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The Inimical Inflation Kind
Not only are there different definitions of inflation to consider when pondering the subject, but there's also good inflation and bad inflation. We have bad inflation. - Ilene
The Inimical Inflation Kind
Why are we bearish?
For one thing, we like to go bearish when the market is testing the top of its channel as there is generally a higher percentage probability that we drop than we pop back over. Secondly, as I mentioned yesterday, it's not just the Federal Reserve that is in denial but the commodity speculators, the equity investors and even the bond investors as the ALL believe they are going to get paid while MATH says that's not even remotely possible.
What is math? I know - thanks to cutbacks in our education budgets over the past 30 years, that is a question that vexes many Americans and it also creates a perfect environment for the people who CAN do math, those in the Financial sector perhaps, to design endless levels of complex instruments that are all designed to con people who have lower math skills than they do.
Complexity is good. Just like the legal scam, complexity forces you to seek assistance with your finances - the more money you have, the more complex your finances become and the more you need help and this allows swarms of leeches or, to be kind, remoras to attach themselves to you and feed endlessly off your earnings and savings (they don't care which as they will happily destroy the host and simply move on to the next big fish).
Personally, I prefer simplicity. My Grandpa Max was a Depression kid who built a business from scratch and invested his money well and had a nice life for himself. He taught me how to invest when I was a little kid and, as you can imagine, he did not ask a "financial adviser" what to do with his money as he had seen where that had gotten his parents generation when he was young (he was 24 when the Global markets collapsed).
Our investing days would begin by reading the papers (not just one - they all say different things, don't they) together and pointing out things that looked interesting. Not just the Business Section but whatever seemed like an important World event or a trend worth watching that would help us get ahead of the curve with our stock selections. I will share with you what I consider the most important and simplest thing going on in the world today - something I have been pointing out for quite some time and the number one reason we remain very cautious on the markets - Inflation:
This is not complicated. This isn't the hypothetical elephant in the room and it's not the 800-pound gorilla we avoid talking about. This is a FACT! These are 12-month price hikes and this is also a 12-month decline in the dollar of 6.5-17.13% against other currencies and that is NOTHING compared to how far our buying power has fallen when measured in things we consume every day like cows (20.36%), oil (21.24%), hogs (22.8%), cocoa (27.8%), gasoline (33.52%), milk (35.69%), wheat (36.96%), sugar (38.98%), oats (41.6%), corn (71.44%), coffee (95.97%) and cotton (168.01%). THAT IS INFLATION FOLKS - no matter what lies your Government chooses to tell you.
As David Fry points out in his chart - That's OK because we are a nation of fat, spoiled bastards anyway and we can all afford to cut back a little. That's why a lot of inflation has been passed through to you in the form of smaller package portions at the store and smaller portions of lower-quality food at restaurants and maybe at your kitchen table. When you see 12-month price trends like this - it is kind of hard to imagine it's all a temporary spike and will all be "back to normal" by summer, right?
So let's accept, for a moment, that Ben Bernanke is wrong and inflation is a real thing. Just yesterday, ECB President, Jean Claude Trichet said the Bank "will exercise "strong vigilance" over rising inflation, signaling that a rate rise was only a month away." This sent our Dollar even lower and gave our markets, which are priced in dollars, a huge boost as it takes even more of our worthless currency to buy the same stocks we bought yesterday.
In fact, if we were to put the S&P 500 on that inflation chart above, we'd see that it has inflated 15.65% since last March, performing just about as well as platinum but quite a bit behind gold and barely half as well as copper. Does this mean we should abandon equities and all invest in commodities? Sounds good (and this is how we force a massive transfer of wealth from the non-investor to investor classes) but - No....
Here's where the ghost of Grandpa Max comes back to haunt us. Max Davis owned a dress shop in London with a high-end clientele. When I would visit him in the summers he would take me on buying trips around Europe where he would negotiate with designers and sellers of cloth and buttons and bows and he would, God bless him, explain to me exactly what he was trying to accomplish and would take me through the whole supply chain, right up to the point where my Grandma Lucy would take the people's money for the finished dress back in England and my Grandpa and I would head to the bank (banks, actually, as only a fool keeps all his money in one!) to make the deposits.
Exchange rates were very important in the business, of course, and our trips would often be planned around currency fluctuations. When the Pound was strong against the Lira - we were off to Italy and there would be Italian dresses featured in the Fall and when the Pound was up against the Franc in July, French fashions would be all the rage in September. That is how the World works and even the high-end clietele that would pull up in limos to visit Lucia's on the High Street in London would haggle over prices and it was always hoped the Pound would be weak when we sold and strong when we bought.
Today, the Dollar has been weak for almost a year. The buying power of the Dollars you own, the ones you have saved you whole life, has dropped from 88 to 77 (12.5%) since last June and yesterday was one of the worst day's in months so it's hard to say things are improving. If Americans had roughly $100Tn worth of assets at the beginning of last summer - they have $87.5Bn today - UNLESS they invested in the things that went up like oil, gold or the S&P, which also beat the devaluation of the dollar by an entire 3.15%.
That all sounds like a great idea, right? Of course we invest in the things that are going up. No says Grandpa Max - who was born in 1903 and has seen his share of speculative bubbles. While speculators can drive prices up to extreme levels for what may seem to be extended periods of time - in the end, these commodities have to be made into goods that have to be sold.
What happened in the housing crisis? Land went up, lumber went up, builder margins went up, prices went up and, when people could not afford the homes anymore, rather than let that put a natural break on the price of homes - the mortgages were repackaged and the rates were lowered and the lending requirements were waived along with the pom-poms of the "analysts" on the Financial News Networks as they encouraged everybody with a job and a pulse to buy a home. Why? Because it was the final sale of all those jacked up commodity prices and because the Banksters collected some very fat fees as did the complicity local Realtors and mortgage brokers, who enabled the lunacy by shoving suckers consumers into homes they clearly couldn't afford based on ridiculous extrapolations that the gains in the value of the home would outweigh potential rises in taxes and utilities and, of course, everyone expected to get raises over time as well.
That didn't happen did it? But think how many years it took us to realize that and think of how quickly it all fell apart once we did. Now we are in a very similar situation. Cotton is perhaps 20% of the cost of your clothing, so we won't worry about that one as up 168% means a $10 T-shirt now costs $13.60 - so "just" 36% clothing inflation assuming all the other costs stay the same. The $2 cup of coffee you get in the diner actually uses about .20 worth of coffee so now it's .40 and your cup "only" goes up 20% on the 95% increase in the commodity. This is how these insane prices are able to be passed through but - small increments though they may be - they do add up over the course of a consumer's average day - especially on those days when a 15-gallon tank of gas costs an extra $15 to fill.
As noted in Wednesday's Beige Book (my commentary for Members available on Seeking Alpha), to a large extent "non-wage input costs" (Fed-speak for the inflation noted above) have not yet been passed on to the consumers. From that we can assume that the Q1 margins are taking a beating but the Fed is enthusiastic that manufacturers and retailers will be able to shove high prices down the throats of US consumers in Q2 and that "optimism" gave the commodity bulls a green light to jack things up to new highs - boosting the market like a rocket since the 2pm release:
I added the titles of my morning posts to give you an idea of our daily positioning on this very stormy week. On the whole, "everything is proceeding as I have foreseen" - which is always fun - but that doesn't mean I have to be happy about it because it is an unfolding disaster!
EVERYTHING can't go up unless wages go up. Hiring people (and we added a healthy 191,000 jobs this month - only 8.5M to go to get back to the 2007 highs) does not solve the problem because each person's wages still have to be divided up among the various things they need to survive. If anything, it exacerbates the problem for the already strapped consumers as one may choose not to buy a $13.60 T-Shirt in order to pay $60 for a tank of gas but another (city dweller) may not need the gas and will pay the $13.60 for the T-shirt. That means each consumer is inadvertently keeping the price pressure high on the other through the aggregate (demand) choices they make.
What this does, ultimately, is lead to a lower standard of living for the workers - even as there are more of them in total - as each additional worker hired is unable to put his money to work on the local level and continues to funnel money up to the speculator class, who make up in volume what they can't accomplish anymore in price action. This is what happened at the peak of the housing bubble as homes were selling as fast as they could be built (even faster with pre-sales) and that caused a massive mis-allocation of resources. as predicted by Hayek, who tells us that the easy-money Fed policies lead us to mistake inflation for demand. By pushing that money UP from the workers to the top, all we are doing is funneling more money from the lower to the upper classes which, ultimately, leads to a much greater crash in the next wave.
Of course it was Keynes himself who pointed out that "the markets can remain irrational A LOT longer than you and I can remain solvent" and he should know, having gone bust himself as a speculator. I don't mind inflation - inflation was MY IDEA, way back in December of 2006, I wrote "Burning Dollars to Fight Gravity" suggesting the only way out of our debt crisis was going to be massive inflation and I felt that Hank Paulson's appointment to Treasury Secretary was a clear signal that the Bush Administration planned on putting my plan into action. In early 2008, I once again extolled the benefits of inflation with my "Inflation Nation" article.
Unfortunately, the path we have taken to inflation is not the "good kind," where Keynesian stimulus pushes wages higher, creating jobs and boosting prices from the bottom up, leading to better Corporate profits while devaluing the debt. As I had noted in my "2010 Outlook - A Tale of Two Economies," the Government was creating the BAD kind of inflation - top down inflation in which stimulus is handed to the speculator class as that $100Tn of National Wealth was being squeezed away from the bottom 90% (who owned just 65% of it), who could not participate in the equity and commodity rally and thus lost that 15% of their 65% asset share to inflation (9.75%) while the top 10% kept pace or got ahead and raised their portion of the Nation's wealth from 35% to 44.75% - a transfer of another $10Tn from the bottom 90% to the top 10% since the crash.
All sounds great so far, if you are in the top 10% (really the top 1% because those guys in the 10-1% range are just the suckers we rope into the markets because they THINK they are one of us, right?). We degraded the quality of life of 270M people by 15% ($65Tn to $55Tn) and boosted our own assets by 28% ($35Tn to $65Tn) - what can be better than that. As we point out to the plebes, over and over again until their brains are thoroughly washed - even down 15%, the workers of our country still enjoy a better standard of living than the workers we outsource our labor to.
In fact, if they would just get the Government off our backs and stop the unions from demanding fair treatment for American workers and stop confiscating our record profits through record low taxation - I'm sure we would throw them a bone and open up an unsafe sweatshop with poor working conditions, low wages and no benefits at wages that a Bangladeshi goat herder would consider very good!
Really, when they put in 40 years for us, toiling away in our factories since we got rid of Kennedy - they didn't really believe we would honor our commitment to fund their retirement did they? Why should 2010 me pay for what 1970 me promised? That is just downright unAmerican! No, it is every man for himself because that is the American way and, if they don't believe it, then they are not watching enough of the television networks we own...
Unfortunately, there is one small problem with this whole scam we are running on the bottom 90%. Most of our profits, so far, are on paper. The stock market is up 100% but have you seen what happens on days when anyone tries to sell volume? Scary stuff. Not as scary as oil in the Middle of February, which fell from $93 to $86 (7.5%) in 10 sessions - wiping out $7Bn on the NYMEX in just two weeks!
We have loads of money and we can keep trading gold, silver, copper, cotton, coffee, NetFlix, Chipolte, etc. back and forth with each other at any price we choose but can we really sell 25% of Netflix for $2.7Bn or is the price pretty much a joke with a p/e ratio of 68 to 1? How about gold? What if someone actually tries to find buyers for even 10% of the World's $6Tn in holdings (4Bn ounces). Gold has jumped $3Tn since it bottomed out at $681 an ounce in October of 2009 and even that was up $2Tn from where it was just a few years earlier.
Actual consumers only bought about $100Bn of gold in the past two years and the rest was just speculators hoarding it and us top 1%'ers passing bits of paper back and forth with each other, just crossing out the last price and putting on a higher price each time. This game of "hot potato" is how us commodity speculators get rich but let's just make sure we have chairs when the music stops (and it always does).
How long can the markets remain irrational in this cycle? We're already seeing some major bears go "insolvent" (poor Whitney Tilson and his NFLX shorts for one) and what we're not seeing in this "exciting" jobs report is rising wages and that means you damn well better have your hands on a chair - even as we dance around to the music!
Have a great weekend,
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It will not be that easy. The real international markets will rip apart any attempt at 'dictating' a valuation on commodities 'post dollar collapse'. In fact, we will see a massive run INTO commodities upon any announcement of a new currency... Changes in currencies will exacerbate the already existing distrust in the financial system.
Most people and governments are realizing that the stock market is a scam to confiscate your money and give you paper fantasies; where money is a commodity' like silver, oil, copper, gold. Therefore, disruptions, new dictations, changes will put even more fantasy money into 'real' money; and out of the wealth creation paradigm. This will be the opposite effect of the intended result of any government faction.
"it's not just the Federal Reserve that is in denial but the commodity speculators, the equity investors and even the bond investors as the ALL believe they are going to get paid while MATH says that's not even remotely possible."
They all don't think they are all going to get paid. Each party thinks they will get paid at the expense of one or more of the others. Capitalism!!!!!
Individuals are overtaxed bacause govrnments overspend . Business is undertaxed because they prefer to make profits. Government goes into deficits because voters demand lower taxes , business have lobbyists, and neo-cons love war . So whats new ???
"stop the unions from demanding fair treatment for American workers and stop confiscating our record profits through record low taxation"
Unions...seeking fair treatment ? *snort* *belly laugh* Go run that by credulous fools. Tell that to taxpayers who are forced to pay sky high property taxes for crappy, propaganda-driven public schools because the state withholds union dues at the point of a gun so the unions can support politicians seeking re-election who will in turn pad union wages/bennies. Or tell it to those who can't get a job as non-union in a closed union shop.
Record low taxes ? By the time I pay federal, FICA, state, local, property taxes and all kinds of taxes on phone bills, electric bills, sales taxes, I'm out almost 60% of my income. How much more would you think is "fair" ?
It is not accidental that American style capitalism went astray after the Soviet empire collapsed because the threat of socialism was always in the background keeping capitalism honest or within a resonable degree of greed.
Now that greed has flourished without an honest broker, the debate has shifted to a polarized blame game between Rebublicans blaming excess regulation detrimental to private sector and union dominance in public sector. Democrats argue deficits caused by Repuplicans is the problem combined with lax regulatory enforcement, but now is the time to pump prime private sector to jump start growth. Both view points have limited credibility
However ,the real problem is now still rooted in greed and the "global economic model" as well. Simply put the private sector has not contributed to real and meaningful growth to US economy in recent years. Profits have been bouyant mainly due to outsourcing and huge deficit financing which has allowed for easy credit, consumer sustainability and RE bubble, all at the expense of future healthy middle class jobs in the private sector. To make matters worse QE I & II primarily help financial industry with benefits not trickling down to middle class or other industrial sectors. In fact, result is even more income distribution disparity and trade deficit continuing to worsen {more outsourcing by multinationals and continuing imports sustained by deficits }
Meanwhile politicians blame currency manipulation and resort to party polemics---both are red herrings and serve to detract from addressing basic problems that will either crash the dollar or cause a major depression
And, I suppose the fact that the "captains of industry" got guaranteed "no jail, no matter what cards" has nothing to do with corrupt, predatory behavior? Yeah, right. From what I recall, the last big banking scam back in the 1980s sent thousands of banksters to jail. Today, even after the most blatant and obscene and obvious-for-all-to-see grossly fraudulant and criminal activity... ZERO go to jail.
Today is the "era of the super-predator". Super-predators suffer ZERO risk for predatory behavior. What do you expect super-predators to do, when they are literally invulnerable?
That is, of course, unless we see the kind of massive armed uprising that is called for in the USSA and just about every country on earth today. At the first hint of that, the predators will instantly be living a life of luxury on the 250,000 acre plantations they bought in SouthAmerica with the loot they've stolen from hordes of productive suckers. Unfortunately, the hordes of productive suckers seem to have been so utterly confused and/or stupid today, that they don't understand what's been happening to them, even when alternate media lays out the story before them (albeit often not in very coherent ways).
I wouldn't read into a government unemployment report an increase in employment. More people are either out of the workforce or taking crap jobs than ever before.
The food- stamp enrollment is more accurate. That keeps relentlessly climbing.
The folks with jobs are not earning more money. Local governments are laying off, these are the same high- wage, high- benefit jobs the economy needs to fuel inflation. People working part time at minimum wage cannot support the high input prices.
The input costs are at the economy- breaking point. The issue next in line becomes the unservicable debt. Remember that debt? It hasn't forgotten about you?
What fuels the rise in prices that ilene notices is not more currency but more debt added onto an already massive mountain of legacy debt. Inflationists point at prices but hide the debt behind a curtain. The Establishment seeks to end a crisis born from too much debt by adding even more. Right now it looks like the Establishment has succeeded.
Tomorrow?
When the debt becomes unserviceable the collateral is called in. The toilet- paper- like cash of the present vanishes and becomes the stuff of dreams. Margin calls dump collateral on the market for pennies on the dollar. With the massive overhang of debt even the largest collateral hoards are only worth the tiniest fraction of what is pledged against it.
This collateralization is what is missing from the inflation arguments. These suggest the current organizing regime will remain intact even as the effects of that regime are in the process of pulling it down.
Down is where this latest bubble will wind up. So- called investors will lose everything and the cashless majority will be dead broke, on the streets looking for soup.
I agree with your thoughts. I think there are two motivations to the obvious stupidity of our Ruling Class: (1) The savvy politicians say extend and pretend and hope the real crash happens when the next Rep president takes office. That will lock in 70 more years of rapidly growing socialism (as opposed to slowly growing socialism); (2) Many of them really have no idea what to do if debt is allowed to reset to non-bubble levels. But they know it will be pretty bad for them. So they extend and pretend and party until Mene Mene Tekel Upharsian appears on the wall. I'm sure Poe was well versed with the book of Daniel.
These exact same dynamics have played out hundreds of times in the last century all around the world, and yet not ONCE have they led to any so-called "deflation" under a fiat currency regime. Just the opposite, in fact: currency crashes, devaluations or hyperinflations. Why anyone still insists on believing that THIS time it's different is beyond me.
the only system that works is borgulism. william banzai 7 may have something to say about that.
"How about gold? What if someone actually tries to find buyers for even 10% of the World's $6Tn in holdings (4Bn ounces)."
Phil, you're thinking a tad notionally/nominally here. Any significant quantity of physical Gold isn't for sale by anyone or any institution that understands its nature as real money.
Otherwise, good article.
Actual consumers only bought about $100Bn of gold in the past two years -
this seems high to me if he means taking delivery of physical....
in short, the story is about reserve currency being devalued.
we can discuss all probabilities, but unless USA finds a way to earn as much as it likes to consume, the future of the reserve currency is not bright in most of them.
have a good weekend!
I read this with that scary deja- vu feeling creeping up my spine. This is exactly what happened in the Irish housing bubble.The property was flipped until the music stopped. The silence was and is deafening.
unless the government confiscates it all
www.shtfplan.com
The problem is not the economic system.
The problem is too much government.
Those with the resources are able to commandeer government to oppress and steal from the rest.
The big steal was done by the PRIVATE sector banks. The government just played along both Bush and then Obama, not having the "balls" to call their dirty hand. It was the plutocrats that stage managed the whole shenanigan since the beginning. Their govt. patsies just played ball like the toothless politicians they were. Would never have hapened under a FDR. These schmucks even managed to save their own skins by transferring their crimes and debts on the public!
O please falak, you don't have a clue what you're talking about. FDR was from an old and very well connected New York banking family; he made his name in one of the most corrupt and politicized of Wall Street's activities: government bond writing.
Here's an excerpt of a letter he wrote in those days:
I am going to take advantage of our old friendship and ask you if you can help me out any in an effort to get fidelity and contract bonds from the powers that be in Brooklyn. --Franklin D. Roosevelt to Congressman J. A. Maher, March 2, 1922.
He was funded into office by major Wall Street players, and then, once in office, he served those same people, putting many of them in influential positions in the government.
If you want to talk economics, FDR is a case study in the total abject failure of state intervention in economies. And, while we're at it, Hoover was not a conservative who refused to intervene and made the Depression worse, as nonsense history for stupid children would have you believe. He intervened a great deal, and set the precedent which FDR followed. Hoover was also tight with Wall Street, by the way. He blamed his defeat in 1932 on the fact that Wall Street switched their funding from him to FDR, likely because he wouldn't adopt the Swopes Plan (which is essentially the New Deal).
Another gem:
"The real truth of the matter is, as you and I know, that a financial
element in the larger centers has owned the Government ever since
the days of Andrew Jackson—and I am not wholly excepting the
Administration of W.W. The country is going through a repetition of
Jackson's fight with the Bank of the United States—only on a far
bigger and broader basis."
--President Franklin Delano Roosevelt to Col. Edward Mandell House,
November 21, 1933, F.D.R.: His Personal Letters (New York: Duell, Sloan
and Pearce 1950), p. 373.
*Don't misundertand the above by thinking that FDR opposed the banking oligarchy. E.M. House was a close advisor, the closest and most important, to FDR, and he was an agent of banking, no doubt about it. The reference to Woodrow Wilson above is amusing, considering that E.M. House also advised Wilson, who was also a shill for the banks. Another interesting tidbit: E.M. House wrote a book called "Phillip Dru: Administrator" about a dictator who took control of the United States and implemented major economic 'reforms' that are remakrably similar to the New Deal.
Actually no, the private sector banks are the 8,000+ financial institutions that are not Too Big To Fail.
kindly explain your gobbeldy gook in english. TBTB banks were private. They lost after speculating their asses off, then ran to Govt. saying save us we are TBTF...the govt. caved in! Period. True they took the whole 8000+ with them and the 300 million citizens as the govt.'s spineless decision sealed the doom of the whole economy. It started amongst the private BIG wheels.
The Big Steal in 2008 was accomplished as a public-private partnership, sometimes hailed as a laudable thing. I think it would be more accurate to call it a "racket."
BTFD, short oil , the fix is in.
The REAGAN laugh caption is a Classic...for the ages to come...Iconic scene...the stuff that legends are made off...The Maltese Falcon...
And to think that anyone would engineer 'bad inflation'.
Good thoughts and I agree, everything is subject to gravity.
My thoughts have tended lately towards a typical family budget, and ordering of priorities. Stuff that I think tends to get paid for before the house note or rent bill:
1. Food/medicine.
2. Utilities.
3. Phone.
Investing in companies that are in those markets, with low P/E's, some manner of a dividend, and low debt, liking that stuff as of late. I'm fully in capital preservation mode (which includes a fairly robust survival plan in the event of a total blowup).
Good post. I read Ilene over at Phil's Stock World.
"Secondly, as I mentioned yesterday, it's not just the Federal Reserve that is in denial but the commodity speculators, "
do you realize that when you repeatedly make statements like this it only legitimizes the actions of these people. bernanke doesnt understand or he is stupid or he is in denial..BULLSH&T...! he knows full well what is going on...F*CKING say it....!
he knows he is screwing everyone but the banks (and speculators which are mainly the banks). how else can he make them whole...?
The Federal Reserve is publically in denial, I think that's what they were referring to.
i would agree with u and grandpa about the input cost of commodities and having to have wages rising to offset, or we do have a bubble. today i see your point about a commodity bubble. BUT YOU ARE FORGETING ABOUT THE REAL PROBABILITY OF THE DOLLAR COLLAPSE. assuming after the crash and a new currency backed by gold, silver, other stuff etc.... comes into play he who has the gold, silver and other stuff will have real wealth. so i would like your opinion on the possibility of a dollar collapse and what that would have on commodities
In the event of a dollar collapse, a new currency backed by gold, for example, will still have a conversion period from "old dollars". That conversion can be whatever they want it to be. I still hold a solid amount of gold/silver to protect my ability to buy stuff during a hyperinflationary period, but I have no illusions that they won't try and screw up the value of it in a new currency situation. To convert gold in it's correct, proper value would be to transfer wealth right back to you. I don't see a logical reason for them to do that.
"boosted our own assets by 28% ($35Tn to $65Tn)"-- Typo? FASB sanctioned accounting? Keypunch error?
and the Reaganomics is still right.
Prices go up
Profits go up
The rich get richer
Wages of the working man stay the same
Shame on the working man for asking to keep their standard of living...
WE DO NOT NEED TO BECOME CHINA
CHINA NEEDS TO BECOME US!
WE ARE FAST GETTING BACK TO THE 1900's!
THIS CRISIS IS NOTHING MORE THEN A FARCE AND A EXCUSE TO KEEP PEOPLE DOWN!
Reagan is the Icon of the 1200...feudalism. He never left it as a Holywood B actor with his gun on in the middle ages of the USA...wild west! It stayed that way all his life.
The rothschilds and unrest in the middle east....
http://nakedempire.wordpress.com/
Well, the Pyramid of Capitalist System is quite accurate. Except that the Communist pyramid is just the same, in worse.
the Capitalist system is the laws of economics (productivity, return on capital employed, profit etc).... you work with them, or die by them, whichever side (right wing or left) you're on in The Parasite Club... both sides destroy wealth creation, right through monopolies and left through State run markets... so let's not 'diss' capitalism, let's solve the problem of the pyramid (parasite) system loosely and fraudulently called "democratic Govt"
Go read Marx. He saw all this. His analysis of big capitalism was perfect. His solution was useless. Your rant about no government is perfect in Sherwood Forest, playing at Robin Hood. Got a feeling you are still in Sherwood...
Falak
as one who persistently grabs the wrong end of the stick and doesn't know what he's talking about i'd say it is you that cannot see the wood for the trees.
Marx's idealism can be defined as a theory based on a bloke with a chip on his shoulder (about the rich). He did not understand capitalism because nobody has defined capitalism properly to date. What Marx described was monopolism. His solution, though he was too stupid too realise it, was to replace private monopolies not with a free competitive market but with State monopolies.
His 'solution' was the same as the problem... that's where thinking with a chip on your shoulder gets you: double-dumb
His analysis was picture perfect. Its being played in the theater of the world right in front of our eyes. Word for bleeding word as we watch it unwind, including the nefarious effects of mad productivity gains search to make a quick buck that sent all manufacturing to China by the lords of the free market model that he foresaw. Wake up the film is on since twenty years and you are snoring in the aisles singing 'no government' like 'no prohibition'...to a speak easy store...you are the original retard from 'clockwork orange'...in denial and total hallucination of nirvanic anarchy.
Falak
Marx was not "picture perfect". He had a moronic 2 dimensional fixed view of captialism, namely that of the rich industrialists drinking wine and having a fuking good time while the poor scraped by on the streets. That is the image of capitalism fixated in every peanut brained zombie socialist, Unionist and Marxist. Is that not a fact?
What 'Marx the Moron' missed was time, how competitive markets work and talent.
Regards the latter point nowhere in Marxs' moronic 2 dimensional writings does he recognise talent. He thinks incorrectly the "means to production" is somehow 'gifted' to the rich when in fact it takes balls and IQ to build a company. Marx also thinks he can simply 'transfer' the industrial capacity of a country into State hands. What Marx does not understand in his peanut sized 2D fixated mind is that it takes ongoing talent to manage and keep it progressing (productive, efficient, profitable).
Marx the Moron does not recognise taking industry out of the hands of talented individuals who built up these businesses and putting them into the hands of untalented morons, as all State employees are, does not enhance and share the wealth around for society, it destroys the industry or business itself impoverishing the society.
He wants to replace hard graft, risk taking and talent (that create wealth) with fat lazy moronic cunts (public sector employees) that will destroy the industry the State steal/thieve off private individuals.
Marx does not understand talent, he never wrote about it.
He also did not understand the competition mechanism, the most powerful force in capitalism. He also did not understand the 4th dimension, time, and its effects on markets.
Namely Marx like all socialists in history was a jealous lazy loud-mouthed windbag and an f'n moron
If you think that the solution to the massive problems facing the world today lie in granting even more power to government, instead of taking away the vast powers usurped by that parasitical and evil institution of sociopathic mass coercion from its only proper repository, the individual, then you are still part of the problem and not part of the solution.
Government is a disease masquerading as its own cure.
The Communist system collapsed for the same reason the Capitalist system will collapse ... runaway greed of the ruling elite. I bet the future of Tunisia, Egypt, Libya, et al will not be based on the American model of capitalistic democracy, but rather a hybrid model of socialistic democracy with limited, highly regulated capitalism. America has proved more than once that unbridled capitalism is an abject failure for the vulgar many, proles, and peons.
True.