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Central Banks Have Failed Because They Can't Push Wages Higher

Tyler Durden's picture




 

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

You can print all the money you want, but it will never boost wages to keep up with prices.

Central banks have been pursuing two goals for the past six years: ignite inflation and an expansion of debt that will supposedly generate "growth." Despite squandering trillions of dollars, yen, yuan and euros, central banks have failed to ignite sustainable inflation or growth.
 
There's nothing mysterious about their failure: you can't get "good" inflation or growth if wages are stagnant or declining.
The central banks don't bother to distinguish between "good" and "bad" inflation: any and all inflation is considered not only wonderful but essential to propping up the Ponzi scheme of debt-dependent consumption, a dynamic I described in Central Banks Create Deflation, Not Inflation.
 
"Good" inflation is wages rising faster than prices. When wages rise faster than consumer prices, households have more money to spend on consumption, and it's progressively easier for them to pay down debt and support additional borrowing.
 
"Bad" inflation is prices rising while wages stagnate. In "bad" inflation, prices keep rising as central bank money-printing devalues the currency, but wages don't rise along with prices. As a result, wages decline in real terms, i.e. purchasing power.
 
In Japan, where the central bank and government have struggled for years to generate price inflation as the means to "re-start growth," wages have fallen by 9% in real terms since 1997. (source:Voodoo Abenomics: Japan's Failed Comeback Plan Foreign Affairs)
 
I explain this in further depth in Inflation Is Not "Growth" (July 23, 2014).
 
These charts reflect the stagnation of American wages and household incomes.
 
Real household income has declined across the entire income spectrum:
 
 
Deduct healthcare expenses and debt service, and what's left of wages for the rest of life's expenses is tanking: Courtesy of longtime correspondent B.C.:
 
 
Meanwhile, the purchasing power of wages is in steady decline:
 
 
The point is that lowering interest rates to zero and issuing unlimited free money for financiers to generate asset bubbles has had a negative effect on wages and household income. This is not accidental or bad luck--central bank money-printing and bond-buying have not had any positive effect on wages because they cannot possibly have any positive impact on wages.
 
In effect, central banks have been trying to pound nails with a handsaw: they don't have the tools to counteract the deflationary influences of labor surplus. Wages are stagnating/declining not because money isn't cheap enough or assets aren't high enough; wages are in structural decline due to three factors:
 
1. Global wage arbitrage: everybody is competing with everyone else globally for work that is tradable or that can be commoditized
 
2. Costly human labor is increasingly replaceable with software and robotics
 
3. The rising costs of labor overhead (social welfare taxes, healthcare, etc.) push employers' costs higher even as employees' paychecks stagnate or shrink.
 
These are global factors, affecting employers everywhere from the U.S. to China. No amount of liquidity or free money can reverse these structural trends.
 
Frantic voices can now be heard suggesting central banks issue free money directly to households. Considering central banks have stolen hundreds of billions of dollars in interest from saver-households in the past six years, there is a painful irony in these calls for free money to households, now that free money for financiers has failed so catastrophically.
 
free money giveaway won't fix anything; all it would do is give households the means to pay down a bit of debt or make interest payments on subprime auto loans for another month or two. Free money giveaways are not a substitute for earned income.
 
Debt jubilees won't work either, as all the debt that proponents want to cancel is an asset to somebody else--and often that "somebody" is a public or private pension fund or another worker's 401K retirement fund.
 
The game has been lost, but central bankers are still on the field, wandering around in disbelief that their unspeakable powers to issue money and credit have failed. You can print all the money you want, but it will never boost wages to keep up with prices.

 

 

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Wed, 12/10/2014 - 11:16 | 5536408 Eyeroller
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Also, central banks have failed because YOU CAN'T MAKE PEOPLE SPEND.

Wed, 12/10/2014 - 11:22 | 5536421 GetZeeGold
GetZeeGold's picture

 

 

When does McDonalds get their robo flippers?

 

I pine for the days of the 99 cent McDouble......it's my life and my choice marxist bastards.

Wed, 12/10/2014 - 11:22 | 5536434 halfasleep
halfasleep's picture

sorry charlie - normally you're spot on, but this presumption is wrong: "Central banks have been pursuing two goals for the past six years: ignite inflation and an expansion of debt that will supposedly generate "growth."" They couldn't care less about the plebes wages.

 

Wed, 12/10/2014 - 11:27 | 5536454 GetZeeGold
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Not even illegial alien plebes wages?

Wed, 12/10/2014 - 11:37 | 5536498 SWRichmond
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Central Banks are failures because they attempt to change reality.

Wed, 12/10/2014 - 12:37 | 5536727 JR
JR's picture

Reality: An American well trained. Top expert. No longer able to own his own small business. Only paid a salary. Highly taxed. In the private sector, faced with no capital to live on in old age, in a time of high inflation.  “A man in his fifties, an employee, seeing into a future without enough money. An enforced retirement. No house of his own. No power.”

And, if he is “retired,” a 1.7% Cost of Living Adjustment (COLA) in his “social security” for 2015; and, if he’s young, unable to “retire” until age 67 on his devaluing and redistributed “social security.” What was that about banker sharing?

The American Dream.

Wed, 12/10/2014 - 13:06 | 5536838 zerozulu
zerozulu's picture

Debt jubilee can boost economy.

Wed, 12/10/2014 - 13:30 | 5536915 El Diablo Rojo
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What a stupid article.  Their intent was never to push wages higher.  If one believes that, I got Fukishma rocks to sell you.

Wed, 12/10/2014 - 14:21 | 5537113 JR
JR's picture

Debt jubilee is a penalty on the responsible; and a reward for the irresponsible. It is sweeping moral hazard, with the responsible man who through years of labor paid his debts and realized ownership of his property vs. a neighbor, heavy in debt, who suddenly owns his property outright, overnight,via a gift from the State.

This is a perversion of economic justice, a basis for legal plunder, the ultimate in socialism. Overriding it all, it is a body block to incentive and ambition to work for a goal when the government simply changes the rules and negates your hard work. It is Zimbawism with bail for the profligate.

I agree with Hugh-Smith: "Debt jubilees won't work either, as all the debt that proponents want to cancel is an asset to somebody else--and often that 'somebody' is a public or private pension fund or another worker's 401K retirement fund."

Wed, 12/10/2014 - 14:26 | 5537129 Usurious
Usurious's picture

 

 

we should demand a jubilee from the interest (usury)

Wed, 12/10/2014 - 14:36 | 5537165 JR
JR's picture

But under the current system...

“Wholesale debt jubilee would so scare investors that in the future they would demand excessively high interest rates in exchange for loans causing a lack of credit which would endanger our whole economic system... In the meantime, we should not forget that countries, and people, who come out of the crisis with a reputation for honest dealing and prompt repayment are the ones that will have easier credit and a greater chance of prosperity in the coming decades.” – Edmund Conway, Why a Debt Jubilee Is Not the Answer to Britain’s Prayers.

If we want to end wholesale usury, i.e., debt slavery control over the American people by the international bankers, we must put an end to the Federal Reserve System.

Wed, 12/10/2014 - 16:40 | 5537677 TSTM
TSTM's picture

Debt Jubilee is a Biblical answer to our problem, but not in the way it is being discussed now. The Biblical Debt Jubilee occurs every 50 years. Borrowers know it is coming and lenders know it is coming and can thus borrow and lend accordingly. When you know that every 50 years all hereditary lands will be returned to the family descendants and all loan balances will go to zero, any debts created will be structured with this in mind, thus credit bubbles will have a built in limited lifespan. Also, usury is frowned upon, Biblically speaking, and when usury is combined with fractional reserve banking the result can only be a situation such as we find ourselves today.

If a debt jubilee were to occur in, say, ten years with a specific date given and the idea that it would be happening every fifty years henceforth, all the actors involved would begin to act accordingly and we might just pull off an orderly deleveraging and set ourselves up to create a prosperous economy again, if, and only if we end the Fed and return to sound money, not a fractional reserve gold standard (which is what we started with that got us here), but sound money. Real money and no fractional reserve banking which is the root of all evil.

Wed, 12/10/2014 - 17:02 | 5537808 JR
JR's picture

But that proposal was for an ancient people whose sole authority was God. If Israel had followed the practice of debt jublilee faithfully under her primarily wayward kings, logic tells you it would have been a society without permanent property.

Consider this scholarly interpretation of Leviticus 25: 9-1, “The Year of Jubilee was meant to be celebrated every 50 years. It included canceling all debts, freeing all slaves, and returning to its original owners all land that had been sold. There is no indication in the Bible that the Year of Jubilee was ever carried out.”

Worse, America no longer considers herself a "nation under God; instead, her representatives bow to a central authority, the Fed, i.e., a godless banker-controlled State. No need to ask how that'd work out for ya.

But, I get your point. If only... Perhaps America's coming Debt Jubilee will be entitled Debt Default, like in student loans.

Wed, 12/10/2014 - 17:43 | 5538050 TSTM
TSTM's picture

Agreed, I have seen no incication that it was carried out. Usury seemed to have grown very popular as well. 

I diagree with you about the no permanent property. The land would be permantly owned by its ancestoral lineage and any selling or buying would be seen as merely a long term lease and priced accordingly. Since everyone owns their own body, a person who had sold themselves into slavery (or was forced into it) would get a chance to change their mind or escape - if they lived that long. I have a problem with slavery. I just don't see how that could be OK, ever, but I do understand the concept of indentured servitude with an enforceable contract and a set time limit.

It will probably just be default by currency destruction and we'll just have to sort it out for ourselves. 

Wed, 12/10/2014 - 11:29 | 5536455 GetZeeGold
GetZeeGold's picture

 

 

I reserved this spot for my replacement from the south. Hopefully he won't double post and do my job for half the wages. Then my former employer won't have to buy me heath insurance.

Wed, 12/10/2014 - 11:30 | 5536469 NotApplicable
NotApplicable's picture

Well, it's true to the extent that they want enough growth to support the overhead of their ponzi.

Eating the "goose that laid the golden egg" indefinitely though? Reality says otherwise.

Parasite 101

Wed, 12/10/2014 - 11:31 | 5536474 usednabused
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And they claim a debt jubilee wouldn't work because of what? Pensions and govt assetts? I say fuck that, reset the bitch.

Wed, 12/10/2014 - 11:52 | 5536545 acetinker
acetinker's picture

Who gets hurt in a debt jubilee?  The very same ignorant, complacent fuckers who allowed the ship of state to run aground, that's who.

I say fuck 'em, they deserve it.

Wed, 12/10/2014 - 16:00 | 5537497 Dr Benway
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Jubilee is a complete fucking moot point. All that is needed is a restoration of true markets and price discovery.

 

This would involve a ~50% loss in the value of assets (property and stocks) that the towering shitpile of debt has been used to prop up.

 

Which for all intents and purposes is the exact same outcome as debt jubilee: debt is written off, the "assets" value is slashed.

Wed, 12/10/2014 - 23:47 | 5539306 acetinker
acetinker's picture

Doc, lemme say this-  There are nowhere near enough actual assets on this planet (at current valuations) to support the various over-leveraged, re-hypothecated 'valuations'.

Thus, in this fantasy world, jubilee is termed moot.  But, you will find soon enough, whether planned or not, jubilee is inevitable.

It's a shit-ton more than 50%, btw, just so you know.

Wed, 12/10/2014 - 11:32 | 5536479 Woodyg
Woodyg's picture

Exactly!
The whole basis of the article is bullshit -
The central banksters are all about Consolidation of Wealth -

Using bs free dollars to buy Real Assets like art and an island in the Carribbean -

It's an ongoing global financial coup d'état -
Rising wages are the last thing these vampires want -

Wed, 12/10/2014 - 15:43 | 5537404 The_Dude
The_Dude's picture

Exactly....wage suppression is a feature, not a bug!

Wed, 12/10/2014 - 11:32 | 5536470 Jethro
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Not soon enough.  With their stock fiasco, I'd imagine that they probably aren't willing to R&D, then field a flagship "restaurant" even though it'd save them so much money later on to jump in with both feet RFN.  The first franchise to field burger-bots will beat the pants off of their competitors in probably less than a year.

Wed, 12/10/2014 - 11:22 | 5536425 Haus-Targaryen
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Central Banks have failed because they are run by the Tribe whos primary goal is to take over the world.  Has nothing to do with economic prosperity.  

Wed, 12/10/2014 - 11:25 | 5536451 Ghordius
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the Russian National Bank too? and the Chinese? how about the Iranian National Bank?

Wed, 12/10/2014 - 11:28 | 5536460 Haus-Targaryen
Haus-Targaryen's picture

when I look at the picture captioning this article -- I see Yellen and Draghi, and someone who stared into the sun for too long.  

Yeup.  Those 3 central banks (plus a few more) are defeinly Tribe slaves.  

Wed, 12/10/2014 - 11:34 | 5536486 Azannoth
Azannoth's picture

Yes, and they are getting exceedingly successful at implementing their Agenda, the Millennial Generation and onwards will be pure Debt-Slaves with 0 assets and 0 prospects for anything above subsistence living

Wed, 12/10/2014 - 11:24 | 5536440 johnnyarrowmaker
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Yes you can, us QE to give the money directly to people!  2000 euros a month should do it!

Wed, 12/10/2014 - 11:32 | 5536478 NotApplicable
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At some point, I'm sure this chapter of the ponzi will be explored yet again. Just need a little more conditioning first...

Wed, 12/10/2014 - 11:47 | 5536532 venturen
venturen's picture

WRONG...you can get people to spend...give them their money! But instead we give the money to criminal bankers who DUH take it and buy your stuff.

Wed, 12/10/2014 - 12:10 | 5536635 Salah
Salah's picture

Critical to have a new, disruptive "tree-trunk" technology come along, i.e. railroads, internal combustion engine, the airplane, steel-frame construction, telephone, Internet, et al.

Best bet right now: boot the UN out of American space policy, withdraw from the anti-growth, anti-capitalist Outer Space Treaty of 1967, and use "national sovereign powers" (treaty prohibits) to go back to the Moon, establish claims, protect property rights, protect IP rights (treaty prohibits)...for fun, adventure, and profit.


Wed, 12/10/2014 - 12:29 | 5536659 Lordflin
Lordflin's picture

Central banks have failed because money derived from debt concentrates wealth. Wage earners will always lag far behind as they are the last ones to gain us of newly printed money. There have been some to suggest that money should simply be handed out at large, assuming the purpose was to stimulate the economy rather than place all of the marbles into a few hands, but this does nothing to deal with the misallocation of capital , the lack of production as a foundation to capital, the formation of a dependent people which by necessity spirals into chaos... so while it might be an improvement over supplying the financial sector it is only chaos and destruction by another name.

Wed, 12/10/2014 - 13:08 | 5536847 zerozulu
zerozulu's picture

I'm ready to spend if I get some money.

Wed, 12/10/2014 - 14:11 | 5537061 pelican
pelican's picture

It does not trickle down.  The rich only need a limited number of watches, cars and homes.  The rest gets invested and creates bubbles. 

 

How is this for an idea?  Give some of the QE money to the productive members of society so it can circulate?  The middle class will buy watches, cars and homes and the economy will start moving again.

 

 

 

 

 

 

Wed, 12/10/2014 - 11:19 | 5536410 buzzsaw99
buzzsaw99's picture

central bankers do not have a beneficent bone in their little hobbit bodies. they like impoverishing the 99%, they want the 1% to have it all. to ascribe any virtue to their motives is preposterous.

Wed, 12/10/2014 - 11:49 | 5536536 venturen
venturen's picture

It is in their nature...6000 years of natural selection. Having no soul makes you short

Wed, 12/10/2014 - 15:03 | 5537256 Conax
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Not to mention devilish looking with a grating voice and dog breath.

Wed, 12/10/2014 - 17:58 | 5537897 Radical Marijuana
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Indeed, that is the most important point, buzzsaw99: the social pyramid systems of Neolithic Civilizations are thousands of years old, with the modern form of banking being merely the latest branch of those developments based on ENFORCED FRAUDS.

In my view, relatively few people take seriously enough what the first book on the Art of War stated, when it started by saying "success in war is based on deceit" and ended by saying "spies are the most important soldiers." War was organized crime on a larger scale. Thousands of years of human history has amplified that to more astronomical sizes. Therefore, we have ended up with the biggest governments being the biggest forms of organized crime, effectively controlled by the best organized gangs of criminals, the banksters.

In that context, I find Hugh-Smith's articles oscillate back and forth from being relatively better the more abstract they become, but towards being sillier the more that they focus upon particulars, as if those really mattered that much, like this article above, which presented relative nonsense about the central banks actually caring about anything that they publicly pretend to be caring about!

I recently stated my overview of that situation in a comment on this article: Chart Of The Day: This Is What 6 Years Of Central Bank Liquidity Injections Look Like

That article made this statement:

... imperative to use quotation marks every time one writes the word "market" ...

More and more, since about 2008, I have felt it was necessary to use quotation marks every time that I wrote the word "money." The word "money" gradually had its meaning inverted and perverted more and more, for about a Century in America, which was preceded by that happening for a few Centuries in the British Empire, wherein the Bank of England promoted fractional reserve banking.

Money originally meant metal coins, while "dollar" was a precise amount of silver. Those forms of real money had intrinsic value, or the "ring of truth" present in the metal itself. However, gradually, the meaning of the word "money" was inverted and perverted, so that "money" today exists as a globalized electronic fiat fraud, backed by most of the world's governments. That "money" as credit is NOT capital, but rather MAD Money As Debt is anti-capital, analogous to anti-matter, that actually annihilates capitalism, since "money" made out of nothing means that "capital" is being created out of nothing. Similarly, after "money" is legally counterfeited, as debts, then there are no more genuine markets, because the price of "money" itself has become a cruel joke, and therefore, all other "markets" also become nothing more than cruel jokes inside of that MAD Money As Debt system.

Ever since fractional reserve banking was first legalized, through the Bank of England a few Centuries ago, there has been an exponential growth of the profits from frauds being reinvested in more frauds, especially through the funding of the political processes, to legalize more and bigger frauds. THE BASIC WAYS THAT PRIVATELY CONTROLLED BANKS WERE ALLOWED TO MAKE THE PUBLIC "MONEY" SUPPLY OUT OF NOTHING DESTROYED "MARKETS" AT AN EXPONENTIALLY ACCELERATING RATE.

Of course, silver was effectively demonetized in America more than a Century ago, while the Federal Reserve Board was enacted about a Century ago, and the last connections of the original meaning of the word "money" as backed by metal, in the form of gold, was destroyed in the USA since 1971. The only thing that changed since the financial crises in 2008 was that the central banks had to up their game, to make more of the required MAD "money" out of nothing, to replace the missing "money" due to the problems that other private banks were having to continue to be able to make enough "money" out of nothing as debts, since there was no longer being enough people able and willing "borrow," by them taking out loans, which could enable those private banks to make more "money" out of nothing, while, instead, too much "money" was disappearing back to nothing, as debts were variously defaulted upon.

With respect to that overall situation, there seems to be a general trend on Zero Hedge for people to look too much at the last 6 years, with its rising role of the privately controlled central banks taking up more and more of the slack from other privately controlled banks, which could no longer keep the social pyramid schemes going, by being able to make more "money" out of nothing as debts, because there were not enough viable borrowers who were still able and willing to do that anymore. Meanwhile, the established systems also appeared desperate to find excuses whereby they can enable more potential borrowers to become viable, which was merely more nutty wrinkles in the basic MAD Money As Debt system.

During the last 6 years, the central banks stepped into the breach, because they did not have as many comparable limits regarding their abilities to make more "money" out of nothing, as the "lender" of last resort. However, people who focus up aspects of the recent wrinkling in that MAD situation tend to continue to be grossly understating the deeper nature of the real problems, and therefore, grossly underestimating what it would take to fix those real problems.

The basic MAD Money As Debt system is legalized counterfeiting of the public "money" supply by privately controlled banks, who gained that power by being able to apply the methods of organized crime to the political processes, and then leveraged that up and UP, so that they also dominated the mass media, and schools, so on and so forth, while that profound INSANITY of making "money" out of nothing by private banks was DESTROYING capitalism and markets, yet that was deliberately ignored, while its consequences automatically got worse, faster.

PRIVATE BANKS CREATING THE PUBLIC "MONEY" OUT OF NOTHING IS A FRAUD ENFORCED BY GOVERNMENTS. In that context, mostly the reactionary revolutionaries who do understand that somewhat then propose going backwards to recover some standard for more sound and honest money systems, that were backed by physical commodities, or whatever, which could not be created out of nothing. However, the deeper realities where that money was measurement backed by murder.

Money backed by gold and silver was the measurement of gold and silver backed by murder. Therefore, what actually happened, over and over again throughout history, was that the murder systems, primarily operating through the principles and methods of organized crime, were able to subvert commodity backed money. In practice, the Bank of England enabled fractional reserve banking to proliferate, and the Federal Reserve Board in the USA enabled those processes to pick up speed, until by 1971 the "solution" was to severe the last links of the value of the American dollar to physical gold. (That destruction process began long before with demonetizing silver, however, even more educated people tend to not equally emphasize that, as much as they emphasize the destruction of the gold standard backing money, despite that the original American money was bimetallic.)

The only things that actually exist are murder systems backing money systems. All other standards for money are based on idealized views regarding what money should be, that deliberately ignore what it is. The "money" system that dominates the world today is the result of the international bankers being the best organized gangsters, the banksters, that were best able to apply the methods and principles of organized crime to the political processes, in order to capture control over governments, which would then enforce the frauds of private banks making the public "money" supply out of nothing as debts.

I repeat that only thing that has changed since 2008 is the relatively increasing role of the central banks in making proportionately more of the public "money" supply out of nothing, to replace the inabilities of other privately controlled banks to be able to make enough "money" out of nothing, as debts, because those lesser banks were finding it harder to have the necessary borrowers able and willing to take out the loans made with that "money" thereby created out of nothing.

THE DEEPER ISSUE OF THE PUBLIC "MONEY" SUPPLY BEING MADE OUT OF NOTHING AS DEBTS BY PRIVATE BANKS WAS ALWAYS ENFORCED FRAUD, WHICH GOT WORSE AT AN EXPONENTIAL RATE. That system of legalized lies, backed by legalized violence, was always destroying "capitalism" and "markets" from the moment it started. Central banks can never improve any aspects of any markets, because their creation of "money" out of nothing destroys markets! It simply has gotten worse, faster, to the point where it has become so blatantly obvious that more people notice that. However, almost nobody who notices the more recent developments of those processes appears able and willing to look at the deeper causes that money is measurement backed by murder.

All private property is based on backing up claims with coercions. There is no private property outside of some system of public violence. The established political economy is built on the foundation of ENFORCED FRAUDS, because human realities were always organized lies, operating robberies. Human beings operate as entropic pumps of energy, while the ways that human civilizations developed were through the biggest bullies' bullshit social stories presenting all of those basic facts in as backwards of ways as possible.

Governments were always the biggest form of organized crime, controlled by the best organized gangs of criminals. For several Centuries those have been the biggest banksters, who were able to dominate the political processes in ways which resulted in legalizing them counterfeiting the public "money" supply out of nothing as debt. That kind of "money" was always a form of "anti-capital," which was analogous to anti-matter in the ways that kind of "money" annihilated "capitalism" and "free markets."

We already now have globalized electronic fiat money, backed by the threat of the force of atomic bombs, which is the actual reality of the ways that we now have money being measurement backed by murder. However, by and large, people tend to regard those phenomena in ways that are way too superficial, and therefore, tend to promote silly "solutions" to those problems.

The ONLY things that have changed during the last 6 years were that the ENFORCED FRAUDS continued to get exponentially worse, within which systems the central banks had to take on a bigger and bigger role in keeping those systems going. The kind of political economy we operate was always inside of the human ecology. Therefore, the debt controls were always backed by the death controls. The history of that was that the War Kings created the powers of sovereign states, which were then covertly captured by the Fraud Kings, the central banks.

Overall, progress in science and technology has enabled the continued exponential growth in the systems of lies backed by violence to become much BIGGER, more sophisticated systems of legalized lies, backed by legalized violence. All the way through those developments, the production of destruction controlled production. However, most people were brainwashed to perceive there being a false fundamental dichotomy between production versus the production of destruction. That enabled those people to develop a mistakenly idealized version of capitalism and markets.

"Money" made out of nothing as debts was inherently anti-capital, and so, the more that was done, the more that "markets" were thereby destroyed. As the central banks took over making more and more of the public "money" supply out of nothing during the last 6 years, it became more and more blatantly obvious that was destroying capitalism, and thereby generating increasingly serious and severe systemic RISKS, since the "markets" using that "money" made out nothing were being overwhelmed by the speculative gambling enabled by that kind of "money" supply.

However, the vast majority of people continue to be mainstream morons that never had a clue about any those things, and continue to mostly be so clueless that they do not have a clue how clueless they are. Furthermore, in my opinion, the few that are awakening to those facts continue to mostly be reactionary revolutionaries. I assert that we can NOT go backwards to find any genuine solutions to those problems. The only genuine solutions are to go forwards, through intellectual scientific revolutions in the philosophy of science, which may enable us to better understand how and why "money" is measurement backed by murder.

There were good reasons for governments being the biggest form of organized crime, controlled by the best organized gangs of criminals. There were good reasons for human realities to always be organized lies operating robberies. The only genuinely better resolutions to those situations require that we develop better organized crime, in the sense of better dynamic equilibria between the different systems of organized lies operating robberies.

Capitalism and free markets appear to have been destroyed by the public "money" supply being more and more made out of nothing as debts by bigger and bigger banks. However, a more scientific view of capitalism and markets should regard those as manifesting evolutionary ecologies, through general energy systems expressed as human activities. Such a more scientific view of capitalism and markets is then able to include consideration of the roles of murder and fraud, as the forms of the production of destruction that control production.

It is a dead-end stupidity to promote any return to idealized "free markets" and "capitalism" that deliberately ignore the roles of fraud and murder. The actually existing systems operate according to the ways that general energy systems operate. In the case of human beings, it means that human systems necessarily follow the principles and methods of organized crime, with the path of least resistance being the path of least morality. The fundamentals are robbery, with murder as the most extreme form of that robbery.

More scientific human beings should necessarily perceive that, to the degree that they perceive at all. As soon as human beings relatively subtract any part from the whole, and thereby give that relatively separated part a name and properties, then that SUBTRACTION has automatically and necessarily created the associated ROBBERY, in the sense that the conservation of energy now operates across the defined boundaries of the subtracted part, and taking energy across those boundaries is basically robbery by definition.

It is unavoidable and imperative for human beings that tell stories to operate through systems of organized lies and robberies, in which the murder systems are the most extreme manifestation of that. Therefore, any better analysis of the economy, within its real ecological context, always discovers systems of lies and robbery, in which money is always measurement backed by murder. Any other analysis is superficial and mistaken.

There is nothing genuinely new that is happening, other than the development of the biggest banks, as the biggest gangsters, having driven their systems of government ENFORCED FRAUDS to the point where that debt slavery has generated numbers which have become debt insanities, because there is no longer any mathematically possible way to ever resolve those from within the frame of reference of those established systems. That is why we appear to be headed towards provoking death insanities, as the only ways to respond to the established systems developing their current levels of debt insanities.

The relatively more obvious debt insanities promoted by the central banks since 2008 are merely the continued unfolding of the established systems,  developing bigger legalized lies, backed by more legalized violence. If anyone is genuinely serious about better resolutions of those problems, then they should address the deeper issues, which are how human beings tell stories, which are based upon SUBTRACTING parts from the whole, and thereafter being necessarily engaged in ROBBERIES due to that perception of reality.

As the central banks become more dominant in the role of creating the public "money" supply out of nothing, it becomes more blatantly obvious how dangerous those destructions of capitalism and free market equilibria have been. However, since those established systems appear headed towards psychotic breakdowns, I recommend much more profound paradigm shifts regarding how we perceive those processes. We are NEVER going back to the illusions regarding what was "normal."

There was never a time when "capitalism" and "markets" did not fundamentally include frauds and murders. That merely has been bubbling back to the surface more, as bigger and bigger banks were creating more and more "money" out of nothing as debts, which was annihilating the previous illusions regarding there being "capitalism" or "markets" when there were more smaller banks making the public "money" supply out of nothing as debts.

If one is serious about the ideals of capitalism and markets, along with the ideas of more honest money, then the place to start should be with respect to understanding how general energy systems manifest through human beings. However, such progress requires appreciating how and why we ended up with a philosophy of science that reversed the meaning of "entropy."

These days, we are more and more obviously living inside of Bizarro Mirror World, where everything appears proportionately backwards. Therefore, the meaning of the word "money" has been inverted and perverted, which processes went along with the inversion and perversion of "markets." However, some of the deeper aspects of that were that the concept of "entropy" was also inverted and perverted, which is why it appears almost impossible for many people to better understand how the concepts of general energy systems apply to human beings.

It is widely recognized on Zero Hedge that we are already inside a situation which is facetiously referred to as the "new normal," where the ways that we are living inside of a Bizarro Mirror World are becoming more obnoxiously absurd every day. However, in my view, there is almost no recognition of the degree to which we should go THROUGH that looking glass to find genuinely better resolutions to those situations, wherein the creation of "money" out of nothing has destroyed the previous systems of "capitalism" and "markets" which could maintain their illusions regarding themselves.

Wed, 12/10/2014 - 11:18 | 5536413 SickDollar
SickDollar's picture

time to send those Helicopters

Wed, 12/10/2014 - 11:33 | 5536477 101 years and c...
101 years and counting's picture

time for fiscal stimulus?  the Fed needs a reason to print.  the government would need to increases its debt by 300-400 billion in the coming year to get treasuries the fed can buy.  ie, a helicopter drop as the money flows from the fed to UST to the peasants.

Wed, 12/10/2014 - 11:52 | 5536549 venturen
venturen's picture

the problem is they send the helicopters to Wall Street...not main street.

Wed, 12/10/2014 - 11:18 | 5536414 the not so migh...
the not so mighty maximiza's picture

good article

Wed, 12/10/2014 - 11:20 | 5536415 yogibear
yogibear's picture

One solution is for society to publicly hang the bastards.

Wed, 12/10/2014 - 13:10 | 5536852 zerozulu
zerozulu's picture

who can argue with that.

Wed, 12/10/2014 - 11:20 | 5536420 Panic Mode
Panic Mode's picture

If your wage is still at the pre-Lehman level, then it's a raise effectively.

Wed, 12/10/2014 - 11:37 | 5536500 NotApplicable
NotApplicable's picture

Food is not cheaper than back then. Nor insurance, ammo, or most other items I have to buy (like auto parts). My biggest net plus from then is the fact that my wife finally quit smoking.

Wed, 12/10/2014 - 11:24 | 5536423 Ghordius
Ghordius's picture

to be fair... has anybody ever given those central banks the goal of pushing wages higher?

If I remember correctly, the FED has two goals: full employment and price stability. And the ECB has one goal: price stability

interestingly, price stability in the US seems to include the stock market from falling

meanwhile, price stability in the eurozone always included a certain protection of the sovereign debt market, and an aversion towards "excess volatility" (see "damn speculators")

so, no, pushing wages higher... I would not involve CBs in such a goal anyway. Isn't anyway "central planning" to ask for higher wages as a policy?

but "free money to households" is a refreshing thought. as a subsidy, it would have a limited, short effect, of course. prices would perfectly adjust, in most cases

Wed, 12/10/2014 - 11:28 | 5536465 i_call_you_my_base
i_call_you_my_base's picture

Those are the fed's stated goals. Their actual goal is to make sure the banking system doesn't implode. Everything else is cover.

Wed, 12/10/2014 - 11:36 | 5536489 IANAE
IANAE's picture

...amazing that one of the 'stated goals' uses a metric (re)defined so as to eventually converge to 'full employment' even as labor force participation hovers at remarkably low levels... 

Wed, 12/10/2014 - 13:14 | 5536871 JR
JR's picture

The goal of inflation is to push everything higher and it ends by the currency of the debtor nation decreasing in value; it’s not price stability; it’s monetization for the debtors and "a scheme for the hidden confiscation of wealth."

Inflation is a hidden tax on the producers – the wage earners and small merchants. And, now, the perceived value of the dollar is plunging – you can see it in the changing perception of the strength of our economy, in our political stability, in our productivity, our consumer prices, and in the benefit of the dollar being the key reserve currency of the world.

The Fed banking cartel is morally equivalent to the counterfeiter. It is engaged in fraud. Therefore, who cares about the Fed’s self-imposed “mandate”? Trust comes from sound money. That trust is now plunging and, in result, all those delayed adjustments are awaiting in the wings to hit with a vengeance.

There’s no free lunch. Somebody is pickingup the tab for those EBT cards. The rise in the U.S. cost of living, as Hugh-Smith points out, has hurt the poor and the middle class and the small businessman much more than it has hit the wealthy.

In short, inflation is prejudicial – it is designed to benefit some at the expense of others (monopoly capitalists and TBTF bankers and the entrenched Establishment). Frederic Bastiat calls it "legal plunder."

Alan Greenspan calls it confiscation. "In the absence of the gold standard, there is no way to protect savings from confiscation thrugh inflation."

Wed, 12/10/2014 - 11:22 | 5536433 johnnyarrowmaker
johnnyarrowmaker's picture

Easy way forward, really, ......

Instead of giving the money to banks, give it to the people - let's say 2000 euros a month.

Initially everybody banks some, spends some etc.

 

Seeeemples!

Wed, 12/10/2014 - 11:23 | 5536435 Jethro
Jethro's picture

I'm disappointed that Greece was once again the beacon for Western Civilization.  Looks like we'll all have to learn to be tax-cheats (anymore, I'm not necessarily philosophically opposed to this) and gray/black market entrepeneurs, and develop bartering tactics.

Wed, 12/10/2014 - 11:24 | 5536442 LawsofPhysics
LawsofPhysics's picture

Yep.  Time for a refund motherfuckers.

Wed, 12/10/2014 - 11:25 | 5536445 Infinite QE
Infinite QE's picture

The goal of central banks is and has always been to transfer the productive wealth of the nations to the owners of the central banks. Period. We are simply at the terminal phase of said transfer.

Wed, 12/10/2014 - 11:24 | 5536446 Panic Mode
Panic Mode's picture

Well, they have certainly pushed their and their buddies wages higher.

Wed, 12/10/2014 - 11:26 | 5536449 Vooter
Vooter's picture

BINGO!

Wed, 12/10/2014 - 11:27 | 5536459 orangegeek
orangegeek's picture

central banks don't care about wages, they only tell you they care about wages

 

central banks have been putting liquidity into the banks - that's it, that's all

Wed, 12/10/2014 - 11:28 | 5536461 Bunga Bunga
Bunga Bunga's picture

Calm down, money doesn't get lost, somebody else gets it, the 0.1%!

Wed, 12/10/2014 - 13:12 | 5536863 zerozulu
zerozulu's picture

If they don't get it from you they can print it for themselve and your next generation will pay it of.

Wed, 12/10/2014 - 11:28 | 5536462 Hohum
Hohum's picture

Their supporters don't earn wages so the question is whether they can raise asset prices.  Yes, they can!

Wed, 12/10/2014 - 11:41 | 5536464 nuubee
nuubee's picture

Wages are stickier than they've ever been because of all the laws and regulations associated with hiring someone now. ZH had an article yesterday on the fact that health care costs (per employee I think) are rising *FASTER* than wages. In such an environment, wages CANNOT grow. If employers have a continually increasing amount of overhead they must spend just to hire someone, they won't hire, and they won't give raises.

The sticky wage problem is FISCAL, not monetary. CB's have no influence over sticky wages, CONGRESS does.

Basically, Obamacare came at the worst possible time. It should have gone down in flames, and massive de-regulation of the labor market should have also occurred, and this "great recession" might actually have abated by now.

I do not buy his "robotics" argument. Humans have easily adapted to all kinds of mechanization of industry in the past, it only made us more productive. The difference between then and now is that these days employers have a gun held to their heads telling them they have to offer full coverage healthcare, including pregnancy coverage, to a male employee who sits there and browses ZH all day.

I also don't entirely buy the world-labor-market argument, since it's relative regulation and monetary bases between nations that causes problems there.

Wed, 12/10/2014 - 13:08 | 5536846 livefreediefree
livefreediefree's picture

Thank you, nuubee. Nice that you highlighted fiscal policy, since trillions of dollars in deficits and hundreds of billions of dollars in wealth transfer from producers to non-producers has and is surely devastating the economy as much as anything the fed has done and is doing.

We have 3 problems: (1) The 3 branches of gov't abandoning all fiscal responsibilty; (2) The fed winging it; and (3) The unaccountabe authoritarian Progressive bureaucracy aggrandizing its power.

We are fucked.

Wed, 12/10/2014 - 11:29 | 5536468 bugs_
bugs_'s picture

Central Banks and Central Bankers have failed their people and their nations.  It is long past time for these institutions to be banned.

Wed, 12/10/2014 - 11:37 | 5536484 savedeposit
savedeposit's picture

Central planners and there magic number 7

https://www.youtube.com/watch?v=woCXmGLyl9k

What a joke, but hey, they just do what they are told

Wed, 12/10/2014 - 11:40 | 5536501 Infinite QE
Infinite QE's picture

I wonder what Thomas Jefferson would say about the current situation? Probably something like "Grab my gun, time to purge some banksters".

Wed, 12/10/2014 - 12:07 | 5536615 SilverCoinLover
SilverCoinLover's picture

I believe it was Jefferson who said "The tree of liberty must be refreshed from time to time with the blood of patriots & tyrants".

I hope (if that time comes again) not too many patriots have to die to rid ourselves of the tyrants.

Wed, 12/10/2014 - 16:50 | 5537746 ApparentlyAPseudonym
ApparentlyAPseudonym's picture

This has been ascribed to Jefferson as well (but may be spurious): "If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered...I believe that banking institutions are more dangerous to our liberties than standing armies... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."

Wed, 12/10/2014 - 11:42 | 5536509 SheepDog-One
SheepDog-One's picture

I don't believe for a second any Fed central bankster gives 2 shits about dirt peasants wages.

Wed, 12/10/2014 - 11:43 | 5536512 suteibu
suteibu's picture

Sucks when the corporations look after their own interests.  What the Hell, aren't politicians satisfied with the QE-driven "wealth effect?" 

It seems that the politicians have a mistaken idea about their relationship with the corporations and banks who own them.  They believe they wield power when they are merely whores and easily replaced.

Wed, 12/10/2014 - 11:44 | 5536520 e_goldstein
e_goldstein's picture

No, central banks have failed because they are Ponzi schemes created by parasites. Unlike a virus that--given time--will evolve into a form less deadly to its host, central banks and banksters couldn't/ wouldn't/ didn't. Time to eradicate the parasites and start over. The treatment might be painful (for the bankers), but in the long run, the host systems and citizens will be better off.

Wed, 12/10/2014 - 11:46 | 5536521 venturen
venturen's picture

IF only the morons had let prices decline and let a real recovery occur. But no the money'd class needed a bailout. And slowly we let the invisible hand pull out the legs of the false recovery.

Wed, 12/10/2014 - 12:04 | 5536606 medium giraffe
medium giraffe's picture

Exactly this.  Nothing is allowed to find its true value anymore.  No economic school makes provision for TBTF. 

Perhaps QE might have done a better job giving every person in the US $23 every month.

Wed, 12/10/2014 - 14:00 | 5537030 Snoopy the Economist
Snoopy the Economist's picture

"Perhaps QE might have done a better job giving every person in the US $23 every month."

This wouldn't have bailed out the banks so it wasn't even an option.

Wed, 12/10/2014 - 13:52 | 5536524 e_goldstein
e_goldstein's picture

(double post, see above)

Wed, 12/10/2014 - 11:48 | 5536527 Shitgum Suicide
Shitgum Suicide's picture

The problem wasn't wages as much as it was property values both commercial and residential . The Fed was propping up housing prices because all the toxic assets were related to mortgages/real estate. If the cost of a mortgage or rent would've deflated like oil and everything else wage increases would not have been necessary. The major hinderance to this economy is the fact that property values, like gold, have not been wallowed to achieve true price discovery.

Wed, 12/10/2014 - 11:48 | 5536531 29.5 hours
29.5 hours's picture

 

 

The "Of Two Minds" guy is using the wrong mind today. This is the wrongest article from a source that is usually spot on.

The Fed has not failed in any way in its true mission of support to the current PTB. They have provided well for that class. Wage increase for workers is not a true concern of the Fed.

And there is also this statement:

"they don't have the tools to counteract the deflationary influences of labor surplus"

Ah? Are we advisors to the Fed? Personally I don't want the Fed to have any more tools of any sort. They are doing plenty enough damage with the tools they have.

 

Wed, 12/10/2014 - 11:51 | 5536546 venturen
venturen's picture

You can't push with QE you need Viarga for Economic Decline....better known as ED...I have seen the commerical!

Wed, 12/10/2014 - 12:01 | 5536576 Notsobadwlad
Notsobadwlad's picture

People just don't get it.

Central banks and their puppet governments don't want a good economy, high employment and independent people. They want ignorant and dependent debt slaves. That is how they maintain their power. Throughout history the Keynesian mumbo jumbo has been proven to be a false religion time and again. It has always professed one thing and accomplished something completely different. I would argue that this is all according to plan. Baffle them with bullshit, then steal their stuff and lock them into slavery.

Unrelated, but similar. This whole thing about CIA torture is a farce. Yes, it has been proven time and again that torture is a completely unreliable way to get true information. However the CIA has never, ever intended to extract true information. Think about what they actually accomplished and in doing so you have established their true goals (or at least that of their leaders).

Wed, 12/10/2014 - 12:01 | 5536585 unplugged
unplugged's picture

Wrong Charles - its not about that - they didn't lose. Contrarily, they won - big.  They've accumulated most of the wealth for themselves and their buddies.  The Global Elite have never been wealthier.  Do you think their mission is to help everyone, to help the economy, to help the little guy, to help those in fly-over land?  Really.  How naive. 

Wed, 12/10/2014 - 12:06 | 5536603 Bold Eagle
Bold Eagle's picture

Inflation is the result, not the cause of the economic growth. Is that so difficult for bankers to understand? Generating inflation and expect economic growth is like telling everybody to take an umbrella and expecting that it's going to rain.

Wed, 12/10/2014 - 13:50 | 5536984 Thisson
Thisson's picture

Economic growth does not cause inflation.  Absent intervention, economic growth causes things to become less expensive

Wed, 12/10/2014 - 12:10 | 5536620 topshelfstuff
topshelfstuff's picture

in China a minimum wage increase of at least 10% annually is the norm, and most all other BRICets countries

>>>Over the last decade, blue-collar wages have increased five- to nine-fold plus a 25% Increase in their currency, on a PPP basis above the US/UK

>>>Minimum wages are of course the legal minimum, and increasingly in China are not applicable in any sensible business model – assuming one wishes to retain workers. Also important to note is that, on top of wages, employers must also contribute mandatory social welfare benefits for each of its employees. This again varies by region, but can add an additional 40 percent to 50 percent on top of each Chinese employee’s base salary.

 

>>> the opposite view in the US/UK led West, paste:

Just how bad have the last three years been for some Americans? A Fed survey has some brutal data today showing that both median family income and net worth dropped dramatically over the last three years. The median family net worth dropped a staggering 40% to $77,300 in 2010 from $126,400 in 2007, the Fed said in its Survey of Consumer Finances which is released every three years. The median family income dropped as well from $49,600 in 2007 to $45,800, or a 7.7% drop...........
Over the last decade, blue-collar wages have increased five- to nine-fold - See more at: http://www.gcber.org/china-economic-bulletin/no-5_wage-growth#sthash.7yr... Over the last decade, blue-collar wages have increased five- to nine-fold - See more at: http://www.gcber.org/china-economic-bulletin/no-5_wage-growth#sthash.7yr... Over the last decade, blue-collar wages have increased five- to nine-fold - See more at: http://www.gcber.org/china-economic-bulletin/no-5_wage-growth#sthash.7yr...
Wed, 12/10/2014 - 12:08 | 5536621 THE DORK OF CORK
THE DORK OF CORK's picture

A social creditor will state that wages add to prices.

Theonhttp://hilobrow.com/2014/08/06/king-goshawk-32/

Wed, 12/10/2014 - 12:12 | 5536632 Oscar Mayer
Oscar Mayer's picture

Wages my ass, just give them another credit card, they'll be fine....

Wed, 12/10/2014 - 12:16 | 5536653 THE DORK OF CORK
THE DORK OF CORK's picture

No , not a credit card.

A national income or better yet a national dividend.

That is the only mechanism to stop this production / consumption loop breaking.

Wed, 12/10/2014 - 13:50 | 5536987 Thisson
Thisson's picture

No, the people need to own their own productive capacity, not have claims on the production of others.  

Wed, 12/10/2014 - 12:22 | 5536671 Bruce
Bruce's picture

Excellent article by CHS-OTM. 

Keynesian policies are doomed to fail.  Just look at Japan to see where the US is going.  The core problem is debt in the OECD nations.  Japan and the Eurozone are leading the way, with the US closing in.  I believe a debt jubilee is a viable solution.  It's going to happen sooner or later anyway since fiat currencies always to to zero.  History repeats.  It's not different this time.  Once sound money was abandoned for fiat the game was lost since now it is too easy to enact ridiculous policies without actually having to pay for them.  Can't do that with gold & silver based currencies as per the US Consitution, hence the formation of the Fed.

"Fiat money eventually always goes back to its intrinsic value - zero" - Voltaire

“When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes. Money has no motherland; financiers are without patriotism and without decency; their sole object is gain.” - Napoleon Bonaparte

"The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks." – Lord Acton

"There is no means of avoiding the final collapse of a boom brought about by credit (debt) expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit (debt) expansion, or later as a final and total catastrophe of the currency system involved." - Ludwig von Mises

“You cannot spend your way out of recession or borrow your way out of debt.” - Daniel Hannan, Member of the European Parliament

 “The national budget must be balanced. The public debt must be reduced; the arrogance of the authorities must be moderated and controlled. Payments to foreign governments must be reduced if the nation doesn’t want to go bankrupt. People must again learn to work, instead of living on public assistance.” - Cicero 55 BC

"America has a debt problem and a failure of leadership. Americans deserve better. I therefore intend to oppose the effort to increase America’s debt limit." - Sen. Barack Obama, March 16, 2006

“I abandoned free market principles to save the free market system.”–George W. Bush, on CNN, December 16, 2008

"The last duty of a central banker is to tell the public the truth." - Alan Blinder, former Vice Chairman of the Federal Reserve

 

Wed, 12/10/2014 - 12:30 | 5536703 americanspirit
americanspirit's picture

TPTB may have to throw a Hail Mary on this one. Universal debt forgiveness? $100,000 for every household? A monthly check for $3000 every month for 5 years for everyhousehold?

It is going to have to be spectacular or it won't have any impact. Hint - ultimately it won't have any impact anyway.

Wed, 12/10/2014 - 12:40 | 5536750 Duc888
Duc888's picture

 

 

Americanspirit. : TPTB may have to throw a Hail Mary on this one. Universal debt forgiveness? $100,000 for every household? A monthly check for $3000 every month for 5 years for everyhousehold?

 

Hand out more "debt" based money?

Why not just erase all existing debt and zero out the balance sheet.  Either way, what would it do to continue a debt based system?

Wed, 12/10/2014 - 12:42 | 5536745 gcjohns1971
gcjohns1971's picture

No.

It is simpler than that.

They thought that currency was money.

They thought that they could print money.

They thought money was prosperity.

They thought they could print prosperity.

 

But prosperity is in products, and cannot be printed.

Money can never have more value than the products it is traded for.

Money cannot be printed.

Currency is whatever you use in trade, whether it is money, debt, seashells or stones.

Wise men use their cheapest currency in trade, and guard their valuables from the eyes of men.

Even more so than paper, ephemeral accounting entries are the cheapest currencies of all.

Wed, 12/10/2014 - 12:41 | 5536748 besnook
besnook's picture

this is actually an unsolvable crisis short of a return to labor intensive production or population annihilation. tracking the japanese signal and you will find an economic recovery in 30 -50 years as the world population reverses growth to find an economic equilibrium.

did anyone really think people would keep buying plastic crap they don't need forever?

Wed, 12/10/2014 - 12:46 | 5536770 gcjohns1971
gcjohns1971's picture

All production is labor-intensive.

The only question is whose labor.

'Uneployment' is a word used to describe people's condition when the work they can do, which others are willing to buy, has been made illegal.

Wed, 12/10/2014 - 12:41 | 5536754 NoWayJose
NoWayJose's picture

In addition to printing money, the Central Bank's printing presses are also capable of printing "$15 an Hour!" signs to give to fast food workers in NYC!

Wed, 12/10/2014 - 12:44 | 5536761 swmnguy
swmnguy's picture

Not all wages are stagnant and declining.  Wages in the financial flim-flam sector are through the roof.  People get paid more if they do what is valued in an economy.  If we valued education, we'd pay teachers more.  If we valued manufacturing, we'd have high-paying manufacturing jobs like we used to.  If we valued personal services and health care (actual health care, not the financial shenanigans associated with health care, which we do value because they're properly part of the financial flim-flam sector instead of the health care sector), we'd pay nurses more.

My income has gone up a lot, well over double what it was 10 years ago (except for 2009, which was a dumpster fire).  I'm hitting the ceiling on income because I really can't do all the work that comes my way and I have to turn it down.  I'm reluctant to hire people because my work can be very cyclical.  And should I fall out of favor, which I strive to prevent, I'd have no work at all.  What do I do?  Well, about 25 years ago I stumbled upon the corporate meetings and events industry.  I built gigantic complicated staging and sets for corporate meetings, where CEOs get to run around like they're Mick Jagger in his prime, and be treated like some mashup of a rock star and an Aztec God-Man figure, and then an actual rock band comes out and plays, some famous celebrities come out and kiss the Executiives' asses, then we see some lavishly-produced videos (more like mini-feature films of a Hollywood production value but a North Korean mind-set), and then go off to some gourmet gala banquet and then entertainment after.

When I first encountered this bizarre niche, it clicked in my head with the other things I was seeing.  We have been reinstating Feudalism, replacing strictly hereditary Lords and Ladies with less-rigidly hereditary C-Level executives and Boards of Directors, pretending it's a meritocracy but actions and results proving otherwise.  We've replaced The Great Chain Of Being with Mission Statements, re-imaginings, and all the other self-justifying horseshit that the Elites have conjured up throughout history, differing only in what will be accepted by most given the cultural context.

I knew then I didn't have the birthright to get on board that gravy train, but I could aspire to becoming an auxiliary Court Procurer.  So that's what I do.  I am a trusted retainer to the official Court Procurers in the Corporate Court.  I'm not officially "In" or "Of" the Court, so I'm more protected from the periodic purges as the Elites reshuffle their staffs to keep everyone on their toes and mindful of who is and is not truly anointed.  I'm like the family dog who sits under the toddler's high chair.  The scraps to be gotten are pretty darned good, compared to the kibble that lands in most people's dishes.

That's why most people's wages aren't going up, and the Central Banks don't care.  Because they don't value what most people do.  They do scratch their heads and wonder why not everyone is in Finance and why people just won't spend when there's so much credit out there to be attached to their names.  But they don't really care, and they won't encourage wages to rise because that money would have to come out of the Royal Chest, and why should they suffer so much  for people who don't even do anything that matters?

So I take the coupons they give me and convert them into tangible things I'll need later, as fast as I can before the next time the untermenschen get frisky and roll out the guillotines.

Wed, 12/10/2014 - 12:59 | 5536821 I Write Code
I Write Code's picture

So you're the guy supplying the styrofoam Greco-Roman columns for Obama, and your business is booming?  We who are about to die, salute you!  LOL

I worked a trade show umpty years ago where we bought a 30x30 booth that looked like that ...

Wed, 12/10/2014 - 13:25 | 5536899 swmnguy
swmnguy's picture

Damn straight.  Actually, I'm the guy taking the order for the styrofoam columns, forcing the Court Designers to decide between Doric, Corinthian or Ionic, finding the vendor, and coordinating the logistics of getting them to where they need to go, set up, and properly lit.

I'd have been the guy leading the crew to set up your 30'x30'.

And yes, if my profession ceased to exist tomorrow, almost nobody would notice.  Which is a pretty good guarantee that my profession will continue, as it has done since some poor bastard just like me had to figure out how to do the fog and fire effects at the Oracle of Delphi 2500 years ago, and it probably wasn't a new job then.

Getting over the idea that it had to make sense and serve a tangible purpose was the first step toward a comfortable and fun career.

Wed, 12/10/2014 - 14:46 | 5537190 I Write Code
I Write Code's picture

Actually might have been 40x40, or 50x30 or something, it was a big corporate booth and it was repurposed a couple of times.  That's back when big trade shows were still a thang, before the Interwebs.

Wed, 12/10/2014 - 15:08 | 5537280 swmnguy
swmnguy's picture

Yeah, the first job I had in the industry was late '80s.  Huge gigantic pieces of cabinetwork.  That's when I learned how to spray contact adhesive and lay down laminate.  The company I worked for warehoused and shipped all the stuff, too.  Huge warehouse with gigantic crates.  Heck, I worked for weeks just building crates and stapling carpet to the insides to protect the laminate surfaces and built-in lighting and so on.  I got pretty handy with a forklift then too.

That line of work, and style of work, took a massive hit after the crash of '87, and the 1990-91 stuck a fork in it.  When things came back in the late '90s, the aesthetic had changed.  Electronics had taken a quantum leap so massive truss structures with skadrillions of computer-controlled lights and lots of projection surfaces were the thing that time around.  I suppose now it's more fabric and video screens all over the place.  There's good money to be made creating the content for that.

Big trade shows are still out there, but nothing like the extravaganzas they used to be, you're spot-on about that.  My body started falling apart though.  By the time I was 30 I needed surgery on both shoulders.  Never had it, so instead I figured out that nobody liked making sure the dumpsters were delivered and the Union Crew showed up on time, so I kicked myself upstairs.  Better all the way around.  I was a really terrible scenic carpenter.  People would find out that I have all these tools and experience and want me to help them hang cabinets or doors or whatever.  I'd tell them, "OK, but I guarantee you it will look great from 30 feet away but horrible up close, and it will fall apart in 3 months.  Oh, and if I don't get a door straight I just take out the belt sander and turn it into a paralellogram."  That usually cooled them.  I'm much better at sitting in Creative meetings keeping a straight face, and making things happen on schedule and budget on site.

What a weird-ass way to make a living.

Wed, 12/10/2014 - 12:56 | 5536811 I Write Code
I Write Code's picture

Best CHS article ever.  Maybe I'd better re-read it and see what I missed ... no, I think he hit it all!

And is the solution really to give money direct to households?  Could it be that simple?

Well it would certainly be a good thing to STOP GIVING IT TO BANKSTERS!

But, HOW do you give it to households?  A tax cut almost does it, y'know, except half the population doesn't pay any taxes - except most of those "non-taxpayers" still pays SSN.  Hmm.  Nope.   I guess you basically have to mail out checks.  OK. how much?  Well, there are about 140m tax returns filed per year, for about 242m adults.  One thousand dollars per adult is $242b.  Ten thousand dollars per adult is $2.4t.  Let's call it: $4,000 per adult, for just under $1t. 

Every year.  For the next ten.  While interest rates slowly return to norbal. 

Who's with me?  Let's goooooooo!

Wed, 12/10/2014 - 13:37 | 5536923 swmnguy
swmnguy's picture

No joking, if we had given every man, woman and child $50,000 on January, 2009 it would have cost less and been vastly more effective than what we did instead.  It would have fixed the banks first, and then the economy, had that been the true intention.  That's how I knew then and still know they're not serious about their stated intentions.  Unless and until they do that, they're not serious about fixing the economy.

That's where I diverge a bit from CHS.  Sure, a free-money giveaway isn't sustainable.  But it could have cleared the way for actual sustainable growth, which isn't happening because everyone's too tied down with unproductive debt.

Given $200,000 for a family of 4, most people would pay off their house, credit cards, cars, student loans etc.  They'd fill up their IRA's, 529s, HSA's, etc.  Some would lose it.  Some would spend it on hookers and blow.  Some might even waste it.  But it would flow through the economy like a lava enema.  It would square up trillions of dollars in private debt, which dwarfs the much-more discussed and far less-consequential government debt.

And that's exactly why they'd never do it.  Because the point is to maintain the system of debt-peonage.  That's what the crisis of 2008 (and ongoing) threatens fundamentally.  If there isn't all that debt, under our system, there isn't all that wealth.  Note the proposals to assist mortgage-holders and student loan debtors.  All involve strategems to make sure the principal gets paid back.  No debt elimination proposed nor would be tolerated.  The debt must be maintained and the value of it enhanced.

The statements of the central banks can't ever make sense because they can't ever disclose their true objectives.  It's not some dark conspiracy to destroy us all.  It's not even complicated.  In a system where debt=money and no money can exist unless it's countered with an equal amount of debt, the debt must be protected at any and all cost.

Wed, 12/10/2014 - 16:01 | 5537505 besnook
besnook's picture

ironically, the theoretical fear is inflation if too much money hit the streets too fast. they feebly tried to help with a cut in ss taxes but the was half hearted bs. what they can do is change the tax structure to reflect the new poor population.

a start would be a $50000 tax exemption for a family of 4. that would only add pennies to the debt and enough money to kickstart the econopmy.

 

 

Wed, 12/10/2014 - 18:05 | 5538148 scatha
scatha's picture

You right but the problem was not housing in 2008 at all. If it was, your solution + rise of minimum wage to $30/hour + short term capital controls, would discharge the real estate bubble promptly with little cost to 99% and by lowering substantially dollar exchange rate, broke the back bone of outsourcing of American jobs and increase export. 

The major problem in 2008 was enormous casino like derivative market of $600 trillions, which could only be sustained by continuous betting so no margin calls are ever made and liabilities stemming from such trades disclosed. That's what $17 trillion of FED liquidity or guaranties was for, while FED would need only $600 billions or less to buy all sub-prime housing assets.

 

Last 6 years, FED begged banks to wind down derivative trades (casino bets) meaning orderly closing trades (closing casino tables) one by one and helping those who lost a gamble to pay their gambling debt. That's all what FED was doing with QE and other programs. It's hallmark of state capitalism i.e. fascism.

Wed, 12/10/2014 - 13:14 | 5536866 andrewp111
andrewp111's picture

You want to boost wages? Then you need full employment. You need massive labor shortages to bid up the price of work. And there is one thing that can do this - World War III.  Just look at history. It was WW II that created full employment after the Great Depression. Only an existential struggle for survival can motivate such an extreme turnaround. And you can bet that WW III is close at hand. Once ISIS conquers enough territory to become unstoppable, everyone will be in an existential struggle for survival. Staying out will not be an option for anyone.

Wed, 12/10/2014 - 13:25 | 5536900 Quinvarius
Quinvarius's picture

WW3 will probably create a labor shortage alright.  It will also create a consumer shortage and a workplace shortage.  Infact, I doubt there will be much of anything left.

Wed, 12/10/2014 - 13:13 | 5536868 Quinvarius
Quinvarius's picture

They are too scared to let that money circulate.  They know what is going to happen.  They would rather see us all dead.  Both things are going to happen anyway.

Wed, 12/10/2014 - 13:23 | 5536892 Livermore Legend
Livermore Legend's picture

Charles, I see you've been reading up.......

Keep following my Lead......

"Zugzwang"

Wed, 12/10/2014 - 13:46 | 5536965 BeerMe
BeerMe's picture

Central banks have only failed those that they weren't really helping in the first place.  They have been quite successful doing what they were always intended to do (e.g. protect the plutocrats).

The way to raise wages is to get rid of central bank/government intervention.  First thing that should go is the tax burden of hiring, next minimum wage.  It should be no wonder that ever since minimum wage was instituted wages have relatively become worse.  Now as they go up more the low skilled worker has written their own death certficate and all those college graduates without jobs will be hired in their place.

Wed, 12/10/2014 - 13:49 | 5536977 capltd
capltd's picture

What do they mean "failed because they can't push wages higher?"  Executives earnings are higher than ever and that's all that matters to elites like central bankers.  If they WANTED hire wages for the average Joe the elites wouldn't be pushing "free trade agreements", job exporting, H-1B visas, union busting legislation and refusal to increase minimum wages.

Wed, 12/10/2014 - 14:15 | 5537085 Ewtman
Ewtman's picture

The Federal Reserve's days are numbered. Even they aren't immune from an angry public once it's had enough BS...

 

http://www.globaldeflationnews.com/the-creature-from-jekyll-island-the-e...

 

Wed, 12/10/2014 - 14:47 | 5537196 FallenOne
FallenOne's picture

swmnguy told us what we all should already know but is always refreshing nonetheless

Wed, 12/10/2014 - 15:18 | 5537306 Shitgum Suicide
Shitgum Suicide's picture

Actually I find the best way to increase wages would be to do away with the income tax. People will have more money in their pockets each paycheck. The fed can continue to print to pay the bills and we can increase the minimum wage each time prices rise.
Let businesses pay a flat %15, corp tax %15, no capital gains taxes.
This would also help for the deficits of public employees. You subtract the taxes that would've come out of their paychecks and that will be their new salary.
Just to clarify government works don't pay taxes because their income is derived by taxes from the taxpayer. There is a reason why people who work for a business are called taxpayers. It's a private sector thang!

Wed, 12/10/2014 - 15:45 | 5537405 Shizzmoney
Shizzmoney's picture

RE

Isn't anyway "central planning" to ask for higher wages as a policy? 

For the Fed?  No.  They've always wanted to keep wages at a level that would offset inflation (which is why them wanting inflation is a lie).  Inflation above the norm would effect banks and creditors, who the Fed really works for.  They have no interest in paying down government (a.k.a military) debts.

Here's proof below:

You see, pay cuts for workers mean that prices as a whole in the economy don’t rise. There’s less inflation, which means that banks and creditors make more money.

What do I mean by a conspiracy?  Well, you can read all about it.  It’s right in thetranscripts of the Dec. 2005 Federal Open Market Committee, which is the committee of central bankers that run America (more on that below).  In that meeting, Dallas Fed President Richard Fisher is complaining about the enormous quantity of Chinese goods flowing into America.  He points out that this is creating ‘disinflation’, ie. lowering prices and wages for Americans.

Only, he isn’t complaining that there are too many Chinese imports, he is frustrated there aren’t enough imports.  Even though China has built special export-only ports to ship goods out of China, he says, the ports at “Long Beach and Northwest” can’t absorb what China wants to sell us, because of work rules (ie. unions).  This is a huge problem, Fisher continues, because it is blocking his CEO contacts from outsourcing as much work abroad as quickly as possible. They cannot “exploit China” fast enough.

 

You won’t be surprised to hear that shipping American jobs overseas isn’t a new strategy.  It’s been going on in earnest since the 1970s – crushing inflation by crushing our wages. According to Bill Greider (who I recently interviewed on Radio Free Dylan), in the early 1980s, Paul Volcker would carry around a card of union wages, so he would know when labor “got the message and surrendered on its wage demands”.

http://www.dylanratigan.com/2011/01/20/the-fed-works%E2%80%A6-for-chines...

So the shitty wage you work for?  That is, in fact, centrally planned.

Wed, 12/10/2014 - 16:55 | 5537783 TSTM
TSTM's picture

Charles, Good inflation? Seriously? 

Also, Central Bankers have not failed. You have accepted their stated goals as their true goals. Watch their policies in action and ask "cui bono" and you will find that they serve their masters well. Every thing is as planned. Rest assured there is someone waiting in the wings to lead the people back to peace and prosperity through a new monetary system of their design after this one blows up. They've been busy converting fiat to hard assets while Main Street is busy paying payments. 

Wed, 12/10/2014 - 17:30 | 5537985 scatha
scatha's picture

It's sad that we, proud Americans have no idea of what FED's been doing especially since latest crash.

Let's not talk financial crap talk here but exactly what FED did for banks since 2008, in terms understood by everyone with GED, before even start talking about unfairness of potential debt forgiveness.

The keyword here is FED provided Liquidity. What the hell this means to average Joe? Should plenty, as illustrates below, example of injection of liquidity into sorry ass of Joe Broke as FED did to Bob Bankster and not exactly for purpose of discharging ass-ets.

Joe Broke is about to lose job, home, truck, furniture, hunting gear, savings, retirement money, wife etc. 

Is he broke (insolvent) or illiquid? I say, it’s up to FED.

Let’s see. His first problem is following:

He cannot not find any employer to pay him high enough wage for his lazy ass, good for nothing attitude. But If FED, would provide him with a job paying as much as he needs to cover all his expenses, that would make his labor power i.e. variable capital holding, liquid.

His second problem is following:

He cannot find anybody to buy his bad ass, decapitated shack and his junkyard real estate assets, called a house for price that covers his multiple mortgages he took to keep up with wife spending orgies and neighbors race for golden Chinese junk.Well, FED could provide liquidity here, and pay double what Joe needs, recognizing private market values of his urinal drawings authenticated by his personal autograph while drunk. That would make his house assets liquid.

Also his 1972 Chevy truck with engine broke and not a tread on its tires, to become liquid if only FED buys it for original purchase price, adjusted to real inflation adding on the top, original body paint, collectible value.

The same could apply to all Joe’ ass-ets including his wife which could be made liquid by FED via total makeover so she could finally leak out of his life, and find herself another Joe to whine to.

Now Joe Broke is broke no more through miracle of FED liquidity. He is Joe Rich now, so he can continue to live his bad ass, comfortably lazy, low life, as before, knowing that FED has his back, exactly like Bob Bankster after 2008 collapse. Now you know all about FED, there is to know.

 

Wed, 12/10/2014 - 22:16 | 5539045 IronForge
IronForge's picture

Guess we've observed the intersection phase where Central Bankers, Rentier Oligarchs, Free Traders, and Wage Earners met in conflict.

The First Three Trumped the Wage Earner - now the World can't get the growth expected because of those Three.

We may have to wait until CHN and IND's 1st-4th Quintile Purchasing Power grows enough where they will become "savvy" International Consumers like the USA_MiddleClass used to be in the mid 1970s CE.

Don't hold your breath...

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