, tally sticks, trading their time, etc, until they discover that GOLD/SILVER works better than the other methods.
That is why JP Morgan said: "GOLD IS MONEY AND NOTHING ELSE".
Federal Reserve Notes are nothing more than those paper tickets you get at the carnival to ride a ferris wheel. They are COUPONS - that's all.
If all the economy's wealth was converted to shiny rocks and buried in the ground, what would happen?
First off, you are using the word 'converted' in a sloppy sense. You can trade a car for gold, but that doesn't mean a magic puff of smoke appears and the car is gone and a chunk of gold appears in its place. Somebody still owns the car, just not you.
Second, digging holes and then filling them up is a totally proper Keynesian work project. So what is your problem with digging up gold and burying it again?
Hm, sounds like it's time to get rid of said "currency".
Red, a lot of us are happy to take the risk of turning Fed notes into gold and silver. We figure the odds are good that people will be eager to exchange their stuff for real money. Of course no one knows anything for sure, so we rely on observation and experience.
Red, a lot of us are happy to take the risk of turning Fed notes into gold and silver. We figure the odds are good that people will be eager to exchange their stuff for real money. Of course no one knows anything for sure, so we rely on observation and experience.
Another Johnny Bravo iteration?
retracted at gunpoint
This might surprise... a friend bought some eagles in his IRA in 2007... and just took possession, they were 2009 coins!
Not sure how Fidlitrade allegedly holds/held coins but they decided, awhile back, not to charge storage fees...
(you ever hear of a bank passing up the chance to charge a fee?) ...
It sure seems like his coins were just a paper slip in a file cabinet. Guess they didn't have the coins, had to go out on the market and buy them.
First off, this particular broker/dealer stopped making any purchases of Gold or Silver bullion for customers back in 2008 and said... "it was becoming too hard to source metal".
Apparently they stopped charging storage fees for metal that had been bought previously (or supposedly bought). Did Fidelitrade stop charging fees or did the broker/dealer just eat the fees?
Who knows? Since the delivery was not of coins from the same year. This is proof that these 2007 (or earlier) coins were either never bought until delivery was demanded or they were not held in segregated form.
Everything inside an IRA account has to be segregated!
Stocks held in an IRA had to be segregated and can not be lent out as in a margin account nor be a part of the firms balance sheet or obligations. They have to physically be there and segregated.
As for Gold, the only form of physical metal has to be American Eagles; nothing else, no Krugs, Maples, Philharmonics, bullion bars nor "pooled accounts" except for ETF's.
Clearly something stinks like "dog shit"! The entire physical metal (Gold and Silver) markets are a complete scam across the globe.
Anyone can say "your Gold is segregated" and thus safe, Do not believe it!
The biggest fraud and scandal in history will turn out to have been the metals markets and thus the integrity of the entire fiat system because Ft. Knox, West Point etc. don't even have 25% of what they say they have!
COMEX nor the LBMA have what they say: even the inventories don't add up to the amounts of paper admittedly sold.
More paper exists on these exchanges than they "say" they have metal, that is the definition of "fractional reserve" custodianship.
Now even IRA's have been infected! This is the stuff 1932-33 was made of! The only reason the world's banking system did not completely collapse in 2008 was because governments had the ability to stuff more "money" into the banks to save them.
They could do this because "paper" is easily and freely "creatable", Not metal! When everyone begins to ask for their metal...the entire financial world will implode!
Not that I want to see the financial world collapse but God damn it... I just want to see a world where everything is not a fucking lie.
I want to see financial markets that trade freely and FAIRLY.
One where the "foundation" is real and verifiable! Investors have the right to be able to believe government statistics and that ownership or "custodianship" is REAL.
Call me a lunatic 9/11 conspiracy theorist, but I believe the US economy became total bullshit on that day. The Cabal/ Mafia openly destroyed all the criminal evidence with spectacular pyrotechnics. (Enron, World Com, etc. etc.)
Nothing but open theft and worldwide fraud since: and nothing but lies to keep the game going. This was originally done supposedly to "protect the people" (yeah...their people...the banking mafia) and will end up destroying the lives of the masses!
Viva LeMetropoleCafe !!!
DP, that was a fabulous rant!!!
+ $1250 or more!
...
Your rant invites the question of "Who owns the Gold?" (if it is not at Ft. Knox or the NY Fed). THAT to me would be interesting to know if an Audit found the USA short of actual physical Gold. Who would have it...?
Decades ago, I decided that my Gold holdings would be in US Eagle 1 toz coins only. Liquidity and standardization.
Re RedMoney guy above, at my age (54, one grown kid), ALL I really care about is wealth preservation.
...
I frequently recommend the below blog for those who "have passed Gold 101":
fofoa.blogspot.com
Would you please elaborate? Why do you consider American Eagles superior to genuine Krugs, Maples, etc.?
TIA
I believe he meant that the IRA would only purchase those as per their policy.
AE's are not superior; actually they are only 91.67%/22k gold whereas the ones you mentioned are usually 99.99%/24k "fine" gold. But the IRA's only approve of AE's as "investment grade" (U.S. guaranteed). The funny part is that they all sell for about the same price! I guess the U.S. doesn't "trust" the Austrians or the Swiss, or the Canadians, or the South Africans or the Australians or the Mexicans, etc...
Between the scams of bankers and the gov't one must take care of their own stuff. We may yet see Treasury send out newly deputized SEUI thugs to collect our gold, using lists from dealers and search warrants. The economy became bullshit a long time ago. 911 exposed it more. The airlines who lobbied against secure cabin doors were bailed out and then protected from law suits by the gov't bailing out the victims. OKC victims had no claims against airlines, therefore no claims compared to NYC. My stepdaughter worked three blocks from WTC, the Red Cross gave her $8K, she said she wasn't out that much, they told her to take it anyway.
Buy bullion using cash, with no paperwork, at coin shows (recommend www.fisch.co.za, but feel free to use your own verification methods).
Bullion dealers requesting wire transfer or credit card payment have records after the fact. Including your name and address. Pay the premium at a coin show for a cash transaction and Uncle Sam has no idea if you spent your money on hookers in Vegas after you cleaned out your IRA.
Call me a lunatic 9/11 conspiracy theorist, but I believe the US economy became total bullshit on that day.
Just take that 911, move the last "1" to the front and add a "3" at the end and THAT is the year the US economy became total bullshit. The pile has just been getting wider and stacked higher since then... are there any Austrian plumbers in the house?
US Departments of Labor And Treasury Schedule Hearing On Confiscation Of Private Retirement Accounts
Liberty Coin Service
By Patrick A. Heller
On August 26, the US Department of Labor issued a news release. It lists the agenda for the joint hearings being held with the Department of Treasury September 14-15, 2010 on what is euphemistically called “lifetime income options for retirement plans.” The hearings are being conducted by the Labor Department’s Employee Benefits Security Administration.
The unstated agenda of these hearings is to push for the US government to eventually nationalize (confiscate) all assets in private Individual Retirement Accounts (IRAs) and 401K plans!
The US government is desperate to get its hands on private assets to help cover soaring budget deficits and debts, and this is simply the largest and easiest piggy bank that could be seized. The Investment Company Institute estimates that at the end of 2008 that there were $3.613 trillion of assets in IRAs and $2.350 trillion of assets in 401K plans.
The US government is going to go after private retirement accounts.
This is the most important reason to avoid establishing precious metals IRAs. The MSM ignored the subject even after a House Committee held hearings on the issue in October 2008.
An outright seizure of assets would meet stiff resistance from the public. So the confiscation will never be described as such by government officials. Expect to see terms such as “retirement income protection” thrown around.
Such a program would be implemented in steps to help overcome public opposition.
The US government plan is to take ownership of all assets in IRAs and 401K accounts and replace them with US government “Treasury Retirement Bonds.” In the October 2008 hearings, it was proposed that these bonds pay a 3% interest rate. Another major change is that, upon retirement, the individual’s retirement account would be converted into an annuity. Once the individual is deceased, the individual’s heirs would not inherit anything (similar to what happens now with Social Security “accounts”).
Among the steps that could be taken to accomplish total confiscation are to first make the conversion voluntary, then make it mandatory for only a portion of total assets. The final step would be making it 100% mandatory for 100% of all assets. One idea proposed in the October 2008 House Committee hearings (after trillions of dollars had already been lost in most assets categories) to help push this plan onto the public, was to allow the seized assets to be replaced with government bonds at a face value of a previous higher valuation date. The idea was that a private citizen, who might have lost 20-50% of his retirement asset value, would be much more willing to accept an inferior retirement asset if doing so allowed them to recoup the losses.
Obviously, brokerage companies and mutual funds strongly object to the potential loss of fees they are now receiving for private retirement plan services. The Investment Company Institute, whose member companies manage more than $11 trillion of assets for about 90 million investors, reports that 96% of surveyed households object to the US government requiring that retirement assets only be distributed as annuities. Among the scheduled speakers at the upcoming hearings are representatives from the Investment Company Institute, Fidelity Investments, Putnam Investments, Lincoln Financial, and Vanguard.
These mid-September hearings have to be evaluated in conjunction with the introduction on August 5 of S. 3760, sponsored by Senators Jeff Bingaman (D-NM) and John Kerry (D-MA) to established mandatory automatic IRAs for many workers who are not covered by company retirement programs.
If enacted, employers of such workers would be required to pay 3% of compensation into these accounts, which would have the effect of increasing the assets that the US government could then seize.
People should avoid establishing precious metals IRAs—because of this risk of confiscation.
Companies pushing such accounts to customers are giving their customers bad advice.
If you already have a precious metals IRA, what can you do now to continue to hold gold and silver as insurance against the decline in the value of other assets?
I’m sorry, but I don’t have any perfect solutions.
Any legislation is likely to take time before it becomes law. Therefore, while individuals need to begin to plan how to protect themselves, there is no need for immediate knee-jerk reactions.
Among the options to consider are distributing assets from the retirement accounts and paying the respective income taxes on them. You can maintain custody of most or all of the assets (depending on where you come up with the funds to pay the taxes). If you are under the age of 59-1/2, you may be subject to an extra 10% excise tax for taking a premature distribution. As ugly as this option is, which could accelerate tax payments, it is perhaps the best protection against having assets turned into US Treasury debt.
Another possibility is to sell off your precious metals in a retirement account and replace this holding with gold and silver outside of any retirement account. This would preserve your precious metals position, though it would leave other assets at risk of confiscation.
It may make sense to see what kind of incentive (bribe) is offered for those who voluntarily convert their assets into US Treasury debt. Because gold and silver prices have been rising for the past decade, though, there may not be any such benefit available.
If I hear of other good ideas for protecting wealth from what I expect will ultimately be outright confiscation of IRAs and 401K assets, I will pass them along. In the meantime, give serious consideration as to whether it is worth making future contributions to private retirement accounts.
Contemplating confiscation of private retirement assets is a sign of extreme desperation by the US government.
It is a loud warning that the future value of the US dollar is almost certain to be much lower than it is today.
Owning gold and silver, outside of private retirement accounts, is now a much more important wealth-protection step than ever before.
GO GATA !
Who says the banks will be automatically saved that time? You will get your insurance money of 100k and the banks will be liquidated.
Newspeak was a systematic attempt by the dictators of Oceania, a totalitarian society eerily similar to North Korea Western Europe and the United States (perhaps the whole world by now), to control thought by eliminating words that gave rise to ideas they disapproved.
NewSpeak==Politically Correct Speach
don'tcha know.
Orwell had been through the mill.
- Ned
MEDIA BLACKS OUT THE FACTS
Here's one terrific example. John Swinton, the former Chief of Staff for the New York Times, was one of New York's best loved newspapermen. Called by his peers "The Dean of his Profession", John was asked in 1953 to give a toast before the New York Press Club, and in so doing, made a monumentally important and revealing statement. He is quoted as follows:
"There is no such thing, at this date of the world's history, in America, as an independent press. You know it and I know it. There is not one of you who dares to write your honest opinions, and if you did, you know beforehand that it would never appear in print. I am paid weekly for keeping my honest opinion out of the paper I am connected with. Others of you are paid similar weekly salaries for similar things, and any of you who would be so foolish as to write honest opinions would be out on the streets looking for another job. If I allowed my honest opinions to appear in one issue of my paper, before twenty-four hours my occupation would be gone. The business of the journalists is to destroy the truth; to lie outright; to pervert; to vilify; to fawn at the feet of mammon, and to sell his country and his race for his daily bread. You know it and I know it, and what folly is this toasting an independent press? We are the tools and vassals of rich men behind the scenes. We are the jumping jacks, they pull the strings and we dance. Our talents, our possibilities, and our lives are all the property of other men. We are intellectual prostitutes."
Do any of you think that it has gotten better since then? Free speech? BWAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!!!!
The WH may have adopted the spending line, but the real push is coming from the banks that make money on consumer debt. When people started saving and paying down their credit cards, banks felt the pinch.
Yes, recovery is about realigning supply and demand, but there is a balance. You can keep prices supported and wait until demand catches up, or you can let values fall to the level of demand. We tend to do the first, which takes longer. History shows that both will get back on the pre-bubble trajectory eventually.
Hang on, you mean we shouldn't take the country's wealth, turn it into shiny rocks and bury it in the ground? What are you saying?
(Gold to $1600, BTW. Gold is "safe as houses" - in 2004. Have fun while it lasts.)
And what does TheMonetaryRed invest in? Ghost money?
GFD I wish you people would just STFU.
Gold is in TERMINAL SUPPLY DECLINE.
Get that through your fucking skull. It cannot be manufactured in goddamned factory like a house.
Those who expect the "price" of gold to crash are essentially saying that the value of the FRN is going to skyrocket. Such an assertion is of the most ludicrous variety.
Hate gold? Then buy fucking platinum.
Actually, the entire point of gold is that the supply never declines, it stays the same.
I think what you're after there is supply decline relative to demand - and we'll see about that once Soros starts selling.
f supply decline was your primary investment criterion, then you'd buy oil (turns into CO2), potash (washes into the sea), phosphate (Nature's "limiting nutrient" - washes into the sea much faster than it deposits) coal (CO2), uranium (neutrons and lead), helium (floats into the sky), and nat gas (CO2, burned much faster than it's created - despite being created in vast amounts on blogs).
Red, I addressed you just above.
In the end, it will be all about how many ounces of Gold you have.
...
If you are, as your name implies a Lefty, I will overly-briefly explain what it will take to bring back America to re-industrialization and great wealth.
That would be LESS government spending, LESS government intervention and regulation, LOWER taxes, ejecting the stupid burdens now being placed on businesses (Obamacare) and (probably) allowing the TBTF to fail (at least some or to a degree).
Gonna happen with Obama? No way, not even a Republican Congress could get anything done with the O standing in the way. And the Republicans disappointed me grievously when THEY HAD THE HELM for six years.
Gold is safer than houses. Gold is safer than anything. Although you can make a case that, in extremis, lead and high speed lead delivery systems are pretty good too.
"Gold is safer than houses. Gold is safer than anything."
Bubble talk if ever I heard it. Equivalent to saying "Sure, markets go up and down, but gold is magic." Have fun and sell at the top.
In essence, aren't you saying exactly the opposite? That "U.S. Dollars are safer than houses"? Would that mean you see US Dollars as being in a bubble?
Most Austrians here would say gold is gold...it's the dollar that rises and floats relative to gold. And US Dollars have definitely been in a bubble for a long, long time.
And Bernake is the prick.
TheMonetaryRed = JonnyBravo = MasterBater = Kid Jizzpants.
Don't know if anyones called it yet, but I am.
Yes, that's who it is, so transparent...
I don't think this is that complicated. Put it in perspective. What do we know about economists:
- the vast majority work for the government and likely never anywhere else
- they all study the same theories that are required by the government who will employ them
- their survival depends on encouraging economic behaviour that supports the continued existence of the government
So now that we are in a situation where preserving the interests of the government is apparently somewhat at odds with what is required to preserve the interests of the people, it's no wonder the economists are not in line with the thinking of the common folk who pay their salaries.
Then there is that bigger question: have you ever known of a government economist that was RIGHT about anything in the economy (not including those who were executed by their employers by saying bad things)?
I see, so the financial industry doesn't hire any economists.
Interesting.
Thanks for the reality-check. I forgot about them.
Now that you reminded me, boy, aren't they doing well these days! And weren't they they #1, #2 and #3 advisors to the government over the past couple of years, encouraging them to spend a few more trillions to bail them out? It looks like the interests of the financial sector are much more aligned with those of the government than of the people.
" It looks like the interests of the financial sector are much more aligned with those of the government than of the people."
Close.
Now just switch the places of the words "financial sector" and "government" and you've got it.
Because the majority of the world's (best-paid) economist work for?????
That's right, the financial sector.
So the interests of economists generally align with????
That's right, the financial sector.
See? Economics works.
Hey, I like that! I learned something new again today. One question though - just who is it that this kind of economics is working for?
This kind of economics is working for the same guys most of the humans are working for. Nothing too surprising if you're willing to forget the crap you were told as a child.
'Works' is a questionable use of the word in this context. 'Provides a service' might be more apropos. There's not much 'work' that ever went on in the financial sector.
Link to Afghan bank story mentioned above:
http://www.msnbc.msn.com/id/38976292/ns/world_news-south_and_central_asia/
The article makes common sense. Why is it so hard for these smart PHD economists to understand it. They like to confuse the issue with pemises of false superiority. Our tax laws represent a similar convoluted ostentacious attempt at destroying common sense.
The problem is that most people still believe the government is working for THEM.
Instead, focus on the idea that government policies are not created by idiots. They are created by evil, greedy, lying sociopaths who are out to separate each of us from our tiny bit of wealth. None of us has much worth stealing individually. But when we're all robbed at once, the wealth of 300 million of us is worth grabbing. And a system has been set up to do just that.
Once we grasp this simple truth, it's really pointless to keep calling Timmy, Benji, BO, GeorgeW and their buddies idiots. They're not idiots, they're quite good at doing the jobs they were hired to do by the people who are REALLY in charge. And that, of course, is not us 'consumers.'
Understanding is just as easy as flipping that mental coin of faith in the world as we know it. It's been tails all along, even though THEY have taught us that it's heads.
heads they win, tails we lose
watch your own, you choose
keep your eyes on the skies
not their bullshit lies
and don't let your friends get hurt
http://www.youtube.com/watch?v=ELcTJZLxhFU
I retired a debt today. Increased the cash flow this month that will show for the rest of the year. The extra funds will be useful.
All from cutting costs and stopping the bleeding of monthly payments to banks with interest. Cold cash rules, bullshit walks and credit borrowing bites.
I will never see great riches in this lifetime, but I will keep a good home and provide for the future, good or bad based on my actions this year.
All the Experts in this world excepting a few like Mises could not understand this simple concept.
"Consumers, as we're referred to by economists, lost $10 trillion of wealth in the bust, and were left with huge debts from their wild spending. We borrowed against the value of our homes, we borrowed on our credit cards, and we borrowed to buy big new cars. Now about 25% of Americans have more debt on their homes than the homes are worth.
So what would you do in those circumstances? Spend more? I don’t think so. And that's why consumers are saving. Yes, it reduces consumer spending, but how else are we going to save when unemployment is high and wages are stagnant? Savers are making rational, informed choices and economists just can’t see that."
I really don't have the depth to add anything but the obvious here, OK? But how about those people who live below their means, save out of habit, and work to provide a comfortable life for themselves and their children. Every time I hear that 70% of GDP is consumer spending, and that somehow this path must be followed, I'm not confused - the idea is absolutely ludicrous. Someone posted that the authors piece was "wordy." How about a waste of thought and paper?
How about a simple - "Pull your heads out of your ass, you dumb fucks."
You have to then save gold and silver. Saving dollars is only saving someone else's debt. Good for you, but does not help country/society.
All gold on this planet is already saved. What next save 2 planets worth of gold.
I swear people thinking they are going to get out of this is quite funny.
I think smug condescension is quite funny, considering the source.
you're so fucking right. Nobody survived the last depression. all were killed. Billions liquidated.
Get your head out of your ass, misanthrope.
misanthrope - a hater of mankind. (for the near/sub-smarts out there like me)
thanks. every time I see a word spelled like that, I'm thinking eye condition. seriously.
d
VI, I too have trouble following what Mako wants, suggests, etc. That we are all going to DIE in the calamity to come, even if we have Gold? That we are all going to DIE because of resource depletion?
I guess I have not read enough of Mako to understand where he is coming from, but I fully intend to come out of all of this, whether deflation, hyperinflation or even normality OK.
Just want to be prepared. Bearings like to be prepared to work.
...
EDIT:
If Mako thinks we are doomed anyway, does that mean that heavy drinking is now OK?
Do, my bearing, been reading your posts tonight. I decided to delete this one because I've been listening to him, but not completely paying attention. I'll pay more attention and then ask for clarification.
As far as coming out of this, I'm with you. Actually, I'm afraid to take my eyes off the whole thing as it unfolds. Tiring. A little compulsive.
At this point I'm only lacking the Au component. Still waiting for "the" entry point, but have been lax with my homework. Would you mind forwarding me the "101"(basics) links again? I will save them this time.
Alas, amigo mio VI, I do not teach Gold 101, that is a notion that fofoa.blogspot.com says you should know to better understand his blog.
You may be there already! Gold has 5000 - 6000 years of history as the best wealth preserver. You may not need to know anything else, just read fofoa.blogspot.com, I would suggest starting about Oct. 2009 (when I started reading him).
Moi? I check out the gold price when I have some cash, but it really does not matter to me, I just drive over to the coin shop and buy whatever I feel like. IMHO, gold is a BARGAIN under $1500 / oz.
I do not even think about entry points. When I have extra FRN$, I just go over and BUY! OF COURSE, there may be other "better" solutions (buy 20 oz from Tulving or APMEX), but I just buy "poco a poco" like I have for decades.
I think I need to go and just buy my first trinket. Knowing my personality type, I'll start collecting at a good clip, once I can see it and touch it. Just like 7.62 - "Oh, what the hell, I guess I could use another thousand." I'm swimming in that stuff. Thanks again for the Au info. Take care.
You too, buddy, take care!!!
I only have 500 rounds of 7.62x 39, so I cannot say that I am where I want to be yet!
LOLOLOL!
Have I ever mentioned AR15.com? The site has several search engines for ammo. Merchants are listed by price, round, whatever you want. You can pick up cases of excellent quality eastern block surplus on the cheap. Corrosive, but who cares, just piss down your barrel. I'll give you a friendly nudge - go buy some now, it's a bargain at these prices. I want to hear that the UPS driver has dropped at least 3K rounds at your door the next time we chat.
I'm counting on Allied Nevada to dig some gold out for me.
Doesn't everyone understand that spending has multiple beneficial attributes?
1) It increases the dependence of the value creating portions of the world on money, dollars, consumerism and debt. This is fabbie for US and banker dominance.
2) It allows us to maintain our "growth paradigm" because without growth the world will end.
3) It funnels money from us to the ruling class who has a better appreciation for money.
4) It prevents people from wasting their lives in wholesome, fulfilling and financially independent existence
5) It increases the number of people who can follow non-value adding activities such as banking, lawyering, politicianing and think tanking; and allows the parasite class to feel as if they are doing something of value.
We a duty bound to dig a hole of debt slavery that we can never crawl out of so that the rest of the people of the world can experience the same pleasure!
All fine points. Fuck that noise.
Let's say that I get to Tumbleweed Town with a population of a few diehards seeking a place for the nght.
I hand a hundred dollar bill to the hotel person and go up to check out the room.
The hotel person quickly pays off the whore.
The Whore quickly pays off the banker.
The banker quickly pays off the butcher.
The butcher quickly pays off the feed store.
The feed store quickly pays off the hotel bill for migrant workers.
I come back downstairs and say I will find another place down the road, take the hundred dollars and leave town.
Everyone in tumble town is now debt free.
This story is taken from memory of another story posted some time ago somewhere online. If someone has the original story it will be much appreciated.
the problem with this story is that it takes place in a magic land of no taxes. for real, in your example, by the end 50% of the money has gone as taxes to service the interest on debt owing by various layers of government.
Only if the Government gains the power to tax each cash transaction.
I can pay you up to 10,000 USD for whatever widget you just sold me and the Uncle Sam dont care about it. Cold cash.
As far as the Magic town is concerned, the people are debt free until next Feburary when they must provide IRS a reckoning of revenue or income for the year.
The hotel man will have to show customers and income
The whore is cash only
The banker has managed to bury the government in piles of paper
The butcher buys his beef from a farm and eventually his sales will be taxed
The Feed Store gets subsidized by uncle sam to help the farmer
and so on.
Now if I thought the room is suitable for a night's stay and paid 40 dollars out of teh 100 on the table. Then the sales tax, room tax etc etc etc all kicks in.
The story works only if the people pay off each other fast and return the 100 bill to the hotel counter before I get back downstairs LOL.
ignoring taxes, if you can get the money to move fast enough, it might take care of alot of things. maybe something like the prosperity certificates which devalued 1 percent per week, except using the debit card system instead of using postage stamps, and only having the balance get penalized if the money is not spent; i.e. when someone buys something from you, the counter resets so you can hold the money for a week before getting penalized, and if you spend it, the recipient gets a week, etc. http://en.wikipedia.org/wiki/Prosperity_certificate and http://en.wikipedia.org/wiki/W%C3%B6rgl
Here is Man, Economy and State in an epub, pdf, and text format.
http://mises.org/rothbard/mes.asp
Unfortunately there is no audio book. However, I have a bajillion videos and other audio lectures on the subject for you to listen to.
Go here for tons of video and audio:
http://fascistsoup.com/suede-college-of-austrian-economics/
edit: bah, wrong reply post
"edit: bah, wrong reply post"
Thanks anyway, intersting.
"He who controls the present controls the past.
He who controls the past controls the future."
We need to rage against the machine... but what do we want in it's place, and how do we come to any agreement on it?
"With all that capital wiped out, you may ask where the capital will come from to finance a revival of the economy once the dead wood is cleared away. We already know that it can’t be done by printing money. It can only be done by savings."
That entire article made me laugh out loud but that quote was the kicker.
Yeah, somewhere between 30 to 50 trillion dollars of wealth was destroyed. But somehow saving money is going to bring that back with 20% unemployment, wages stagnant, and a push to cut government spending at the same time.
Yeah, the road out of this mess is to cut govt spending and consumer spending at the same time. This is the "common sense" school of economics?
The country doesn't want the deadwood to clear away. No one wants to swallow the losses on their homes. No one wants to stuff the bad debts down the banks throat. At the same time no one wants to watch their quality of life to go down the toilet while the nation "clears it deadwood". There is no such thing in America as taking one step back to take two steps forward. Any politician that tried to preach this would lose instantly. Hard choices are never made by America, we don't believe in that.
Once this accepted as fact, there's only one solution. That's spend spend spend.
People wonder why Japan has had two "lost decades"? Check their savings rate.
by "no one" you mean "no debtors" right? Savers, on the other hand, would prefer for their savings be increased in value, not devalued through taxes and inflation (an indirect tax on savers).
I propose that Japan's lost decades are not due to savings rate, but due to continuous government intervention stifling investment combined with aging demographics.
When we get back to Keynes and our last few Whitehouse Administrations, it becomes a moral question in my mind.
1. You don't spend what you don't have.
2. You don't take out credit for pleasure.
3. You encourage children to follow 1. and 2. above; not issue them credit cards and pointedly seduce youngsters into consumption habits.
4. You save for your children and grandchildren - not spend\burn oil\burn the rest of earth's good without looking ahead.
5. Someone asked Keynes what the end result of his theories was; he said, "well, then you're dead." He didn't mention children, grandchildren or the earth's good.
6. Last but not least, you stay free that way - freedom as opposed to a kind of invisible slavery that many of our neighbors labor under.
Morality has no place in a modern monetary system . Stop that shit. Your kids live under constraints the govt does not. Point blank
Saxxon, I totally agree with your post.
Banks want us to consume more than we earn. That way we become their Debt Slaves. We work to pay off the Debt and Interest from future earnings. It is easy to control people when they are Debt Slaves and indebted to you.
The only way to truely be free is to be Debt Free.
None of this monetary shit MATTERS, ok???
Fuckin OIL PEAKED. Get over it. The cost of doing and creating is going up, and the net amount of doing and creating has peaked, therefore there will be less of it going forward.
Money and credit and all of this Keynesian stuff is bullshit. There is NO WAY out of the laws of physics. Fuck all the economists.
How about they offer eleventy TRILLION dollars to whomever invents antigravity or perpetual motion while they are up?
Thorium
True, and everyone with a serious nuclear research facility is working on that, from S Africa to India, france to russia; but nuclear is a dirty word, so says the greens (who are mostly funded by the oil oligarchs [how else can one explain the greenpeacees are not shutting down offshore oil rigs after the Gulf, yet are busily fighting Japanese whaling fleets]; the same oilmen also happen to be paying most of your friendly congressmean and women to ensure nuclear is taxed until it is no more commercially viable). So you see, just as a utility bank and Glass Steagel are simple solutions to the financial world's problems, so Thorium is solution to peak oil and climate change. But neither will ever become reality, at least not in the US of A as long as we have a Demopublican system.
Demopublican - Is that government of corporations by corporations for corporations?
I thought so.
It is really that obvious!! When will other people catch on to this no brainer?
Resources are finite, infinite growth is impossible, change the F%^%%n economic model.
the universe is, for practical purposes, infinite. it would take us millions, if not billions of years to consume all of it. Which is why now is the time to build the Bridge to the Stars.
The alternative, sustainability, would, in my opinion, require intense population control and restrictions on consumption, which I believe are not socially & politically viable options.
Trav: Agree, but why wait for somebody else to do it? I have reduced my energy consumption 35% over the last two years. It was a series of simple changes that bought me that. Now I'm going to do something really fucking radical. I am buying a small piece of farmland and building an off grid, earth-sheltered, zero energy home. Been looking at this for over 5 years and after ruling out straw bale, SIPs, rammed earth, shipping containers, etc. I am absolutely convinced that earth sheltered is the way to go, not only for energy but security as well. Farmland is sort of obvious. My point is, why wait for somebody else to save us? Millions of us are saving ourselves with absolutely no loss in quality of life. It's an incremental process with us, and the planning started long before Senor Obama became president. It's not about running to the country and hiding....I already live in the country. It's about building a sustainable lifestyle free of BOTH government and corporate interference. More importantly, it's about taking control rather than waiting for John Fucking Galt to rebuild his engine.
Agree with all of the above, except the earth-sheltered part. That's going to be construed as a real improvement to the property, and thus taxable.
40' Conex, sprayed with 4' of urethane foam inside and then kitted out with small, quality furniture and appliances, is still just a conex. Moveable, and not a real improvement to the property, and thus not vulnerable to property tax. Also, no wheels, so no registration required nor a license plate.
It's just a box that's been paid for. Eff the taxman.
This post reminds me of the parable of the grasshopper (consumer) and the ant (saver). And we know how badly that ended for the grasshopper in the winter (recession)
If you don't like that one consider the fate of the poor drunk Alaska natives who frittered away the summer instead of catching and smoking salmon for the winter. They traded their furs to the Russians for booze, drank it, then starved and froze to death in the winter.
Same thing happens to farmers who don't save their seed for the next crop.
Or to summarize the Austrian school. Debt=Serfdom, Freedom=Productivity + Savings. Q.E D. Keynesians = Clowns.
+1
To explain why saving is good and why economists are wrong, we have to ask why we keep having these boom-bust cycles.
Well, It is the only way that exponential growth can exist within a closed system.
If you crave the exponential Boom, you will have to eat the Bust also - or the system will just hit one of the rails and stick there i.e. Zero "Growth" Forvever, the path chosen by our leaders, who cannot stomach the reset.
Most people I know, even before the current problem, were okay with paying their bills and having a little left over. The exponential boom wasn't our idea.
A lot of things are "not our idea"; But we have to deal with the world that is rather than waste time arguing about the world that might be!
In this world we pay interest. Interest is exponential. When you have to pay interest, you have to grow earnings at a faster rate than the interest payments. Physically and mathematically this is impossible to do forever, so the game ends, the debt and "assets" are reset to Zero and we can have another round.
This Boom-Bust cycle is not really a problem in itself. The serious damage is done by vested interests throwing all ressources into stopping the inevitable, ensuring that the reset will leave only scorched earth behind.
There has been plenty of newspeak about the economy. Remember all the talk about 'green shoots' right after the scandalous TARP passed?
I don't even know why people own televisions now, unless it's to play the occaisional DVD. There is nothing truthful being told on broadcast television.
You can say that again, last time I turned on "oldschool TV" there was nothing but fags talking about dresses on one show, fags talking about remodeling on another, and yet a third show of fags talking about how good it was to be fags because everyone else is distracted from the fag agendas watching fags in dresses remodeling houses.
If Sony had a clue they would put a suck knob on their Bravias. At least one could act like they are turning down the suck.
I'm junking your comment. I don't think trolling is allowed on ZH.
Had to junk your junk.
Perhaps he/she explained it poorly, but Widowmaker is right.