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"We Are All Greeks" - SocGen Presents The New World Order

Tyler Durden's picture




 

"We are all Greeks" - so begins one of the best reports on the unsustainability of the status quo, and on what "the new world order" will look like, created by SocGen's Veronique Riches-Flores. Her overarching observation: "No one can claim immunity from a Greek-style spiral" because "Our economies are mature, with weak potential GDP, especially post the financial crisis" and due to that old standby which everyone chooses so conveniently to forget, yet which is the biggest threat to the world's "welfare-state" stability, in existence since 1860 and which has been responsible for not only the longest period of peace in world history, but for the longest stealth plundering of middle-class wealth (there is indeed no such thing as a free lunch): "We are aging - we have no chance to see our future income improving substantially in the long run ; our savings capacities are shrinking and our health and pensions spending is increasing." That, in a nutshell, is it, no matter how many protracted essays one reads predicting the future (or war in Europe): the truth is there is increasingly less cash flow, coupled with increasingly more demands for cash.

Unlike before, where growth could be masked by incremental new debt in either the public or private sector (that strawman which for decades allowed Keynesianism and its modern versions to flourish despite its fatal flaws), this time around, there is no more debt capacity dry powder. In SocGen's words - 1) at 100% of OECD's GDP, even if the primary deficit disappeared as of today, it would still require three years to stabilize the debt ratio, and 2) the fiscal consolidation required - returning to 60% of GDP - would take a minimum of 10 years according to the OECD, 20 years according to the IMF. Here is where the report gets a slightly political twist, one which those GOPers capable of simple math, could easily use in their debates with democrats over the proper way of achieving fiscal stability: "of the 107 episodes of fiscal adjustments observed in the past 40 years the most efficient in terms of fiscal results and least costly in terms of growth have been the ones based on spending drag rather than tax increases."

And therein lies the rub: with the average age of the global developed world population older now than it has ever been in the history of the welfare state experiment, the last thing a politically unstable world can afford is to spring upon the population that there is simply "no moah money." Or at least not in a world which does not want to experience the aftermath of hundreds of millions of formerly 'entitled' people suddenly realizing they have been lied to for decades and all those golden years have suffered the fate of aaand it's gone.

It gets worse:

Fiscal austerity efforts are more accessible when they are carried out in isolation (their depressive effects can be offset by growth in the rest of the world)

60% of the past episodes of adjustment lasted less than one year; none of them dealt with as many economies as are involved today

At this point we read one of the scarier observations which SocGen reaches: "SG current economic scenario suggests that the public expenditures to GDP ratio could surge to 45% of 2015%." Yes, that means that nearly half of global economic output will rely on the government/entitlement programs and vice versa. We leave it to the 'Austrians' in our audience to explain to everyone else what this means.

With no other way out, at least fiscally (the monetary discussion is a whole different topic, and one which will be a source of ever increasing tension both in the US and Europe, where as the most recent bailout demonstrated on one hand the ECB is demanding the creation of a fiscal union and the issuance of Eurobonds to remove "money printing" pressure from it, while the fiscal authorities will hear none of it and instead demand that the ECB print ever more in order to avoid blame when it all goes horribly wrong), the next step is a substantial cut in public investment. The social response will not be enjoyable.

But probably the most damning piece of evidence for the upheaval that is coming is not some recent revelation, but the conclusion from an S&P report published 5 years ago, that is before the GFC had even come to its predictable end. It represents the long-term forecast of sovereign debt ratings by Standard and Poors by decade, beginning in 2020 and going all the way through 2040. All we can say is: Canada better prepare to receive lots and lots of immigrants (and Europe, whose entire future is now reliant on the credit rating of the world's most complex structured credit instrument ever conceived, which in turn depends on the AAA-rating of constituent countries, is done).

Full slideshow:

 

 

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Sun, 10/30/2011 - 00:28 | 1825699 gwar5
gwar5's picture

I though we were all economic Quantum Tunnelers. There was no obstacle to any bailout.  Sounds like SocGen is admitting we can't even go around the Keynesian debt trap printing at light speed. 

 

But no, can't be!  That would mean Socialism made promises they couldn't keep!  Sad, because that usually means the little dictator is about to make his appearance on the balcony to instruct the troops to point guns at the angry crowds until he has time to redirect their anger at the pre-selected scapegoats. 

Meantime the elites' "solution" is no doubt already sitting in a drawer somewhere -- NWO currency and a NWO central bank for a "fresh" start.

Tickles my heart to know a NWO bank has the Pope's blessing (They must have pictures). As I recall, the unsealed third vision of Sister Lucia, of 1916 Fatima fame, was that the Pope was surrounded by corpses and the angel that appeared with Mary in the vision had lightening coming out of his sword yelling "Penance" at the Pope as if he had done a big boo boo against humanity. Well, it's common knowledge the Pope's boss didn't like the money changers -- so this must be the Pope who is gonna mess it all up.    

But all we really need to do is bring back the gold standard and revalue gold accordingly to limit the debts and deficits. It is the objective dispassionate answer for bringing discipline to government spending. From here, Nancy Pelosi and Harry Reid better damn well be flying commercial coach until they can balance the budget.

 

 

 

 

 

 

 

 

 

 

 

 

 

Sun, 10/30/2011 - 00:32 | 1825707 Vuvuzela
Vuvuzela's picture

There's A Gulag In Your Future

Sun, 10/30/2011 - 00:37 | 1825715 Pay Day Today
Pay Day Today's picture

Increasing western birth rates just as energy per capita availability (and affordability) falls through the floor sounds to me like a very bad idea. Or an impossible one.

Sun, 10/30/2011 - 00:41 | 1825720 Georgesblog
Georgesblog's picture

Ahhhh ...... yes. The emperor has no clothes. More of the world is noticing the nakedness of the fiat currencies. The markets that respond with anything but resounding applause shall pay dearly for their insolence. The preferred business model of the central banks has always been slavery. The coming days will not be happy and carefree.

  

Sun, 10/30/2011 - 01:08 | 1825766 devo
devo's picture

If you had no debt and a sizeable sum of money, what would you put it in?

15% metals...what else? When this all collapses is land going to be worth anything, or will the government simply seize it? Trying to plan for the end game...

Sun, 10/30/2011 - 01:28 | 1825786 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

15% is light

Sun, 10/30/2011 - 01:37 | 1825800 devo
devo's picture

Do you think land is worth purchasing?

If it's doomsday, I'd like secluded land. But, if it's not, I'd like some rental income/property in a city. I'm just wondering how bad it will get. I know that nobody knows, but I'd love to hear opinions.

Does the government seize land? Do they round up the unemployed and burn them? I mean how bad is this going to get?

Sun, 10/30/2011 - 01:43 | 1825812 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The things you own end up owning you.

Sun, 10/30/2011 - 01:45 | 1825815 Hulk
Hulk's picture

You have it backwards, the unemployed will round up the government and burn them... QED

Sun, 10/30/2011 - 01:21 | 1825781 connda
connda's picture

I really enjoy reading ZH, but lately most of the commentary has been a rehash of "what the problems are."  Tyler: I'd like to start seeing more commentary the states those problems and includes alternate "realistic" scenerios to fix the problems without sparking interal civil wars, all out anarchy, or WWIII.

However, with the current global corporcacy in place, and the hubris and greed of 0.01% of our population...well, damn, I'm just not too optimistic.  But what the hell -- Let's start seeing some alternate solutions that have a possiblity of working.  I still believe that an informed minority can put pressure on the political establishment, and can effect change (I hope).  If not?  It's a good time to live in a rural location in a non-Western country and learn how to live a simple life off the grid. 

Sun, 10/30/2011 - 01:29 | 1825788 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Buy silver

Sun, 10/30/2011 - 01:48 | 1825818 devo
devo's picture

I'd like to hear some solutions, too. And calling out mainstream media, supporting Ron Paul's message (End the Fed) cohesively, etc. Most of my friends have no idea disaster is lurking...there are a lot of people left to educate. The Jekyll Island post was great. More posts like that, please.

Sun, 10/30/2011 - 02:47 | 1825862 prains
prains's picture

The solution is to make greed the new normal....wait... I mean make it the old normal.How do you solve basic human instinct?Build it and greed will come.Welcome to the Möbius paradox.There is no solution, just a new normal. The question is who's running the new normal. Welcome to the show. Popcorn to the left, unicorn skittles to the right. Enjoy the show.

Sun, 10/30/2011 - 04:19 | 1825866 Tuffmug
Tuffmug's picture

The Japanese Zombie Economic Model continues it's conquest of the World.

Fraud and Bankers Uber Alles !!

Fiat Printing Macht Frei !!

Ponzi Macht Frei !!

The success of the Japanese in surviving their massive deflationary debt crisis has created the playbook which World governments  are now using. The central frauds that make everything work are the universal fiat monetary systems which enables each government, via controlled fiat printing (which stealthily steals the wealth of fiat monetary participants via debasement)  to fund deficit spending and bank bailouts as perpetual Ponzi schemes. 

Eventually the Euro countries will figure out how to print away the Greek and other PIGS deficits. It's just too good a scam to pass up.

Sun, 10/30/2011 - 03:13 | 1825878 uniman
uniman's picture

Here's a fictional essay about The Brotherhood.  It's an attempt to describe an alternative to the existing dying system.  Enjoy!

 

Knock, knock, knock…

Yes?....

Hello, my name’s John Smith and I’d like to give you an information packet about an organization I work with called “The Brotherhood.”

The Brotherhood?

Yes, ma’am.  As you’ve probably noticed, the economy is in terrible shape.  There are many people who are suffering from this and our goal is to help them survive.

Oh that’s nice.

Yes, I think so.  What makes the Brotherhood special though is that what we’re really doing is helping these people get organized to help themselves.  You know… “give a man a fish and he eats today, but teach him how to fish and he can eat forever?”

Yes, that makes a lot of sense.

Well listen Mrs…

Nussbaum. 

Yes, thank you.  Mrs. Nussbaum, If you have a few moments I’d be happy to explain what we’re doing in greater detail.  Or if you’d like I can come back at a more convenient time.

Could you come back at 6 o’clock this evening?  You can join my husband Bob and I for dinner.  This sounds like something he might be interested in.

Ok Mrs. Nussbaum, that would be great.  Thanks for your time and I’ll see you all at 6 o’clock this evening.  Bye!

Later that evening….

Knock, knock, knock…

Hello, you must be John Smith?

Yes, and let me guess, you must be Mr. Nussbuam?

That’s it.  Come on in and have a seat.  Dinner will be served shortly.

[lots of small talk omitted, Mrs. Nussbaum serves dinner and has a seat]

So…. John…. Tell us about the Brotherhood.

Well… as I was explaining to the misses earlier this afternoon, the economy is in terrible shape and many people are hurting.  So many people are loosing their jobs, their money, their families, and their homes.  It’s really terrible.  We the Brothers have had enough of this and are organizing to do something about it.

What can you do?  This problem is so large nobody can fix it.

I agree.  And in fact, realizing the actual truth of that statement is the first step towards the solution.  You see, the present economy is so totally built on unsustainable principals that it’s completely doomed.  There is no solution for it.  Our only choice as people is to either lie down die or to stand up and do something about it.

Yeah, the system really is fucked, that’s for sure.  But what can you do about it?

Our basic idea is that we take our men and we teach them to work together in order to help themselves.  This one simple step is the most amazingly powerful thing we can do.  For example, let me compare and contrast the before and after experiences of four of our recent recruits, Andy, Billy, Curtis, and David.

Before we found them, they were all individually homeless and lost.  Each of them had to always carry their meager possessions with them, lest they be stolen.  Each of them individually had been assaulted and robbed by the police.  By themselves, they had no encouragement and no direction so they could not pull themselves together in order to improve their lot.  Finally, their isolation, boredom, and loneliness fed their tendencies to abuse alcohol and other drugs.  Pretty grim, eh?

Yeah, sounds like a bleak life to me.  So what do you do about that?

In the Brotherhood, as a starting point we organize our men into four man “squads.”  The most able is the squad leader and he’s assisted by the assistant squad leader.  The 3rd and 4th ranks are held by new recruits, in the order of their accession.

The four men I just spoke of were all individually in pretty bad shape when we found them.  They would not be much better off if we tried to get them to organize together.  None of them had sufficient skills, leadership, or self-discipline to contribute.  But we didn’t just dump them together.  Each one of them was assigned as the 4th member of an existing squad.

Oh! I see… so now the other three members of each squad can provide a stable foundation for the new member to heal?

Exactly!  And heal they do.  To get them started, we give them a hot shower, a medical checkup, a hair cut, some clean clothes, and a lumberjack special meal.  They think they died and went to heaven!

Yeah, I bet they do.  Hey, are there any of them Virginians in your heaven? <sly grin>

I can’t say for sure, cuz I haven’t been there yet.  Not even sure if I qualify.  Anyway…

Yeah, so what happens to the recruits?  What do the squads do ?

Good question.

The new recruit gets two nights and one day of rest and recovery.  They usually spend most of their time sleeping.

But the morning after the 2nd night, they wake up at the ordinary time that the rest of the squad does and they are given orientation.  Now that they’ve rested and recovered, and their heads have cleared a bit, it’s time for them to decide if they’re going to join us or not.  As you might have noticed, one element of the cultural decay in today’s world is the lack of respect for freedom and free choice.

Yeah, if it’s not mandatory it’s prohibited, right?

Exactly.  In today’s world “freedom” has been reduced nothing more than a choice to itemize or take the standard deduction.  But we’ll rag on those topics later.

The new recruit is told that he is free to go at anytime.  And he really is free to go.  But while he’s with us, he’ll keep the same schedule that the other men do, he’ll do the same work that they do, and that he’ll be subject to our rules and discipline during his time.

Wow, this sounds like the army, except for the free-2-go bit.

Yes, intentionally so.  There’s a lot of benefit to be had in careful organization of a man’s time.  You know, idle minds, workshops of Devils, etc.

Yeah, I hear ya.

The Brotherhood has a model schedule for the squads to follow.  Newly formed squads start with this schedule, but they have some discretion in adapting it to their circumstances. Also, the various squads are also deployed for various Brotherhood duties and their schedules must accommodate said duties.

What sort of duties?

I’ll get to that in a moment, but first, let me explain the basic schedule:

It’s important that the men go to sleep and wake up at a regular time.  Anybody who’s ever had the freedom to keep their own hours can attest to the fact that sleep can get major fubared when you can nap during the day, and stay up late at night.  Then, when you need to rise and shine at 6:00am someday, it’s impossible to sleep.  We don’t let that happen and it’s the squad leader’s duty to lead the way.

When they awake, they do exercises, eat their breakfast, clean up their surroundings, shit, shower, ‘n’ shave, and generally get ready for the day.  Depending upon the day, they may do the shower later.  We believe that maintaining physical fitness is important for both health and defensive reasons.  Many people look at us a “bums” or some sort of sub humans that are deserving of abuse.  We don’t start trouble, but we aim to end it quickly when it starts.

Yeah, that makes sense.

Then, it’s off to do the day’s work.  As I said, each squad has different duties.  Let me describe a few examples:

Physical Labor

One of the things we do to support ourselves is we hire out for physical labor.  That’s often hard, hot, cold, dirty, unpleasant, what have you.  A labor squad is where most new recruits start.  Unless they have a very valuable skill that we really need, then the labor experience serves as bonding/hazing for the recruits.  It’s something anybody can do, no special training need apply.  And it’s also good for physical fitness.

It’s also an excellent method for the men to develop good work habits.  You know, come to work on time, just fucking do the work and not complain about it, don’t argue and fight about who has which perk or privilege, etc.

Yeah, I heard that before!

It starts them on their development path upwards in the organization.  Even if they start as Recruit 4, they eventually rise to Recruit 3, Assistant Leader, and finally Squad Leader if they can handle it.  But they have to learn how first.

Security

Hey Bob, what do you do if your company has a field of valuable supplies or equipment?  Even a simple fence is expensive and something big ‘n’ bad enough to keep the Marines out of costs much more.  And fuggedabout video camers.  Those are useless for too many reasons to rag on now.  So how do you keep your stash secure?

Let me guess… hire one of your labor battalions?

Exactly

If all you need is some men to stand around looking mean and ugly to keep the bad guys away, then you’ve come to the right place.  But wait, there’s more!  They can also do cleaning and yard work.  Maybe you need somebody to inspect incoming shipments.  Maybe… there’s 100 other things people are easily trained to do under these circumstances.

Finally, our men need a place to live and sleep.  Being homeless kind of pisses on that ideal and if they can pitch their tents inside your compound during the night, then they and your stuff are much more secure.

Yeah, that sounds secure.  But how do I know your men won’t just do the stealing themselves?

That’s a good question and a deep subject.  Much of what we’re doing depends upon the systematic development of integrity and trust.  Let’s defer that issue until later.  Then I promise I’ll address that issue much more thoroughly.

Ok.  Go on….

Next, we have Farmer.

Some of our squads maintain gardens and farm animals.  However, as you might guess, this takes some specialized skills and not everybody is suitable for it.  Also, the idyllic life of the farm is viewed as a plumb assignment so there’s a reward for brave and loyal service element built in.

Next, we have Chuckwagon.

We accumulate food and cooking utensils and instruments from a variety of sources.  It’s much more efficient and nutritious to organize a central kitchen that many squads dine at, than it is to deploy them with whatever random soft drinks and peanut butter crackers they individually have.

Next, we have Supply Depot.

We accumulate surplus and donated everything and somebody has to baby sit it and manage the flea market.  Some squads are dedicated to that.

Other specialist squads include Barber Shop and Laundromat.

Oh yes, did I mention Hospital?

What? A hospital?

Eventually yes.   But even now, you’d be amazed at how much bang-for-buck there is in simply organizing a medical squad.  Anybody with any medical or first aid training, armed with a beginning collection of aspirin, cold medicine, band aids, etc. can form the humble beginning of such a thing.  I’m afraid we don’t yet have any Cat Scanners, Proton Beam thinga majingies, or nano celluar repair stuff quite yet, but we do the best we can.  Best of all, you can’t beat the price!

Hmmm…. Is it even legal to do that?  Isn’t somebody practicing medicine without a license?

Probably not, probably so.  But that’s a legal risk we’re going to take.  And while we’re on the topic, let’s discuss another important angle to this plan.  You caught the bit about practicing medicine without a license.  Maybe you didn’t realize you need a license to cut hair also.  And there are probably some payroll issues and worker’s comp and unemployment insurance problems as well.

The bottom line is that almost all of what we are doing is in fact illegal according to the existing “law” of the land.  And this my friend is the core of the problem.  The existing law has been somehow hacked and converted into a weapon designed to disrupt our ability to live.  It is our belief that all these rules and taxes are smothering we the people.  Not merely smothering, but in fact have a more sinister purpose of fostering weakness and dependency in pursuit of the goal of control of the people.

We totally reject all of that and we’re going to engage in some heavy-duty non-violent civil disobedience in order to implement our plan.  We are building our own system and we will take care of ourselves.  Which leads us to the next specialist squad of:

Liar, Liar

Yes, some of our men have legal expertise and they help us with our legal woes.  With or with out a license.

Wow, John....This all sounds very interesting and you make a very persuasive case.  Nevertheless, you left out a few details.  Perhaps you can fill in some blanks?

Sure, shoot.

The first thing I want to know is about the trust issue.  These guys are not certified or licensed and, let me guess, some of the may even have criminal records, am I right?

Right on every point.  Let’s see how we can deal with those issues.

Let me start by asking you a simple question.  Do you trust the government or banks or insurance companies?

Fuck no!

Funny you say that because those are the three of the most highly regulated and licensed institutions in this country.  How about doctors?  If they remove the wrong kidney, who’s fault is it, your’s or theirs? 

Hmmm….

Yeah, exactly…. When they accidentally hook your brain up to the Internet instead of a monkey’s brain you not only get no apology or compensation but they bill you for the procedure because your insurance company doesn’t cover monkeys.  And the Feds bust your ass for animal cruelty.

Hmmm…. Yeah, that’s what would happen….

Exactly… yeah, you’re woes would never end if that happened.

So let’s see if we can find a better way to deal with trust.

Hey, I know, do you trust your wife?

Uhh…. Well, uh…. Most of the time I do.  So long as I can see here that is <winks at wife>

Did you check her credit score or do a criminal background check before you married her?

No!

But seriously, I assume that in the beginning, you two were strangers and she probably had much more to fear from you than you from here, am I right?

Damn straight!

So you developed trust the old fashioned way.  You started by taking small and simple risks.  “Hey, will you watch my books while I go to the restroom?  Sure”  You return and the books are still there.  This is how trust starts and develops.  Also, was she a total stranger or did you know her from school?

Oh, I knew her from school.  I think all the boys knew her <grin>  Bob!

So we have a similar situation with the Brotherhood.  First of all, we know who’s trustworthy and who’s not because we have much more experience in dealing with them.  Part of our development process is that we ask people to engage in trust building exercises.  For example, let the crew come over during the afternoon and mow your lawn.  You meet them, they meet you.  You begin to develop a personal connection to somebody you know, instead of being frightened by an abstract risk.

We also can provide numerous references for the particular people on any squad.  Granted a new recruit will not have any references.  So if references are important to you, then you won’t get a new recruit.

Finally, consider the four-men-to-a-squad policy.  The men start off as strangers as they join the squad, one-by-one.  The men who behave themselves and keep their squad clean are the ones who rise to the leadership role.  A man alone is susceptible to temptation.  But if he’s working with other men, then collusion must take place.  This of course can happen, but it’s much less common than an individual going bad.

So how can we help?

Take a look at the back of the info packet.  You can see the long list of things we need.

  1. We need work.  We have men who can do yard work and security guard work.  Also handyman and auto mechanic.
  2. We need donations of non perishable food.
  3. We need any surplus junk or garbage you don’t want.  Call us and we’ll get rid of it for you.
  4. We need tents, sleeping bags, blankets, and generally camping supplies and equipment.
  5. We need land to pitch our tents.  Imagine the extra security you’ll have at night knowing that your trusted security squad is camping behind your home.
  6. We need land for gardens.
  7. We need storage space.
  8. We need a class room/meeting room.
  9. We teachers to organize classes in everything there is to know.  If you’re a doctor, nurse, lawyer, mad scientist, or whatever; if you know something and are willing to teach it, we have a squad who wants to learn.
  10. We need legal help.
  11. We do not need financial donations.  Our Brotherhood is a sincere effort to help our people.  We do not want to taint our image by hustling you for money.

 

http://67.208.112.48/brotherhood/index.php?board=1.0

Sun, 10/30/2011 - 03:47 | 1825893 NetDamage
NetDamage's picture

Just goes to show that the whole idea of governments asking private banks to issue our money with interest is flawed like in it´s the greatest ponzi ever made. It´s not a question of what is backing the FIAT but who is in control of issuing it. In this FIAT system the people closest to the money creation (read: primary dealers) does the rest of us Greek style.

-They get paid interest when governments and the public borrow money

-They get the lowest rates themselves when they borrow money from the CB

-They even get interest on money that was given to them from the CB

-They get bailouts from the public when they speculate recklessly

 

 

 

Sun, 10/30/2011 - 05:55 | 1825935 falak pema
falak pema's picture

Navel gazing from inside the vortexed economy whose financial- political construct is damned by its own past actions. Western civilization looks at itself in the mirror and does not like the botoxed look it gets staring back at it through bloated lips.

The initiative, in the blood and turmoil that will follow, will move strategic decision making to other regions who have been in the shadow of the great experiment of Atlantis that started in 1492 and is now coming to a debt deluged end. 

What is remarkable is that if the Euro zone collapses it is in the name of a novel POLITICAL construct that involves an exorbitant economic and financial cost; basically as a result of the fact that 300 million 'new europeans', those living in southern and eastern regions, did not understand the principles of Adam Smith, of Ricardo, in the context of the great globalisation model, outsourced industry/services based on international labour arbitrage, gradualy but inexorably imposed on them by the 1% elites  of their northern Anglo-saxon cousins from across the Pond since Nixon gold standard revocation days. 

What is remarkable also that these very US Oligarchical cousins, all the while imposing their multipolar financial-economic model on the world did also impose a psycho-rigid unilateral political model, the NWO,  based on mega deficit spending by national governments in military conquest to protect their oil and RM assets world wide. In the hubristic aftermath of the collapse of the Soviet construct; fed on the vision of a towering colossus bestriding the world without challengers.

So on two sides of the Atlantic divide we saw, over the last thirty years, an acceleration of Political 'hopium' and Financialised 'dopium' that were completely in disymmetric and unrestrained growth trajectories on basically antagonistic agendas.

What the Euro zone faces is the financial collapse as the consequence of its political construct of irrational welfare state based Hopium. It is evidently violently incompatible with the global free market construct imposed by their Oligarchical cousins.

What the USA faces is the political and social collapse resulting from its financialised oligarchical dopium that has drowned the world in FED and surrogate banking debt. Its political nerve centres having died in the process from within, the social checks and balances of a democratic, egalitarian construct of the Founding fathers, land of equal opportunity for all in a horizontal not vertical social construct across a continent, now flounders in  elitist verticality, totally self serving, totally corrupt as supported by a sham legal structure. The very premises of the Republic are now weakened at its very foundations. Damning legacy for the future generations.

Which is worse : lack of political construct or lack of economico-financial acumen?

Lets see how this plays out as its now in a race to bottom logic on both sides of the pond around the Euro-USD controversy, symbols of this dysfunctional first world.

Brave new world, suffocating on this disymmetric blindness. While the mice of the emerging nations benefit from the windfall distribution of this globalised economy which has unshackled their past status of ignorant continents, projecting them into the blazing sunlight of labour rich, young but impoverished, hungry, potentially world-powerful nations. Their path to conquer new territories now unhampered by the ills of the drowning first world, who ironically unshackled them but from their own selfish 1 percenter profit generation perspectives, not understanding the consequences of this mega global rebalancing act. Until it is too late as now recognised as irreversible.

Ponder this major geo-political shift that Reaganomics and NWO have bequeathed to the planet. Ponder also the new challenges that this raises and understand that the solutions and paradigm changes will now come from new horizons and new energies released in unsuspected places of the globe.  We are now apparently in irreversible multipolarity.

Thanks to the self inflicted wounds concocted by the first world, in its Zirp fed, deregulated, irrational exuberance of seemingly unending, exorbitant $ reserve currency, nuclear protected, privilege .

And retreating into the cocoon of PM buying shelter is not going to solve the fate of first worlder people from this painful re-adjustment process. A drop in the huge bucket of socialised debt economy which is their common heritage. 

Understanding how to build a reset strategy involves understanding the roots causes of the previous collapse. And then acting on it. 

Sun, 10/30/2011 - 06:40 | 1825956 Tao 4 the Show
Tao 4 the Show's picture

Lots of good comments here. I will just add that I think massive confusion arises from the use of aggregates in economics. It's easy to see why they are used, but I really think they tend to obscure the real issues and open the door to abuse by govts and banks.

There are two problems underway. One is misallocation of workers and money in the system (as Rynak discusses). The other is structural shortages such as too many old people (not enough workers), lack of oil, food, resources, etc.

The SocGen piece goes through the long route of economics to get to the point of shortages (in the form of an aging population). If you believe, as many ZH'ers point out, that we are facing real shortages in energy, food, water (along with having an aging population in the west), it sheds a different light on the misallocation problem.

That is, the power to allocate (govts,banks,etc) becomes the biggest weapon around in the struggle for survival. Sorting out which forces (e.g.shortages vs misallocation) are really dominant at a particular point in time is not simple and all the discussion about aggregates just obscures the situation further.

I have little doubt that some real strategists somewhere (maybe CIA, PTB, Chinese govt) attempt to keep such real measures. But they have little motivation to share them as such real info would only dilute the power of the aggregate double speak in its role as a weapon of mass confusion.

Sun, 10/30/2011 - 07:47 | 1825985 Atomizer
Atomizer's picture

Arithmetic, Population, and Energy

 

So how will European Union grow to sustain compound interest payments? Carbon Tax revenues. Another receipe of failure in the workings.

Sun, 10/30/2011 - 08:53 | 1826028 falak pema
falak pema's picture

how can anybody sustain compound interest payments in a no growth, debt drowned environment?

By cutting down debt, by increasing taxes on the rich, superrich, corporates etc. By regulating the financial hegemony. This type of capitalism is dead. It'll either die in a prolonged violent convulsion or fast; but its mantra is unsustainable. Both sides of the pond will be engulfed.  If its death is prolonged it'll bring more poverty where it promised wealth. So don't finger point at one and not the other. Its collective and its massive.

Sun, 10/30/2011 - 09:02 | 1826031 overmedicatedun...
overmedicatedundersexed's picture

any system supported by large central planners - must violate & restrict the citizens rights - call it any name you wish - socialism - empire - an attempt was made to limit size of government - it failed - as the founders knew it would - Humans are too programed to avoid uncertainty and can NEVER accept true freedom. as fear and sloth are the inertia of the human spirit..

If you understand above: it is insanity to delegate more power to central planners ..for we now live in the time of insanity..more debt to solve debt-One world goverment to solve failing governments- paper valued over physical goods-

smaller government much smaller is the safest path - it may not solve all society problems but to try solve them robs man of freedom while creating a power seat for sociopaths seeking that power.

a one eyed man in the land of the blind

Sun, 10/30/2011 - 09:02 | 1826034 beaker
beaker's picture

You know, this is so fucked up...  I'm down in Texas working on a project and cannot believe all the energy-related activity around here.  Labor is actually scarce and so are truck drivers.  It is like an ant hill in  this area.  If only the country could rally around something like nat gas or whatever, we can pull out of this nosedive.  But I do not believe tis will happen.

Sun, 10/30/2011 - 09:22 | 1826051 Marco
Marco's picture

As long as Saudi Arabia gives the US oil below cost (because of the artificially high dollar) natural gas would need nearly as much subsidy as solar ... not to mention the environmental impact of fracking underground rocks all across the country.

Sun, 10/30/2011 - 09:39 | 1826070 SamAdams1234
SamAdams1234's picture

Entitlements are like homeowner's  insurance: you hope never to need it. The premiums haven't been paid, the house is on fire and so sorry, policy is cancelled. Some people can self-insure, for others, polish the guillotines when its time to rebuild.

Sun, 10/30/2011 - 10:14 | 1826099 Atomizer
Atomizer's picture

After decades of laws instituted, world economies growth has become stagnated. This plan was hatched by design. As you have witnessed, passing new laws and extending credit to pay back existing debt obligations is the mantra. This central planning idea has become a dead man walking in developing growth.

The full agenda is to discredit capitalism's failure by progressive laws that hinder growth within society. After many programmed MSM hours displacing capitalism's deficiency's, Government control will be played out as the only solution for reformed measures.

  • One World Government consist of the basic mission statement:
  • One Religion
  • One universal healthcare program
  • One universal currency
  • One Global Governance Rule of Law

This is not very complicated. Once you understand their motive, you can begin helping others. Don't panic, have an anxiety attack, or think the world is coming to an end. Teaching others about the so called central planners ideas is your best strategy. Remember, they fear you more because the entire financial monetary system can never payback the counterfeit fiat that has been injected into the system.

 

Sun, 10/30/2011 - 11:39 | 1826187 JR
JR's picture

“We are aging --- we have no chance to see our future income improving substantially in the long run; our savings capacities are shrinking and our health and pensions spending is increasing." -- SocGen

Translation, you have no chance because the French banks are going to be bailed out by the taxpayers of Europe and Americans through the IMF (you) on the order of the German banks and the Fed -- to protect the holdings that Goldman Sachs and other TBTFs have with all of them.  To protect those holding we (you) are all going to have to endure great austerity.

The point is, why do we want to hear from SocGen now? They are implicated, they are guilty, they have huge investments in Greece. They are insolvent (I can’t wait for Reggie’s analysis of this European deal. Maybe tomorrow?).

The key in this whole thing is Spain and Italy; if they go, the whole thing goes… and a ton of lost investments by the banks.  And they’ll do almost anything to try and save them.

SocGen’s swan song for the people of the world reminds me of Carter’s malaise speech. The people threw him out, of course...

You’re right, Veronique Riches-Flores, there is no “free lunch.” Not even for Lloyd Blankfein.

Sun, 10/30/2011 - 12:13 | 1826235 zuuuueri
zuuuueri's picture

Time to revisit the Kean Law, maybe? 

we first apply it to politicians and bankers.. 

longest period of peace in all of history? i guess they just didn't notice two world wars, industrialized massacres of tens of millions, atomic bombs, and all the rest? it's the most brutally violent period of all of human history! theyre still smoking a heavy dose of their own mythology.

and indeed its so nice of them to keep reminding us that the welfare state is really all for us. bullshit, it has been the way politicians have built their careers and power by bribing the weak, poor, morally compromisable masses, and has nothing to do with 'welfare' except in the fantasy of the same masses of suckers! 

let it burn, and the sooner they get it over with the better it will be for actually productive people. default already!

 

Sun, 10/30/2011 - 13:00 | 1826333 JR
JR's picture

Exactly! Exactly!! Exactly!!! Thank you.

Sun, 10/30/2011 - 12:36 | 1826278 Piranhanoia
Piranhanoia's picture

I think the article is deeply flawed for its lack of reporting on causation.  There is no mention of where the revenue that is incoming is outgoing to begin with.  There is no mention of the privitization of services that become for profit rather than on a cost basis.  There is no mention of the bribery to public officials for privatization,  and the rising costs of service based on this bribery.  There is no mention of the cost of certain services going up only because they have been allowed to go upward consistently as a result of the bribery.

There is no mention of the lion's share of monies going to bribery, the so called "defense" industries that are no more defensive than a atomic bomb.  They are "attack" industries, and they have bribed 99% of their little puppets to feed them and starve every other system required for function.  There is no mention of insurance and medical companies being allowed to dictate pricing, levels of care, creation of useless medications, and bribe their little puppets to vote for their draconian policies.   Has there been a new medicine created that helps people lately?  No, only those that generate profits by bribing the FDA to allow the useless or harmful crap to destroy humans. The Feds pay defunct companies to spend money for PR projects to make it appear that something is being done for the little people, when in fact the PR is all that is being done.

Since the story is clearly trying to tell the little peons that there isn't enough money for the rich people any more so you pathetic little workers have to eat shit now so they can have more as the world downsides,  it is a propaganda piece that would make Prince Charles of Libya proud.  All the people that do real work might disagree.

But, I must say, were it written with the facts instead of selectively removing all the unpleasant truth,  Tom Paine might be proud, and it might just begin the unwind required for a reset.  We have a unique form of cancer in our world. It is visible, malignant,  and oddly enough, it can be excised without any damage to the surrounding tissue.  Isn't it time we terminate the cancer that is being forced upon us?

 

Sun, 10/30/2011 - 13:22 | 1826377 JR
JR's picture

Veronique Riches-Flores’ bonus is probably okay now that’s she’s been able to explain what’s in store for the rest of us, with her obfuscation and “lack of reporting on causation,” as you so aptly point out.  Thankfully, her mythology about history (the peace of the 20th century) was so over the top that it’s a warning to all who read or listen: Beware of lies ahead!

Reminds me of a supermarket tabloid with a story of Elvis Presley coming back and marrying Barbara Walters – it warns people that even if something is in print and with pictures showing Elvis and Barbara riding in a Cadillac, that in-print or on-TV does not make it truth.

Sun, 10/30/2011 - 13:22 | 1826378 SilverDoctors
SilverDoctors's picture

Excellent article.  I've said all along that the US is Greece x 100.

http://silverdoctors.blogspot.com/

Sun, 10/30/2011 - 14:18 | 1826462 johntempleton
johntempleton's picture

Does anyone know where I can get a copy of the S&P report that is mentioned here about the long-term debt ratings of the countries? It looks really interesting.

Hope you can help...

Thanks!

Sun, 10/30/2011 - 15:03 | 1826558 Georgesblog
Georgesblog's picture

The combat between the central banks and the governments of Europe looks like a repeat of the bank panics of the 1800s, in the United States. We're seeing poverty used as a weapon to set factions in the EU against each other, just as it was done in the U. S.

 http://georgesblogforum.wordpress.com/2011/07/20/unnatural-law-debt-vs-security/#more-514


Sun, 10/30/2011 - 15:10 | 1826575 Dealer
Dealer's picture

So this has a happy ending, right?

Sun, 10/30/2011 - 16:15 | 1826694 tony bonn
tony bonn's picture

the analysis is reasonable for a non-economist or non-bankster, but these matters are best solved using bankster calculus. in bankster calculus massive welfare programs are promulgated by banksters who then find fucktarded politicians to champion them because the sheople need the gummint to hep them....

all welfare, war, and development initiatives are bankster protocols for conquering and subduing once sovereign states. it takes time to build up enough debt created by fiat out of thin air to vanquish a state, but the payoff is immense....whole nations become vassal states of the plutocrat-bankster....

the rothschilds and rockefellers - not to mention larry summers the cunt - are laughing hysterically at how the educated west has fallen for its designs...the beast must be fed and so it shall be....

 

Sun, 10/30/2011 - 16:19 | 1826698 Buck Johnson
Buck Johnson's picture

The West is seeing what happens in a first world nation that gets old and have low birth rate.  Not enough to replace and more individuals that are drawing money than being taxed.

Sun, 10/30/2011 - 18:53 | 1826899 JR
JR's picture

The San Francisco Chronicle reports: Nationwide, the number of Hispanics grew by 43 percent over the past decade – to 50.5 Million – with officials noting that “It is only going to get even bigger in the next few decades” and that “the country should expect that to show up in more elected Hispanic leaders in the coming years” with “the nation as a whole becoming far more Hispanic influenced.”

According to projections developed by the Pew Research Center: If current trends continue, the population of the United States will rise to 438 million in 2050, from 296 million in 2005, and 82% of the increase will be due to immigrants arriving from 2005 to 2050 and their U.S.-born descendants.

http://pewhispanic.org/files/reports/85.pdf

Hispanics accounted for one in six Americans last year; among those under 18, Hispanics were roughly one in four.

Mon, 10/31/2011 - 00:32 | 1827569 honestann
honestann's picture

What BS.  Reject the status-quo scenarios and scams that destroyed the world.  Exterminate the NWO thugs, break up the EU, eliminate the federal government of the USSA (just as the USSR vanished), and the world can become a wonderful place, and the planet of human beings can live good lives.  Not utopia, just good lives.

Anyone who falls for this kind of nonsense can't see the obvious in front of their faces, and can't think their way out of a paper bag.  Consider how many inventions and technologies have come to pass since the 1950s, and as a consequence, consider how much more productive human beings CAN be.  Why are they not?  Simple - elitism, statism, authoritarianism, direct NWO manipulation of the governments of the world.  The consequences of these manipulations is to take the productivity gains of the past century and direct ALL those gains into the pockets of the predators-that-be and predator-class, leaving LESS than before for producers and "regular folks".

Eject the predators-that-be and predator-class out the airlock and the world would quickly become massively more efficient and productive.  That's all that's required.  The world is not doomed by statistics or birthrates, the world is doomed by predators.

Eliminate the predators, and life will be good and always getting better.

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