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A View on Inflation & Keynesian Talking Points

CrownThomas's picture




 

As the world spins helplessly into insolvency, central banks are becoming more and more active in helping to "solve" the crisis (although some would argue it's odd to have those who helped create it be counted on to help solve it). As this is taking place, the Keynesians (MMT'ers) and Austrians are renewing their rivalry, and are once again going after each other for their thoughts on the situation (note: it really doesn't matter what the Austrians believe, as the Keynesians are currently in charge of the decision making).

Volumes can and have been written on these two schools of economic thought - what I'd like to focus on is inflation.

Austrians are always sounding the alarm on inflation, and the Keynesians always laugh and point to the monthly CPI figures the BLS publishes. They say that it's in the 2%-3% range, everything is fine. And besides, the velocity of money is down significantly, so the Austrians need to be quiet and take their "crazy" somewhere else.

That's one way to look at it. I would argue that inflation is all around us, we just choose not to look.

Some context: Say you were buying apples at your local store. What if you thought that there were only a dozen apples in the store you were in, with no chance of more apples being delivered. You'd place a higher value on each apple right? Now what if you knew there was a truck load of apples being delivered shortly - you'd place a little less value on each apple, knowing that the supply of apples will be increasing shortly.

This is the same way Austrians view the value of money. They believe that individuals value money based on both quantity, and QUALITY. If the Federal Reserve can just print money and increase the money supply, creating more dollars to chase a similar amount of goods, why would you value each dollar the same as you would before the money supply was increased? And in regards to velocity of money, the velocity of money does not create inflation, it is a symptom of inflation. Think about it, if you knew there were more and more dollars chasing the same amount of goods around, you'd begin to draw on your account & borrow to purchase goods now instead of in the future, thus increasing the velocity of money. But the inflation was already there when the money supply increased arbitrarily.

Inflation is all around us. I don't need to get into things like WTI or Brent, you feel the effects of those each time you get gas. What I'd like to point out are things like healthcare, energy as a whole, housing prices, and student loans. Do you not see the inflation in those areas? -- As an aside, I recommend reading this piece ZH published on student loans.

Here's the case I lay out for those reading to make up their own minds. The Federal Reserve prints money, "buying" treasuries & increasing the money supply, thus devaluing the dollar. The Government then subsidizes all of the aforementioned areas, which means more dollars are available to purchase those goods & services. And this is how the game is played (also, banks net income swells as a result).

A. M2 (Money Supply) skyrockets (Fed printing)

 

B. An Example of Government Subsidies in Student Loans

 

C. Here's Your Inflation (that nobody can seem to find)

 

D. All with a declining velocity of money

 

E. The USD is losing value at a rapid pace (but who wants the paper tied to something of value, that's crazy) -- Also, you can look at DXY, but you'd only be looking at how the U.S. is doing devaluing their currency vs. the rest of the currencies in the race to the bottom.  

 

 

And may I present to you the only reason money is printed - so everyone can consume all those iPads and sweet big screen tv's:

 

Eventually the game will be up folks, and I strongly recommend you learn to live below your means before you're forced to. The ponzi will fail, and the economy will reset - the only question is when.

In the spirit of the Zero Hedge Mob 

 

 

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Fri, 03/30/2012 - 13:19 | 2303955 robdashu
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Where are the Optimism Trolls.  You guys sure need one.  I surely sense trouble acoming, but the magnitude and speed with which it approaches is a mystery.

 

I'm more worried about solar flares burning out all of the utility power transformers and causing civl chaos when public services no longer exist!  Seriously.

Fri, 03/30/2012 - 10:57 | 2303507 Paul451
Paul451's picture

The Austrians will NEVER be 'in charge'. Their view of economics is directly at odds with statist ambition.

A 'reset'? How about you go to the bank to take out your money and they tell you to go fuck yourself? And they'll think they're being 'fair' about it because that's what they'll say to EVERYONE. How's THAT for a 'reset'?

Fri, 03/30/2012 - 10:45 | 2303451 cranky-old-geezer
cranky-old-geezer's picture

 

 

The ponzi will fail, and the economy will reset - the only question is when.

People talk about a "reset" like it's a minor 1-day event.

I don't think they've really thought it through.  A monetary collapse would plunge America into horrible anarchy lasting months.  It would be survival of the fittest and lots of people wouldn't live through it. 

Some believe if the dollar collapses the government would simply issue a new currency and everything would go back to normal.

No, it wouldn't be near that simple.  Nobody would have any faith in a new currency.  It would be just as worthless and the old failed currency.

Even if they said it was backed by gold, who would believe it?  It wouldn't be redeemable in gold, just "backed by gold" at some number they pull out of the air. Who would believe it?  Nobody.  

Ok, some American sheeple would believe it.  Quite a few actually.  Buy nobody outside America would believe it, the new currency would be worthless outside America, so international trade stops ...including oil.

Inside America things wouldn't be much better.  Wages paid in the old currency would now be paid in the new currency, but the new currency would be nearly worthless.  Your $1,000 / week paycheck would now be 1,000 whatevers / week, and it might buy a loaf of bread (just like $1,000 might buy a loaf of bread right before the dollar collapsed altogether).

In hyperinflation preceeding a currency collpase, wages lag way behind prices.  Prices rise way faster than wages.

We're already seeing it happen.  Since 2007 the dollar has lost 40% of its value (purchasing power, whatever).  Prices have risen 67% more or less to compensate.  But wages haven't risen 67% since 2007.  In many cases wages haven't risen at all.  You're stlll at 2007 pay while prices have risen 67%, more in some cases. 

That's why you can't make ends meet anymore.  You stop paying your mortgage to keep food on the table, you get foreclosed on, and things go down hill from there.  You dropped out of the middle class into the poor class.  You're evicted from your middle class home in a middle class neighborhood, now you're looking for section 8 housing in a project to make ends meet, trying to get food stamps, etc.

Count your blessings.   Some of your peers are living in their cars.  Whole families.

But Wall Street bankers sure got a pay raise.  About $7 trillion.   Some of that $7 trillion came out of your pocket.

Fri, 03/30/2012 - 10:33 | 2303419 mrdenis
mrdenis's picture

But it's getting better ....they just said so on the TV 

Fri, 03/30/2012 - 10:47 | 2303392 Ewtman
Ewtman's picture

The problem I have with this analysis is that it looks too specifically at cherry-picked data and ignores the aggregate. Yes food and gas are up but housing, oil, stocks, bonds and other commodites are way off (50% or more in many cases) their 2006/7 highs and aren't likely to see them again for years to come. That's a deflationary scenario - not inflationary. How many years of groceries or tanks of gas could you buy with just the money you've lost on your house. Sorry, but I don't see inflation when I look at the grand scheme.

I totally agree that "the Pnozi will fail, and the economy will reset" - but not because of inflation. Quite the opposite. Which means the value of dollar will eventually increase, not decrease and gold and other PMs are eschewed for the only things that people will want to pay off their debts - good old US dollars. Strange irony and and a contrarian view, of course. But as the economy collapses on itself, the demand for dollars will make them extremely valuable. BTW, the Fed isn't really in the business of printing money. They are more determined to force "credit" (debt) down consumer's throats. Eventually consumers will choke on the "easy money" they no longer see any use for. If you bet against the dollar do it cautiously.

Fri, 03/30/2012 - 12:58 | 2303870 lasvegaspersona
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I agree with a cautious approach but the Fed will monetize the debt and the ultimate outcome will be hyperinflation not deflation. The pain of deflation is too great and printing is too easy. Can you give a single example of a country, not on the gold standard, that deflated?

Fri, 03/30/2012 - 14:53 | 2304390 Ewtman
Ewtman's picture

While that seems to be a popular view among the inflationist crowd, bear in mind there is over $650 Trillion dollars of outstanding debt globally. Debt is so leveraged that it will be impossible to monetize that much. Once the bond vigilantes take over, the implosion will be so abrupt and so quick there won't be time to monetize much of that - much less a significant portion. The Fed doesn't have access to enough printing presses to fill that void in real-time. Even if they attempt it, the effort will be like trying to fill Lake Michigan with a garden hose. It simply can't be done.

Fri, 03/30/2012 - 12:51 | 2303842 skipjack
skipjack's picture

Inflation in what you need, deflation in everything else, including wages.  Altho I'd debate you on oil - the cost per barrel is lower than 2008, but the price of gas is as high or higher.  Most people use gas, not oil - just a tiny distinction, don't you think ?  Additionally, the asset price of a house may be down, but the price of rental units is up, so I'm not sure what the net is on that.

Fri, 03/30/2012 - 14:58 | 2304398 Ewtman
Ewtman's picture

If you use PVC, bread wrappers, merchandise packaging, grocery sacks, bottled water, tires, garden hoses, ketchup bottles or anything else made of plastic you are consuming oil. Gas is actually a small portion of the oil footprint worldwide.

The value of housing has simply been lost - vanished into thin air. Rentals don't make up for that loss in GDP. Rentals merely hold the new (reset) value in place. The next deflationary collapse will take housing further down the rabbit hole. Real estate still has another 50 to 60 percent decline from present values. This thing is a long way from being over.  

Fri, 03/30/2012 - 09:44 | 2303287 proLiberty
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"...And in regards to velocity of money, the velocity of money does not create inflation, it is asymptom of inflation..."

 

Think of "velocity of money" as analogous to inventory turns in a retail operation.   In the private economy, the only time money moves from one party to another is when a free exchange occurs and mutual value is increased.  When government exchanges debt-based money that cost nothing to create for goods and services, on balance that money is spent in a way that gets far less than $1.00 of economic value for each $1.00 spent.  

In other words, the more "velocity" that money has in the private economy, the more prosperity there will be, but the exact reverse is true as the government's share of the economy increases.

 

This important disctinction is totally lost in the Keynesian aggregates.  Indeed, the famous formula C + I + G claims that government spending contributes just as much to the economy as any other spending.  This is absurd on its face.




Fri, 03/30/2012 - 12:18 | 2303738 jpmrwb
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The recent strong increases in money supply raise the likelihood of acceleration in the rate of growth of prices of goods and services in the months ahead. The effect of these increases cannot be neutralized by the fact that the so-called velocity of money is declining.Contrary to popular thinking, the velocity of money doesn't have a life of its own. It is not an independent entity, and hence it can't cause anything, let alone offset the effect of an explosion in the supply of money on prices of goods and services.The apparent simplicity of the equation of exchange and its consequent widespread acceptance by mainstream economists has been instrumental in the erroneous assessments of the true state of the economy. Hence, it is an urgent requirement that this fallacy be removed from the economic literature and from economic textbooks, in order to prevent future theoretical confusions and their practical consequences.

Fri, 03/30/2012 - 12:09 | 2303711 Ghordius
Ghordius's picture

good point on velocity

look, C + I + G is just a math - the propaganda does not start at the claim that C and G are the same, the propaganda started at saying that every increase is good and that C is more important than I. It adds quantities without any regard to quality.

G has more wast than C because a war is less productive than raising a family. but have a look at what rubbish is being C'd at times

Smart Investments - high quality I is what should be cherished and nurtured. Quality. Quality before Quantity.

As long as the US of A is being dominated by huge corporations, you'll see more quantity-driven efforts. That's where they excel.

Fri, 03/30/2012 - 09:44 | 2303258 exartizo
exartizo's picture

This is an "obvious" article imho. 

 - Obvious that the idiots that created the mess cannot fix it.

 - Obvious that "the ponzi will fail and the economy will reset"

Please do not waste my time with "obvious" information.

Now, if you manage to get a handle on the "when" the Extend and Pretend game ends then...

I'm all ears.

The last guy to try that on ZH recently was pedaling a cheap newsletter. What's your angle?

Fri, 03/30/2012 - 11:02 | 2303530 Straying from t...
Straying from the flock's picture

I would love to have the exact  date, too.  The problem is turning the page on the calandar is not going to give us the answer. 

My solution?  Prepare as if it were tomorrow, and you will never be caught off guard.  Better a year too early than a day too late.

 

RGD

Fri, 03/30/2012 - 08:31 | 2303074 tradewithdave
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To say the ponzi will fail would be the equivalent of saying that TV replaced radio or that when Nixon closed the gold window, we didn't have money anymore.  When Bedford Falls Building & Loan was morphed into Long Term Capital Management and George Bailey replaced the cash in his wallet with a credit card, the economy didn't collapse, money simply changed its definition.

It used to be both a store of wealth and a means of exchange.  If this month's March madness meme of "Money is a technology" gets traction then they have successfuly sunk the sovereign ship of fiat-based fraud and replaced it with a glyph on your iPhone.  If money is no longer considered a store of weath, then obviously Ben Shalom was right all along... gold isn't money.  You certainly can't buy a cupcake with it easily.

www.tradewithdave.com

 

 

Fri, 03/30/2012 - 09:44 | 2303283 Quinvarius
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No.  The definition of money never changed.  Just very stupid people bought into a ponzi scheme.  You might as well tell me tulip bulbs are money as tell me paper that comes off a printing press at the will of the bankers is money.  Even if paper were money, there is way too much of it out there already, and a lot more has to printed.

Fri, 03/30/2012 - 07:14 | 2302948 DavidC
DavidC's picture

If Raspberry Pis gain traction, bringing the cost of computing hardware right down, that could have quite an impact (although no doubt the statisticians would find a way of hedonically adjusting so that the inflation rate comes down to zero).

DavidC

Fri, 03/30/2012 - 02:34 | 2302820 JOYFUL
JOYFUL's picture

 

What kind of 'living within one's means' can be expected of a population educated to allow every important event in their lives to be institutionalized? 

Within living memory, the majority of births and deaths took place within the sphere of the home...and those attendant upon each of these key events were as likely as not "non professionals" (in the sense of not being subject to state-adjudicated standards).  As such, costs of being both born and dying were within rational distance of the means of a family.

As peoples' ability and desire to be direct agents upon their own lifes has receded, the cost of living goes up accordingly. State sanctioned\State mandated "middlemen" control each variable of one's existence, eroding the capacity of the laboring classes to escape being numbed into witless compliance with those who will ceasely exploit them by imposing a greater and greater burden of extra costs upon their existence...all the while pretending to be mere neutral providers of freely chosen "demand" in the case of the private predators, or "social need" in the case of the public sector piranhas.

THIS is the real meaning of inflation, measureable only generation over generation, and neither Keynesian nor Austrian can begin to credibily affect this process until it is recognized as the prime mover it is...people are laboring more to receive less of what they desire most...the freedom to live their life in accord with the goals they set for themselves - an infinitely more important proposition than the matter of the means with which to do so. MOTIVE alway creates means, and a demotivated society will always reflect itself in a lack of means.

As entertaining and enlightening as it is to read the speculations of a Rothbard or other Austrians, in the end it will be another escapee from the post Austro-Hungarian empire who will be remembered as the apogee of socio-economic thinking....and the road not followed.

Healthy people are those who live in healthy homes on a healthy diet; in an environment equally fit for birth, growth work, healing, and dying... Healthy people need no bureaucratic interference to mate, give birth, share the human condition and die.
and,

The compulsion to do good is an innate American trait. Only North Americans seem to believe that they always should, may, and actually can choose somebody with whom to share their blessings. Ultimately this attitude leads to bombing people into the acceptance of gifts.

Ivan Illich

Fri, 03/30/2012 - 02:59 | 2302829 experimentals
experimentals's picture

+1000 well said.

Most people were never taught about having a purpose driven life. Schools don't teach the most important aspects of life, and unfortunately most people learn about life and create their lifes perception within a school environment put together by those special people.

Fri, 03/30/2012 - 03:43 | 2302848 Zero Govt
Zero Govt's picture

i think kids still learn the most about life in the traditional manner, from their parents ..that's the way it should be and expecting the State to do anything (properly) is highly unrealistic

the sooner we get the State out of our hair in every facet of our lives the better

Fri, 03/30/2012 - 06:03 | 2302890 falak pema
falak pema's picture

back to tribalism. Just look at the statistics of child mortality, maternal mortality and adult life expectantcy from 1900 to today. It tells its own story in the developed world. Both child mortality and birth mortality have diminished drastically and life expectantcy has gone from 40-50 to 75... So don't blame government and society for ALL your ills. 

We are in tipping point of consumerist civilization that is clear. The current capitalist model is blocked. All the central banking shenanigans is a sign that the central planning trilateral power protects the rich global Oligarchs and now wants first world labour to align to third world labour rates, legacy of Reaganomics and NWO-Thatcherist era; all the while using the energy conundrum resulting from global hyperconsumerism it has begot, like a mad king on rampage, to thin down the herd from 8 billion to 2 billion by the end of the century. Malthus now is our only salvation as otherwise the king of Oligarchical order loses his elitist crown jewel hoard  to the irate mob.

That is the game plan of the Oligarchy. And its working. The rest is froth of media fed turbulence on the waves of the sea of globalization. One world, for the happy few...But this construct of Neo conservative power elites is now burning in the flames of its own vanity. Its an uncontrollable fire beyond the reach of central planners and money printers. The chickens are coming home to roost. Like a hundred years after the Congress of Vienna erected what would become Pax Britannica. To neutralise the menace of Pax Napoleon, as Reagan/Bush did with the USSR, in 1991. Nowadays time flies faster than in 19th century, thanks to the information revolution. 

We lose our democracy and republic in first world of failed Pax Americana construct just like in the past Armageddon of failed Pax Britannica construct from 1914-1945; after its 100 year reign. Pax Americana will have lasted less... This world order is transient, as always...Sic Gloria Mundi Transit. 

Fri, 03/30/2012 - 09:41 | 2303275 Zero Govt
Zero Govt's picture

Falak  -  yes i do blame Govt for all our ills, be silly not to, this monopolist institution is entirely consumptive (a parasite) of others wealth. Govt destroys wealth sucking it out of productive societies pockets and pissing it away on other parasites. It compounds a negative rather than allowing the private sector to compound positively that wealth further enhancing our society

Growth in our life expectentcy again has zippo to do with Govt who shortens our lives by impoverishing us (see every Govt that ever lived). Our increasign life spans are entirely due to private enterprise, nobody else takes society forward.

And there is no "tipping point for consumerism", unless it's fueled by the faked wealth politicos and bankers have been pumping into an ever more indebted society since the 70's.

Consumerism should be based on increasing productivity which itself is based on knowledge (technology etc) which is itself infinite. There has been and will never be any limit to mans knowledge nor his productivity. 

Unlike productive private sector people the Oligarchy are unproductive and their game is as old as the hills (see Romes demise). They play power-grab games to bleed or acquire wealth and other peoples productive assets. But they destroy what they thieve because they are parasites (unproductive). Like Govt everything this human scum greedily grabs will in time crumble like sand between their grubby fingers

Everything Govt touches turns to crap... same goes for monopolists

Fri, 03/30/2012 - 12:00 | 2303678 Ghordius
Ghordius's picture

nice - you just redifined (again) the Oligarchy in the most vague terms - though I agree with the "parasite" part, fully. And other parts which in my view you mix up with others - remember, the 70's started with the US Default on Gold.

Your nick is your program: zero Government. I think you could not find a more radical program, and one more impossible.

I make you and your ilk (ok, a bit hyperbolic) responsible for the ills of the US of A.

I blame you.

Why? Because after frigging 100 years of government expansion you still ask for zero government instead of just settling for a compromise. It could be just a number between 10% and 50%. Take your pick. And of course the higher, the greater would be the chances of a political deal. But no, you have to ask for zero. Which translates into "No more Taxes", sometimes with a side dish of "Read My Lips". Just to be exchanged by "We can". And back.

So the compromise is that the taxes are slashed and the expenses are raised. And you feel confirmed in your view, and of course the progressives feel confirmed in their view and politically, everything is just fine. Until it isn't, though we are not yet there.

Grow up (again, I'm not talking to you directly) and pick a frigging number that can find a majority. I'd say you would have to start at 35%.

----

+1 (not junking you)

Fri, 03/30/2012 - 12:45 | 2303810 skipjack
skipjack's picture

Some sheep never learn...like you.  We have arrived at this point BECAUSE you "picked a frigging number".  The original compromise number was 1-2%, then it grew to 6% then...more power grabs abounded, until we all end up under the heel again.  Ben Franklin had it right - "a Constitutional republic...IF you can keep it."  Two hundred years of compromises has lost us the grand American experiment.

 

Take compromise and shove it right back up your ass - when you compromise with evil - make people into slaves - then you too are evil.

 

The only way to keep the camel that is the feral government out of the tent, is to not let it in at all.  Ever.

Fri, 03/30/2012 - 18:35 | 2305124 Ghordius
Ghordius's picture

I rest my case - IMO the gap is too great. 6%? Last time we europeans have seen 6% was probably before the Romans, and I understand even the biblical Israelites thought 10% was somewhat normal, as the Babylonians and the Persian, etc...

If for you the Grand American Experiment stopped at 6% you probably want the Amish Lifestyle or something - in any way something the freaking rest of the world has probably only in Somalia nowadays...

Somehow you seem to think "if the rest of the world would just leave us in peace it would be all right". This from a country that has 700+ military bases outside it's borders...

You have no clue of the world you are living in. And you call me sheep? You are a cute little lamb...

Fri, 03/30/2012 - 06:29 | 2302915 Ghordius
Ghordius's picture

tribalism is only more evident where it's younger, bigger brother is less present: nationalism.

greater parts of the US of A where long time at the edges of the empires and have some history of not being involved in the big imperial struggles - eyes of hurricanes

hence the resurgence of tribalism and anarchism - in the USA and other parts of the former Commonwealth

though for the herds with self-appointed shepherds and dogs (as for the herds that have nothing to say about leadership) the self-appointed sovereign person/family is treated as a wolf. either as a pack of wolfes as the rentseekers invariably are seen if they are too long successful - or as lone wolfes, and the treatment of the lone wolfes is harsher, as mafia families can attest (the archetypical sovereigns)

the big movements in history are not based on individuals - they are based on syndicates, groups, great interests and greater accords

Fri, 03/30/2012 - 06:15 | 2302907 Ghordius
Ghordius's picture

I concour with your point of view - though I think it's a difficult one to digest for the angry. Even the NWO model is completely misunderstood after thirty years of application (otherwise protectionists/labour movements would be stronger), and yourself talk about the "Malthus plan" to "thin down the herd from 8 billion to 2 billion by the end of the century". Sheep are not slaughtered, they are sheared - just to keep the popular cartoonish view straight. Sheep are revenue-producing assets.

back to the not-yet-enough angry masses: why? because the debt frenzy of Greenspan has the same morality of drug dealing: who is more responsible, the drug pusher or the drug user? in the same way, are the debt pushers really the only responsibles?

and the "Oligarchy"? no distiction between the financiers/entrepreneurs and the rent-seekers from the corruption of governments and financial organizations? no questions asked when a CEO remunerations explodes from a small multiple to a gigantic multiple of the "normal" worker?

there is no "cunning plan" by a few - only opportunities taken by some of the few that generate less-than-optimal outcomes for the many.

otherwise, please explain how sixty frigging years of US Presidents telling the electorate that "something has to be done to curtail the US oil dependency from the outside" has resulted in over 200 millions monstruos gas-guzzlers in America. My explanation: popular will.

the Pax Britannica morphed into the Pax Americana and it will morph further sometime in something else again, yes, all transitions and flows.

Fri, 03/30/2012 - 08:17 | 2303036 AnAnonymous
AnAnonymous's picture

Sheep are not slaughtered, they are sheared - just to keep the popular cartoonish view straight. Sheep are revenue-producing assets.

_______________________________________________

Until they no longer produce assets. At this point, kick off for reduction of the extorted population. It matters as it gives a time line for US citizen grand plan of cleansing the world.

Through depletion of resources, many extorted, many farmed will no longer be revenue producing assets.

-----------------------------------------------

back to the not-yet-enough angry masses: why? because the debt frenzy of Greenspan has the same morality of drug dealing: who is more responsible, the drug pusher or the drug user? in the same way, are the debt pushers really the only responsibles?

and the "Oligarchy"? no distiction between the financiers/entrepreneurs and the rent-seekers from the corruption of governments and financial organizations? no questions asked when a CEO remunerations explodes from a small multiple to a gigantic multiple of the "normal" worke

____________________________________________________

No. Why the tension? Because of a stalling process of promotion.

There is nothing like angry masses in US citizenism.
The angry masses have been silenced efficiently globally by US citizens.

What is the situation? One is not good enough to be part of the extorter class but one is too good to be part of the extorted class.

Does this configuration ring a bell? A US citizen middle class bell?

This is the explanation, not pseudo differences between entreneurship and financial trades etc.

Not enough Indians, too many US citizens. The gap between extorters and extorted grows wider and wider.

And the guy in the middle, well...

Fri, 03/30/2012 - 09:25 | 2303222 LawsofPhysics
LawsofPhysics's picture

On our property, all unproductive animals are in fact slaughtered for their meat.  Whether it be poor milk or wool production.

Fri, 03/30/2012 - 10:06 | 2303340 GeneMarchbanks
GeneMarchbanks's picture

Is that because you're a gentle, forgiving individual?

Fri, 03/30/2012 - 11:35 | 2303618 LawsofPhysics
LawsofPhysics's picture

Doesn't really matter does it?  When it comes to survival and profits, being gentle and forgiving are for those who enjoy mental masterbation.  Life is hard, grow the fuck up.

Fri, 03/30/2012 - 13:53 | 2304147 GeneMarchbanks
GeneMarchbanks's picture

Ah, a social Darwinist, how reflective of intelligence. Masterbation? Is that those experts at bating hooks and such?

Fri, 03/30/2012 - 10:33 | 2303417 JOYFUL
JOYFUL's picture

Gene & Falak:

both of you mentioned tribalism, and as far I can understand, regard it negatively....is that a correct interpretation of your comments above?

Fri, 03/30/2012 - 11:05 | 2303541 GeneMarchbanks
GeneMarchbanks's picture

It really depends, I assign no moral sentiment to my little musings here. Tribal ethics are present through-out human history more or less. If we define tribal ethics as mistrust of foreign custom, values, etc then I'd prefer that over a universal secular ethic which is at its root based on a lie.

Fri, 03/30/2012 - 06:25 | 2302914 falak pema
falak pema's picture

I am not a conspirationist more a historical rationalist; but when you are on a winning ticket, and Reagan was, you tend to go all the way, and the US oligarchy did. It was part of their power logic. Why change a winning strategy...But as always, your strengths become your weaknesses when pushed too far...like Rome, like Charles Fifth etc. etc. A bridge too far...Achilles heal! 

* life expectancy...I misspelt. 

Fri, 03/30/2012 - 07:43 | 2302978 Ghordius
Ghordius's picture

well, I am both. I just think that the real conspiracies are in plain sight, for all to see.

Fri, 03/30/2012 - 06:09 | 2302906 GeneMarchbanks
GeneMarchbanks's picture

The unleashing of a credit tidal wave masked the simple fact that we never left tribalism. A Ponzi scheme of global proportion showed the temporary high of a universal desire of mankind, credit. The other word for this is debt, first the Greeks had a lot of credit and now they are in terrible debt. This will be regarded as a period of mass delusion by adroit future historians.

BW II is coming, the only question is can it happen without major conflict. As far as I can tell battle lines are being drawn presently.

Fri, 03/30/2012 - 06:51 | 2302928 Ghordius
Ghordius's picture

major conflict -> MAD applies -> minor conflicts

the big battle at the moment is, (I know, I know...) for the hearts and minds

the "big Ponzi" is nothing else than collective, multigenerational optimism

Fri, 03/30/2012 - 00:37 | 2302745 Common_Cents22
Common_Cents22's picture

Prices of the necessities are/will be going up.   Financial/paper assets will largely fall.   Stagflation.   Get tangible.

Fri, 03/30/2012 - 00:33 | 2302740 oldman
oldman's picture

How much mountain spring water would you buy at 10 cents a gallon?             

Anyone, please                      om

Fri, 03/30/2012 - 08:24 | 2303056 Schmuck Raker
Schmuck Raker's picture

Serious question?

Fri, 03/30/2012 - 09:52 | 2303304 oldman
oldman's picture

@SchmuckRaker

Yes, it is a serious question, but I guess not in the US.

I have reall high quality water from an artesean source---naturally filtered mountain spring water---in case all goes to hell as I read constantly here---It is something that I can sell or barter for but I don't know how valuable a resource it is--I have trillions of gallons of water each year that flows through my self-contained watershed

any idea?

thanks         om

Fri, 03/30/2012 - 10:49 | 2303483 Bicycle Repairman
Bicycle Repairman's picture

That water belongs to the foreign investor that bought your state's watershed rights, so the "value" of "your" water to you is zero.

Fri, 03/30/2012 - 15:55 | 2304627 oldman
oldman's picture

@Bicycle Repairman

Go back to sleep, my friend

I am that foreign investor, but the people here are saying that they disagree with the proposed new law and so, once again, we may have to vote for a new president--------------

That is why I live here---the street has balls and is very sophisticated politically even though uneducated. in less than twenty years it has deposed three presidents and thrown out the US---true democracy is like this.

The value is nothing to me because I am using the water as a pretext to preserve the the fthe 1000 acres of primary habitat/forest from being cut------------by virtue of its value as an income stream. I don't need the stinking money---I plan on giving it away---I need the forest and so do my co-residents who do not have human law to protect them--------asnd who humans cannot even understand when they speak

never mind

the 'state' doesn't own anything under the constitution--it is considered patrimony--it belongs to all or none---the water is not anyone's to sell

thanks biker                        om

Fri, 03/30/2012 - 19:31 | 2305239 Schmuck Raker
Schmuck Raker's picture

Well, oldman, I'm no expert but I'd say it's worth whatever somebody is willing to pay for it.

If you're thinking in terms of post-apocalyptic SHTF/EOTWAWKI you might want to give considerable thought as to how you could secure such a thing from interlopers.

Personaly, I suggest you plan on sharing it more or less free of charge and hoping this engenders some goodwill among neighbors that will help you secure it for what they would hopefully consider their, and your common good.

Here in the states you'll pay anywhere from $1.50 for 12oz bottle at a convenience store to $1/Gal at the grocer to a few pennies per gallon from the tap, courtesy of your local utility. Put it into a fancy bottle/give it a nifty name/make false claims about it's purity or amazing powers to heal and you can charge a lot more.

Fri, 03/30/2012 - 21:28 | 2305451 oldman
oldman's picture

@Schmuck Raker

Thanks, for the above----$1/gal comes out to about 27 cents /liter, so 3 cents a liter should be enough to accomplis the conservation trick--------I won't compete with the locals as I am a permanent guest among them, so I can find a national to take the water and simply pay me a royalty at this price.

The locals can have whatever they need, of course---they will also receive an annual grant to the community---generosity is still a virtue here           thanks, again        om

BTW---it is pure and does have healing powers, but    shhhhhhhhhhh!!!      not a sole!

 

 

Fri, 03/30/2012 - 12:05 | 2303699 LawsofPhysics
LawsofPhysics's picture

right, well at least until "they" come and try to collect the water.  possession is rapidly becoming 100% of the law.

Fri, 03/30/2012 - 00:43 | 2302748 Kimo
Kimo's picture

Great collateral for a Fed loan.  Giddy Up!!

Fri, 03/30/2012 - 00:15 | 2302726 TruthInSunshine
TruthInSunshine's picture

Here's an outstanding Bloomberg article that Zero Hedge should front page, that should scare the shit out of anyone who is wondering how long the debt disaster that The Federal Reserve & The Federal Government have now already created can be ignored before it inevitably rears its quite ugly head (hint: not long, and there are compelling specifics as to the "when" moment arrives).

Here's a teaser excerpt:

Four Numbers Add Up to an American Debt Disaster

Consider the following numbers: 2.2, 62.8, 454, 5.9. Drawing a blank? Not to worry. They don’t mean much on their own.

Now consider them in context:

1) 2.2 percent is the average interest rate on the U.S. Treasury’s marketable and non-marketable debt (February data).

2) 62.8 months is the average maturity of the Treasury’s marketable debt (fourth quarter 2011).

3) $454 billion is the interest expense on publicly held debt in fiscal 2011, which ended Sept. 30.

4) $5.9 trillion is the amount of debt coming due in the next five years.

---And here's the link to the full article:

Four Numbers Add Up to an American Debt Disaster

Fri, 03/30/2012 - 01:20 | 2302773 LowProfile
LowProfile's picture

(no snark)

No problem...  The Fed will buy that debt that needs rolled over.

But then we run into that "quality of money" problem outlined in the article this thread is in...

Beans, bullets, bullion, bandages, booze, blunts and boobies, baby!

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