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The Endgame Of Keynesianism: Savings Confiscation To Force Spending Now

Tyler Durden's picture




 

Submitted by Patrick Barron via Mises Canada,

From today’s Open Europe news summary:

Reuters: ECB readies negative deposit rate and target liquidity for June

 

WSJ: Bundesbank ready and willing to back further easing of ECB policy

 

Reuters reports that the ECB is working on detailed policy plans for its June meeting including cuts to all interest rates and targeted liquidity operations to boost lending to the real economy. The ECB could also announce a plan to purchase asset backed securities (ABS) which would come into force later this year. Meanwhile, the WSJ reports that, according to unnamed sources, the Bundesbank is willing to support such unprecedented steps to ease policy, if inflation got unacceptably low. The euro dropped sharply on both reports.

“Negative deposit rates” means that the banks will charge the customer for saving money and placing it in the bank. 

According to Keynesian theory (if there really is such a thing) government needs to spur “aggregate demand” in order to stimulate the economy to increased production.  Keynes had no respect for savings... only spending. 

He called the consequences of savings to be a “paradox of thrift” in that if we all save instead of spend, then the economy will go into a death spiral.  He was completely ignorant of capital theory, which explains that REAL capital, not paper money capital, comes from deferring spending ON CONSUMER GOODS in order to increase spending ON CAPITAL GOODS. 

The money that we save is not destroyed.  It goes into the lendable funds market to finance long term capital investment that will pay future dividends, both literally and figuratively, ensuring MORE goods in the future.

It is a mark of the fanaticism and desperation of the Keynesians that they would resort to threats of money confiscation in order to prevent people from saving and force them to spend in the present.  This is shear and utter madness... some might say it is theft on a vast scale, perpetrated by government fanatics.

 

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Wed, 05/14/2014 - 14:50 | 4759964 OpenEyes
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Bullish

Wed, 05/14/2014 - 14:53 | 4759974 ZerOhead
ZerOhead's picture

Bullshitish

Wed, 05/14/2014 - 14:53 | 4759981 CheapBastard
CheapBastard's picture

Burrish !

Wed, 05/14/2014 - 14:55 | 4759987 BobPaulson
BobPaulson's picture

They are already charging effective negative interest with inflation and service charges. 

Wed, 05/14/2014 - 15:04 | 4760016 lordylord
lordylord's picture

Anyone with brain would just take their saving out of the banks...but...what do you do when you can't buy anything with cash and can only use a government approved debt card (no, I didn't misspell debit)?  We are already moving towards a cashless society. 

Wed, 05/14/2014 - 15:09 | 4760043 Greenskeeper_Carl
Greenskeeper_Carl's picture

They won't have to force that at all. People are already doing it voluntarily. Pay for everything that keeps an electronic trail of everything you buy forever. That's why I don't understand some on this sites obsession with bitcoin. At least with our currency now, you have the option of getting cash out. Bitcoin is a central planners wet dream. Everything is digital and stored forever for easy tracing. In this age, nothing electronic is secure from prying eyes of govts. Why people think bitcoin is different is beyond me.

Wed, 05/14/2014 - 15:13 | 4760067 Gaius Frakkin' ...
Gaius Frakkin' Baltar's picture

They don't need an electronic currency to know what you buy and sell.

Wed, 05/14/2014 - 15:28 | 4760148 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Yes, we are going to take away non-existing savings away from people to force them to spend. Who is the genius that thought of this one?

Wed, 05/14/2014 - 15:35 | 4760197 Gaius Frakkin' ...
Gaius Frakkin' Baltar's picture

There's still some wealth in the upper middle class to squeeze. Then the uber elite will start feeding on the lower elite. The gap between the rich and poor grows greater every day. Neo-Feudalism here we come.

Wed, 05/14/2014 - 16:35 | 4760422 outamyeffinway
outamyeffinway's picture

If confiscation leads to more spending people need to figure out how to do better maths! Fuck! The stupid, it hurts!!! STACK BITCHES!!!

Wed, 05/14/2014 - 15:19 | 4760093 lordylord
lordylord's picture

"That's why I don't understand some on this sites obsession with bitcoin."

Anyone say bitcoin 2.0 AKA Fedcoin?  Fully backed by the US government and it comes with a high rate of inflation!

Wed, 05/14/2014 - 15:44 | 4760243 Petrus Romanus
Petrus Romanus's picture

" full faith and credit"

Obamma said it, Gotta be true!

Don't verbalize dissent, you dirty RACIST!

Get it.

Wed, 05/14/2014 - 16:41 | 4760443 outamyeffinway
outamyeffinway's picture

"Anyone say bitcoin 2.0 AKA Fedcoin?  Fully backed by the US government and it comes with a high rate of inflation!"

 

And all the fucktards who are negative on BTC right now will use that digital fiat shit like the bitches they are. BITCH ASS BITCHES!

Wed, 05/14/2014 - 15:31 | 4760162 PeakOil
PeakOil's picture

Beg to differ. Bitcoin is anathema to Central Bankers. They cannot print it or control it. As far as Bitcoin anonymity goes - the answer is it depends. Bitcoin is all about addresses and transactions. With some detective work addresses can be tied to identities. But not by default and not in all cases. There are ways to make uncovering identities using bitcoin addresses very difficult if not practically impossible. Similar laundering steps are required for physical cash also - if that is your desire.

Wed, 05/14/2014 - 15:52 | 4760273 BrosephStiglitz
BrosephStiglitz's picture

Absolutely.  One of these days Bitcoin is going to get slammed by legislation and a rival product based on similar technology, but modified to give the central banks a monopoly on its supply/demand (nationally) will step up.

People won't even need to dump Bitcoin as the media outlets plug the new competitor to death.  It will just be naturally adopted by vendors, individuals and companies and given favorable tax status.

Wed, 05/14/2014 - 16:13 | 4760338 Gaius Frakkin' ...
Gaius Frakkin' Baltar's picture

They've done the same thing to Gold for a hundred years and it still exists. There are certain currencies which are relevant because they stand apart from the system.

Thu, 05/15/2014 - 01:27 | 4761695 JustUsChickensHere
JustUsChickensHere's picture

Bitcoin currently is missing true anonymity. Dark Wallet and friends are in the process of delivering that (there is a 'test only' alpha available right now).

When Dark Wallet is production stable, the main 'tracking' complaints about Bitcoin go way.  I would expect that by late this year or early next year.  Just in time to be a good way to protect against the coming bail-ins.

Wed, 05/14/2014 - 15:33 | 4760179 TrumpXVI
TrumpXVI's picture

When everyone takes their money out of the banks to put it under their mattresses, the government will simply decree that that cash will be worthless and is to be replaced with a New Dollar.  Everyone has a choice; spend all their savings, or replace their cash with New Dollars......worth substantially less....your choice.

This is why everyone needs to have gold and silver.....and guns.

Wed, 05/14/2014 - 16:47 | 4760472 outamyeffinway
outamyeffinway's picture

FUCK ME! Dude I think you nailed it. I must say that escaped me. Brilliant!

Wed, 05/14/2014 - 18:33 | 4760848 ljag
ljag's picture

Sounds like MPC changeover in the 'Nam. If this escapes you, talk to a V.Vet.

Wed, 05/14/2014 - 16:49 | 4760483 Intoxicologist
Intoxicologist's picture

No wonder my back hurts when I wake up.  Gold and silver are lumpy!

Thu, 05/15/2014 - 06:39 | 4761846 Dr.Engineer
Dr.Engineer's picture

I understand what you said but it is a very low probaility event.  At that point the government becomes the enemy and the people will revolt.  Remember, behind every blade of grass is a rifle in the US.  Many people aren't stupid.  They just have a high tolerance.

Thu, 05/15/2014 - 11:59 | 4762828 detached.amusement
detached.amusement's picture

When everyone takes their money out of the banks to put it under their mattresses, the government will simply decree that that cash will be worthless and is to be replaced with a New Dollar.  Everyone has a choice; spend all their savings, or replace their cash with New Dollars......worth substantially less....your choice.

This is why everyone needs to have gold and silver.....and guns.

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

true but what makes you think every and all businesses will stop taking dollars because the gov said stop using 'em?  how they do stuff where dollars are black market goods?  so it shall become here.

Wed, 05/14/2014 - 15:46 | 4760255 BrosephStiglitz
BrosephStiglitz's picture

People start to barter.  

And that is the end game for government and bankers alike..  You cannot tax barter goods, or easily value them.  Kiss your tax revenues goodbye big Govt.. 

Wed, 05/14/2014 - 16:46 | 4760468 quasimodo
quasimodo's picture

And that is the point when being a snitch will pay very handsomely...........I'm sure they have that base covered already

 

Wed, 05/14/2014 - 16:51 | 4760495 Hobbleknee
Hobbleknee's picture

Bartering is impractical. What do you do when you need the shoes, and you don't have anything the shoemaker wants?

Wed, 05/14/2014 - 17:40 | 4760687 Zymurguy
Zymurguy's picture

You'll need a new currency... like ammo.

Wed, 05/14/2014 - 19:48 | 4761084 No Quarter
No Quarter's picture

Then you figure out what the shoe maker needs and barter your goods with someone else that has the required thing. Not that difficult- was done regularly that way in the distant past. Money was just another conveinience for people. An accepted medium of exchange that allowed you to get the shoes and the shoe maker could get what he wanted from another vendor without having to make a couple fo trades to get to point b. 

Mon, 06/02/2014 - 08:11 | 4816347 Hobbleknee
Hobbleknee's picture

And what happens when you don't have anything that person wants either?  It could take an entire week to complete the chain. Money makes specialization possible. Without it, we're all reduced to subsistence living.

Wed, 05/14/2014 - 16:53 | 4760504 Intoxicologist
Intoxicologist's picture

They already ask you, when you file your taxes, if you had any barter transactions to report.

What I want to know is what dumbass would reply, "yes."

Wed, 05/14/2014 - 15:58 | 4760304 rbg81
rbg81's picture

I think you are missing the point.  This is a backdoor wealth tax.  The real purpose is that people will pay the Government to hold their bonds. In essence, the Government will make $$ on the deficit.  The bigger the deficit, the more $$ they make.

Wed, 05/14/2014 - 16:18 | 4760365 Mr. Delicious
Mr. Delicious's picture

solid fucking point, that.

Wed, 05/14/2014 - 14:57 | 4759993 timeless21
timeless21's picture

rubbish

Wed, 05/14/2014 - 14:53 | 4759978 Gene Parmesan
Gene Parmesan's picture

For safes and burial tubes.

Wed, 05/14/2014 - 14:57 | 4759997 john39
john39's picture

for hanging ropes and pitchforks...

Wed, 05/14/2014 - 14:59 | 4760005 LawsofPhysics
LawsofPhysics's picture

Optimist.  All you need to know now;

When fraud is the status quo, possession is the law.

Wed, 05/14/2014 - 15:10 | 4760048 OC Sure
OC Sure's picture

Possession is the law regardless of the status quo.

Wed, 05/14/2014 - 15:14 | 4760078 Headbanger
Headbanger's picture

And possession is done through the barrel of a gun.

Of course some ammo and a good aim are very handy as well!

Wed, 05/14/2014 - 15:29 | 4760152 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

In this case, go buy gold! I am not a gold bug, but it would make tremendous sense here.

Wed, 05/14/2014 - 16:17 | 4760358 BandGap
BandGap's picture

Or sorta good aim with 00 buckshot.

Wed, 05/14/2014 - 15:11 | 4760057 Greenskeeper_Carl
Greenskeeper_Carl's picture

Yep, and you can't go wrong with a liberty safe. I love mine. Libertysafes.com. If you guys are in the market, head to your local gun show. The safe shops in my area always have a big display, and give a lot better prices at the shows. Paid cash, had it delivered to my door a couple weeks later.

Wed, 05/14/2014 - 14:50 | 4759965 The Juggernaut
The Juggernaut's picture

Cue the run on bank, now.

Wed, 05/14/2014 - 14:54 | 4759983 Gamma735
Gamma735's picture

Exactly, why put your money in an institution that is just going to steal a little each month.  There will be many new banks in Europe, if they do this.  Everyone one will have a new bank branch under their matresses.

Wed, 05/14/2014 - 15:01 | 4760011 lordylord
lordylord's picture

We are already moving towards a cashless society (anyone say Bitcoin 2.0 aka Fedcoin?).  What do you do when you can't buy anything with cash and can only use a government approved debt card?

Wed, 05/14/2014 - 19:37 | 4761064 UselessEater
UselessEater's picture

The movie In Time is starting to look prophetic; Cashless & Controlled. Especially with fewer and fewer insider corporations running the businesses we need to purchase goods and services from. Fascism will dictate what medium of exchange the vast majority of us can be paid in and use.

Wed, 05/14/2014 - 15:10 | 4760050 Sudden Debt
Sudden Debt's picture

oke for negative saving rates...

but if you loan out money... do they pay you interest?

Wed, 05/14/2014 - 15:19 | 4760096 AmCockerSpaniel
AmCockerSpaniel's picture

What ever you put in your matress best be PM's

Wed, 05/14/2014 - 14:56 | 4759990 Eyeroller
Eyeroller's picture

Great new idea for the "Shark Tank":

A fire-proof matress with a hidden compartment for cash.

Wed, 05/14/2014 - 15:11 | 4760054 Things that go bump
Things that go bump's picture

Too late. I saw those on a link on this site several years ago.

Wed, 05/14/2014 - 15:41 | 4760215 lordylord
lordylord's picture

Easy fire-proof fix ->  Silver melts at 1760 F and gold at 2000 F.

Wed, 05/14/2014 - 14:50 | 4759966 anarcholeptic
anarcholeptic's picture

Wait. People still keep their money in banks?

Wed, 05/14/2014 - 14:59 | 4760002 john39
john39's picture

who the hell still has money?

Wed, 05/14/2014 - 15:11 | 4760053 jay28elle
jay28elle's picture

I always have tad until 4/15 each year.

Wed, 05/14/2014 - 15:12 | 4760059 Slave
Slave's picture

Wait, are we talking about money or FRNs?

Wed, 05/14/2014 - 15:19 | 4760098 OC Sure
OC Sure's picture

PMs are money, FRNs are only the "ghost of money."

Wed, 05/14/2014 - 14:52 | 4759971 williambanzai7
williambanzai7's picture

Wed, 05/14/2014 - 15:04 | 4760018 Big Corked Boots
Big Corked Boots's picture

As a kid who grew up on Lawn Gyland at that time, I get that... and it's brilliant.

Wed, 05/14/2014 - 15:04 | 4760021 negative rates
negative rates's picture

No , but the reasturant down the street has some good vittles, if you can handle the walk.

Wed, 05/14/2014 - 14:52 | 4759975 BlindMonkey
BlindMonkey's picture

The hangover from Keynes' big bash will be a complete bitch.  No worries I guess.  Hair of the dog and all of that.

Wed, 05/14/2014 - 14:52 | 4759977 lolmao500
lolmao500's picture

Funny. Rich people have safes at home or bank accounts in Switzerland and don't give a fuck. Once again the poor folks get rammed.

Wed, 05/14/2014 - 14:55 | 4759986 CheapBastard
CheapBastard's picture

 

"The meek shall inherit the Earth."

So, at least they get something.

Wed, 05/14/2014 - 15:01 | 4760009 NotApplicable
NotApplicable's picture

Dirt cookies for everyone!

Wed, 05/14/2014 - 15:01 | 4760010 therearetoomany...
therearetoomanyidiots's picture

"The meek shall inherit nothing"  -Frank Zappa

 

Wed, 05/14/2014 - 15:06 | 4760026 Big Corked Boots
Big Corked Boots's picture

The meek will inherit the debt.

Wed, 05/14/2014 - 15:32 | 4760171 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

The meek inherit a ruined society.

Wed, 05/14/2014 - 15:27 | 4760139 Smiley
Smiley's picture

The meek shall inherit a pile of ash.

Wed, 05/14/2014 - 15:09 | 4760046 Robinhood
Robinhood's picture

Right now the poor folks can buy a silver eagle for a little over $20 or two, or three etc. and they should. They don't need a safe nor a Swiss bank account to protect their hard earned assets as humble as they may be. The sooner we all GOTS the sooner the central planners will realize we ain't playing their game.

Wed, 05/14/2014 - 16:50 | 4760486 quasimodo
quasimodo's picture

Right now most poor folks care only how much uncle sugga will continue to provide and where the next carton of Pall Mall's will come from

Silver? WTF is that?

Wed, 05/14/2014 - 15:00 | 4759979 Bunga Bunga
Bunga Bunga's picture

Sorry, money velocity is just a useless straw. Only credit expansion can save the Keynesians.

Wed, 05/14/2014 - 14:53 | 4759982 Nevsky
Nevsky's picture

Considering that debt can be and is used to enslave, the drive to part people from their savings may [and perphaps should] be understood in a context as other than desperation.

Wed, 05/14/2014 - 14:55 | 4759985 TomGa
TomGa's picture

Guess I'll just withdraw my entire paycheck in cash every two weeks.

Wed, 05/14/2014 - 15:06 | 4760028 NotApplicable
NotApplicable's picture

Or what I call, "going to the grocery store."

Wed, 05/14/2014 - 15:25 | 4760128 RichardENixon
RichardENixon's picture

Speaking of the grocery store, I was in one yesterday and found 12 oz packages of bacon priced at over $5.00, even the discount brands. Found a couple of "Uneven Slice" packages attractively priced at $2.45. Once they're gone I reckon I've consumed my last bacon in this life. Wish they would bring back Scrapple.

Wed, 05/14/2014 - 15:30 | 4760157 SmallerGovNow2
SmallerGovNow2's picture

fry up some spam.  long shelf life...

Wed, 05/14/2014 - 15:34 | 4760185 RichardENixon
RichardENixon's picture

The Spam is stored with my SHTF supplies. Ooops, guess that comment will get me on the No Fly List.

Wed, 05/14/2014 - 15:30 | 4760158 SmallerGovNow2
SmallerGovNow2's picture

fry up some spam.  long shelf life...

Wed, 05/14/2014 - 15:59 | 4760307 alt.hedge
Wed, 05/14/2014 - 20:22 | 4761159 RichardENixon
RichardENixon's picture

Holy mackeral those prices! We really are heading for hyperinflation

Wed, 05/14/2014 - 23:49 | 4761587 NeedtoSecede
NeedtoSecede's picture

+1 for scrapple reference. Nasty stuff, but brings back some fond memories of my grandparents.

Wed, 05/14/2014 - 14:55 | 4759988 Two Theives and...
Two Theives and a Liar's picture

Money velocity has collapsed to historic lows...but as Max Keiser has said, when you have a printing press...do we even NEED an "economy"?  Can't stack fast enough!

Wed, 05/14/2014 - 14:56 | 4759992 Relentless101
Relentless101's picture

This is about keeping people dependent. Don't worry about retirement costs, buy a new (insert product here) more often. The government is here for you when you need it. Vomit.

Wed, 05/14/2014 - 14:57 | 4759995 Frank N. Beans
Frank N. Beans's picture

negative rates = forced spending = buy PMs

 

Wed, 05/14/2014 - 15:07 | 4760035 Panafrican Funk...
Panafrican Funktron Robot's picture

I see the current rate structure and balance sheet strategy as an intended transfer of wealth.  Expansion of the dollar supply is intended to transfer the value of the productive labor for those who hold their wealth in dollars, to those who hold their wealth in tangible assets.

Wed, 05/14/2014 - 14:58 | 4759999 oklaboy
oklaboy's picture

ohhh this sounds like it's gonna be fun!!!!

Wed, 05/14/2014 - 15:06 | 4760000 OC Sure
OC Sure's picture

 

 

 

"some might say it is theft on a vast scale, perpetrated by government fanatics."

Counterfeiting is theft no matter what the scale, perpetrated by thieves.

Theft only benefits the thief.

 

Wed, 05/14/2014 - 15:00 | 4760003 honestann
honestann's picture

All this supposed Keynesian "theory" is not theory, it is nothing but a rationalization provided to the predators-that-be for doing what they want.

In this specific case, what is the result of getting everyone on the planet to spend all their savings and get into maximum debt?  Think about it, and as they say, "follow the money".

The answer is... 100% tyranny and 0% self-defense.

That's right.  And that is the "endgame".  When nobody has any money, they have no way to buy bullets to defend themselves.  A predator-that-be, whether "king" or "emperor" or "president" does not want the masses to have money to spend... on guns and bullets and swords and dynamite.

And so, when planning mass enslavement and 100% tyranny, the first and most important step is to impoverish.  What better way to impoverish than... get everyone to waste all their savings on worthless trash and get deep into debt?  Answer: that's what they're doing (in addition to shifting all wealth into their own pockets).

Wed, 05/14/2014 - 15:02 | 4760015 NotApplicable
NotApplicable's picture

I've got to warn you Ann, this honesty stuff will get you nowhere these days.

Wed, 05/14/2014 - 15:19 | 4760103 Eternal Complainer
Eternal Complainer's picture

Except on the NSA's suspected terror list

Wed, 05/14/2014 - 15:28 | 4760149 honestann
honestann's picture

You're both right, but what's an honest girl to do?

Wed, 05/14/2014 - 15:32 | 4760175 Puncher75
Puncher75's picture

Store up your treasure in heaven; forget about storing it up on earth ;-)

Wed, 05/14/2014 - 15:38 | 4760211 OC Sure
OC Sure's picture

Happiness is pursued on earth.

Wed, 05/14/2014 - 18:56 | 4760932 honestann
honestann's picture

Yes indeed.  Which is why I moved far away from the USSA, and set up my mostly self-sufficient life in the extreme boonies where nobody knows where --- except I've said it is in the southern hemisphere, so I have narrowed it down.  Woops!

However, except for time I spend typing useless characters into these ZH text input widgets (and grow food), I work on a project that will eventually get my butt OFF planet earth, where I can enjoy life even more.

But literal heaven?  Yet another fiction.

Wed, 05/14/2014 - 15:55 | 4760286 NotApplicable
NotApplicable's picture

Well, I try to point and laugh at the absurdity of the Keynesians, but since I don't have a magic solution like their idol did, I'm written off as not being serious about society's problems.

Wed, 05/14/2014 - 19:01 | 4760954 honestann
honestann's picture

!!!!!  BUT YOU DO  !!!!!

Seriously...

Hold no wealth in fiat.  That is a solution for YOU, which is what YOU need.  Unfortunately, that is only a partial solution, because the very existence of fiat and "easy loans" is... to drive up prices for everyone, including those of us who never borrow a single cent.

When you think about it... why should you or anyone else be able to change "all of society"?  Seriously!

The problem is, the predators-that-be who foist fiat on the world DO impact everyone.  But as I said above, you can reduce that impact, and stop aiding and sanctioning those predators by simply keeping all your savings in physical goods like gold (though the best of all is to keep your wealth in productive machinery with which you constantly churn out more and more real, physical goods to trade with others who churn out real, physical goods.

Wed, 05/14/2014 - 15:25 | 4760131 OC Sure
OC Sure's picture

 

 

"What better way to impoverish than... get everyone to waste all their savings on worthless trash and get deep into debt?"

THIS:

Counterfeiting is a better way and it is Tyranny's method of operation.

It is so insidious that its greatest protection is that few understand how it works; how thieves rob you from miles away simply by lowering your purchasing power.

They don't have to get you to spend what you have on worthless trash because they have already stolen from you what you would have bought had your power to purchase not been lowered.

Wed, 05/14/2014 - 15:30 | 4760161 honestann
honestann's picture

Making loans trivial to get also makes prices 2x to 10x higher than otherwise, because people make buying decisions based upon "can I make the down payment" or "do I have any available balance on my credit card", not "can I afford this".

Wed, 05/14/2014 - 15:40 | 4760200 OC Sure
OC Sure's picture

Counterfeiting is the cause. Loans are "needed" since purchasing power has decreased. Attack the cause of causes. Counterfeiting is the lifeblood, the monsters head,  of Tyranny. Attacking anything else is just wrestling with the monster's tentacles.

Wed, 05/14/2014 - 18:50 | 4760917 honestann
honestann's picture

Of course fiat is a huge, important part of the cause!

I would never deny that, but fiat (counterfeiting) is not the whole problem.

Wed, 05/14/2014 - 19:47 | 4761083 OC Sure
OC Sure's picture

The only way that you could argue that counterfeiting is not the whole cause of all the subsequent problems that sustain the tyranny is if you were to argue why despots choose to steal rather than produce. Since this is primarily a financials-cultural-view forum and not a philosophic-cultural view (at least not directly) forum, I usually steer clear of the why of the cause and address the how instead.

How the modern society's drift into tyranny is by a ruling class that has usurped power and maintains it by counterfeiting. Instead of stealing wealth and seizing control directly with brute force at your doorstep, they are lounging in their living room orchestrating their keynsian (counterfeiting) scores. This is after decades and decades of the populace confused and numbed by the idiocy of modern "economics." Once the populace's mind is numb, their body will succumb; and, presto, the slavery of which you speak.

Wed, 05/14/2014 - 15:27 | 4760144 SmallerGovNow2
SmallerGovNow2's picture

Really enjoy your posts and perspective...  jus sayin'...

Wed, 05/14/2014 - 18:53 | 4760923 honestann
honestann's picture

(-:  Thanks  :-)

Wed, 05/14/2014 - 15:01 | 4760008 zipit
zipit's picture

Bitcoing, bitchez.

Wed, 05/14/2014 - 15:02 | 4760013 Yancey Ward
Yancey Ward's picture

If it were really your money, you wouldn't have it in a bank.  Since it is in a bank, it doesn't really belong to you.

Wed, 05/14/2014 - 15:10 | 4760014 Itchy and Scratchy
Itchy and Scratchy's picture

Forcing the future generations of sheeple to pay the tab might be a tad trickier!

(PS My wife has confiscated my savings & spent it already!)

Wed, 05/14/2014 - 15:06 | 4760029 icanhasbailout
icanhasbailout's picture

“Negative deposit rates” means that the banks will charge the customer for saving money and placing it in the bank. 

 

That's been the de facto case in the US ever since ZIRP started. Banks offer near-zero interest (if not actual zero) on deposits, then load on whatever fees it can get away with. "If that's not charging the customer for saving money and placing it in the bank", what is?

Wed, 05/14/2014 - 15:19 | 4760104 oddjob
oddjob's picture

paying .025% to deposit cash.

Wed, 05/14/2014 - 15:07 | 4760032 discopimp
discopimp's picture

Nothing that a culling a few banksters by satanic suicided methods can't solve

Wed, 05/14/2014 - 15:07 | 4760033 notadouche
notadouche's picture

So the public gets hammered for not saving enough from one side of the mouth only to get hammered for saving to much from the otherside of the government mouth?  What What WHAT!!!

Wed, 05/14/2014 - 15:13 | 4760063 Sudden Debt
Sudden Debt's picture

they just want you to have enough to survive.
Every seen that movie "in time"? everybody has enough to survive for 1 day so that forces them to keep working to get to the next day and keeps them in check. A 1 day protest would kill them.

Wed, 05/14/2014 - 15:27 | 4760140 agstacks
agstacks's picture

that sounds familiar..

Wed, 05/14/2014 - 15:29 | 4760151 Puncher75
Puncher75's picture

I can go weeks without food ;-)

Wed, 05/14/2014 - 16:00 | 4760313 headhunt
headhunt's picture

Pelosi has an orgasm every time she watches that movie... 'Imagine the control'

Wed, 05/14/2014 - 16:55 | 4760511 gcjohns1971
gcjohns1971's picture

Yes,

The insulated, egomaniacal, self-important elite can't imagine that an act of nature or pure accident would put their whole workforce, indeed their whole system, permanently out of commission.

They have been life-long too insulated from consequence to grasp that consequence is not a human creature, does not wear a judges' robe, and cannot be hobnobbed or bought.

That is the lesson from Dark Swans and Anti-Fragile.

Wed, 05/14/2014 - 15:13 | 4760064 Quinvarius
Quinvarius's picture

The recent unexpected downturn was caused by artifically and temporarily repricing gold too low.  80% of the world saves in it and uses it as collateral.  It was not an educated move to deflate the global money and collateral supply.  All they did was lose their gold and crush the global economy.  It just amazes me that no one makes the connection whne there were actually treaties in place for the longest time to keep exactly this from happening.  And when gold is over 5k, and the economy suddenly starts to recover, they still won't get it or allow themselves to believe the real reasons.

Wed, 05/14/2014 - 15:14 | 4760072 Mr. Delicious
Mr. Delicious's picture

since the federal reserve note is nearing the end of its life cycle, now would be a splendid time to have the government itself actually issue a public currency - oh, and it can be fiat for now - issued not as a loan, and not with any interest attached, but issued as a credit or utility.

Take or leave or quibble with the above, but the Krugman Kargo Kult can not fathom a different monetary system, hence negative rates, taking savings, laws enabling the government to force you to buy vegetables, birth control, and rubber mats for your shower are all necessary to extend the life of that system...

 

meanwhile, banks and the .01% will buy up that land the feds are selling, and other real assets, including that house you used to own...

Wed, 05/14/2014 - 18:13 | 4760782 MeelionDollerBogus
MeelionDollerBogus's picture

House you pretend to own.

Since in reality you must always pay & if you miss payment they take the house, the reality is you never owned it ever.

Wed, 05/14/2014 - 15:15 | 4760081 bg6666
bg6666's picture

Today I was denied paying any bill over $10,000.00 at my online banking account bill payment feature. Upon calling the bank we found out that the only way we can pay any bill over $10,000.00 is by a check or daily increments under $10,000.00 until the amount desired is reached. So now, if people use an AMX card for business and need to make a large payment, they can only mail a check, to California, allowing 7-10 business days for mail to be delivered or have the bill payment system send payments out daily in increments. So now banks and third parties who run the bill payment features are restricting our ability to pay off large credit card bills unless we jump through new hoops to do so.

Wed, 05/14/2014 - 15:27 | 4760142 Puncher75
Puncher75's picture

Yep.  I make large purchases on AMEX and must do this dance often. 

Wed, 05/14/2014 - 15:43 | 4760240 QQQBall
QQQBall's picture

Thanks BG and puncher. Mine will be over 10k this month. I'll make an earlier payment

Wed, 05/14/2014 - 15:46 | 4760253 NotApplicable
NotApplicable's picture

Why would you need to use your bank's "bill pay" service? I'm not an AMEX customer, but surely they have the ability to set up the payment on their side via an ACH transaction or e-check.

In general, I'd never use one of those services, as it is merely yet another unnecessary middleman. I have to deal with these companies regularly, and I'll tell you, they are the dinosaurs in today's financial world. Some of the biggest ones still print and mail paper checks, or insist upon transferring transactions via email as their only delivery method.

You should contact AMEX's customer service to inquire about this.

Wed, 05/14/2014 - 16:25 | 4760383 bg6666
bg6666's picture

I used the bank on line bill paying service to avoid "lost checks" that the inept post office, particularly in Chicago, seems to have problems with. It also stopped the "late payment" fees that credit cards seem to tack on as they would claim at a payment was "not received" on time. It was quick, easy and could be done anywhere on my laptop. I could schedule payments for utilities or auto ahead of time, when traveling. For some reason, the third party payment entity has decided to put bill payments on their leash. Or is to limit/control the outflow of cash from my checking account?

So I guess it's up to the big dogs at AMX to figure this out. It's not unusual for business people to charge thousands of dollars on travel, meetings, and seminars, which all is usually paid back monthly. What a joke it is becoming almost on a daily basis. It's getting miserable to do business in Amerika.

Wed, 05/14/2014 - 18:08 | 4760775 MeelionDollerBogus
MeelionDollerBogus's picture

here's a thought: deny them completely and say you'll cut out the banks and deal directly in cash.
Even if you're lying, say it and make them believe you can and will.
Just to get a response, for now.
For a person I'd say you can easily do this. As a business AMEX card-user obviously you have your reasons.
Gotta love them capital controls in all their flavors.

Wed, 05/14/2014 - 15:24 | 4760125 Smiley
Smiley's picture

Can't save, fine:  Buy guns, ammo, food caches, precious metals...anything but techno-garbage trinkets.  Pay in cash always, that REALLY pisses em off.

Wed, 05/14/2014 - 15:25 | 4760132 Puncher75
Puncher75's picture

How many disasters must there be before the Keynesian lie is murdered forever?  ANSWER: It can't be killed because ignorance and the thirst for control is eternal. 

Wed, 05/14/2014 - 16:15 | 4760345 malek
malek's picture

I'd say:
It can't be killed because people will always want seemingly "rational" justifications for stealing, so they can get something for nothing.

Wed, 05/14/2014 - 17:01 | 4760536 gcjohns1971
gcjohns1971's picture

Larceny hides in every man's heart seeking the right rationalization to come out into the light of day.

More power = more opportunity for rationalization.

Wed, 05/14/2014 - 16:11 | 4760210 GooseShtepping Moron
GooseShtepping Moron's picture

When the idea of Euro-Socialism is at stake (the only unifying ideological theme these people have), then the socialists feel like they are able to assume the power of command in good conscience. Negative rates are not a confiscatory ploy, not in the minds of the people imposing them in any case; they are analgous to a sort of military draft, a "draft of Euros" if you will, the purpose of which is to provide Euro-Socialism with the cannon fodder it needs to surge over the last hill, to win the final battle and establish "peace on earth" (some varient of which is the final desideratum of every ideology).

The vesting of authority is one of those protean political and psychological problems that man has always faced. Under what circumstancs do men assume the right, the responsibility, and the obligation to take control of other mens lives, to dispose of their property as if it were their own, and even to command them to their deaths, and do so with a good conscience about it? The question is too big to address in its entirety here, but suffice it to say that it does not happen without at least the tacit consent of the commanded. Their is no government on earth which can long remain in power without some sort of legitimate relationship to the governed.

We need not object to governments turning confiscatory in the abstract, as if that fact itself could ever be changed. Governments have always been confiscatory and there were times, indeed whole periods of human history, when hardly anybody seemed to mind. The problem in the nonce is that the social compact is breaking down. The right of the leading and directing elements to assume the good conscience is being called into question. In other words, the population is getting ready to "surrender" in the war for Euro-Socialism, the long war against property and privilege, the war that was supposed to secure the "rights of man" as the intellectuals of the last two centuries concieved them. The end has turned out not to have been worth fighting for, but the powers that be are literally incapable of imagining anything else. The reality of their failure will not be borne in upon them until they have exhausted themselves in one last pyrrhic push, followed by civil unrest and revolution.

This is the real Keynesian endgame; it is the end of Euro-Socialism and of two and half centuries of Western sociological development. But at present, the new idea which will form the self-evident basis for a new vesting of authority has yet to take shape in the public mind. When it does, the reign of the present authorities will be all but concluded.

Wed, 05/14/2014 - 16:33 | 4760406 Ludwig Von
Ludwig Von's picture

We are currently not governed by left, but by right. 

Wed, 05/14/2014 - 16:48 | 4760473 gcjohns1971
gcjohns1971's picture

Redistribution "From each according to his ability to each according to his needs" is a creature of the left.

The problem is the left recast the two wings of itself as the whole political spectrum.

This is how National Socialists became 'right wing' while following Marx in all but the internationalism.

Wed, 05/14/2014 - 15:40 | 4760221 QQQBall
QQQBall's picture

What do you call negative real rates... its stealthier, but impact is the same - it costs you to save

Wed, 05/14/2014 - 15:54 | 4760281 NaiLib
NaiLib's picture

It's the first EU tax touching the whole Union. (only disguised as "negative deposit rate") More to follow

Wed, 05/14/2014 - 15:52 | 4760277 NaiLib
NaiLib's picture

Every kind of property tax is confiscation. Nothing else.

Wed, 05/14/2014 - 16:25 | 4760382 Spungo
Spungo's picture

Our banks are undercapitalized. Solution? Let's undercapitalize them more.

Wed, 05/14/2014 - 16:27 | 4760390 SheepDog-One
SheepDog-One's picture

The serfs won't spend? We've got an ap for that.....we'll steal whatever meager saving they have, then they'll be FORCED to borrow from us and spend at our confiscatory interest rates or die!

Wed, 05/14/2014 - 16:28 | 4760397 moneybots
moneybots's picture

"What do you call negative real rates... its stealthier, but impact is the same - it costs you to save"

 

Actually, it costs you to spend.  If you want to spend, sell stocks.

 

 

 

Wed, 05/14/2014 - 16:44 | 4760458 gcjohns1971
gcjohns1971's picture

No it costs you to save because the effective return is below inflation.

AND

it forces cash into higher yield securities where they otherwise would not be, pushing multiples into the sky.

Any change in policy .... EVER.... would reverse those forces, causing the market to collapse.

For that reason, they have entered a devaluation spiral since 2000 - arguably since 1971 - and every financial asset will rise and fall with the tide of fleeing money independent of business prospects or reality.  Fraud catches the wave much less expensively than buisiness.  So more and more businesses become frauds.

Eventually there is no real economy left.   And then there will be a rush to the exits.

Exit started in 2008.  But the doors were locked and the punch-bowl came out to slow the process down.  Slow the exiting.  Not the fraud replacing business.

Wed, 05/14/2014 - 16:37 | 4760412 gcjohns1971
gcjohns1971's picture

This will do more than Putin can

to trash the dollar and free man.

They conspire to  take our quid

They'll force out Dollars,  pump the bid

Then prices will conflagarate

And Dollar will hyperinflate

Wed, 05/14/2014 - 16:39 | 4760421 CaptainSpaulding
CaptainSpaulding's picture

All my money belongs to Gov. Coumo. Tax season ya know.

Wed, 05/14/2014 - 16:36 | 4760423 Mr. Delicious
Mr. Delicious's picture

Support for Keynesianism comes only from two, albeit rather large populations:  thieves and morons.

Most of the morons are at heart fetishizers of the state - like Krugman talking lovingly, terrifyingly about Asimov's Foundation series, his admitted love of the idea of central, omnipotent planning, much or even most of the Left envisions government not only as a way to heaven, but the only way, and, importantly, the only thing preventing this utopia is individual choices obviating the coherence and unity of rules and regulations issued from the architects at the center.

There is also no better proof that economics is light years from being a science.  Why they should be given cotnrol of the economy defies the very logic and reason they pretend to which they pretend to adhere.

 

Wed, 05/14/2014 - 16:57 | 4760522 KingFiat
KingFiat's picture

I have experienced negative nominal (not real, as after adjusting for inflation) rates here in Denmark. It started in summer 2012, and lasted until 2013.

First our central bank started to give a negative nominal rate of -0.2 percent on excess liquidity parked there. Of course our banks did not like it, so they tried to place their excess liquidity elsewhere. As a result our local treasury note rates went negative all the way up to the ten year note. The kingdom of Denmark actually sold new 10 year treasury notes at negative rates in 2012.

The nominal rates on almost all bank's checking deposit accounts of course also went to zero. But they did not go negative. The official explanation was that this would be bad policy for the banks, but I think the real reason was that everybody knew that people would take out their money in cash, and that could cause a banking crisis.

Some mortgage rates also came close to being negative, and there was a lot of talk about the computer systems handling mortgages not being prepared for negative rates. But fortunately this did not happen.

Since then several policy and law changes have been made trying to make it hard or risky to pay in cash. One law change says that if you pay in cash to another person or company more than about US$2000 per year, you are liable for any tax fraud committed by the person or company you paid to - even if you knew absolutely nothing about such fraud. So if you pay more than $2000 in cash per year at your local grocery store, you could become liable for millions in tax fraud you did not even commit. And a new law under preparation would make it legal for anyone to refuse to accept cash as payment.

The intent of these policy changes is IMHO clear: To make it almost impossible to use cash, without directly make it illegal. If people know that cash is almost useless here, people would not take money out from the banks in the form of cash when the interest rate goes negative again.

Wed, 05/14/2014 - 17:21 | 4760599 AdvancingTime
AdvancingTime's picture

The modern economy that has evolved over the last several decades is loaded with interwoven contracts reeking of contagion. If faith drops in these intangible "promises" and money suddenly flows into tangible goods seeking a safe haven inflation will soar. Never before has mankind diverted such a large percentage of wealth into intangible products or goods.  I contend this is the primary reason that inflation has not raised its ugly head or become a major economic issue. Like many of those who study the economy I worry about the massive debt being accumulated by governments and the rate that central banks have expanded the money supply. 

The timetable on which events unfold is often quite uneven and this supports the possibility of an inflation scenario. A key issue being one of timing. If the price of gas jumps to $8 a gallon overnight do you buy gas and not make your car payment or stop driving the twenty miles to work? Answer, it could be months before your car is repossessed so you buy gas. It is important to remember that debts can go unpaid and promises be left unfilled. Is this possible and if so where would that leave us? Chaos and major disruption would result from such a scenario. As we have seen from the economic crisis of 2008 and following many other unsettling developments legal actions can continue to drag on for years.  More in the article below.

http://brucewilds.blogspot.com/2014/04/inflation-seed-of-economic-chaos....

Wed, 05/14/2014 - 17:39 | 4760683 hobopants
hobopants's picture

Meh, just move to a debt free currency like gold or silver and don't worry about it. I keep a bank account for the bills and thats it.

Wed, 05/14/2014 - 19:47 | 4761086 alfbell
alfbell's picture

 

 

My business and income source is through private lending (lending to real estate investors). I need cash (FRNs) and deal only in cash in order to do business. My cash is in banks because I need to bankwire money into escrow and then it is bankwired back to my account. My Investment Portfolio consists of ALL cash in order to support my business. Can't put FRNs into gold or silver. More cash I have = the more I can loan = the more income for my business. I'm hoping to be able to continue transacting in FRNs for a few more years until the global currency crisis hits (the USD will be last, Japan and EU will crash first). Before it gets that bad I will convert all of my FRNs to agricultural farm land (that I can lease) and some rental properties (will have 10% gold too). I don't see the need to go to tangibles yet. Gonna keep lending until I'm forced to switch over. Leasing farmland out and owning some income properties and being fabian and mobile (living full time in an RV) is my solution for the future.

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