This page has been archived and commenting is disabled.
"The Only Way The Rich Get Richer Is If The Rest Of Us Get Poorer"
Submitted by Raul Ilargi Meijer via The Automatic Earth blog,
Far too many people have already used lines like “We Are All Greeks Now” for the words to hold on to much if any meaning by now. But it’s still a very accurate description of what awaits us all. Just not for the same reasons most who used it, did.
No, I don’t really want to talk about Greece again. I want to talk about where you live. And about how similar the two will be not too long from now. How Greece is holding up a lesson and a big red flashing warning sign for all of us.
Greece is the mold upon which all of our futures will be based. Quite literally. Greece is a test tube baby rat.
Greece will never “recover” to our North American and Western European economic levels (if ever they were there). Instead, it’s us who will descend, “uncover” so to speak, to the levels Greece is at today. That is baked into the cake, that is inevitable, and that is therefore what we need to be ready for.
If we wake up in time to this new reality, we may, and that’s still only may, be able to prevent the worst, prevent something akin to the same punitive measures the Troika has unleashed upon Greek society, fully wrecking it in the process, its healthcare system, the safety nets for its most needy.
We may find a way to make a smoother transition from here to there if we prepare in time. But that’s the best we can do. As societies, that is; individual fates will vary.
Greece will find ways to do better than it does right now, balance things out, but it won’t be through a recovery or a bailout. Athens will -because it must, lest the humanitarian crisis deepens profoundly- find ways to better -fairer- apportion what means are at its disposition, amongst its people.
We all have to do the same, wherever we are. Our advantage today is that we can do this from a relatively well-to-do starting point. Our disadvantage is that, unlike the Greeks, we do not understand the reality we’re in.
We’re ignorant, we deny, we prefer not to think about it. The Greeks used to be like that, but they no longer have that choice. And we won’t for much longer either.
The reason why Greece is where it is today, and why we will all be there tomorrow, we can by now for good reason call ‘deceptively simple’. That is to say, the global banking system that orchestrated the financial crisis refuses to take the losses on its extravagant bets, and it has the political clout to get its way, all the way. That’s all you need to know.
The losses are therefore unloaded upon the citizens of our respective nations. But the losses are far too massive for those citizens to bear. They, or rather we, will see our societies stripped of most things, most of the social fabric, that hold them together. Any service that costs money will be cut, progressively, until there’s very little left.
It happened in Greece, and it will happen all over the world. Mind you, this is nothing new; third world nations have undergone the same treatment for decades, if not forever. Disaster capitalism wasn’t born yesterday. What’s new is that it now takes place in the supposedly well-off part of the world, in this case the European Union. And it will spread.
The successive Greek bailouts that have now ruined the entire nation were “needed” to stem the losses on wagers, derivatives and other, incurred by global banks, French, Dutch, German, Wall Street, the City. The first bailout in 2010 also served the purpose of allowing the banks time to shift away from their exposure to Greek debt.
All bailouts, be they directly for banks, or indirectly through a country like Greece and then for the banks, have been set up according to the exact same MO. Greece’s economic reserves just happened to be a bit tighter, and moreover, the country was a convenient lab rat and scarecrow to prevent others from protesting the bailout system too loudly.
The whole system of bailouts, be it in Greece or in the US, was never anything else than a transfer of public money to private interests, with the express aim of making good on the lost wagers of that private sector. With impunity, no less.
And no, the losses have not disappeared. Nor have they been written down. They have instead been transferred to fester in dark vaults, hidden behind swaps and other derivatives, and on central bank balance sheets. But that won’t last either.
The Automatic Earth has warned of the imminent deleveraging and deflation for years, and now everyone is talking about deflation. No worries, guys. As you were. But do please try and understand how this works.
There’s all these losses, with no-one prepared to write down any of them (see Germany vs Greece), and the elites behind the banks unwilling to absorb any -the elites instead insist on getting richer even in a depression-. There is only one outcome left then: that you and me will have to become much poorer. They are our losses now.
The only way the rich can keep getting richer is if the rest of us keep getting poorer. Economic growth is a thing of the past. Deleveraging has started for real. Huge amounts of zombified ‘money’ are disappearing as we speak.
That leaves the world with a lot less wealth. And still the rich seek to get richer, and they are in charge. The math is simple. As Greece shows us, the rich have no qualms about throwing an entire society off the cliff.
A large part of what is now considered wealth is made up of QE and related and inflated stocks, bonds and real estate prices, all of which is zombie wealth. Which can disappear overnight. And if it can, it will.
China stocks and “real” estate and local government debt to shadow banks, emerging markets, commodity currencies (Australia, New Zealand, Canada etc.), if you overlook that whole panorama it’s hard to see how you could possibly think there’ll be some kind of recovery.
Where should it come from? Overall debts are much worse, much higher, now, then they were in 2008. We haven’t had a recovery, we’ve had an “uncovery”. And we’re headed for a discovery.
The entire idea, the phantom ghost, of a functioning market died, if you were willing to look, with the advent of central bank intervention. People who work in finance, obviously and for understandable reasons, have never been willing to take that look. They’re just looking to make more money even if things tumble down the mountain in a handbasket. They call it “opportunity”.
But they haven’t been actual investors in years. They’ve just helped the banking system put you into deeper doodoo. Greece shows us where that leads. And soon, wherever you live will show that to you too.
Deflation is a bitch. Nicole Foss here at the Automatic Earth has used the phrase “multiple claims to underlying real wealth”, for a long time. It’s like playing musical chairs. And you’re not winning. You never had a chance.
The only people who will wind up winning are the rich trying to get richer. The rest of us will soon live like the Greeks, and that’s if we are lucky.
There is no other possibility. “Money” is vanishing fast, and the only way it can even seem to return is if central banks do more QE, but that’s a dead in the water policy. Economic growth across the globe, and certainly in the west, is an illusion.
China was the last place that briefly seemed to have any, and they screwed up just like us, ending up with far too much debt to ever repay.
There is a point when the can gets so big and heavy, no-one can kick it down any road anymore. Not even one that plunges down a mountain. Something to do with gravity.
- 23952 reads
- Printer-friendly version
- Send to friend
- advertisements -


An honest game needs honest rules, but the rule makers are easy to buy off. It will end badly, mostly due to laziness and greed......
The politicians are making the rules (with help from lobbyists) and they're the most selfish people on the planet. Save the planet, shoot a pol.
No, the banksters make the rules, which their puppet politicians enact into law, so that thugs with guns force us to live by them.
Save the world. Hunt the banksters.
Another urgent thing needed to save the world is to arouse the people to resist the increasing influence of the papacy over America. Next month the pope speaks before Congress for the first time in history. This is a most ominous developement that we have sunk this low as a nation. I assure you, I know whereof I speak, they are up to no good. There are plenty of signs and warnings if you read between the lines:
May 19, 2015
Vatican Adviser Says America’s Founding Document Is Outmoded, Reveals Global Game Plan
"Top Vatican adviser Jeffrey Sachs says that when Pope Francis visits the United States in September, he will directly challenge the “American idea” of God-given rights embodied in the Declaration of Independence."
http://www.westernjournalism.com/vatican-adviser-says-americas-founding-document-is-outmoded-reveals-global-game-plan/
Our Foundng Fathers knew the dangers and enacted safeguards which are now being dismantled.
“I see a very dark cloud on America’s horizon, and that dark cloud is coming from Rome.’’ - Abraham Lincoln
"If ever any Congregation of men could merit, eternal Perdition on Earth and in Hell... it is this Company of Loyola." - Thomas Jefferson, 2nd President of the United States
"Liberty and Popery cannot live together." - John Adams, 2nd President of the United States.
Pope Pius IX, in his Encyclical Letter of August 15, 1854, said: `The absurd and erroneous doctrines or ravings in defense of liberty of conscience are a most pestilential error--a pest, of all others, most to be dreaded in a state.' The same pope, in his Encyclical Letter of December 8, 1864, anathematized `those who assert the liberty of conscience and of religious worship,' also 'all such as maintain that the church may not employ force.' "The pacific tone of Rome in the United States does not imply a change of heart. She is tolerant where she is helpless. Says Bishop O'Connor: 'Religious liberty is merely endured until the opposite can be carried into effect without peril to the Catholic world.'.
While our Congress is fawning over the pope next month, just remember what is really going on - the papacy is employing every device to extend her influence and increase her power in preparation for a fierce and determined conflict to regain control of the world, to re-establish persecution, and to undo all that Protestantism has done.
Economic growth across the globe, and certainly in the west, is an illusion.
China was the last place that briefly seemed to have any, and they screwed up just like us, ending up with far too much debt to ever repay.
America's fiscal gap has gone up from $60 trillion in 2003 to $210 trillion in 2014 (over $1,720,000 per taxpayer). There is not 1 in a billion chance that gap can be filled.
There is no real growth in teh US. Inflation is adjusted sharply lower to create a fake growth
The Chapwood Index (real inflation) for 2014 was 9.7% and official CPI in the land of the free was only 0.8%.
-
Sure it can...just have the Treasury mint up a couple buckets of those $1T platinum coins they were talking about. Put the Bernank's face on the front and voila - problem solved.
Hyperinflation will deal with those debts no problem.
Release the Kraken.
I have released the Kraken all to many times, now I prefer Sailor Jerry it causes a not so bad hang over compared to the Kraken. Sorry I thought we were talking about boozing our way to success.
In a deflationary environment, cash will be king in the short run. Just make sure you can get at it before they either bail in us or declare a bank holiday. The mattress is looking better and better.
When the Chapwood Index reaches 2,000% real inflation, that $210T will suddenly seem much more affordable. A 2 bedroom 1 bath house in SF would run you 1.3 trillion at that point though.
Is there an actual thesis of this post? Or is this a new ZH feature where we're supposed to guess it (like Caption Contest)?
Even if there was, it would be far from coherent. "We need a better mafia" just doesn't quite pan out... EVAR!
The thesis I suspect is 'whining'
Frankly the title sounded like something a Marxist or Hillary would say but I repeat myself.
Wait, why would anyone think that lawyers who turn to politics can provide "safety nets for the most needy" in society?
Did the author ever consider the incoherence in that?
A drunk socialist never makes sense.
Correction:
"A socialist never makes sense"
Isnt one of the side effects of deflation falling prices?? How is that worse than inflation which can cause higher prices for consumers?
It also makes house payments, car payments, and credit card debt impossible to service. Bankruptcy becomes the only option. Suddenly, all that "wealth" tied up in your house is gone and there is probably little cash left to increase in value. Wages decline faster than prices and voila...we have ourselves a formerly middle class family turned to serfdom.
On the other hand, those with large bank balances and no debt make out like kings. Lenders have loans defaulted on, but keep collateral and suddenly own the majority of assets. (Think of how many homes have gone from private ownership to REITs since 2008.) In a deflated, depressed economy everyone suffers. But those that own the assets and means of production suffer much, much less.
Here in Argentina we went throug hell and back many times... inflation. hyperinflation, rocket-propelled inflation and rampant deflation in 2001. Take my word, full-blown deflation is MUCH worse than inflation. Inflation makes you poorer (you can adjust to that), while deflation simply kicks you out of the system...
Probably I didn't expressed myself, sorry. As I saw it (in person), inflation makes credit more expensive, while deflationary pressures cuts access to credit completely. In a serious deflationary environment the kind of credit that gets cut is not only banking credits (the kind used for growth), just forget about that because those are not important... the very lifeline of modern society are those 30 days retailers get to sell stuff before it has to be paid (so in effect all retail works with manufacturer/wholesale money), some morning you wake up with the news that everything has to be paid on spot... instant Venezuela!
The rich get richer and the poor get poorer.
Well, it is built into the system:
a) Those with excess capital invest it and collect interest, dividends and rent.
b) Those with insufficient capital borrow money and pay interest and rent.
Trickledown was an invention of US billionaires looking for lower taxes.
Make sure the young haven't got enough money to buy their own homes (student loans); become a landlord and extract rent from them for their entire life.
“Money” is vanishing fast, and the only way it can even seem to return is if central banks do more QE, but that’s a dead in the water policy. Economic growth across the globe, and certainly in the west, is an illusion".
Well, call QE what you will, but it isn't "dead in the water"
Anyone that has any thought that the un-fed will throw in the towel, is delusional. They will go ape shit crazy first and pump like zombies.
Seriously can you hear Jack Yellen saying...We have been wrong in our approach, we will no longer prop up the markets and big banks. We are going to raise rates and rein in our "free" money policies.
Ain't gonna happen!
Nope, not today.
Sure, economics is a zero sum game.
deflation is a minus sum game.
And as we speak the dow begins its afternoon ascent higher!!
Statistical Physics 101
So, we end where we began, always at the multiplexer node, casting perception. The establishment politicians – public, private or non-profit, cannot move the main body of the distribution, which includes all participants in the ponzi. The main body isn’t a waste of time, but trying to get any work done there is.
“There is no shortage of labour.” That’s what passes for public education, in this country like every other, which is why the bankers and participants have no exit, from economic discharge. Within the empire, one warm body is assumed as good as another, with patronage as the guiding force, but the empire is only reality for those who choose it to be so, unable to escape from their own false assumptions made in childhood.
If you look at the solar system the way the majority was trained to do so, you see only a dc circuit travelling one way in time, experiencing thermal runaway, which the majority thinks will fuel solar to balance. You aren’t going to get very far trying to go backwards in time more efficiently than the solar system. Likewise, you can only repeat History, a rear view mirror, by focusing on it. History is valuable, but it doesn’t get any work done.
I just turned down three union jobs paying six figures, because the union didn’t want to wait a few weeks until my child was born, on the assumption that one warm body was as good as another. You expect capital and the middle class to fail to recognize priorities, that without children there is no economy, and a union is in a good position to time employment.
Because my wife comes from the middle class, and nature requires her to be the primary caregiver, I had her call all the commercial banks in northern California to inquire about a commercial line of credit, based upon my ability to capture a six figure income. They all asked her the same questions, what was her credit score and how much collateral did she have, effectively, was she willing to trade assets for worthless numbers in a computer. The union is quite capable of giving me working capital, and does so for its children, which are incapable of maintaining demographic expansion.
Replacing humans with dc computers and no alternative outlet, to maintain the mythology of scarce resources, is the stupidest thing humanity has ever done, to itself. A cursory look at global infrastructure projects tells you that the latest new world order, efficient automation, was completely fubared at inception, and the participants now have no idea how the technology they are installing doesn’t work.
The number of people on this planet who really understand economics relative to the general population is infinitesimal, and they do not occupy ivory towers, at Wharton or anywhere else. If capital wants to hire its own superintendents and cut its own throat accordingly, it is welcome to do so, but you simply cannot run an economy without labor superintendents, and there is a severe shortage of labor accordingly. Labor is the outliers.
Likewise, rebelling from behind, pointing out stupid efficiency, is a waste of time, merely creating friction, dragging the main body backwards faster, which you may want, depending upon application. The empire is a counterweight, which has its regenerational uses, if placed properly, in a dynamic system.
If you want economic mobility, circulation, the last thing you want to do is specialize in one area for a long period of time, to become increasingly efficient, but have no idea what needs to be done. Like people, empires go through phases, and like all empires, this one has run its course, and the Internet is obviously not the solution, except to maintain the status quo until it blows up.
In the beginning I told this story, which I repeat now. In the fourth or fifth grade, in California, we were given an assignment to give a speech, teaching the class anything. Mine was ripping the chapters out of a book, giving each to a different person and having a short discussion, to efficiently get all participants an A on the test. You can imagine the response. I didn’t go to class much.
You don’t learn anything with efficient specialization, and those who teach so are expert authorities on nothing, Save the 110 line for a light, rip the rest of the wiring out, and take it to the recycling center. Empire real estate is always a sunk cost, with a mismatch time duration, a bomb. Treat it accordingly.
The first test on the jobsite, unlike public education, is whether you are capable of learning, despite being surrounded by others who appear to have no intention of learning, and every intention of enforcing their own authority, on arbitrary efficiency, in a competition created for the purpose, to maintain the status quo. CEOs, the gatekeeper at the cliff edge, do not challenge the status quo. If they did, America, and the global economy dependent on Wall Street to give Silicon Valley credit, would not be hopelessly bankrupt.
A woman has three basic choices: marry a man she is willing to listen to, learn to do shit herself at far lower performance, or keep 20 guys around in case she needs one. Her power is in having children. The men that know this and have no intention of working a day in their lives take advantage of the women who choose poorly, to create a financial pyramid, the sh-show you are hopefully watching on your break, when you have nothing better to do.
There is nothing wrong with a female executive being President, but that is not what is going to turn the lights back on, prevent a fire in that German airport, or reduce the number of redundant make-work jobs. Women and empires have been having babies for thousands of years, without a doctor. The old man compensates for the artificial anxiety. Labor is induced with increasing heat and decreasing oxygen, what you see on empire media.
Ben Carson may be a ‘rookie,’ but he brought his brain and a sense of humor to the job, unlike most professionals, who are trained for an emergency, expect an emergency, and take action to create an emergency. Pensions are a debt, leveraged to prop up the markets, booked as a fantasy asset, so perceived by the majority, which wants to be deceived, as long as possible, both throwing kids out of the market and stopping household formation, required to maintain the pensions, all of which were spent to grow the university healthcare complex.
Ohio determines elections and has sent the most Presidents to office because its professionals have good manners and can cut your throat so smoothly that you don’t know it until you have already bled out, which isn’t a bad resume for the job, negotiating with State-sponsored terrorists, at home and abroad.
Thinking the best of others is a good thing, but you have to reverse the lens once in a while, to see the distribution for what it is. It’s not about what you lose; it’s about what you gain, if you want to go to the future. Ideally, the pensioners with disposable income would bankroll industrial kids directly, but the majority didn’t earn them, so they have no idea what an industrious kid is, where to find one, or how to make the exchange, leaving a tiny pump and a mammoth flood.
Was waiting for you to get to the Physics part..... Free body motion? Electricity and magnetism? Thermodynamics and wave theory??
It won't matter how many little functioning labor units are procreated . . .if the majority of them are born to govt entitlement (medicaid, food stamps et. al.) which the majority are now, that is simply dead weight. Very few from this majority demographic will make a contribution in any meaningful sense. In years past the saving grace for the uneducated and drifting teen was the military, not anymore tho.
....and, of course, here comes the Friday 2:30 'melt up'.
Yes the markets are rigged. But the system can be individually un-rigged if you are able to do a few simple things from an early age. Sadly, most humans don't know the tools to un-rig yourself. Here are some tools;
1. Avoid debt at all costs or get out of debt as fast as your means allow.
2. Live well beneath your means and adjust your lifestyle accordingly.
3. Utilize compounding of interest to your benefit.
4. Legally pay as little taxes as possible.
5. Understand that God, not man, is sovereign and follow His word.
6. Understand the the Fed and the government are not here to help and should never be trusted to tell the truth. Believe the opposite.
That's a start to the un-rigging. Feel free to add your own wisdom or strategies.
7. Kill all of the Richie Rich and their families.
The FAIR solution is for all of the Richie Rich and their families to get decidedly DEAD!
"The only way to get richer is if we all get poorer".
Actually, this is close to something I repeat often. I've told my family, when all of this excessive debt sorts out, we should stand tall. In my neighborhood, we will appear richer if debts are someday called on my currently "richer" neighbors. I await the day. I'm prepared. My defensive, no-debt strategy is called idiotic by many around me.
I must admit though, I'm losing faith that a reckoning will ever come.
"I must admit though, I'm losing faith that a reckoning will ever come." -- the unsettling feeling you are getting is due to the changing demographics of the earth...
How's your Mandarin?
LOL!!!! more propaganda. Define "wealth" before you decide who is "rich"...
under the right circumstances a person with a gallon of potable water and a can of beans could be very wealthy...
Can't read very much of this crap. "Athens will -because it must, lest the humanitarian crisis deepens profoundly- find ways to better -fairer- apportion what means are at its disposition, amongst its people." More and fairer socialism is the answer according to Raul. That's all I could stomache.
Raul Ilargi Meijer
IS A SOCIALIST COLLECTIVIST PROPAGANDIST CUNT.
OK, that already happened!!!
It is amazing people trying to explain inequality with complicated constructions, but the fact is that we haven't had REAL growth for quite some times now.
That is why QE that was in theory a good move, didn't work... inflating the pockets of a very limited audience. Now, printing money is usually not creation of wealth in a overall economy, but due to the fact that money is the way we allocate wealth, assigning money to a specific small portion of people and having money trapped in financial limbos... it greatly distorts the allocation of wealth... as simple as that...
After all the only way to get reasonable returns was dangerously increase leverage and margin operations in the financial world, living in a world of transactions that add no real value to the goods/services object of the transactions.
So QE will not work, if not to screw up more a system that is already screwed up.
Now about rates increases... that will happen...
Raising the cost of money in an economy that is booming has the effect that the best horses get picked, eliminating the ronzinantes, and it slows down the boom simply recalibrating investments only on the best horses that can grant higher returns drying up money for the poor performing ones.
In an economy that has not been booming in a long time, where the low cost of money was a necessity as there are no horses that are champions so that every horse is a ronzinante a poor performer dragging along… raising the cost of money will simply dry up liquidity and in the absence of champions it will kill all the ronzinantes… the poor performers… which is the entire economy, isn’t it?
The Oligarchs are going nowhere with my boot permanently on their collective necks. Nothing will work for the Oligarchs no matter what route they think will be safe for them. They are caged animals that are in fear for their lives, and there is nowhere for them to hide.
de Rothschild Bank is first on my extraordinary rendition waterboarding list.
Economic growth is the natural state of affairs. It's the blanket of suppression and repression that stops it. Yet, everywhere there is daylight that shines through that blanket, there is growth.
The living standards of the past can be re-achieved and exceeded, and to do that, we must extinguish the despotisms that suppress growth.
Makes me glad I have no debt and own productive assets. I should do ok.
Karl Marx figured this one out more than 100 years ago. This is why we read. He also said that the poor will eventually rise up and slaughter the rich because the unboundable greed of the rich will never be sated. The rich will become so greedy that they will snatch every last crust of bread from the poor and sweep every last crumb from the larder. No matter how desperate the poor become, the rich will demand more, more, more. So be ready for the revolution when it occurs.
What we are witnessing is the collapse of Western civilization. The whole system is coming down and what will emerge is going to be much more local, much less technical and a lot greener. It's going to be great when we get there, but the road ahead is ugly. If you think gold, ammo and storeable food are going to save you, you're sadly mistaken. Your only hope is to begin building the new world that will emerge from the ashes of this one.
Your best investments are land away from populated areas where you can grow food, and tools to work that land. Have some cash on hand because that's going to grow more valuable with deflation.
Your plan for the future is to find a viable skill. Not some bullshit like marketing, sales, financial engineering or corporate gladhanding, but something like tractor repair, barn building, biodynamic farming or fabrication. Move into a small community and begin building local economies and networks of people. Move your extended family in with you and have lots of kids. You'll need them to work your land.
If you can do this, you have a chance. If you think you're going to bug out and be an island living off your stored food and shooting anyone who comes around, you're toast.
You've been warned.
And you’re not winning. You never had a chance.
Please explain the electrical outlet on my wall and hot and cold running water. Did I mention I had an internet connection?