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It's The Entrepreneur That Saves An Economy – Not The Fed
Once again via a stunningly dismal monthly “jobs” report we were shown just how inept the Federal Reserve is in its ability to deliver a qualitative as well as quantitative resolution to one of its core mandates. Only if you use the “math” now prevalent (as well as rampant) within economics can one look at any part of it and say “the economy is creating jobs” without bursting out in laughter, or, busting out in tears.
Yet, just when one thinks it couldn’t get any worse, all one needs to hear is an explanation from one of its members as to try to explain such a pitiful report. The reason for so many without jobs? (I’m paraphrasing) “They just don’t want one.” I wish I were making that up, but sadly, that’s their assessment.
The participation rate hit a low not seen since the late 1970’s with a now whopping 94.6 million out of work. However, if one were to listen to the next in rotation tenured economics professor from _____________ (fill in your Ivy League of choice) you would think the jobs market was strong. After all, “We’re at 5.1% unemployment!” As if this was a number one could use in earnest.
This number itself has been so adulterated with adjustments even the Fed scuttled it’s policy weighting when they originally implied years back somewhere in the 6’s would make certain for a more hawkish monetary policies. Yet, the 6’s came – and went – and QE came, and stayed well past its “sell by date.”
The problem that’s taking place right now within the economy is exactly what you get when you take a free market economy and try to impose a command and control blanket over it: you smother it.
The Ivory Tower academics have no real understanding of what “free” actually entails when it’s expressed through the economy as a whole. The ability to build a better mouse trap, or, solve a previously unsolvable riddle all while charging a price two parties can both bear, profit by, and have satisfaction in the transaction does not, nor ever will take place within a command and control base. Ever.
Free markets allow for competition to find equilibrium as to provide and deliver a service or good someone will pay a fair price for. And yes, even for such an item such as a stock price.
Command and control fosters either the “State” to be the only provider, or, a fostered crony capitalism styled arrangement which is nothing more than another iteration of some communist system in prettier buildings wearing better suits. Harsh? Yes. Off point? Hardly. And that’s the problem.
The great capital formation experiment and enterprise known as Wall Street and its Exchanges, once the envy of the world, has now been transformed into nothing more than a rigged casino where Fed fueled “hot money” front runs orders in ways so egregious to the principal of fair play; walking into “a den of thieves” would be considered a step up.
Today the entrepreneur is being stifled. Yes, some will point to Silicon Valley and shout “But, but!” however, there too these issues of perversion against the entrepreneur are also made manifest. Unicorns are just that – fictional manifestations claiming to be real to anyone who’ll stay at arm’s length. (i.e., don’t get too close to the books or else!)
Here again, the reality of a market no longer primed and pumped via QE for their long-awaited IPO will find out the hard way their time for “cashing out” has come and went; further crushing many budding entrepreneurs hopes let alone the employees that took “stock options” in lieu of salary.
The funds or individual investors that were sold these fictional based realities (i.e., the can’t tun a net profit via GAAP yet via Non-GAAP they’re killing it!) who bought into the fictional hype will abandon and be far more than hesitant to invest in any future IPO’s let alone stocks in general.
If you think I’m exaggerating just look at Twitter™ or Alibaba™ for clues. For if you missed their original IPO not all that long ago, not too worry. You can buy in now for even less. And it’s just the beginning.
The real issue here is that some other good ideas that would, or could, help the economy foster business formation, encourage hiring and more will be left to dangle and rot on many a branch for discontent doesn’t take place in a vacuum – it happens throughout all sectors when confusion, disillusionment, as well as apathy sets in via mixed messaging from “central command.”
You can’t run or start a business when you can’t rely on what the rules or overarching policies going forward will be. (i.e., The cost of money will be whatever we decide today for tomorrow we might change it back) It wreaks havoc throughout the acutely connected fibers of business.
Businesses don’t stand alone – they depend on each other in differing sectors for supplies, transportation logistics, and so much more. Change a policy haphazardly, or signal a coming change only to not follow through sends ripples and shock-waves down a supply line with unintended as well as unforeseen consequences which can throw some businesses into free fall, and some into out right bankruptcy.
Business people know and understand this intuitively. Ivory Tower academics, intellectuals, and economists are not only clueless, it’s their wanton indignation of these facts that move their policies beyond destructive right into outright dangerous territory for any free market based economy.
The only one’s that can benefit from such a business environment are those that gorge and reward themselves via the availability current Fed. policy fosters. And the name for it is: crony capitalism.
Whether the Fed. wants to admit or not, that’s what their current policy and communication fosters and bolsters which is the antithesis of what the Fed. itself states as its primary objective; for there is no wage growth, no true job creation, no sustainable capital formations, and not stable markets.
The Fed. is killing the economy – not helping it. And as de facto proof I point to their own measurements of achievement. The markets, the labor participation rate, small business formation, wage growth, and on, and on. It’s all pathetic.
The Fed’s QE program has adulterated valuations so much it will be a wonder if we ever get back to a more normalized set of business values let alone their valuations and away from this calamity.
There are entrepreneurs along with CEO’s of companies who are quite literally chomping at the bit to try new or improved innovations – yet don’t dare for either their competitors are being kept alive via cheap money afforded them under current ZIRP policy, or worse, don’t dare hire or spend for who knows if the Fed. will raise out of the blue or announce some new program that runs anathema to basic sound monetary policies.
You don’t invest in cap-ex or hiring for the long-term if you don’t know what the rules might be tomorrow never-mind next year. Period.
If you want to see how and why the U.S. economy was the envy of the world along with the how and why everyone on the planet wanted the opportunity to come here and try for themselves. It can easily be done using this simple yet forgotten example or exercise:
Want an example of crony-capitalism, or, “State” run centrally commanded and controlled? Look no further than any communist or dictatorial country on the planet. What you’ll notice and can’t avoid is this: There are very few if not one sole business or supplier for any given service. The reason? You can’t compete with their favored access to either capital or permitting.
Want an example of a free market? Although they’re almost a relic, pick up any telephone book and look in the back where the businesses are located or, the Yellow Pages™. Look at how many differing as well as different options are available for any given service. Want your septic tank cleaned? There’s usually 10 or more options with names like “Steve’s” or “Dave’s” or Bill’s” and so forth. Need windows for your house? There’s probably 20 or more of those with assorted names. Many I’ll garner are also closer in proximity (as to your neighborhood) than you ever paid attention to previously. It goes on and on.
The issue today happens when “Steve, Dan, or Bill” can’t stay in business because “Conglomerate Septic Enterprises” is allowed to not only provide cheaper pricing afforded to it via relying on its stock narrative (i.e., we make Non-GAAP profits sparkle) rather than having to compete using fundamental business practices. (i.e., making a net profit via 1+1=2 math) “Steve, Dan, and Bill” find themselves either forced out or forced into liquidation only to be sucked up at bargain prices by the “conglomerate” which will finance the acquisition with “free money” available only to it and entities like it. And if it all hits the fan and begins rolling down the hill “Conglomerate” will either be “bailed out” or better yet, “bailed out and government-owned.”
This is just one example of why the economy is mired in quicksand. Entrepreneurs, as well as others are being stymied in what seems a relentless battle against academic theory rather than true business acumen. And the theory that an economy so large, so complex, so diverse as that of the U.S. can be fine tuned, manipulated, and more by some appointed committee that for all intents and purposes never held a position in that economy except for some academic based position is not just maddening – it’s lunacy!
The Fed needs to stop its meddling. Stop trying to add one more extension to their already over extended Rube Goldberg inspired monetary policies and get the hell out-of-the-way.
If the Fed is going to do something – do it. If you’re going to say something for clarity – say it – then stop talking. If you’re going to set and announce publicly an objective (such as hitting a specific target value like 6.1 unemployment et al) once it gets hit – do what you stated. Other than that, all the mumbo-jumbo clarifying classifiers for clarity regurgitated one Fed. speaker after another will do nothing more than increase the tension on the economies “parking brake.” Not release it.
Entrepreneurs can and will find ways as to navigate conditions and produce the much wanted as well as needed business formations that bolster a growing environment for business. However, what they won’t do is put their livelihoods on the line where bankruptcy and more can be around every business day when not only do rules change near daily – but goal posts get pulled up and moved at whim.
Adherence to timelines and narratives of an imperfect policy are sometimes far more important than tinkering and dabbling daily in some ill-fated quest for policy perfection.
The Fed keeps approaching the economy from the viewpoint of a “tinkerer.” Maybe a little more of this, or a little less of that here, or there. Maybe just an adjustment here, or there, and sooner or later it will run like a finely tuned machine. It won’t. That’s the job for the entrepreneur – not the Fed. And the more they “tinker” after every misstep or miscalculation; the more their policy and approach would make even Rube Goldberg blush for the complexity to such a straight forward task.
As I’ve stated many times it’s an open question where both sides have a legitimate argument for the Fed’s original insertion into the markets during the 2008 crisis. However, what is not an open question is their resolve to continue and pump trillions of dollars to incentivize Wall Street’s predator class to find ways of adulterating the capital formation process while forcing savers, retirees, and more to question why every-time they take out their wallet a bulls-eye or laser dot suddenly appears on it from the shadows.
The markets are beginning to show just how tall and flimsy this house of cards built on QE quicksand has grown. And the coming shifting sands have only just begun with onerous consequences for everyone involved. And this all could have been avoided in my opinion if the Fed. had relinquished its insertion into the markets back years ago and had let the markets rise and fall on their own to find its equilibrium.
Entrepreneurs and ideas thrive in that type of environment. Exactly what we so desperately need. Yet, instead, all we have is this crony styled, unicorn imagined monstrosity of all that’s unholy to true business principles.
I’ll finish with one last thought which I’ve been pounding the desk (as well as keyboard) for years to anyone that would listen. However, now I don’t think it needs to be said – it’s coming to fruition in vivid detail I’m afraid sooner as opposed to later which no one will be able to avoid.
“Markets right themselves with pain… That’s Capitalism.
Back room manipulation to avoid that pain only increases the severity of it down the road.”
If one cares to see just how much pain might be in the near future, all one needs to do is look at a chart of one’s favorite major index. For it’s not a pretty picture of health by any stretch of the imagination even if viewed through rose-colored glasses.
The Fed has created a playing field where now even Unicorns are going to come up lame to only limp past greener pastures on their way to IPO heaven and quite possibly – straight to the glue factory.
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Wait a minute! Thats not what Obola said, he says we didnt do it ourselves!
Markets?! Central planners don't need no stinkin' markets! /blazing saddles.
An omnipotent god, if one existed, couldn't save this economy.
Sure you could, all you need to is let the dead wood fall. Propping up poor decisions or worse allowing all profits to come from the fed kills the vary idea of an economy.
Forest fires are important, in forests and economies. Both serve the same purpose. To cear the area for new growth.
http://www.msn.com/en-us/money/markets/ben-bernanke-more-execs-should-ha... That ought to make some people on here angry - interesting timing on Bernanke's part.
Is God willing to prevent evil, but not able? Then he is not omnipotent.
Is he able, but not willing? Then he is malevolent.
Is he both able and willing? Then whence cometh evil?
Is he neither able nor willing? Then why call him God?
Can you spare a few minutes for the Immaculate Conception?
Simples.
Girl get's knocked up in less than ideal circumstances, husband to be and all concerned are really great people about it. Rather than get their knickers in a twist like their gossipy neighbors would they decide to call it an immaculate conception. Their compassion is inspirational and becomes legendary, the church ruins it.
Done.
He's not a tyrant, he's the Creator.
He wishes for ALL to recieve his love and the free gift of salvation, and in return recieve his blessings.
He paitiently waits, and waits and waits for the human race to come back him, and pull thier heads out.
If you are forced to love someone... is it love?
If you are a robot built to love someone... is that love?
No, love must be a freely offered to be LOVE.
Humans have the FREE WILL to choose to love him and gain the wisdom for ultimate success aaaannnnd thats where the wheels come off.
Get great Bible Study and TRUE wisdom at ShepherdChapel.com
Rock on ZHr's
Hmmm, after a 5% gain on Friday silver is up 2/3% out of the blocks today. Everyone go to your LCS tomorrow and do what you can to break the banksters!
Oh really? Like my business and a million other small businesses that employ 1 to 50 people who make things and create stuff and manufacture widgets that people want?
Who the hell would have guessed small business is the backbone of America.
Oh that's right. I didn't build that. My bad. I deserve to be destroyed.
Good luck as it all swirls down the toilet bowl.
Shame on you for taking incredible risks in order to provide a service to your common man and expecting to be compensated for such. How dare you compromise the american values of free enterprise, trade, individual property, and hard work.
And if you manage to muddle through, increasingly expensive Obamacare will put you out of your misery.
Ha, the entrepreneurs don't want to save the day anymore. Central planning and Socialism has corrupted our government's politicians and yet the people continue to blame private business. Why save the very people who thrust a knife into their own back by expecting the government to fix everything?
That's ok though, with moar Hope and Change soon we will transcend the boundaries of color, culture, and law through the almighty power of multiculturalism and liberalism that uses increased government power. Freedom somehow equals more centralized power.
As an entrepreneur I love to risk my hard earned capital under highly dangerous and "challenging" circumstances and work my ass off against all odds to turn a profit selling to brokeass consumers so that I can contribute the hoped for profit to "society" and help "make the world a better place". All the sheeple will love me and I will feel warm and fuzzy and full of happy rainbows. Socialism used to cure cronyism/fascism/feudalism (popularly mislabeled capitalism for/by the bleaters) is such an outstanding concept.
Main street is going back street bitches. FOAD
How bout we mothball main street fer a bit?
WASHINGTON (AP) -- Former Federal Reserve Chairman Ben Bernanke says some Wall Street executives should have gone to jail for their roles in the financial crisis that gripped the country in 2008 and triggered the Great Recession.
http://finance.yahoo.com/news/bernanke-wall-st-execs-gone-211351321.html
After 27 years of being an entrepreneur, I folded up the tent this time last year, gave up, sold everything, retired all debt and moved to Florida.
One year later, I see opportunities to start another business every week.
Will I do so...not. Even though there is opportunity, general business conditions are the worst I have seen in 30 years for a start up entrepreneur.
Too much risk, plus, I am not signing my life away again to the Banksters.
I am sure that I could make it again, but for the first time in a long time, there is no monthly nut to crack, headaches, worries, stress and wanting to torture government officials every week. ;) Good luck to those here who are still "grinding" every day, I hope it all sorts itself out.
Opportunities - like what? I'd love to start a business, but it seems to me that opportunities are few and far between...
There are always opportunities if you have the cash or credit rating to pull it off. But as stated, even an opportunity must be weighed against risk, and risk is high for all of the "fundamentals" we see pointed out here daily, but the real risk is simply facing a completely irrational market place with no way to have confidence in your predictive abilities. We have a government that changes the rules daily, rules that markets have more or less functioned under for seemingly forever.
In addition to cash / credit, you should have the ability to produce a product or service that has value. If you can do that, you'll do fine. Focus on expanding that ability for a higher price and at lower cost to you.
Printing food stamps.
MD, where are you located - what state?
I've worked in government. Fed, State, and Local for short periods while trying to get over the rough spots of being an entrepreneur. I never met a single person who had the ability to survive in that environment that had the slightest clue what being an entrepreneur was about. To be fair, I didn't have a clue how anybody could stomach being in government.
what a fucking lie.
kings determine who and how their territory is used.
if you think of entrepreneurs as theives and kings in waiting who are willing to change the territorial landsacpe than sure. but then you are talking semantics.
entrepreneurs cannot DO SHIT witohut the kings say so. if it doesn't work for them, they can bring their innovative ways to other nations with receptive kings.
the 'economy' is just another term for territory of the king.
the power to destroy is the power to control a thing entirely. and if the king can destroy anything in his territory, --than the king is the economy and not the entrepreneur.
being able to build new things makes a good narrative as being the main important thing. but never believe the foraging ants and 'builders' and 'entrepreneurs' are the ones who control and make things go. they don't.
the ayn randian narrative of 'dropping out' is nonsense. because people do that, it's called starvation and hobo life. good luck with that. it's not as romantic as it seems in the books.
Government's power to create rests with its willingness to allow freedom. It power to destroy rests with removing that freedom.
People do not need kings. Kings need people. No kings, no war.
I agree. Walmart will never save an economy. GE will never save an economy. Exxon will never save an economy. Microsoft will never save an economy. Goldman Sachs will never save an economy.
Facebook, Google, Twitter and LinkedIn are laughable. They exist on advertising. They do nothing of use, except for spies who contribute nothing.
The Fed is a parasite and nothing more.
"Facebook, Google"
Wall Street loves Zuckerberg. Goldman and JPM made sure their prodigy succeeded at all costs.
Yes of course because the CIA and NSA (and the dark powers behind them) love Facebook and Google.
Zuckerberg is just the assigned guy (insert your own descriptive noun if you must) to be a rich slave of the powers. More money, more a slave. Zuckerberg adds no value and never did. He did not create Facebook.
So, if Wall Street, Goldman, and JPM love Facebook and Zuckerberg then what does it tell you about them?
I am the entrepreneur, and I decided long ago that I was going to DESTROY Ponzi Casino Capitalism, the MIC, all fascists n' Corporatists, and Wall Street, the City, the FED, the synagogues of Satan, the Council on Foreign Relations, Fractional Reserve Banking, Financialization, Securitization, the Vatican Bank, de Rothschild Bank, Goldman Sachs, JPMorgan Chase, Citi, BofA, Sally, Freddie, Fannie, AIG, and every other motherfucking corporaton in the entire effin' fucking world including the United States of America.
Don't piss me off, I'm the entrepreneur that figured out how to do unto the United States of America as it has done unto others.
Up yours, Greenspan, Summers, Rubin, Geithner, Bernanke, Paulson, Palosi, McCain, Bush, Wolfowitz, Israel, Cheney, Rumsfeld, Bush, and the cocksucking Council on Foreign Relations, you suck pig farts in Purgatory IMHO.
EDIT: I forgot Robert Wolf, Jon Corzine, John Paulson, et cetera!!!!!
Personally, I think it is easier to just not need them or want them than to defeat them. If they have no power over us, then they have no power. Get rid of fear and get rid of ego ... easier said than done, I know.
I believe (and hope) that I can be happy and productive anyware under any circumstances... and to never, ever be dependent on them.
The fucking Tan Man too dont forget that guy.
And Mozillo too, God damn it.
he makes a decent web browser...hic!!
I have a fetish for removing the penises of men I hate.
Now I'm getting excited.
Love,
Alexa
"The participation rate hit a low not seen since the late 1970’s with a now whopping 94.6 million out of work."
As of September 12, 2015, the United States has a total resident population of 321,729,000
(100*94.6e6)/321729000 =: 29.4036% percentage unemployment
However this figure includes those not in the workforce such as the very young and very old. The working age population is smaller than the general population, so the true unemployment rate must exceed 29%
The Great Depression unemployment rate was around 25-30%. Before this over and done with we'll likely get to 50%.
@TheEndIsNear: Your point is right even if your math and definitions are off. Even though the recent pronouncement that the 94 million don't want to work is laughably insulting, some of them certainly don't belong in the numerator. Such as stay-at-home parents, for example.
there are no kings. there are mob bosses. sure they have power, but they are not royalty, they are criminals. bow if you must.
SOME entrepreneurs save the economy - Ford, Kroc (McD), Sam Walton, Jobs, Gates, etc.
And then there are three classes of parasites, who have more power to destroy it:
Politicians and their extensive tentacles - including the Fed; "investment bankers", and a new breed that preys on government using sick people here:
Valeant’s Drug Price Strategy Enriches It, but Infuriates Patients -
http://www.nytimes.com/2015/10/05/business/valeants-drug-price-strategy-...
Just call it the FREE [money] "market"!
Another great example of a company living off the market is Tesla.
They haven't made any money (a couple quarters they had a tiny positive), and quarter after quarter, when they need cash, they just go to the markets with ANOTHER stock offering. The last couple quarters it's been half a billion dollars a quarter.
Just to add more vitriol to the fire...
I repeat...
We know there is no public market. It is the Fed Fuck's market now.
We all know the Fed Fucks, through market manipulators (pick one) are stair stepping their 'markets' down vs. permiting an uncontrolled crash.
We all know that the Fed Fucks are using manipulated government statistics to show weaker economic health to help throttle the equities markets down.This gives the Fed Fucks an escape from raising interest rates and further sinking this moribund economy into a deeper recession, or worse.
We all know the Fed Fucks do not want to be blamed for another recession or mismanagement of the economy, again... They also know they do not have 100% control either. And this is what keeps the Fed Fucks awake at night. The sooner we exposed these fucks and the fact that there are no public markets, and drive the public to losing all faith in the Fed's markets, the sooner we will take the Fed Fucks out of the game and get back to capital markets normalcy.
Off with their fucking heads already
Low interest rates favor entrepreneurs
And speculative investors
Remember the dotcom bubble
High interest favors blue chips
And banks
All the big bankers and blue chippers bemoan low interest rates
But high interest rates gave us the great depression
And the bursting of entrepreneurial "bubbles"
Interest rates kept decreasing through the 20s and 30s.
Low interest rates fuel the increase in asset prices. This works against real entrepreneurs, not including those dot com geeks.
Low interest rates fuel the increase in asset prices. This works against real entrepreneurs, not including those dot com geeks.
In a properly managed MOE process, low interest means low defaults (they are exactly equal perpetually). That means responsible traders predominate ... and that's a good thing.
Low interest rates favor entrepreneurs
And speculative investors
Remember the dotcom bubble
High interest favors blue chips
And banks
All the big bankers and blue chippers bemoan low interest rates
But high interest rates gave us the great depression
And the bursting of entrepreneurial "bubbles"
The thing about Control, which is not only the playing field but the oxygen of the pathologically Self-Absorbed -- the Narcissist and Sociopath -- is that by definition, it cannot resolve itself.
What's this "equilibrium" thing he's talking about?
Economic growth for 10-12 years was driven by Wall Street - economics majors trading around IOUs to be repaid with the productive labor of others.
That's not an economy, neither is growing "GDP" much more than the expansion of debt to viewer fewer and fewer over time.
Nothing the Fed does goes to fundamentals - it is merely designed to protect the economic **sytem** of exchange, the use-value of tokens.
It's not to protect work - its' to protect the parasites who grow rich off other people's labor.
I mean "economic growth" as you describe it is questionable.
Nothing really "grew" unless you count slaves buying iphones with welfare checks as "growth" lol
The country debased its own currency in order to consume what it didn't produce.
And it continues to do so... and will continue to do so until every single American wakes up homeless.
Then they will demonize the upper middle class (whats left of them) for hoarding assets.
The govt will never blame itself even if it knows its responsible.
And in anycase the govts primary reason for existing is to protect the counterfeiters by taxing and keeping the public as poor as possible so that the population never acquires enough wealth to threaten the status quo.
The last thing the govts want is a population that doesn't need to borrow money in order to consume.
"The govt will never blame itself even if it knows its responsible."
The government is not an entity that can "blame itself."
It is, in the context in which you seek blame, a collection of persons with faces and names...
but you give the corrupt a pass, that's enabling...
and you don't have a clue you are doing so.
Banks:
Print money, Loan Money out, Demand more than you even had in the beginning back as interest, even though simply getting the FIAT you counterfeited back from the "borrower" would result in profit.
Entrepreneur:
Work, save currency that the banks are devaluing start a business.
or
Leverage property you have in exchange for counterfeit money from your local bank (see above) invest the counterfeit funds you "borrowed" from your local bank into a business and hope that at the end of it all your business produces more than you borrowed + enough to feed yourself + enough to feed your employees + enough to leave you a profit so that it was worth your time and risking your house.
In the end the bank always wins , without working or contributing anything, and infact actually making it harder for you to succeed by devaluing your capital before you even have a chance to use it.
If you go to court and argue that, your lender bribes the judge and you lose.
There is no escape.
There are two groups of people
Its the Printers vs. The slaves.
And if enough people wake up to the Ant Farm they live in, well "war was declared" and hospitals start going up in flames.
This is how 1% of the population acquired 99% of the wealth in the world, by simply hitting print and fucking you behind your back like sniveling sleaze bags.
+1 Thank you for concisely explaining my decision to not start another business and my aversion to the risk involved dealing with those sniveling sleaze bags...dead on accurate.
"Markets right themselves with pain... That’s Capitalism.
And oh how quickly markets right themselve (actually they never become toppled) with "traderism" that isn't distracted and diluted by the load of communism (Keynesianism), capitalism (bankerism and governmentism), and Austiran economics (strangulation by gold).
Business as usual......extract everything of value down to the most minute particle, then leave a smoking crater.
No ancient civilisations are around today, they all go wrong somewhere along the line.
The UK was the last global super-power and the US is the current one.
Nothing is forever.
There is a study that shows all civilisations tend to follow a very similar cycle ending in “the Age of Decadence” where money and individual gain becomes the sole driver (sound familiar).
http://www.rexresearch.com/glubb/glubb-empire.pdf
The human race, like all animals, wants the best for their children and this very basic desire probably results in the decay of all civilisations.
Once an entrenched elite is established it is the beginning of the end.
Their desire to do the best for their children kills social mobility through inheritance, private schools and universities, etc .....
Then the aim becomes to maintain fortunes rather than generate them and the creative forces behind that civilisation begin to die.
Welcome to the “Age of Decadence”.
The countries with the lowest social mobility in the developed world?
The US and UK.
The last two super-powers.
http://www.oecd.org/centrodemexico/medios/44582910.pdf
Probably why our elites are into finance and investing rather than starting companies.
Maintaining fortunes rather than creating them.
"I only want what's best for my children" Kim Jong-Il.
It does have its problems.
The core problems strangling the economy, especially entrepreneurs (I used to be one, but could not endure the struggle anymore) are:
1. taxes - most working people actually earn enough income to pay all of THEIR OWN living expenses, BUT the high tax burden, TO PAY OTHER PEOPLE'S LIVING EXPENSES thru entitlement programs, drags them down into mere survival or poverty
2. entitlement programs, now MORE THAN 60% of government spending, that are the driving force behind the absurdly high taxes
3. excessive regulations that make the costs (time AND money) of business too high, AND also extend the entitlement programs from expenditures only by government into government also forcing businesses to pay for entitlement programs, eg obamacare
The entitlement program cancer is a vicious inevitably fatal positive feedback loop that destroys:
1. effective government, by politicians pandering to proletariat voters with ever more vote-buying entitlement programs that dominate all government activity, priorities and spending, so things like infrastructure crumble to third-world conditions
2. society, by creating a permanent growing class of lazy, incompetent, useless parasites and dependents and punishing strivers and achievers
3. individual and entrepreneurial spirit and prosperity by confiscating their earnings and making striving and risk-taking more challenging and unrewarding
Think about this: In all the developed countries, the breeding/cloning rate, and invasion/import rate of the entitlement parasites (ie "poor" eg poverty of Latin America, islamic invaders, etc), greatly exceeds the rate of production of successful entrepreneurs and stable good-paying jobs. This is just simple arithmetic - eventually the entitlement state devours and destroys the individual productive economy.
I can't poke a hole in any part of this article except the ending.
The Fed CAN'T just get out of the way. We do not have a neutral monetary system and have not since 1914. They CANNOT. It is not possible. The short answer why that is so is this: Because the design of the Federal Reserve Note (Dollar) system inherently requires CONTINUAL MONETARY INFLAITON.
The Fed does not exist for any of the reasons its charter states except one - to be the lender of last resort. And even that small truth in its charter is at least partially fictional for the implication that it is to be the lender of last resort TO GOVERNMENT.
No. Not just for the government. But also for the Fed's owner banks.
Yes. The Fed banks are PRIVATE BANKS who may use Fed policy to bail themselves...and their parent corporations out of any financial difficulty. Only the FOMC is public.
But how?
Credit.
They designed the Fiat Federal Reserve Dollar as a bill of credit backed at face value by government assets, including Gold and DEBT.
The DEBT BACKING THE DOLLAR CAN NEVER BE PAID OFF BECAUSE THERE ARE NOT ENOUGH DOLLARS IN EXISTENCE AT ANY GIVEN MOMENT TO PAY OFF BOTH THE FACE AND ACCUMULATED INTEREST.
That's actually true. And this is why the Gold Standard was mortally wounded in 1914, but didn't finally expire until 1933.
Since it is impossible to pay off the debt backing the dollar, and since the process of paying interest on the debt backing the dollar continually shrinks the money supply, the Fed must continually expand the money supply via interest rate manipulation, and the government must continually borrow more so that there is enough debt to back the creation of ever-more money, so that there is enough money in existence to roll over the the last set of debts backing the dollar plus accumulated interest.
Read that sentence again. Debt backing currency cannot be paid, but only rolled over if new larger debts are continually contracted. The only way to ACTUALLY pay off the debts would be to revalue gold upward...which would kill the notes. Hence the Great Depression and Gold Seizure.
And also, hence why the Fed can't just get out of the way.
If they get out of the way the debt backing the dollar will default rendering the dollar valueless.
They CANNOT just get out of the way.
It is NOT POSSIBLE ...
...unless the nation went back to a commodity currency.
Oh... and one last lick.
Q: What happens in such a system as I've described above, when eventually the accumulated interest portion of those rolled-over debts get so large relative to the original collateral, that the entire enterprise value of all productive assets it describes can no longer service the accumulated interest payments???
A: 2008 happens. Defaults begin...because where there once wasn't enough money in existence to pay principal + interest...eventually there's not enough to consistently pay JUST THE INTEREST.
A: At which point a chair-reaction-default becomes inevitable.
A: Unless the price of that interest is marked to ZERO (ZIRP).
A: And unless the Fed and Government conjure up a whole lot of money to roll-over all that old debt (making the problem bigger) with a longer maturity date (delaying the chain reaction).
A: Which is why ZIRP cannot end.
A: Because the Dollar will default if they raise rates.
The question your excellent post did not ask or answer:
Q: Why do ALL regimes want to use fiat currencies based upon debt ?
A: Because ALL regimes want to spend a lot more money than can be raised in taxes alone, ESPECIALLY with the global pandemic of socialism and entitlement programs. Wars (eg WW1, WW2, Korea, Vietnam, ) add to spending, but wars end, while entitlement programs not only live forever, but they also ALWAYS grow BOTH in size AND proliferate in number and scope.
These entitlement programs are fundamental to the corruption of democratic government, ie the politicians buy the votes of the proletariat majorities with ever larger, ever more expansive entitlement programs that the proletariat majorities NEVER pay for! Bernie Sanders has already proposed MORE THAN 18 TRILLION USD in NEW entitlement program spending and his popularity is SOARING along with campaign contributions. No politician whose platform is the elimination or reduction of entitlement programs could possibly get elected because of insurmountable opposition by the proletariat majorities, none of whom understand squat about monetary policy, economics, finance, etc, BUT all of whom want an unlimited amount of money and services from the government.
This positive feedback loop of unlimited spending and debt is why all societies based upon democratic elections in which any person has a vote, regardless of their intelligence, knowledge, judgement, and financial self-insufficiency, are doomed to continuous decline, decay and rot into mediocrity.