This page has been archived and commenting is disabled.
Marc Faber Warns "Karl Marx Was Right"
Authored by Marc Faber, originally posted at The Daily Reckoning,
I would like readers to consider carefully the fundamental difference between a “real economy” and a “financial economy.” In a real economy, the debt and equity markets as a percentage of GDP are small and are principally designed to channel savings into investments.
In a financial economy or “monetary-driven economy,” the capital market is far larger than GDP and channels savings not only into investments, but also continuously into colossal speculative bubbles. This isn’t to say that bubbles don’t occur in the real economy, but they are infrequent and are usually small compared with the size of the economy. So when these bubbles burst, they tend to inflict only limited damage on the economy.
In a financial economy, however, investment manias and stock market bubbles are so large that when they burst, considerable economic damage follows. I should like to stress that every investment bubble brings with it some major economic benefits, because a bubble leads either to a quantum jump in the rate of progress or to rising production capacities, which, once the bubble bursts, drive down prices and allow more consumers to benefit from the increased supplies.
In the 19th century, for example, the canal and railroad booms led to far lower transportation costs, from which the economy greatly benefited. The 1920s’ and 1990s’ innovation-driven booms led to significant capacity expansions and productivity improvements, which in the latter boom drove down the prices of new products such as PCs, cellular phones, servers and so on, and made them affordable to millions of additional consumers.
The energy boom of the late 1970s led to the application of new oil extracting and drilling technologies and to more efficient methods of energy usage, as well as to energy conservation, which, after 1980, drove down the price of oil in real terms to around the level of the early 1970s. Even the silly real estate bubbles we experienced in Asia in the 1990s had their benefits. Huge overbuilding led to a collapse in real estate prices, which, after 1998, led to very affordable residential and commercial property prices.
So my view is that capital spending booms, which inevitably lead to minor or major investment manias, are a necessary and integral part of the capitalistic system. They drive progress and development, lower production costs and increase productivity, even if there is inevitably some pain in the bust that follows every boom.
The point is, however, that in the real economy (a small capital market), bubbles tend to be contained by the availability of savings and credit, whereas in the financial economy (a disproportionately large capital market compared with the economy), the unlimited availability of credit leads to speculative bubbles, which get totally out of hand.
In other words, whereas every bubble will create some “white elephant” investments (investments that don’t make any economic sense under any circumstances), in financial economies’ bubbles, the quantity and aggregate size of “white elephant” investments is of such a colossal magnitude that the economic benefits that arise from every investment boom, which I alluded to above, can be more than offset by the money and wealth destruction that arises during the bust. This is so because in a financial economy, far too much speculative and leveraged capital becomes immobilized in totally unproductive “white elephant” investments.
In this respect, I should like to point out that as late as the early 1980s, the U.S. resembled far more a “real economy” than at present, which I would definitely characterize as a “financial economy.” In 1981, stock market capitalization as a percentage of GDP was less than 40% and total credit market debt as a percentage of GDP was 130%. By contrast, at present, the stock market capitalization and total credit market debt have risen to more than 100% and 300% of GDP, respectively.
As I explained above, the rate of inflation accelerated in the 1970s, partly because of easy monetary policies, which led to negative real interest rates; partly because of genuine shortages in a number of commodity markets; and partly because OPEC successfully managed to squeeze up oil prices. But by the late 1970s, the rise in commodity prices led to additional supplies, and several commodities began to decline in price even before Paul Volcker tightened monetary conditions. Similarly, soaring energy prices in the late 1970s led to an investment boom in the oil- and gas-producing industry, which increased oil production, while at the same time the world learned how to use energy more efficiently. As a result, oil shortages gave way to an oil glut, which sent oil prices tumbling after 1985.
At the same time, the U.S. consumption boom that had been engineered by Ronald Reagan in the early 1980s (driven by exploding budget deficits) began to attract a growing volume of cheap Asian imports, first from Japan, Taiwan and South Korea and then, in the late 1980s, also from China.
I would therefore argue that even if Paul Volcker hadn’t pursued an active monetary policy that was designed to curb inflation by pushing up interest rates dramatically in 1980/81, the rate of inflation around the world would have slowed down very considerably in the course of the 1980s, as commodity markets became glutted and highly competitive imports from Asia and Mexico began to put pressure on consumer product prices in the U.S. So with or without Paul Volcker’s tight monetary policies, disinflation in the 1980s would have followed the highly inflationary 1970s.
In fact, one could argue that without any tight monetary policies (just keeping money supply growth at a steady rate) in the early 1980s, disinflation would have been even more pronounced. Why? The energy investment boom and conservation efforts would probably have lasted somewhat longer and may have led to even more overcapacities and to further reduction in demand. This eventually would have driven energy prices even lower. I may also remind our readers that the Kondratieff long price wave, which had turned up in the 1940s, was due to turn down sometime in the late 1970s.
It is certainly not my intention here to criticize Paul Volcker or to question his achievements at the Fed, since I think that, in addition to being a man of impeccable personal and intellectual integrity (a rare commodity at today’s Fed), he was the best and most courageous Fed chairman ever.
However, the fact remains that the investment community to this day perceives Volcker’s tight monetary policies at the time as having been responsible for choking off inflation in 1981, when, in fact, the rate of inflation would have declined anyway in the 1980s for the reasons I just outlined. In other words, after the 1980 monetary experiment, many people, and especially Mr. Greenspan, began to believe that an active monetary policy could steer economic activity on a noninflationary steady growth course and eliminate inflationary pressures through tight monetary policies and through cyclical and structural economic downturns through easing moves!
This belief in the omnipotence of central banks was further enhanced by the easing moves in 1990/91, which were implemented to save the banking system and the savings & loan associations; by similar policy moves in 1994 in order to bail out Mexico and in 1998 to avoid more severe repercussions from the LTCM crisis; by an easing move in 1999, ahead of Y2K, which proved to be totally unnecessary but which led to another 30% rise in the Nasdaq, to its March 2000 peak; and by the most recent aggressive lowering of interest rates, which fueled the housing boom.
Now I would like readers to consider, for a minute, what actually caused the 1990 S&L mess, the 1994 tequila crisis, the Asian crisis, the LTCM problems in 1998 and the current economic stagnation. In each of these cases, the problems arose from loose monetary policies and excessive use of credit. In other words, the economy — the patient — gets sick because the virus — the downward adjustments that are necessary in the free market — develops an immunity to the medicine, which then prompts the good doctor, who read somewhere in The Wall Street Journal that easy monetary policies and budget deficits stimulate economic activity, to increase the dosage of medication.
The even larger and more potent doses of medicine relieve the temporary symptoms of the patient’s illness, but not its fundamental causes, which, in time, inevitably lead to a relapse and a new crisis, which grows in severity since the causes of the sickness were neither identified nor treated.
So it would seem to me that Karl Marx might prove to have been right in his contention that crises become more and more destructive as the capitalistic system matures (and as the “financial economy” referred to earlier grows like a cancer) and that the ultimate breakdown will occur in a final crisis that will be so disastrous as to set fire to the framework of our capitalistic society.
Not so, Bernanke and co. argue, since central banks can print an unlimited amount of money and take extraordinary measures, which, by intervening directly in the markets, support asset prices such as bonds, equities and homes, and therefore avoid economic downturns, especially deflationary ones. There is some truth in this. If a central bank prints a sufficient quantity of money and is prepared to extend an unlimited amount of credit, then deflation in the domestic price level can easily be avoided, but at a considerable cost.
It is clear that such policies do lead to depreciation of the currency, either against currencies of other countries that resist following the same policies of massive monetization and state bailouts (policies which are based on, for me at least, incomprehensible sophism among the economic academia) or against gold, commodities and hard assets in general. The rise in domestic prices then leads at some point to a “scarcity of the circulating medium,” which necessitates the creation of even more credit and paper money.
»
- 31605 reads
- Printer-friendly version
- Send to friend
- advertisements -
Re: So your real problem is with bullshit. Anything plus bullshit equals bullshit. We can agree on that.
No, "anything" which can have "bullshit" added to it, will create value for the sociopaths creating the bullshit. Which means sociopaths are attracted to things like morals, government, and craft for which they can create bullshit and extract value. What's more valuable to a sociopath the government, religion, economics, finance, and abstract painting? The bullshit potential is unlimited.
Bullshit is just a tool (the best tool, tho) used by sociopaths to manipulate dumbasses.
I get you.
I like the addition of abstract painting.
Usually when someone goes around calling everyone a sociopath without concern for any sort of rational content, I'm more inclined to think that person is actually the Sociopath in the room. Not that I have any courses by which this was demonstrated to me by practice and example. I did, but I won't post the details here, let's just say that Sociologists have a very good model that demonstrates the behavior of the sociopath and it starts with projection and distraction to keep the eyes off of them.
I notice that you have done nothing but blame others for the problems and accuse everyone else of being a sociopath, and you magically have a final solution just waiting for some to ask about it.
can you say "rentier tax" ?
Use BitCoins not dollars.
Last price:$306.30422
FAA says it's behind schedule on guidelines for drones in US
http://america.aljazeera.com/articles/2013/11/7/faa-sets-roadmapformassd...
We still have a little time. Stop with your profiteering bullshit and join the fight. Or does your XX chromosomes prohibit that?
Over.
The clearest sign we have a financial economy run for the benefit of money-changers is the FED buying $85 Billion PER MONTH on the back of future generations and paying a below inflation rate on Treasuries.
If we had a real economy there would be no Federal Reserve and the currency would be tied to Gold.
Surely you jest....
We would have run out of gold by 1975 if Nixon had not closed the window...
And just where would that have led us?
Re: And just where would that have led us?
Could it worse that where we are now? The gold bugs might be simplistic their "belief" of a gold-standard but what they are fantasizing about is simply some way to control the sociopaths. We do know that the sociopaths run the current system. We also know that the sociopaths manipulated the country when it DID have a gold standard, but... People know there's a problem with the sociopaths, but they can't create a system (or an ISM) to deal with them.
So, a gold standard "appears" to be work better than the obvious corruption we've got now.
Hey, no problem with me re: the role sociopaths...
but you do realize the no gold is no imported oil and that after Agriculture demand there is basically no oil left for the consumer....
Do you think 'murcains would be content with a roughly 1955 level of absolute consumption or about 50% of that per capita???
I think not....
"Do you think 'murcains would be content with a roughly 1955 level of absolute consumption or about 50% of that per capita???"
No they won't be content, but they're not going to be given that choice before this is over with. Americans will be consuming much less, one way or another.
Yes, and in the mean time they had a helluva party...
But any rational person knew it was going to end eventually, no matter what....
Re: and in the mean time they had a helluva party
Yeah, I still remember Reagan's 600 ship navy and "star wars" idea. I was a "Conservative" then, I LOVED Big-MIC. It was everything that made America the greatest and most glorious free-enterprise loving place on the planet, and we were showing "those people" how hard work was better than government welfare - every single day.
Isn't bullshit wonderful. It's almost like the sociopaths were manipulate us back then... na... couldn't be.
Re: I think not....
I'm not saying it would work. I think we've got the only system possible as it's the same system in use everywhere in the world right now.
The top 10% - everywhere - are winning because they are THEE most duplicitious and sociopathic. Those are the evolutionary traits that the "fit people" use to eat the "less fit people". The children (those who are "unfit"), who are getting eaten alive, are still bitching about the proper placement of the genitals or wanting to building a space alien defense shield to have perpetual "Keynesian" growth. These people are simple-minded fools and they will be eaten by the predator humans.
And don't call me Shirley...
https://www.youtube.com/watch?v=0A5t5_O8hdA
You do realize that Nixon had to cut the currency from gold due to Washington's profligate spending right?
Umm...
please remind us of what the deficits were as a fraction of GDP back then?
I proffer this nugget
http://en.wikipedia.org/wiki/File:US_Crude_Oil_Production_and_Imports.svg
Note the shape of the import curve and compute what that was as a fraction of GDP...
Throw in the fact that the French remembered the dynamics of the Gold standard and what happened with WWI. They were not going be left holding the bag...
Deficit to GDP doesn't have a darn thing to do with it. We can run these deficits that we do now because we have the world's reserve currency, we are resource rich, and we have the most powerful military (rightly, or wrongly) in the world.
The fact is our economic output was contracting giving us a large trade deficit, we were funding a war in Vietnam, and funding the great society programs. Throw on top of that the monetary inflation of the 60s and you have the recipe for a gold flight from the country. And yes oil production had its role too, hence the birth of the petro-dollar.
Here is some data for you to munch on
http://www.usgovernmentspending.com/spending_chart_1900_2018USp_XXs1li111mcn_G0f
Just because every rightwinger has blamed closing the gold window on "The Great Society" don't make it true....
Crank through the numbers for your self looking at flows and you will see things in a new light...
Where in my response did you see me blame the great society? Don't cherry pick parts of a response. You're smarter than that for cripes sakes.
Guns or butter, you can't have both.
No, I didn't claim you blamed "The Great Society", but many have and that was the point...
You are correct, Guns and Butter was no small player in the equation, but it cannot explain the result by itself...
You're arguing economics when the real problem with disconnecting the currency from Gold is a moral one.
I never thought you were that naive...
Especially given the discussion...
Where would that have led us?
Uhhh, to a fiat currency system backed by muppet faith?
Oh, wait..
Yep, and there was no choice in the matter...
Capitalism isn't the problem, it's merely a symptom. The cause is self interest. Self interest can manifest itself in many forms... we tend to argue over the classification of a symptom rather than the cause.
Marx was right in many of his criticisms of capitalism, but his solutions were... far fetched to say the least. And, ultimately, he failed to correctly diagnose the issue.
Who is John Galt?
The better rhetorical question is now: >>> Who is Valerie Jarrett? <<<
Yes, we will never get rid of self interest.
Marx's problem (Karl not Groucho...lol) was, he trusted government and the people within it to have no self interest.
Which is unpossible ;-)
Re: And, ultimately, he failed to correctly diagnose the issue.
None of the ISM's can deal with the end-game resulting from the simple fact the people are assholes and 50% of them are dumber than the other 50%. Eventually, the smarter ones screw the dumber ones and take all their loot and females. The dumb ones get pissed and form mobs.
Or join the Tea Party....
Edit: Speaking of which
http://www.forbes.com/sites/rickungar/2013/10/16/insani-tea-reigns-koch-brothers-fail-to-control-the-monster-they-created/
GOP is definately having their Changeling moment...
Re: GOP is definately having their Changeling moment...
I don't like the tea-partiers or the simple minded fascist view of their politics, but populism is the only thing that can change things. It would be nice if the Blue Team had the same problems with the "Progressives", but I suspect the "Progressives" actually aren't must different from the Blue Team.
Most humans are authority worshipping facsists or socialists. Humans are organized with bullshit: stories of the glory of the "da people": which in bullshit talk translates into "da people following da great leaders" inside their tiny-little brains. Bullshit is really amazing when it gets inside the brains of the dumbassES, they'll believe anything.
Populist outrage is easily manipulated. Look at what the Kochs and Dick Armey just did for a real live example...
Furthermore, recent history shows that fascism is the typical outcome...
The real enemy is wealth inequality... Hell GW was one of the wealthiest men in Revolutionary times and gap between him and the average landowning male was relatively small...
Re: Furthermore, recent history shows that fascism is the typical outcome...
It's the only "natural" system there is for humans. Kick-ass daddy kickin' the asses of the dumbasses.
Smothering-mommy works for awhile, but honestly, in a disfunctional family... it's kick-ass daddy that eventually takes over. All this stuff is just primal behaviors exagerated. The people with political OCD think humans are "thinking", but were not. It's just kick-ass daddy and smothering-mommy in a drunk brawl with the neighbors laughing, at least until kick-ass goes into the basement and come out with his machine gun and sprays the neighhood in a drunk rage.
That about sums it up....
And explains why a Libertarian society can only exist in an low-tech subsistence Agrarian society or in a hunter-gatherer arrangement...
The moment that one person gets the itch to take over, it's over...
Or get a membership to Zerohedge.
In the post-Spiritual world there are no "isms". There is only inevitability. Strip away all the fantasies and superstitions of what makes us what we are, and the only thing left is harsh reality.
When I'm in India, where all sorts of animals are allowed to run freely, it is illuminating to watch monkeys, either rhesus or langur. Spend five minutes watching them and one can point out the pack leader. There is always a pack leader. That pack leader has some combination of skills---in that world probably strength and a willingness to use it---that allows it (not "him", because on occasion the pack leader is female) to remain in charge and enjoy the spoils of Darwinian superiority. Thy will be done.
We're merely the same thing dressed up, but we get lost by obfuscating our existence with supposedly contrasting "isms". No matter the name, all end up the same: pack leaders lead, the rest take what's left over.
Perhaps our "evolution" is evidenced in the fact we have things like blogs and comment sections where the inferior (in a Darwinian Socialism sort of way) can bitch and moan about either "a better way", or else fantasize about how we're finally going to show the pack leaders that they're not really so tough. It makes the inferior feel better, but ultimately changes nothing. We cannot escape our biology.
Sure, by all means let's have a Great Reset. What the heck; we probably cannot avoid it. Let's also be honest and admit it's all going to end up in the exact same place. That fact was cemented at the time of birth, or at Oldavai Gorge, or a microsecond after the Big Bang. We all got dealt a gene structure that gives us a certain level of intellect, a physical appearance, a physical strength capability, an aggressiveness or lack thereof, even an ambition potential. We'll either be a pack leader---or on the pack committee---or we won't. At least we can bitch and moan. The monkeys don't have blogs.
Pretty much... The isms are all ex post facto determinations... you can't accurately guage what ism you're presently in... it's like determining history as you live it... not something we get to do... only afterword do we get to debate as to what actually happened. Further, it's foolhardy to think that because we declare ourselves capitalist or communist or any other ism that this will actually change anything, in the end... self interest manifests itself in many ways... and the market always dictates everything... the institutions we create to manage things are just temporary placeholders in much bigger cycles.
"Capitalism isn't the problem, it's merely a symptom. The cause is self interest. "
Is it really in your self interest to cheat people or provide an inferior product for the price, and thereby tell the world that you cannot be trusted? You haven't really though this through ...
Possibly, but if you have the choice between fucking people out of a few billion and retiring to the beach or duking it out in some type of stoic competition for the benefit of humanity, which do you choose? Simple risk aversion tends to dictate the former... as your best laid intentions are every bit as likely to fail.
"The cause is self interest" is about as insightful as saying the cause is people breathing. Every organism that has ever existed has been motivated by self interest.
Enlightened self-interest being a good one. Cheers, Bazza.
No doubt, but yet we act like we can somehow change that fact by declaring ourselves as within a particular economic system... again, if you want to build a system, you need to find the most basic unit of measure/activity... to date, no human has managed to implement a system that accurately accounts for self interest. So, you can poke fun at the fruitfulness of my observation, but it serves a purpose.
Did you mean the part where Karl & Hitler disagreed and we took out Adolf by claiming the event as a (Hebrew) haloCOST.
/Sarc
Bollocks. Marx was interesting in describing an economic superstructure - and that aided his paymaster most:-
Rothschild, and the cheque given to Marx by the Rothschild was in the British Library until around the time of the New Labour bust in 2010. All Nazis know it is important to control the propaganda, and the lexicon, especially among the compliant academia.
Every financial crime, every corruption, oppression, tyranny and failure has been magnitudes greater under the crypto-fascist collectivist mindset: socialism, communism, fascism. That is the old feudalism, same as the new feudalism in the making.
Wrecking genuine capitalism is the determined goal of the crony fake 'capitalists' who are monopolists in reality. They hate competition, as per the American tradition. They manipulate every market: FX, Libor, oil, utilities etc.
Why? They must destroy all hope in a genuine alternative to their crypto-fascist agenda, and the USA is the last hurdle.
Stay in whoresville, comrade Faber. Take your losses, and consider it a cheap lesson at twice the price. Schmuck.
What part of Adam Smith did you not get?
Better yet, have you ever even opened his book?
Address your question to Faber who seems to have a problem with complex economies, only after he loses money.
Interesting that ZH issues 'access denied' notices to anyone that challenges one of its Internationale.
Keep your ideologies in your own homelands, and stop wrecking true and working capitalism by constant manipulation, and trying to make political capital out of it, while losing your shirts. Thank you.
Oh my, we have a pontificating ideologue...
I base my evaluation of isms off of observable facts and real history, not some naive world view...
But please do go on, I'll be back after making some more popcorn...
You are ignorant, and proud of it. You are pretentious, and your shallow knowledge is self-evident, pet.
Yawn....
Yawn like a good little sheep sheared, although you pretend to be otherwise; a woolf in sheep's clothing. Schmuck. Sleep well, preferably in a communist country which will appreciate your obedience and meagre effort for the one Party.
Wow... you are one deluded puppy, you must be a graduate of Glen Becks on-line debating course...
Let me guess, you have an autographed copy of "Protocols of the Zionist Elders"...
Do you?
Your problem is that you are very ignorant, and narrow minded. You are incapable of addressing issues, and must make assumptions about individuals; the sign of a very poor education. Celebrity TV news would be more your level of discussion.
Now that is funny...
It's funny because it's true. Nice to see you're back to get your a** handed to you yet again through the simple application of perspective. What's funny is you referring to Constitution - or anyone for that matter - as a pontificating ideologue...
Well, I will really stir the pudding [and probably get a lot of down votes if anyone on ZH reads this], but I always liked Art Laffer and Milton Friedman way more than Adam Smith [from what I can remember of Smith -- it was like three decades ago].
The world is a contest of ideas, it seems to me and anyone with a good education beyond the indoctrination which some mistake for the same. Laffer and Friedman added to the honest debate. I just find it repugnant when people only complain AFTER they lose money or BEFORE their chosen one and only flawed hero is debunked.
Live moves on...
Laffer???? You have got to be fucking kidding me...
My fuck, and you called me a sheeple??
Now that is truly rich...
Don't bother replying, as it is clear that you are a waste of my time...
You don't get online mischief, do you Flap meister? Silly boy...easily led.
While I actually agreed with a good number of Faber's points, he lost me at marx.
In fact, I might not even have read the article, if I hadn't miss-read the title.
I think I had a senior moment and thought it had said Groucho Marx.
You might want to read a bit about Marx beyond the cliff notes. I disagree with his philosophy, but he was a brilliant person and right on target.
I've read enough of his works to be scared . . . very, very scared of how they are always implemented.
[Besides, what do you really need to read beyond the "Communist Manifesto" in order to know almost all of what you need to know?]
I know that the mention of K Marx is a red flag for you guys. You lose all sense of logic at hearing that name; like I do when I hear the name of Pope Innocent III or the likes of him being evoked to justify western's civilization's christian ETHOS.
But Marx's critique of this new fangled "leveraging device" for the rich, which he CALLED capitalism, in the context of social upheaval in France, England and Germany during his age, was a brilliant analysis of things to come. His solution to problem was less relevant; although even there the notion of state "whithering away", post communist correction, is still relevant today in an age where the communist statist ethic has now been debased.
As for Marc Faber, he ruefully deplores today the breed of his own kind; poachers of capitalism now being humbled into becoming gamekeepers of "virtuous commercial capitalism" that Reaganomics have relegated to becoming a surrogate outsourced appendix to the financial behemoth of our current conundrum of peak resources, unlimited fiat toilet rolls and great stagnation.
Faber fell off the wagon again.
a real economy requires a real basic unit of measure,
no, or is that just silly?
Units of measure are not required when your goal is to debase accounting.
thank you for that clarification.
Just Google: Talmud book on children rape
The ADL whips up a defense to protect the Media Artist selling products to support cultural changes.
The Jewish Talmud - Recipe For Pedophilia and Murder
http://www.liveleak.com/view?i=f72_1213398101#eZpyPaeUtpHqOPvH.99
Keep sending aid to Israel & let them drop the middle east bomb.
We all have it coming.
The way it is, don't fear it.
All systems reset and some point. Ours will be brutal
And they almost always create new opportunities when they reset, if you pay attention. You can trade on prices going lower just as easily as higher, for the most part -- if you get educated about how to do it safely.
If things reset so much that even that can't be done, there will still be even newer opportunities -- if not less-desirable ones.
Please. I have been trading in the markets for a long time. What will hit us, will be something that you have only read about in history, but this time it will be whole systems collapsing at once, economic turmoil with no safe havens. This is crony capitalism as it reaches a crescendo, Faber is right, on a global scale all primed at the same time. If it was isolated say in Europe somewhere sure we get 20% wipe-out on markets, flows into safe havens, the cronies set the bail in/outs and you buy the dip.
But that ends...
"much-less-desirable opportunities"?
"ours will be brutal"...or long, drawn out and barely noticable until the last second
Mexico's drug wars are the beginning of humanities cannibalization. Very sad. I blame the money printers, the cronies and the disgusting a-holes in power
http://gizmodo.com/can-mexicos-drug-war-memorial-honor-both-victims-and-...
I thought Faber was more a of a free market guy. What is going on here?
No, he is actually a pretty smart guy that recognizes certain truths and isn't blinded by ideological claptrap...
BTW, Marx was a lot more than just "The Communist Manifesto"....
He is.
Marc is pointing out to excess in systems, Marx was right about that one thing re: capitalism, if it grows under a crony flag - like it is now, it will destroy it's self. We should have never allowed this too happen.
No. He did not point out that the USSR also failed under cronyism. Was the USSR capitalist too then?
Faber awhile back made a point about price-fixed cartels i.e commies collapsing which was Russia/East Europe. He is an economist so that is how he describes communism. He has dig against China because it's a massive commie con job. In fact he is one doomy paradoxical mf, that is what i like about the guy. Especially his 'all countries are f*cked because we copied the commie/crony capo rulebook.'
Thanks. Does Faber also explain that cronyism is the inevitable result of dishonest banking and a dishonest money supply, which are both anti-capitalist, or more specifically, anti-freemarket?
“While there have always been some unprincipled men who were able to acquire power and wealth, dishonest banking has given them almost unlimited power and money. While cronyism has always existed, a flood of unearned money has made it grow exponentially – especially under Obama.
“We all know that the opportunity to receive unearned money creates perverse incentives, but this historically unprecedented flood of unearned money has created a pusillanimous plethora of perversity. …
“The reality is that we now live in a system designed to corrupt, expel, or hobble … honest, independent minded men of principle, and reward unprincipled conformists. The purpose of our system is to control us and milk us while preventing any competition from arising.”
To all that you say here, I say Yes!
Yes.
Read over the ZH article again and note Faber talking about the bailout of LTCM, also he notes from countless interviews that the start of cronyism after Volker was Greenspan under that a-hole Clinton. More so the Mexican bailout in 1994 that should have NEVER happened. Look at the country now! Cronyism feeds corruption and we have a crony/corrupt bubble globally. Again, what Faber is pointing out is Marx relaying that when you have a massive corrupt capitalist system, it will blow up.
Faber is a true capo.
OK. The part I don't get is why capitalism MUST devolve into cronyism and corruption. Cronyism requires big government, but given the state authorized by the Constitution, none of this cronyism would be allowed, but of course, the power of the Constitution rests on the character of the people, and the character devolution of the people is accelerating, but not because of capitalism.
The framers of the Consitution did not fathom the creation of the Corporation... Jefferson among others would be appalled at the special status of the multinationals and the roots therein are found here
Santa Clara County v. Southern Pacific Railroad Company
Tie this in with comments above about the power the RRs wielded over Washington at the time....
Re: What is going on here?
What going on is you didn't read the damn article.
Marx is only in one sentence at the end, and if you want to read it and not go blind - just put on masic Libertarian sunglasses.
FFCS...
Just keep creating a new world. Your funds will dry up.
Setting up Heterosexual/ faggot prostitution revenue streams to nourish by making up your loss in foreign aid. Maybe you can sell illegal drug bonds and collect new taxes. Please bomb Iran. We all have bets on the survival of Israeli monsters turning this world upside down. My speculation, no Israeli peasants will be harmed. But you on the other hand….
/hahahahaa
BTW, Israel's leaders have come out from under their covert alliance with Saudi Arabia, and announced that they are happy the Saudis have bought nuclear weapons from Pakistan which merely await delivery, whereby Israel and Saudi can become the nuclear threat in the Middle East that dominates everyone there.
They are angy that popular American opinion dissuaded the U.S. from bombing Syria on the way to Iran, as per orders from Tel Aviv and its pet Riyadh, the Wahhabists set up by Britain's Zionist Rothschild Mi5 in the early part of last century in order to divide and rule the ME under a fascist theocracy.
Only American soldiers refused to hand over their jewish comrades to the Nazis who were founded and funded by the old world order like the Rothschilds, Bush, Warburg, Queen et al. Those socialists, communists, fascists.
American jews have this moment in time to stand firm in the U.S.A. Put America first. Put aside religious pre-eminence. We are all born into our traditions, but an oath of allegiance to the American ideal transcends all color, creed or religion.
We have troubles that we had best sort out as family in our own land, among ourselves. Let the rest of the world have its wars and resources, and pay for it. Not us.
Let us know when you have finished sucking Rand Paul's cock....
Mommy Dearest has milk and cookies waiting for you upstairs when you finish word wanking in the basement, and trolling adult sites, pet.
Really, your sort are ridiculous. Completely unintelligible. If you don't like what someone writes and are clearly incapable of an intelligent counterpoint, then go bother Mommy Dearest, poor thing. She has more patience with you.
Let us know Flakmeister, when you stop being a troll.
In case you haven't noticed, I've been posting here for nearly 4 years, so pray tell, who is really the troll?
Toodles....
Trolling has nothing to do with length of time on a site...try understanding a term before you comment about it and you won't look so ignorant.
It is ridiculously obvious that you are on here to troll, to flame to piss off as many people as you can.
Fine with me, just makes me feel better about myself every time I see people like you who actually derive satisfaction out of trolling. Slightly sick, IMO.
Happy trolling.
Have a nice day,
I merely call out the poseurs and the bullshiters...
Oh, and did I mention the anti-semites?
The holocaust deniers?
The Global Warming deniers...
The Abiotic oil wingnuts...
And we shouldn't forget the HAARPists....
You could argue that if anything, I am the anti-troll....
Sorry if you have a hard time when your echo chamber doesn't perfectly resonanate...
Ta ta for now...
I don't agree with everything posted on this site...far from it. But there are two ways to criticize - use unbiased facts/data to prove your point or just spew forth bile in whatever direction serves one's purpose.
The latter is clearly your preferred 'way'...and that is the way of the troll.
Trolls are usually closed-minded - as you seem to be. So I won't waste much further time with you.
I just wanted to show you that your behavior is ridiculously blatant, largely ignorant and rather childish...something I would want you to do for me were our roles reversed.
Have a very nice day.
I routinely post facts, the people I call out are not interested in facts... Why don;t you peruse the above thread for links to data and more recently this thread:
http://www.zerohedge.com/news/2013-11-08/worlds-strongest-cyclone-ever-slams-philippines-200-mph-winds
and see who is posting verifiable facts....
If refuting crack pot conspiracy ideation and bigots is close minded, then yes I am closed minded...
A nice day to you as well...
Jew hater in extremis.
It's not a drug war, it's a takeover. divide and conquer.
As the above poster stated, don"t fear it. Anyone with mutiple means to purchase during reset will survive. This scares the fuck out of some peeps. :P
there you go friend:
I must not fear. Fear is the mind-killer. Fear is the little-death that brings total obliteration. I will face my fear. I will permit it to pass over me and through me. And when it has gone past I will turn the inner eye to see its path. Where the fear has gone there will be nothing. Only I will remain.
recite that daily and you will be fine.
There is no such thing as a financial economy; it is a State-ruled society (hardly an economy). Marc Faber should know better.
It is a continuously erroneous fallacy that what we face today is capitalism gone wrong, sometimes called crony capitalism. But it is not capitalism at all; it is banker rule; it is central managed ownership and control of the money. The Fed, for Heaven’s sakes, prints the money, owns the money, identifies what it is worth, selects who gets it and who doesn’t and determines the winners and the losers.
That’s not capitalism.
We live in a society where you can buy and sell, produce and consume... with the permission of the State.
The nation's 10 largest financial institutions now hold 54% of our total financial assets; in 1990, they held 20%, says PolicyMic
“Capitalism means free enterprise, sovereignty of the consumers in economic matters, and sovereignty of the voters in political matters. Socialism means full government control of every sphere of the individual’s life and the unrestricted supremacy of the government in its capacity as central board of production management.” Ludwig von Mises (1881-1973)
Crony Capitalism is socialism, i.e., crony communism.
The current confusion in word definitions and deliberate misuse of the language – such as socialism, capitalism, state welfare capitalism, fascism, liberalism, conservatism… among economists and educators and journalists and by professors “who engage in their own form of academic Newspeak” -- is made use of by the Marxists “to promote their own ends.”
That’s how the former editor of the English weekly, The New Statesman, Paul Johnson, explained it.
In a review of Hunter Lewis’s latest book, Crony Capitalism in America, 2008-2012, David Gordon, who covers new books in economics, politics, philosophy, and law for The Mises Review, writes:
“An especially glaring example of a predatory partnership between government and business followed the financial collapse of 2008. It was widely alleged that massive government subsidies to prop up failing banks and investment houses were required lest the entire economy be destroyed. ‘So in the fall of 2008, the US supposedly stood on the edge of an abyss, with a likely shutdown of the entire financial system, and a Depression from which we might never emerge.’ (pp. 110-11)
“The allegation of imminent collapse served as an excuse for massive transfers of money to a favored few investment bankers.”
Lewis devotes particular attention to Goldman Sachs. ‘At the center of Wall Street stands Goldman Sachs, master of the crony influence game.’ (p. 86)
“Lewis devotes six pages of his book to a chart of what he terms the ‘revolving door’ between Goldman Sachs and the government. (pp. 86-91) The result of these close connections, together with the large amount of money spent by Goldman Sachs in lobbying, will occasion no surprise: ‘Government connections conferred many other benefits … in some areas of the market post-Crash, Goldman Sachs enjoyed what former employee Anthony Scaramucci called a near monopoly.’” (p. 102)
Goldman, the KGB outfit that runs the U.S. Fed (via the NY Fed), the European Central Bank and the Bank of England – and a million other things a self-administered world reserve currency out of “thin air” can buy, is not an example of capitalism.
Even Marx could see through this one.
http://www.lewrockwell.com/2013/09/david-gordon/the-american-economic-fraud/
In the 1980s, Baudrillard posited an “immanent reversal,” a flip-flop or reversed direction of meaning and effects, in which things turn into their opposite. Thus, according to Baudrillard, the society of production was passing over to simulation and seduction; the panoptic and repressive power theorized by Foucault was turning into a cynical and seductive power of the media and information society; the liberation championed in the 1960s had become a form of voluntary servitude; sovereignty had passed from the side of the subject to the object; and revolution and emancipation had turned into their opposites, trapping individuals in an order of simulation and virtuality. Baudrillard’s concept of “immanent reversal” thus provides a perverse form of Horkheimer and Adorno’s “dialectic of Enlightenment," where everything becomes its opposite. For Adorno and Horkheimer, within the transformations of organized and hi-tech capitalism, modes of Enlightenment become domination, culture becomes culture industry, democracy becomes a form of mass manipulation, and science and technology form a crucial part of an apparatus of social domination.
Capitalism is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned.
The recognition of individual rights entails the banishment of physical force from human relationships: basically, rights can be violated only by means of force. In a capitalist society, no man or group may initiate the use of physical force against others. The only function of the government, in such a society, is the task of protecting man’s rights, i.e., the task of protecting him from physical force; the government acts as the agent of man’s right of self-defense, and may use force only in retaliation and only against those who initiate its use; thus the government is the means of placing the retaliatory use of force under objective control.
“What Is Capitalism?”
Capitalism: The Unknown Ideal, 19
http://aynrandlexicon.com/lexicon/capitalism.html
What you state about private rights and its limits is the legs of the Enlightenment, not of capitalism per se...which was invented as social construct fifty years after the Enlightenment was born. During enlightenment days we were still a totally agrarian society in Europe and therefore also in the fledgling free colonies liberated by the sons of ENlightenment there. Both the US constitution and the French Constitution firmly declared the inalienable rights of the individual, including private property and right to protection, and its limits: aka the golden rule of "your liberty ends there where someone else's begins. And we decide that in the law courts not in the streets of Dodge."
But to go back to Inception : Lex Romana of Republic days recognised PRIVATE LAW and property rights; that notion goes back to the first legal system the west invented which we all inherited. We are Greeks in terms of culture and Romans in terms law.
Nothing new under the Coliseum where they lodged the lions; that was the other form of more expeditive natural law making for non roman citizens. The lion market for the slaves and the law for the brave.
I think our capitalist neo colonial world has retained the original lesson; now coming home to the land of the brave as you be part of the non 1%, aka the NEW true Romans of globalisation!
Carroll Quigley :Tragedy and Hope, page 44: 'money is a claim on wealth" (1966 edition)
Ban organized government and you solve the problem.
You clearly haven't thought things through very far, have you?
I vote we put you in charge of that. All in favor?
You cannot,(by definition), have free market capitalism with government interference. Free market was abandoned about the time it was established. It took a long time, but with more and more government interference, it has been made to fail. A true free market is a natural, self regulating system. The government was never intended to be part of the capitalist system, now it is the largest, self regulated industry in the world. The insanity is so obvious and common that it is now accepted as normal.
Did you just get back from a seance and you are channelling Uncle Miltie?
Really, self regulating??
You have to be trying to poe us all...
In a completely free, capitalistic society there would be no govt mandated fiat money or central bank engaged in central planning causing the problems we have now.
So, how could Marx have been "right "?
Try reading Marx, you'd learn that the propaganda daily fed to you all your life is seriously defective, e.g. contrary to popular belief Marx was not a "Marxist", nor even a socialist, because he refused to join any of the early socialist movements, mid-19th Century.
The bulk of his writings were both analysing the relatively new phenomenom of Capitalism, replacing Mercantilism, AND documenting social conditions in 19th Century Britain. He wrote little about Communism, except in his quite short polemic "The Communist Manifesto", which is worth a read and includes such memorable statements as, "Capitalism contains within itself the seeds of it's own destruction." And, to paraphrase, mankind will never achieve anything until, with sober senses, it awakes to the reality of relations amongst it's kind ... which were increasingly anti-social and sociopathic in the 19th Century and have only gotten worse since, though disguized by increasing consumerism/affluence, which is now radically breaking down, as Marx predicted.
strangely enough Karl Marx works are based on Adam Smith
Of course ... but both Smith and Marx are far cries from both neo-classicists and Marx' actual writings.
"In a completely free, capitalistic society there would be no govt mandated fiat money or central bank engaged in central planning causing the problems we have now."
You are just as "utopian" as those who seized on some of Marx' writings, such as Lenin and Mao, to develop their own ideologies (rather like Christians have seized on some purported sayings of Jesus to develop competing christianist ideologies, e.g. Catholic vs Protestant and a myriad variations in both camps.
Both Capitalism and Communism are religions and never existed in "pure form", which are only theories espoused by competing economists, for instance, and people like yourself who maybe follow Mises' theories and/or some Libertarian dogma.
BTW the Fed is NOT engaged in Soviet-stlyle central planning, which set five-year plans for such as grain production and industrial output, whereas all the Fed does is take the blunt instrument of Financialism to manipulate commodity prices and stock market indices.
Anyone who believes that Obomber is a socialist is nuts.
Anyone who believes that ObomberCare is a move towards "single payer" health insurance (socialized medicine) is deluded. ObomberCare is totally to do with privatization in a fascist, corporatist system.
Don't you know that the Fed is totally owned by private banksters, who own Washington DC and have zero, zilch, nothing whatsoever to do with socialism in any shape or form, such as a single-payer health care system which has worked quite well in Canada, Australia and other countries.
via MARC FABER BLOG http://www.marcfabernews.com :
Every Bubble will create some White Elephant Investments The point is, however, that in the real economy (a small capital market), bubbles tend to be contained by the availability of savings and credit, whereas in the financial economy (a disproportionately large capital market compared with the economy), the unlimited availability of credit leads to speculative bubbles, which get totally out of hand.Read more »
this guy is smart , he really did study Political Economy as opposed to Economics trash textbooks they teach us nowadays
Of all the analysts out there, Faber is my favorite. He's not an idealogue obsessed with pushing a single asset class. He quite accurately knows that you have to follow bubbles sometimes even though you may think negatively of the asset class. He doesn't claim to have all the answers but provides you with his knowledge and, in the end, he's gotten a hell of a lot more stuff right than wrong. Plus he's funny and the best major network troll out there... especially, when he seems really confident, perhaps after a good night out on the town in one of his favorite Asian hotspots.
Guys like Schiff may have the big picture right but reality is that the investments he's pushed have often times been disastrous.
Rogers, though I like him, would have had you completely missing the most recent stock market bubble and sitting around in agricultural derivatives, which have gone absolutely knowwhere. Plus, his interviews are a broken record, at this point.
How can a government controlled economy, government controlled for a hundred years, where everything that happens or doesn't happen is a function of the state, be considered a capitalist economy? It is corporatist economy at best. Marx wasn't talking about an economy that was a creature of 100 years of state manipulation, regulation, lack of regulation (for friends) and distortion. That didn't exist then.
Maybe the reintroduction of the invisible hand and spontaneous order might help? Maybe leveling the playing field for small business might help.
The TBTF banks were created by the US government, among others, with forethought and a lot of lobbying. They are quite a new phenomenon. I remember when my small very good local bank was eaten by a bigger bank, which was then consumed by an even larger bank again and again. Even now there are very good regional local banks, generally trust companies, and credit unions available.
I would argue that it began losing it's "Corporate Economy" in 1913 with Wilson and began evolving into a Government Economy. By the 70's Carter with vastly more powerful EPA, NLRB, and Unionization of Government employees cemented the deal. No State could invite a corporation in to do business. Today if EPA restrictions and NLRB/DOJ massive class action law suites were taken way down and States were allowed to woo "MFG. Corporations" there would be a resurgence in jobs not seen in 50 years. Allow States to woo without Federal restrictions. Look at "Mexico" GE, GM, Honeywell, Goodrich, Cessna and many many other foreign MFGR,s are in Mexico building factories and hiring tens of thousands creating ancillary millions of jobs!! Our States and our kids could have had those jobs!
Do you actually believe the claptrap you just wrote? I am amazed...
Praytell, what is the difference in wages between Mexico and the US... Do you think that might have something to do with it?
Here is the question no Libertarian/Free Market/Randian can ever convincingly answer: Can you provide a working example of your philosophy, other than Somalia? They usually spout nonsense about Revolutionary America or, even more laughably, Hong Kong.
Here is the question no Libertarian/Free Market/Randian can ever convincingly answer: Can you provide a working example of your philosophy, other than Somalia? They usually spout nonsense about Revolutionary America or, even more laughably, Hong Kong.
I knew in the end you guys would come round to the correct way of thinking!
It took a while but you're already nearer than you've ever been to determining the solution to this mess. Take Marx away from communism and just read his analysis and critique of capitalism and you guys will see that you share many opinions with him.
"The important thing in their horror at the falling rate of profit is the feeling that the capitalist mode of production comes up against a barrier to the development of the productive forces which has nothing to do with the production of wealth as such; but this characteristic barrier in fact testifies to the restrictiveness and the solely historical and transitory character of the capitalist mode of production; it bears witness that this is not an absolute mode of production for the production of wealth but comes into conflict at a certain stage with the latter's further development"
"The utimate reason for all real crises always remains the poverty and restricted consumption of the masses, in the face of the drive of capitalist production to develop the productive forces as if only the absolute capacity of soceity sets a limit to them".
kudos to:
flakmeister,
ZH11,
helvetico,
setarcos,
falak pema,
chump666,
chindit13,
ghordius, and
macroeconomist.
if it were not for people like you, then reading ZH and the comment sections would be a waste of time.
\hattip
I also see you are one of the old hands....