Non-Linear Crises

 

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  • #8569
    ashvin
    Participant

    Nature is chock full of inherently non-linear systems that do not follow predictable or proportional paths, yet human nature seems unable to escape a
    [See the full post at: Non-Linear Crises]

    #2278
    jal
    Participant

    For the last 30 years, growth was being generated by borrowing.
    The borrowed money did not exist. It was created, (heheh, God Work)

    Can borrowing, (creation of money), continue without paying back the lender with interest?

    Who or what organization is capable to continue lending without getting their loans paid back?

    How long can loans be given out with only a token cash flow coming back to the lenders?

    At some point in time, there has to be loan forgiveness and a rebalancing of the books. (There has to be a recognition that bankers are false gods)
    The participants of all this fraudulent accounting are well aware of what is happening and must continue the pretend game.

    There is no other game in town.

    #2283
    Birdshak
    Participant

    My bank seems to be moving toward increased fees on everything. The money it loans is ginned up out of thin air, then it charges fees out the wazoo for each transaction that occurs in the larger economy. Velocity of money yields handsome returns. Maybe this softens the blow of late loan payments.

    #2294
    william
    Participant

    Part of what keeps things going is the simple flow of money. Kind of like a animal in a long death the things get extended with this lumbering flow.

    That is what the whole debt thing is about. Companies offer their own financing to sell there own products. Many auto manufactures do this and by it can keep themselves from bankruptcy for a time.

    But it is a move of desperation. Don’t pay now we will finance you way into the future and in fact we will give you money now to purchase our fine product.

    In the dot com era the message was don’t look at the bottom line, forget about profit and just worry gaining market share at any cost. This flawed logic works for a time.

    Now we say don’t worry about debt, in fact worry about not taking on enough debt. Throw trillions in of electronic money. This will increase the movement of money and keep this sick beast breathing. Again flawed logic.

    My feeling is this will all end badly.

    #2298
    Golden Oxen
    Participant

    I had thought the Fed said QE 3 was on the back burner UNLESS the economy weakened again. It was the only truthful comment they made IMHO.

    #2304
    ashvin
    Participant

    Golden Oxen post=1902 wrote: I had thought the Fed said QE 3 was on the back burner UNLESS the economy weakened again. It was the only truthful comment they made IMHO.

    They’ve been saying something to that effect for about a year now. They never say QE will certainly come back if the economy weakens, but rather that it remains a viable policy tool. What’s the alternative?

    “QE3 is off the table no matter what happens to the economy or markets. Sorry, folks, better luck next time!”

    Then watch the markets melt down?

    Everyone knows that economic health is reflected by stock market valuations, because that’s what the propaganda has made us believe. So now we can’t get QE until the markets crash, but the markets refuse to crash as long as QE is still possible… any day now. There are, of course, other factors that have made QE3 unlikely in the first half of this year, as I’ve explained many times in my posts. The elections are one factor, but that’s more of an issue when the general campaigns get fully underway. Another important factor is that QE has simply lost a lot of effectiveness in the eyes of the banking elite, so they must wait longer and longer before they can get significant marginal benefits from turning on the liquidity faucet again.

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