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Title: America faking its way around the economic apocalypse
Source:
Daily Reckoning
URL Source: [None]
Published: Dec 14, 2010
Author: Bill Bonner
Post Date: 2010-12-14 05:47:17 by Tatarewicz
Keywords: None
Views: 145
Comments: 15
Lies, Lies, Lies The New Foundation of the Financial System Let's begin by thinking about this, a quote from The Daily Bell: "The problem with where America is now is that the country has been built on one lie after another for the past decade and the lies show no signs of slowing down." And then, there's this from Charles Hugh Smith via Marc Faber: "[T]he status quo would collapse were systemic fraud and complicity banished... They have become the foundation of the US economy and financial system..." You will recall how Goldman Sachs wowed the whole world with its dazzling trading. Day in, day out...the traders at Goldman made money. The firm turned in "perfect" trading quarters, with not a single day showing a loss. Surely, one of the junior traders would have miscalculated at least once? Or a seasoned old pro, after a well-irrigated lunch, take his fat finger and hit the wrong button? Nope. Not once did Goldman's trading machine err. It was uncanny. Almost unnatural. Who was on the other side of those trades, we wondered? Trading is a zero sum game. One side wins. The other loses. So some poor schmuck must have taken a loss for every gain earned by Goldman's geniuses. Imagine him taking his lumps day after day...and still coming back for more. How could anyone stand so many losses? What kind of fighter could take that kind of beating and still be on his feet? And yet, there were no major new bankruptcies announced during that period. How was it possible? Who was losing all that money? We were perplexed. But now we know who the schmuck was...the poor sap was us! Had it not been for Senator Bernie Sanders from the Green Mountain State, who insisted that the Federal Reserve expose its shenanigans to the outside world, we would never have known what had happened to the Fed's $3.3 trillion in bailout cash. Now we know. Goldman helped itself 212 times - roughly every business day - during the 12 month period beginning in March '09, all the while telling the world that it needed no bailout. Lies, lies, lies... Corruption is not only at the top. Like a Christmas pudding steeped in rum, the whole economy - from top to bottom - reeks of it. Here's the latest proof from Bloomberg: Americans want Congress to bring down a federal budget deficit that many believe is "dangerously out of control," only under two conditions: minimize the pain and make the rich pay. The public wants Congress to keep its hands off entitlements such as Medicare, Medicaid and Social Security, a Bloomberg National Poll shows. They oppose cuts in most other major domestic programs and defense. They want to maintain subsidies for farmers and tax breaks like the mortgage-interest deduction. And they're against an increase in the gasoline tax. Let's see, how does that work again? Yeah, balance the books...says the noble citizen...but make sure it's at someone else's expense. Make the rich pay. That's how corruption works. People want something for nothing all the time. But only some of the time are they able to get it. Now, Goldman gets free money from the Fed. The taxpayers expect free money too. And so, the whole society lives a lie - that each man can live at the expense of someone else. But why CAN'T people live by taking money from the rich? Well, of course they can. For a while. Maybe even a long while. But not forever. And every time they spend someone else's money the less money there is left to spend. The rich are just as self-interested as everyone else. Take away their money and they dodge. They feint. They play dead. They hire lobbyists, bribe Congressmen and play the game. If that doesn't work, they hide their loot and flee. The problem with trying to live at the expense of others is that others don't like it much. They stop producing and try to live at someone else's expense too. And pretty soon, you have a nation of poor zombies...feeding on the little living flesh still left alive. "The idea that we can solve our structural-deficit problems merely by asking more of the well-off is totally unrealistic," said David Walker, who was US comptroller general from 1998 to 2008 and now leads a group advocating against deficits. "The math simply doesn't work." But that never stops the rabble from attempting it. "The one place Americans are willing to see sacrifice is in the wallets of the wealthy and Wall Street," Bloomberg News relates. "While Americans say they strongly support balancing the budget over the next 20 years, when offered a list of more than a dozen possible spending cuts or tax increases, majorities opposed every one of them except imposing a bigger burden on the rich. "A majority backs raising the cap on earnings covered by the tax on the Social Security retirement program above the current limit of $107,000. Two-thirds would means test Social Security and Medicare benefits. Six of 10 would end tax cuts for the highest-earning Americans. And 7 of 10 favor a tax on Wall Street profits. " Taxing the "rich" to fix the budget deficit is a ruse, a charade, a something-for-nothing game. Lies, lies, lies... The first lie was the biggest whopper of all - that you could get rich by spending money rather than saving it. The second was that the stock market would make you rich. All you had to do was to buy a well-balanced portfolio and hold for the long run. When that one ran into a wall, along came the lie that you couldn't lose money in real estate. There was also the lie that the free market would make people rich...and if it didn't, the authorities would force it to do so! Then there was the lie that an economy saturated in debt could be stimulated to heights of prosperity by splashing on more debt. And then there was the lie that you didn't need real money in the system; the authorities could manage a flexible, paper money system so as to help maintain full employment. And then, after half a century of adding cash and credit, when the Wall Street speculators cried and moaned, we were told that they were "too big to fail." They needed to be saved. Then came the lie that monetary and fiscal stimulus would lead to "recovery." When recovery didn't come, we were told that "quantitative easing" would do the trick - so they pumped hundreds of billions of dollars into Wall Street's failed institutions. When it didn't work, we got QEII. And now, the federal government is headed to bankruptcy. We are told not to worry. No need to change course. Tax. Spend. Overspend. Stimulate. The same goofballs, liars and incompetents who have brought us this far say they'll take care of us. Which is what we're worried about.
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#1. To: Tatarewicz (#0)
Gold 12/14/2010 06:32 1405.70 1406.70 +11.20 +0.80% SILVER 12/14/2010 06:32 29.83 29.86 +0.28 +0.95%
"Let us hear the conclusion of the whole matter: Revere God, and keep his commandments: for this is the whole duty of man".
SILVER 12/14/2010 06:32 29.83 29.86 +0.28 +0.95% Those numbers can be manipulated up and down. Gold and silver are distractions, imo -- just two more ways to destabilize economies, cause inflation, crashes, and to continue just about all the problems we've had with the dollar and poverty, before and after the Fed Res. In a time-based currency system, an hour of labor invested today = an hour always. Who might find that troublesome? So- called "artists" and "art dealers", for example, who couldn't expect to inflate their assets or collect exorbitant sums for various colored paintballs fired at a canvas for five minutes; Insurance companies of the alleged "art". Their entire money game is junk "art" and rigged against us. We need our own money system.
------- "They're on our left, they're on our right, they're in front of us, they're behind us...they can't get away this time." -- Col. Puller, USMC
The question is: "Whose hour and whose labor?" There is no perfectly objective store of value. Commodities for which there are relatively predictable relationships between supply and demand fill that role. Imperishables like gold and silver have been used as stores of value for many centuries for good reason. In the absence of honest money from which we suffer, we should at least have transparency in these markets to give us at least a little protection from growing uncertainties. Like every other game in this economy, the deal is rigged. You are right. Actors like Morgan may have gone too far. We'll see shortly how badly they get burned. They'll probably find a way to stick someone else with the consequences if past (mis)behavior is any guide.
We hang the petty thieves and appoint the great ones to public office. - Aesop
The masses are and have never been a party to the holding, owing nor manipulation of value of any and all traded commodities. Manipulation and speculation have forever operated behind the guise of "supply and demand" to give this operation some semblance of integrity and honesty.
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The relationship between morality and liberty is a directly proportional one. "Only a virtuous people are capable of freedom. As nations become corrupt and vicious, they have more need of masters." - Ben Franklin
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The relationship between morality and liberty is a directly proportional one. "Only a virtuous people are capable of freedom. As nations become corrupt and vicious, they have more need of masters." - Ben Franklin
Where are you getting those PM quotes? ino.com is showing a bit less as I type. It's a free service so my quotes are not real-time. Thanks.
Somewhere in Kenya, a village is missing its idiot.
Who wants to measure their success by others not being able to live as comfortably well off as them? "Aristocrats." What about Doctors and others with college degrees? Suppose there was a way for anybody to get one of those in their chosen careers -- even PHDs -- if they were able to spend enough time and effort to meet those requirements while they get paid for their time invested in employing the Education Industry workers and all their various subdivisions (maintenance, transportation, etc., etc., etc.) by being students? Supposed "menial workers" like garbage collectors, dishwashers, etc., etc., etc., are just as important or more so to societies as currently higher-paid administrators, for instance, and those are some jobs that could be worked at before or during the schooling phase of obtaining a degree for more preferred employment. But what's the point in those job hours being cheapened in value? None, imo, other than to preserve luxury and privlege for a few, disparity and deprivation, suffering and premature death for multitudes. Maybe that's what people have been conditioned to believe -- by the same financial elitists who would like us to remain oblivious to our projected labors being commoditized and traded by them by way of our birth certificates and social security numbers. Why should we consider our labor as a perishable item? Shouldn't a certificate for an hour of one's labor just be re- distributed, for instance, to all the time invested by others to produce crops and other ingredients for groceries, ship them to factories and bakeries and such, transport them to a store, stock them on the shelf, and sell them at the cash register? I think it would just be a matter of calculating in hours, minutes, and seconds instead of coins and dollar denominations. They'd like to do that, I'm sure. America needs a market that is just American owned companies in America for Americans only. American businesses aren't short on customers. There are hundreds of millions of customers here. Using our resources to get rich in global markets should be too costly for them in taxes and tariffs to try and do that. That would give us some protection from the destroyers of our economy. A ridiculous belief system in "what is money" is what is causing so much suffering -- that our prosperity depends on gold and silver miners, or more beneficent corporations, or constantly tweaking the value of everything up or down to preserve a defunct system with milleniums of history impoverishing many more than not. There is only a perceived absence of honest money if people refuse to consider that their time and labor investments are honest money and that they are not really dependent on some business or government or financial fiddlers to dictate what they can do or not that's considered valuable and exchangeable for their own survival and their dependents', their communities and their nations. There's plenty of work that needs to be done. The only thing standing in the way of doing it is a dysfunctional system that we don't need or want. Who seriously wants to defend that monstrosity with arms if they could prosper much better if they don't work so for it?
------- "They're on our left, they're on our right, they're in front of us, they're behind us...they can't get away this time." -- Col. Puller, USMC
Happy dance! :)
------- "They're on our left, they're on our right, they're in front of us, they're behind us...they can't get away this time." -- Col. Puller, USMC
Sounds like you're in the midst of developing a labour theory of value there. Maybe you can work in a little class struggle doctrine into your work. You'll probably need a vanguard element to put your program over on the proletariat. Good luck. ;)
You: Sounds like you're in the midst of developing a labour theory of value there. Maybe you can work in a little class struggle doctrine into your work. You'll probably need a vanguard element to put your program over on the proletariat. Good luck. ;) Don't be silly. What I'm talking about is real Capitalism -- self- employment for everyone at whatever prosperity level they choose to invest their time and energy that can improve their living conditions and societal values. Communism is Feudalism writ large and so is the what's been absurdly passed off as Capitalism. Who is an "aristocrat" in business and who is a "proletariat" serf working for them and their idiotic system of mass producing the downtrodden are the classification divisions. You are kidding yourself if you think that your dollars and cents transactions aren't being re- distributed as a senseless "labour theory of value" or rather empty value.
------- "They're on our left, they're on our right, they're in front of us, they're behind us...they can't get away this time." -- Col. Puller, USMC
a key to understanding is that the US dollar is held artificially high. We know that it is artificially high because we have a very large trade deficit. Our trade deficit with China is especially large as they export more than 4 times to us what we export to them. The dollar is over-valued by mutual agreement with many nations around the world. They prop up our currency, but our government cooperates with them, even puts them up to it and encourages it. Some Americans prosper from the over-valued US dollar. For instance the owners of the federal reserve produce dollars and thus profit from an over-valued currency. Other americans who invest in foreign businesses also profit from it. But Americans who must work for a living are hurt very badly by the over-valued dollar. It means that it is not economical to produce inside our country if the producer must compete with a foreign producer in the same niche. The 'strong-dollar' systems began in the early 1970's and have been in place ever since. By systematically encouraging an over-valued dollar the ruling regime is purposely destroying our domestic economy and the opportunities for our ordinary people. Today it takes 6.6 yuan to buy 1 US dollar. Given that they export more than 4 times to us what we export to them, this one relationship is causing great problems. If their currency would float to ours' and both currencies' values be determined by a free market, then it would probably take 4.0-4.5 yuan to buy a dollar. and under that case many things we produce would be economical for them to buy from us. and we would find their goods more expensive which would discourage us from buying their goods. This process would cause great investment in domestic production here and thus - jobs. In our country it is simply not a priority for the ruling regime to create an atmosphere of prosperity for our people earned by the production of goods and services here. Our ideology is that we must consume, but we don't have to produce to do that consumption. We pay for a large portion of our imports with borrowed money, not with exports. We have an ideology that our people should not do many types of work and that only foreigners are fit for that. Meanwhile, many of our lower income people desperately want those jobs. Consider that the republicans just gained power. and they say that we need a new government program to facilitate guest workers coming to our country. Consider that whenever a meat-packing plant or a crop harvesting operation is busted they find that usually over half the workers there are Americans legal for being here, frequently born here. and even when Americans are obviously willing to do these jobs it is said in our mass media and among our leaders that they are not willing to work and we must fill those jobs with foreigners. Our leadership regime is bringing us to a suicide path. and our people (many of them) eagerly follow.
Psalms 137:1 By the rivers of Babylon, there we sat down, yea, we wept, when we remembered Zion.
Sorry for pulling your chain, old paint. I agree with much of what you say. Don't know what the answers are. May they be writ large across the heavens when the crap hits the impeller. Could be any day now.
But many millions of these have such cognitive, physical or other deficiencies that they cannot produce sufficient wealth to exchange for production of much more capable and higher-paid workers. Were it not for low-cost Chinese production many people would have to go without modern appliances, computers and so on. Many of these marginally-capable producers faked their way into higher income and purchasing power brackets by becoming part of government bureaucracies but at the same time inhibiting economic activity and growth with their regulations and ineptitude and at such expense that they've begun to bankrupt the countries of the West.
I agree with much of what you say. Don't know what the answers are. May they be writ large across the heavens when the crap hits the impeller. Could be any day now. Old paint. lol Amen to the answers being writ large across the heavens.
------- "They're on our left, they're on our right, they're in front of us, they're behind us...they can't get away this time." -- Col. Puller, USMC
#2. To: noone222 (#1)
Gold 12/14/2010 06:32 1405.70 1406.70 +11.20 +0.80%
#3. To: GreyLmist (#2)
hour of labor invested today = an hour always.
#4. To: randge (#3)
#5. To: GreyLmist (#2)
#6. To: Tatarewicz (#0)
#7. To: noone222 (#1)
#8. To: randge (#3)
(Edited)
The question is: "Whose hour and whose labor?"
There is no perfectly objective store of value. Commodities for which there are relatively predictable relationships between supply and demand fill that role. Imperishables like gold and silver have been used as stores of value for many centuries for good reason.
In the absence of honest money from which we suffer, we should at least have transparency in these markets to give us at least a little protection from growing uncertainties. Like every other game in this economy, the deal is rigged. You are right. Actors like Morgan may have gone too far. We'll see shortly how badly they get burned. They'll probably find a way to stick someone else with the consequences if past (mis)behavior is any guide.
#9. To: Eric Stratton (#5)
I concur.
#10. To: GreyLmist (#8)
Shouldn't a certificate for an hour of one's labor just be re- distributed, for instance
#11. To: randge (#10)
Me: Shouldn't a certificate for an hour of one's labor just be re- distributed, for instance
#12. To: GreyLmist (#8)
#13. To: GreyLmist (#11)
#14. To: GreyLmist (#8)
There are hundreds of millions of customers here.
#15. To: randge (#13)
Sorry for pulling your chain, old paint.
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