May 112012
 
 May 11, 2012  Posted by at 5:01 am Finance

 


Leslie Jones Über Boston 1936
"The Hindenburg over Boston Common"


No matter how you look at it, as The Automatic Earth and others have pointed out ad infinitum, in the end the US economy rests on two pillars: Jobs and Housing. They are where both all the good and bad in economic terms begin and end. Ben Bernanke and his Fed policies are majestically failing on both counts.

That is the reality that is shaping America's reality today. Anything else is just a sideshow. Discard all the hubris on recovery, on falling unemployment; all that is but a mirage the political/industrial/financial/media conglomerate wishes you to see and believe in, so you won't pay attention to what truly goes on. Which is that Fed and Treasury policies were never designed to support or revive the economy you depend on for your income and your well-being in general. They were and are designed to take your wealth away from you.

What is at issue? Easy as pie: banks were bailed out with many trillions of dollars in taxpayer funds (which they won’t pay back, they’ll just come back for more) without any scrutiny to speak of.

Bernanke and Geithner at best (yeah, right!) just "hoped" they would lend again, but they never made it a condition of the bailouts. What we find now is what I have repeatedly been saying for years now: The banks are far too deep in debt, even after the bailouts, to revive lending even to "healthy buyers". The entire bailout circus has been a scam, since the money was handed out to banks without looking at how much debt they really have on their books.

It's all been one big massive wealth transfer, perpetrated under the guise of fixing the financial system and the economy in general. Neither was the real purpose behind the bailouts: they were and are nothing but a clever way to steal from the poor and fork over the loot to the rich. And they ain't done yet. That, you can put your money on. That is a safe bet.

You need to wake up to this. You really do. You need to cut your dependence on the financial/political system to the maximum extent that you can. If you don't, it will steamroller over you. The system is so deep in debt that it will come looking for every last penny it can find in your pockets. Many of you will be caught by surprise, and stuck with tens of thousands of dollars, and often many times, in debt. That will turn you into a potential slave. Or a prisoner, if you will. Terminology is not an urgent priority on the chaingang.

So where do Ben B.S. Bernanke's deliberate "failures" show up? Have a look, I'll try and paint you a picture. First, here's Caroline Baum for Bloomberg:

 

Government’s Snake Oil Won’t Cure Jobs Ailment

 

Operating under the assumption that more stimulus will create more jobs, the Fed reduced its benchmark interest rate to 0 to 0.25 percent, pledged to keep it there at least through the end of 2014 and engaged in multiple rounds of bond buying to lower long-term interest rates. The Fed rationalized its stance, well after the crisis and recession had passed, as necessary to fulfill its full-employment mandate.

What if the Fed, through all its efforts, can’t buy more employment? What if unemployment is structural, with an inadequately trained workforce or labor immobility preventing employers and job seekers from hooking up? Signs are pointing in this direction. Long-term unemployment hasn’t been this high for this long since World War II, with 41.3 percent of the unemployed out of work for 27 weeks or more in April. The longer Americans are out of work, the more obsolete their skills.

 

The BLS unemployment rate may be 8.1% right now, but that's only because many millions of Americans are not counted as unemployed and/or are not counted as part of the labor force at all. And even that doesn't really make a dent of a difference: the Fed's rationale that in order to "fulfill its full-employment mandate", it put its benchmark interest rate at 0% simply makes no sense at all. None. Never did, really, but certainly after doing it for years and seeing the outcome, it's nothing short of bizarre. The only thing more bizarre, however, may be the pledge to keep at it until 2014 despite the numbers. Something doesn't add up to say the least.

And who can still be surprised to see that the hardest hit Americans are the same ones that bear the brunt of the disaster doctrine in Greece and Spain, the young people? Sure, US youth unemployment hasn't reached 53% yet. But it's much closer than we like to think. And there is no more surefire way to blow up a society than to offer its young nothing but idleness and despair. You will see in your lifetime how and why that is so. Bonnie Kavoussi for Huffington Post:

 

Half Of Recent College Graduates Lack Full-Time Job, Study Says

 

Of all those who have graduated college since 2006, only 51 percent have a full-time job, according to a Rutgers University study released Thursday. Eleven percent are unemployed or not working at all.

The situation is even more dire for those who have graduated since 2009. Fewer than half of college graduates from those years found their first job within 12 months of graduating, much less than the 73 percent of those who graduated from 2006 to 2008. Those who graduated since 2009 are three times more likely to not have found a full-time job than those from the classes of 2006 through 2008. [..]

Graduates since 2009 have earned an average starting salary of $27,000, down from $30,000 for the classes of 2006 and 2007. That's because employers can pay less with a surplus of job-seekers. In addition, many recent graduates take jobs below their skill level. The study found that 43 percent of employed recent graduates said their jobs do not require a college degree.

The wages of these recent college graduates will likely remain depressed for the next 10 to 15 years because they graduated into a weak economy, according to the Economic Policy Institute, a nonpartisan think tank. Many know it, too. Just half of employed recent graduates said they are satisfied with their income, opportunities for training and advancement, and progress toward career goals, the Rutgers study found.

Adding to that dissatisfaction, 55 percent graduate with student loan debt averaging $20,000, according to the study. One in four recent graduates with student loan debt have made no progress paying it off.

 

There's your US jobs situation, ostensibly a main reason for that 0% benchmark rate. And one half of "the pillars of the American economy". Let's go to the other half, housing. More Bernanke B.S. here. The 0% policy has led to the lowest mortgage rates ever. Amy Hoak writes for MarketWatch:

 

Mortgage rates hit record lows: Freddie Mac

 

Average interest rates on fixed-rate mortgages hit record lows in the most recent Freddie Mac survey of conforming rates, released on Thursday. Rates on the 30-year fixed-rate mortgage averaged 3.84% for the week ending May 3, down from 3.88% last week and 4.71% a year ago. Fifteen-year fixed-rate mortgages averaged 3.07%, down from 3.12% last week and 3.89% a year ago.

Meanwhile, rates on 5-year Treasury-indexed hybrid adjustable-rate mortgages averaged 2.85%, unchanged from last week and down from 3.47% a year ago. And 1-year Treasury-indexed ARMs also hit a record low at 2.7%, down from 2.74% last week and 3.14% a year ago.

 

Hey, that sort of worked, you could argue. Only, it doesn't. Even at the lowest rates on record people are not buying homes. First of all of course because many of them are much worse off financially than before. No job at all, wage cuts, benefit cuts, student debt, health care debts, there are many reasons why many Americans are not buying homes. Affordability is a two-sided coin. It doesn't help that home prices are still elevated either. They have a long way to fall; don't listen to that housing market bottom nonsense that oozes from every pore of the industry these days, that's just a sure sign of rot and fermentation.

Ben to the rescue: He doesn't know why really, but that 0% benchmark rate fails in housing just as it does in jobs. And Ben warns this could take a while, because the banks insist on keeping the money the Fed and Treasury have doled out to them. Which takes Ben by surprise, he'd like you to believe. Glenn Somerville for Reuters:

 

Bernanke: even worthy borrowers can't get mortgages

 

Banks have become so restrictive in making mortgages that many worthy home buyers are being frozen out of the U.S. housing market, and lending practices are not likely to loosen any time soon, Federal Reserve Chairman Ben Bernanke said on Thursday.

Speaking via satellite to a banking conference in Chicago, Bernanke highlighted ongoing problems in mortgage finance availability, even though banks are much healthier now as the 2007-2009 financial crisis has receded. "To be sure, a return to pre-crisis lending standards wouldn't be appropriate," Bernanke said. "However, current standards may be limiting or preventing lending to many creditworthy borrowers." [..]

Bernanke implied the backlash by banks against criticism of their lending practices, which now are far tighter, might be overdone and will be extremely hard to reverse. "Many factors suggest this situation will be difficult to turn around quickly, including the slow recovery of the economy and housing market, continued uncertainty surrounding the future of the government-sponsored enterprises, the lack of a healthy private-label securitization market, and cautious attitudes by lenders," Bernanke said.

Overall, Bernanke said, home mortgage credit outstanding at banks has contracted about 13 percent from its peak.

The government-sponsored enterprises – Fannie Mae and Freddie Mac – are key vehicles in home-mortgage finance because they buy mortgages originated by banks and package them into securities that they resell to investors. The practice frees up funds for banks to make new mortgages. But Fannie Mae and Freddie Mac had to be bailed out by the government and were taken over at the height of the crisis. The government is considering options that include possibly winding them down, leaving it unclear what type of housing finance system eventually will emerge in future.

U.S. Housing Secretary Shaun Donovan told Reuters on Thursday he believed that 10 to 20 percent of potential home-buyers who could adequately carry the debt were being "locked out" of the market because credit was either not available or was available only at a restrictive price. "We had risk-amnesia going into the crisis and I think now we've gone a bit too far in the other direction," he said.

Bernanke said Fed surveys show that even when home buyers can make a 20 percent down payment, banks are often reluctant to offer mortgage money to any but the best qualified. "Most banks indicated that their reluctance to accept mortgage applications from borrowers with less-than-perfect records is related to 'putback risk' – the risk that a bank might be forced to buy back a defaulted loan if the underwriting or documentation was judged deficient in some way," he said.

Recent Fed surveys on credit conditions have found that, years after the crisis, banks remain worried about hangover from the bursting of the housing bubble and now also fear strains from the ongoing European debt crisis. [..]

 

Am I the only person on this planet who remembers that all that money was trucked out, and that benchmark rate was cut, with the explicit goal of making banks lend again? Am I the only one as well who thinks that if they don't do that, we should demand for that money to be returned?! At times it feels like reality has become a lonely place to be.

Last week William D. Cohan tried valiantly to cut through this sort of crap for Bloomberg:

 

U.S. Perfecting Formula for Budget Failure

 

Erskine Bowles, a true Southern gentleman and co-chairman of President Barack Obama’s erstwhile budget-deficit commission, came to New York City from his home in North Carolina the other night to talk sense about the nation’s perilous fiscal condition.

"I think today we face the most predictable economic crisis in history," he told an audience on April 24 at the Council on Foreign Relations — an audience that might actually be able to help do something about the problem. "Fortunately, I think it’s also the most avoidable. I think it’s clear, if you do simple arithmetic, that the fiscal path that the nation is on is simply not sustainable."

Bowles, a Democrat, then laid on the crowd some pretty simple, but devastating, arithmetic. He explained that 100 percent of the tax revenue that entered the Treasury in 2011 went out the door to pay for mandatory spending — such as Medicare, Medicaid and Social Security — and to pay the interest on our staggering $15.6 trillion national debt.

That means that every single dollar we spent on everything else, including two wars, national defense, homeland security, education, infrastructure, high-value-added research and the like, was borrowed. "And," he warned, "half of it was borrowed from foreign countries. And that is a formula for failure in anybody’s book."

He said the U.S. is now paying $250 billion a year in interest on the debt, and that is only because, mercifully, interest rates are at historic lows. That’s chiefly because investors are more worried about the risk of default by European nations, and because the Fed is doing everything in its power to keep interest rates low. "It’s because we’re the best-looking horse in the glue factory," he said.

If interest rates were normalized, Bowles said, the annual bill would be $600 billion a year. "We’ll be spending over $1 trillion on interest alone before you know it," he said. To nervous laughter, he offered the example of the country’s obligation, by treaty, to defend Taiwan in the event that China decides to invade the island. "There’s only one problem with that," he said. "We’ll have to borrow the money from China to do it."

But wait, it gets worse. He reminded the audience of the numerous "cliffs" the country faces at the end of 2012 when the George W. Bush tax cuts expire: More than $1.1 trillion will be cut from the budget, about half of which will come from defense because of the infamous "sequester" of last year; the payroll tax cut will expire, as will the "patch" in the alternate minimum tax. "If you add all those up," he said, "it’s probably $7 trillion worth of economic events that are going to occur in December. And there’s been little to no planning for that." [..]

Without serious debt reduction, it won’t take much of an increase in interest rates to create a fiscal crisis for the country the likes of which only those who lived through the Great Depression can recall. Once interest rates reach a level that reflects the genuine risk inherent in our ongoing fiscal mismanagement, and debt-service eats up more and more of a shrinking pie, the financial crisis we just lived through (and are still living through) will seem like a sideshow.

"Deficits are truly like a cancer," Bowles said, "and over time they are going to destroy our country from within."

 

But if you would like to have a glimpse at reality, away from the empty dreamscapes incessantly fed you by pundits, presidents and assorted spokesmen, here's a bit of a cold shower from Harry Wilson at the Telegraph.

 

Companies must raise £28 trillion ($45 trillion) to finance 'wall' of debt

 

Businesses will need to secure as much as £28.5 trillion to refinance old borrowings and fund new spending, raising major questions over the ability of the world economy to avoid a recession, according to a report from Standard & Poor's.

British companies will have to find between £220bn and £268bn of new financing to fund their growth plans on top of refinancing hundreds of billions of pounds more of existing debt, according to the ratings agency. The scale of the refinancing required, as well as the amount of new debt companies must sell, could create what S&P described as a "perfect storm for credit markets".

The report continued: "Governments and banking regulators are now not as well placed to counter another perfect storm scenario given that they have already expended so much of their fiscal and monetary arsenal to mitigate the problems arising in recent years." The consequences of this are already being felt in the rising cost of borrowing faced by everyone from the largest banks to homebuyers when taking on new debt or refinancing existing loans.

British banks have dramatically reduced the size of their balance sheets in the past three years, as well as tripling the amount of capital they hold against potential losses. However, these moves have led to a shrinkage in the amount of credit available to businesses and soaked up some of the investor demand for new debt.

Anthony Peters at SwissInvest said it was likely there would "not be enough money" available in the coming years for companies to refinance and raise the amount of new debt required. "There is not enough money on planet Earth to fund it all. We are living on borrowed money and there is no way of avoiding that," he said.

Fears over the ability of countries to fund their debt have caused borrowing costs to soar. This week, Spanish 10-year bonds yields rose above the 6pc danger level, while Italian bond yields have also jumped. S&P said this is likely to only be the start of a wider credit crisis as national austerity programmes and sovereign debt fears combine to put "refinancing needs in jeopardy".

On Thursday, the Dutch central bank said it thought Europe was on the brink of a "lost decade" of low economic growth as the region struggles to get its finances in order. Against this backdrop, eurozone and British companies will have to have to deal with managing the £7.1 trillion debt pile they have accumulated, equivalent roughly to 80% of the region's economy.

 

This is real. This is not something someone wants you to believe, it's not a mirage or a dream. And those $45 trillion, mind you, is just what companies need to raise. It does not include countries. Which need at least as much on top of it. And it's not as if Ben Bernanke is not familiar with these numbers; if anyone has access to the most accurate data, it's him, collecting them is what the Fed does.

Once again: get out of the way as much as you can or you will be robbed blind and end up as a steamrollered debt slave. Put your remaining wealth somewhere where no-one can get their hands on it. And then lay low and try to ride it out, that perfect storm. The only way to outsmart it is to go where it can't touch you. Even if that's close to home.

 

Home Forums There Is Not Enough Money On Planet Earth

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  • #3244
    TheTrivium4TW
    Participant

    Reverse Engineer post=2856 wrote: [quote=TheTrivium4TW post=2854]RE, I have to agree that humanity is doomed on its current course. When doom hits, the root cause probably doesn’t matter too much.

    IMHO, even the oligarchs are being played for fools… their lust for “more” will destroy themselves as well. It has already made them bitter, angry, soulless people.

    Understanding the Root Cause does matter, because if enough people understand how Money perverts Human Society, they may be able to reject it in time enough to prevent an Extinction Level Event. Time grows short though now, the Window is Closing here on Homo Sapiens.

    IMHO, it is our JOB as Bloggers and Commenters to get the MESSAGE out NOW to as many people as we can, as fast as we can. I write at a furious pace to achieve that goal. I will NOT GIVE UP on Humanity. Not so long as these Keyboard fingers will cruise at 100WPM or even BETTER than that sometimes when I really get going. Not so long as the Internet remains up and running, and even after that if I am still walking the earth I will find another means to get the message out.

    The Keyboard is MIGHTIER than the Sword. Keep WRITING Triv. Get the MESSAGE OUT.

    SAVE AS MANY AS YOU CAN

    RE
    https://www.doomsteaddiner.org

    I’m fighting side by side with you. Although our messages are slightly different.

    The difference don’t matter at as long as the current structure is in place, so I’m 100% with you we need to tear down the status quo before it kills us an society.

    BTW, my message isn’t just to reform the monetary system. Even with a perfect monetary system and a free market, the system would fail because of selfish human action facilitated by money.

    I also believe that humanity has to realize that big is bad, very bad, and we should all do the best we can to support those businesses that are small and local. Big businesses will SELFISHLY leverage their wealth and power to eliminate their competition so they can grow even bigger. They will then infiltrate the education system and dog train the students how this is most excellent.

    The the average person could own a business again, IF we valued small and were properly terrified of BIG.

    The issues are complex, brother… we live in interesting times.

    Hold on tight!

    #3245
    steve from virginia
    Participant

    @m111ark, Trivium,

    I apologize for being confusing, it’s a bad habit. Let’s try another tack:

    At issue is secured and unsecured lending. If you make a deposit of $10,000 you are making an unsecured loan to your bank. Mr. Bank can turn around and lend this money ten or more times. this is infamous ‘fractional lending’. From $10k your deposit becomes $90k of loans, only $10k or which is secured (by your deposit). In effect you have indirectly created $80k in new money or 8x your deposit you inflationist you!

    And you blame Bernanke! Horrors!

    A central bank cannot make unsecured loans and still remain a central bank. The two kinds of banks are assembled differently, for one thing CBs don’t have a conventional capital structure. Since they aren’t profit-making enterprises, capital in the conventional sense is not required. They have almost no capital: the ECB has €50bn in capital against a €4tn in liabilities. However, their assets and liabilities always match on paper, the books are always balanced.

    New money is not the source of credit but its excess over collateral.

    What matters is the face amounts not market worth which is simply an opinion. Even implied leverage would destroy a central bank because it lacks adequate capital, if this were to be an issue the Central Bank would be just another (large) commercial bank.

    If CBs make unsecured loans they are instantly PERCEIVED as being insolvent. Quote from Bagehot:

    Just so, an immense system of credit, founded on the Bank of England as its pivot and its basis, now exists. The English people, and foreigners too, trust it implicitly. Every banker knows that if he has to prove that he is worthy of credit, however good may be his arguments, in fact his credit is gone.

    Assets fly to the CBs when the market panics and are worthless on the markets. CBs exist to validate the worth of assets and to provide liquidity while doing so.

    Assume for instance you are a bank and hold a $10m bond, you’ve lent to some industry such as real estate. For one reason or another real estate bonds are worth less with the passage of time. Bonds have lost enough so that other banks like yours have become insolvent. Capital and deposits are fleeing. You must jettison assets and shrink your balance sheet. You have a choice: the market prices your bond at fifty cents. The Fed will lend $10m against your bond. Quick: what will you do?

    What the Fed won’t do is offer you $100m for your bond. It will offer $10m or a little less for a haircut. It will offer par and no more. Whether the market says the bond is worth fifty cents or not is irrelevant, the face amount is the limit of what the central bank will lend. It can create new money only if it lends above what the collateral is worth.

    What this means is the central bank is collateral constrained. It cannot lend more than the face amount of collateral it takes in exchange for credit. If the Fed lends $3 trillion it has $3 trillion on its balance sheet. Instead of being a ‘bank’ it is more like a pawn shop.

    The CB can issue credit but it must have collateral.

    If the Fed says the collateral is worth fifty five cents there is no point to having a Fed.

    If the Fed says the collateral is worth $100 billion the markets will know the Fed is lying and ignore it. If the Fed was to leverage your collateral the other banks dealing with the Fed would ask why they cannot leverage their collateral as well. The Fed would have to decide which collateral was marginable and which is not. Unlike commercial banks, there is no underwriting department at the Fed to determine whether prospects of this or that business venture are as advertised. It simply accepts instruments face worth in exchange for credit in the same amounts.

    Commercial banks have underwriting departments, rating agencies, risk management sections and analysts. There are also thousands of banks who can make granular judgments about trillion$$ in unsecured loans. (Most of these judgments are bad, BTW.)

    Being collateral constrained the CB cannot create new money it is impossible as what goes out is equal to what comes in. Only commercial banks offering unsecured loans create new money.

    What confuses is the offhand use of the term ‘central bank buying’. If you sell your car to me for $1000 then buy it back in a year for the same $1000 it is the same as you borrowing $1000 and offering the car as collateral.

    I have been annoyed by the Fed’s open ended lending against collateral such as during QE 1. However, there were good policy reasons for doing so (retrieving bad mortgage paper from the Chinese). The Fed will hold the collateral to maturity whence the loans will be retired and credit extinguished. But there was indeed collateral accepted in this and all other cases including all open market operations and QE.

    The point is not the mechanics of the process but that Central Banks do not create anything new. When their balance sheets expand it is because private sector balance sheets contract an equal or greater amount. (This is always left off those ZeroHedge charts, btw!)

    Think of the Fed and other central banks as pawn shops. They will lend you the five hundred dollars, but you have to let them hold onto your $2,000 Rolex watch. And they won’t lend you the $50,000 against that watch.

    #3247

    Long argument there Steve, most of which is true, but the fact that CBs only can create money based on Collateral does not address the fact the collateral they will accept is so impaired.

    For instance, a given Bank can issue Bonds it writes on itself and then use said bonds as “collateral” upon which to borrow more from the CB. There is no constraint on the CB creating money for so long as the CB will accept Baseball Cards as “worthy collateral at par value”. The ECB is accepting complete JUNK as collateral now. Spanish Bonds are worthles toilet paper, they will NEVER be paid back, yet the ECB will buy them at Par or close to it.

    CBs are only collateral costrained insofar as they will accept a given aset as its Mark to Make Believe value. Soon as anyone actually tries to SELL said asset on the open market, the REAL value is exposed. Pretty close to ZERO in the case of a lot of the garbage Fannie and Freddie have on the books, that is for sure.

    CBs are not creating any new money here, I do agree with that. What they are doing is validating the worth of asets that clearly are not worth the paper they are printed on.You cannot make something Valuable by diktat, and that is what they are trying to do.

    McMansions are basically WORTHLESS. CARZ are basically WORTHLESS. Factories which PRODUCE carz are worthless. Yet the CBs continue to GIVE them worth and loan money on a a truly WORTHLESS asset. That is money creation by the back door.

    RE

    #3248

    TheTrivium4TW post=2857 wrote:

    I’m fighting side by side with you. Although our messages are slightly different.

    Agreed, we fight on the same side, as indeed I think Ashvin and Ilargi also fight on this side of the line. We have differences in how we interpret the spin down and how the mechanics of it work, and hashing that out is worthwhile IMHO.

    Never though must we lose sight of the TRUE ENEMY here in the Battle, those who CLAIM ownershp over that which NO MAN can own himself, the resources of the earth. They belong to ALL MANKIND, but only as Stewards for all the rest of the creatures living on this planet who make our own survival possible.

    Those who CLAIM OWNERSHIP are OBVIOUS. They are the people who use the monetary system to centralize wealth into their own hands. It matters not if you believe they are Zionists or Reptilian Aliens even, it remains TRUE that a very small percentage of the population CLAIMS ownership over the resources of the earth. That CLAIM comes in the form of how much MONEY they are worth right now. Long as they continue to claim this as their OWN, they must be EXTERMINATED. Nobody owns the earth or its resources. All Mankind does, and only as Stewards of the Earth and all life that lives upon it. All who do not believe this to be so must be EXTERMINATED. Repent thee Sinners, or face the WRATH OF THE INQUISITION.

    You cannot have a healthy society without a Clean Kitchen. The cockroaches must be EXTERMINATED. Bring in the Orkin Man.

    NOBODY expects a Spanish Inquisition.

    RE

    RE

    #3249
    skipbreakfast
    Participant

    Reverse Engineer post=2856 wrote: [IMHO, it is our JOB as Bloggers and Commenters to get the MESSAGE out NOW to as many people as we can, as fast as we can. I write at a furious pace to achieve that goal. I will NOT GIVE UP on Humanity. Not so long as these Keyboard fingers will cruise at 100WPM or even BETTER than that sometimes when I really get going. Not so long as the Internet remains up and running, and even after that if I am still walking the earth I will find another means to get the message out.
    SAVE AS MANY AS YOU CAN

    RE
    https://www.doomsteaddiner.org

    I admire your commitment to getting the word out, RE. Once one begins to understand how serious things could get, it’s difficult not to think about it and try to impress upon others that they should at the very least take minimal precautions. But even getting friends and family to listen isn’t always easy.

    #3250
    pipefit
    Participant

    ashvin post=2844 wrote: But that does not mean the oil trade is the ONLY function the debt-dollar serves, or the financial system in general. Imperialism and wealth extraction come in many forms – the oil trade just makes it really easy.

    True, Ash. The problem is that the world reserve dollar is being asked to do too many things. Since it is no longer tied to gold, the USA can (and does) run perpetual trade deficits. The cumulative total is so great that we can no longer afford the interest payments.

    As our debt is rolled over, our trading partners find themselves, increasingly, in a vendor financing scheme where they don’t even get much interest on the outstanding balance. This is part of their cost structure, and it is inflationary, from the perspective of the customer of goods. China (for example) receives revenue from sales, but also interest payments on the outstanding balance of vendor financed goods in the past. As this latter source of revenue shrinks, the other revenue stream, the wholesale price, must rise in order to maintain the same total revenue stream.

    #3251
    jal
    Participant

    I am sure that forms of this discussion have happened in the past and has been reduced to simple saying of wisdom. You can find them in all the “holy books” from around the world.

    The messages have been forgotten, basterdized, and twisted and ignored.

    You will not need to re-invent the wheel.

    #3252
    ralfy
    Participant

    The problem isn’t that there is not enough money. Rather, there’s too much money: more than a quadrillion dollars, much of it consisting of unregulated derivatives.

    The problem, then, is far larger than Bernanke and the Fed. It is a global capitalist economy run by a few powerful global banks.

    #3253
    ralfy
    Participant

    Total money supply is more than a quadrillion dollars, and much of it consists of “shadow” derivatives and future government liabilities.

    Most of that money isn’t created by central banks but by commercial banks, and comes in the form of numbers in accounts.

    Almost all of money supply has no value. As for gold and other precious metals, there may be only around 150,000 metric tons of such, or less than one troy oz. per capita. What makes matters worse is that gold and silver have little practical value.

    Given that, there is no relationship between money and energy and resources worldwide. There is too much money but not enough resources and energy to maintain global economic growth. There is no money system that is not “fraudulent” as money is nothing more than debt or something durable and pretty to look at, such as gold. And something like a “gold standard” won’t help either, as the issue works both ways (i.e., you have assurance that your paper currency is backed by gold, but at any point, you should be able to redeem your paper currency, which the one who has gold won’t like!).

    Ultimately, what we face is a debt-ridden global capitalist economy that requires increasing credit to support increasing production and consumption of resources, with some making more profits from financial speculation. What we are seeing now is the effect of increasing financial speculation masking a resource crunch.

    And that resource crunch coupled with the long-term effects of environmental damage (including climate change) will make a global financial crisis look like a walk in the park.

    #3254
    bluebird
    Participant

    skipbreakfast said “I admire your commitment to getting the word out, RE. Once one begins to understand how serious things could get, it’s difficult not to think about it and try to impress upon others that they should at the very least take minimal precautions. But even getting friends and family to listen isn’t always easy.”

    2nd that.

    I have found that most of all people that I know are not receptive at all to the coming ‘doom and gloom’. Until they open their own eyes and ears, it truly is most difficult to spread the word.

    #3255
    TheTrivium4TW
    Participant

    steve from virginia post=2858 wrote: @m111ark, Trivium,

    I apologize for being confusing, it’s a bad habit. Let’s try another tack:

    At issue is secured and unsecured lending. If you make a deposit of $10,000 you are making an unsecured loan to your bank. Mr. Bank can turn around and lend this money ten or more times. this is infamous ‘fractional lending’. From $10k your deposit becomes $90k of loans, only $10k or which is secured (by your deposit). In effect you have indirectly created $80k in new money or 8x your deposit you inflationist you!

    And you blame Bernanke! Horrors!

    I’m not sure who you are talking to, but I don’t blame Bernanke for being anything other than a lying, fraudulent front man for a fraudulent system being controlled by a bunch of con men.

    The Fed is ultimately controlled by the people who finance the BODs of the Federal Reserve. Bernanke is an employee. He was put into position because he does what he’s told.

    Big Finance Capital controls the Fed such that THEIR AGENDA is worked out in the markets. More for them, less for everyone else.

    Also, the Federal Reserve System is the system that mandates fractional reserve lending be legal. Of course the Federal Reserve System is at fault – and especially THE ARCHITECTS and CONTROLLERS of that system.

    It’s bizarre that you’d mock an attack on these criminals, even one wrongly levelled primarily at this fraud’s front man.

    steve from virginia post=2858 wrote:
    A central bank cannot make unsecured loans and still remain a central bank.

    Oh yes they can – they lie and keep the public away from the books. Come on, stop being so naive – these people are lying criminals. They lie about the trivial like their mandate. Look it up – it isn’t a dual mandate (low unemployment, stable prices), it is a singular mandate to keep credit and monetary aggregates “commensurate with” the long term productive capacity of the nation.

    What did these criminals do? They broke their mandate and took monetary and credit aggregates PARABOLIC TO the long term productive capacity of the nation! That PARABOLIC MOVE is a ROOT CAUSE of the ongoing collapse, but everyone lies about that, too, and blames something else.

    Weapons of Mass Debt
    https://www.keepandshare.com/doc/3324744/wmdebt-graph-3-79k?tr=77

    (Keep and Share is a PDF hosting site – nothing nefarious)

    Stop being so gullible and trusting the book propaganda, steve. They aren’t playing “by the book” any more. In fact, they burned it up and buried the ashes as evidenced by their actions, NOT their lying words.

    steve from virginia post=2858 wrote:
    The two kinds of banks are assembled differently, for one thing CBs don’t have a conventional capital structure. Since they aren’t profit-making enterprises,

    Maybe not for the Central Bank itself, but they ABSOLUTELY are profit making mechanisms for THOSE WHO CREATED IT AND THOSE WHO CONTROL IT!

    The flow chart of the fraud is in this PDF:

    Debt Money Tyranny:

    https://www.keepandshare.com/doc/3325954/debt-dollar-tyranny-2-54k?tr=77

    Again, stop with the book reading, it was propaganda to deceive the masses while this Trojan Horse worked over time to collapse the nation state system.

    steve from virginia post=2858 wrote:
    capital in the conventional sense is not required. They have almost no capital: the ECB has €50bn in capital against a €4tn in liabilities. However, their assets and liabilities always match on paper, the books are always balanced.

    New money is not the source of credit but its excess over collateral.

    Which is EXACTLY what the central banks are creating by taking on toxic trash assets valued at top value. The typical mistake, though, is to think that this new money will not require repayment with interest ONCE THE CENTRAL BANKS STOP THE LYING, and they can’t lie forever.

    It, too, will be debt based money once the VERY REAL LOSSES are finally admitted.

    steve from virginia post=2858 wrote:
    What matters is the face amounts not market worth which is simply an opinion.

    An opinion of the counter party that will buy it! -lol-

    You seem to be spitting Fed propaganda like there is no tomorrow. So you think that worthless 2nd mortgage or that home that is 60% below the mortgage value and falling are just “opinions” and that their prices will snap back under our debt based monetary system when society and government are saturated with debt?

    Get real. Those are assets are impaired. Big Finance Capital wanted to offload them to the public and they need a way to do so – and they use the Fed as the conduit.

    steve from virginia post=2858 wrote:
    Even implied leverage would destroy a central bank because it lacks adequate capital, if this were to be an issue the Central Bank would be just another (large) commercial bank.

    If CBs make unsecured loans they are instantly PERCEIVED as being insolvent. Quote from Bagehot:

    Just so, an immense system of credit, founded on the Bank of England as its pivot and its basis, now exists. The English people, and foreigners too, trust it implicitly. Every banker knows that if he has to prove that he is worthy of credit, however good may be his arguments, in fact his credit is gone.

    That’s exactly how I perceive them. I also perceive the mega banks who had to legalize securities fraud in order to pretend not to be insolvent as insolvent. Maybe they’ve had time to switch their toxic assets to one or two banks by now – so maybe a couple of the winners aren’t insolvent any more… it is impossible to tell when they all can lie through their teeth.

    steve from virginia post=2858 wrote:
    Assets fly to the CBs when the market panics

    Created by CBs that break their own law – you forgot to mention that part steve. Did you not know it? If not, now you do… Again…

    Weapons of Mass Debt

    https://www.keepandshare.com/doc/3324744/wmdebt-graph-3-79k?tr=77

    Its all there – the mandate and the reality of what the Fed did… About $30 trillion in law breaking societal debt was created, bare minimum.

    steve from virginia post=2858 wrote:
    and are worthless on the markets. CBs exist to validate the worth of assets and to provide liquidity while doing so.

    CBs don’t “validate” the worth, they just lie and accept the worth at 100%. If I recall, the Fed broke the law when it it accepted non government guaranteed paper as assets. There is so much fraud and law breaking it is tough to keep it all straight.

    steve from virginia post=2858 wrote:
    Assume for instance you are a bank and hold a $10m bond, you’ve lent to some industry such as real estate. For one reason or another real estate bonds are worth less with the passage of time.

    “[O]ne reason or another?” Are you kidding me steve? The Fed criminally, CRIMINALLY, broke Section 2A of the Federal Reserve Act and CRIMINALLY spent 25 years blowing the world’s largest credit bubble that eventually busted, as all bubbles must, and you sum it up as “one reason or another?”

    Why do you hide the obvious criminal nature of the Fed and the fraudulent nature of the Federal Reserve System (by blaming customers and mocking the blaming of their front man)?

    Is it that you can’t quite grasp reality through the social engineer conditioning?

    steve from virginia post=2858 wrote:
    Bonds have lost enough so that other banks like yours have become insolvent. Capital and deposits are fleeing. You must jettison assets and shrink your balance sheet. You have a choice: the market prices your bond at fifty cents. The Fed will lend $10m against your bond. Quick: what will you do?

    File bankruptcy unless you have your criminal hooks so deep into government that you have captured it and control it. Reality, once again, slips right through your grasp – and you seem to rather enjoy the state of suspended disbelief.

    steve from virginia post=2858 wrote:
    What the Fed won’t do is offer you $100m for your bond. It will offer $10m or a little less for a haircut. It will offer par and no more.

    Oh, they are so tough at the Fed. Funny you chose bonds instead of MBS where the REAL problem lays. How about those mortgages, steve? Accepted at par (don’t look at the books, prole!), down 60% with no hope of recovery. Par, baby, par.

    steve from virginia post=2858 wrote:
    Whether the market says the bond is worth fifty cents or not is irrelevant, the face amount is the limit of what the central bank will lend. It can create new money only if it lends above what the collateral is worth.

    MBS are where the real problem is (in America), steve, and I think you know it. Is that why you avoided discussing MBSes? As RE has pointed out, the Greek bonds were valued at par and some won’t be paid because they can’t be paid. BTW, they knew this BEFORE they bought them AND MADE THE PRIVATE BANKS WHO ORIGINALLY LENT WHOLE FOR THOSE BONDS.

    steve from virginia post=2858 wrote:
    What this means is the central bank is collateral constrained. It cannot lend more than the face amount of collateral it takes in exchange for credit. If the Fed lends $3 trillion it has $3 trillion on its balance sheet. Instead of being a ‘bank’ it is more like a pawn shop.

    Still burning down the straw man, steve. Nobody I know claimed the Fed let $10 on #3 in collateral. NOBODY. What they have said is the Fed takes $10 in face value MBSes that are worth $5 and lends $10 against this.

    Yet you avoid the real issue like the plague.

    steve from virginia post=2858 wrote:
    The CB can issue credit but it must have collateral.

    But that collateral can be fictional as long as people suspend disbelief. Right now, people are suspending disbelief. Nicole’s and Ilargi’s message is that this will, at some point, reverse and there will be new rules that turn the current game upside down.

    steve from virginia post=2858 wrote:
    If the Fed says the collateral is worth fifty five cents there is no point to having a Fed.

    The whole point of the Fed is to do this…

    Debt Dollar Tyranny

    https://www.keepandshare.com/doc/3325954/debt-dollar-tyranny-2-54k?tr=77

    Everything else is designed to confuse people that rather enjoy a state of permanent suspended disbelief, for whatever reason.

    steve from virginia post=2858 wrote:
    If the Fed says the collateral is worth $100 billion the markets will know the Fed is lying and ignore it. If the Fed was to leverage your collateral the other banks dealing with the Fed would ask why they cannot leverage their collateral as well. The Fed would have to decide which collateral was marginable and which is not. Unlike commercial banks, there is no underwriting department at the Fed to determine whether prospects of this or that business venture are as advertised. It simply accepts instruments face worth in exchange for credit in the same amounts.

    That’s the propaganda, steve. You’ve been conditioned well. “The Man” pats you on the back. But here in reality, that’s a straw an argument. You built up an argument which nobody made, you limited it in scope and then you burnt it down.

    The Fed’s MBSes, steve – do you believe they are worth par?

    Yes or no. If not, WHY DID YOU AVOID THE REAL ISSUE AND POST THIS WORTHLESS STRAW MAN TRIPE INSTEAD?

    steve from virginia post=2858 wrote:
    Commercial banks have underwriting departments, rating agencies, risk management sections and analysts. There are also thousands of banks who can make granular judgments about trillion$$ in unsecured loans. (Most of these judgments are bad, BTW.)

    Thank goodness for ratings agencies, RIGHT STEVE? -lol-

    steve from virginia post=2858 wrote:
    Being collateral constrained the CB cannot create new money it is impossible as what goes out is equal to what comes in. Only commercial banks offering unsecured loans create new money.

    That false idea burns up when your straw man burns, steve. If I give the Fed a $1,000,000 paper mortgage that will only sell for, at most, $500k for the foreseeable future, and the Fed loans $1,000,000 against it, THE FED HAS CREATED NON INTEREST BEARING DEBT UNTIL SUCH TIME AS THE FED FESSES UP TO ITS LIE AND RECOGNIZES THE TRUE VALUE OF THAT PAPER. At which point, the Fed will demand that the tax payers repay the Fed for the difference between the $1,000,000 and the price the MBS actually sold for, MINUS $10KS OF FEES PAID TO THE BANKSTER, NO DOUBT.

    steve from virginia post=2858 wrote:
    What confuses is the offhand use of the term ‘central bank buying’. If you sell your car to me for $1000 then buy it back in a year for the same $1000 it is the same as you borrowing $1000 and offering the car as collateral.

    The Straw Man is Ash. Here in reality, which you craftily avoided, the example is selling the Fed a $500 market value care that was bought 5 years earlier for $1,000. The Fed pays out $1,000 and then eventually sells the vehicle for $400. The Fed will eventually demand the $600 from the tax payers.

    steve from virginia post=2858 wrote:
    I have been annoyed by the Fed’s open ended lending against collateral such as during QE 1.

    QUITE PROVIDING COVER FOR THE FED’S **CRIMINAL** ACTIVITY, STEVE!

    https://www.keepandshare.com/doc/3324744/wmdebt-graph-3-79k?tr=77

    They are crooks BEYOND ALL DOUBT! They lie about their mandate BEYOND ALL DOUBT! They CRIMINALLY blew the world’s largest credit bubble BEYOND ALL DOUBT!

    Yet you are annoyed at lending in Q1. Man, you are a tough guy! BTW, those weren’t bonds they borrowed in Q1, were they? How is that real estate market since they bought those MBSes AT PAR?

    steve from virginia post=2858 wrote:
    However, there were good policy reasons for doing so (retrieving bad mortgage paper from the Chinese). The Fed will hold the collateral to maturity whence the loans will be retired and credit extinguished. But there was indeed collateral accepted in this and all other cases including all open market operations and QE.

    Yes, and if you are a gullible sucker, you will conclude that NOBODY WILL DEFAULT ON THE MOST TOXIC MBSES SOLD TO THE FED SO THEY CAN HOLD 100% OF THOSE TOXIC TRASH MORTGAGES TO MATURITY WITHOUT BEING FORCED TO SELL ANY INTO THE COLLAPSING MARKET.

    The holes in your Straw Man, steve, are so wide that the mice have lost interest.

    steve from virginia post=2858 wrote:
    The point is not the mechanics of the process but that Central Banks do not create anything new. When their balance sheets expand it is because private sector balance sheets contract an equal or greater amount. (This is always left off those ZeroHedge charts, btw!)

    Think of the Fed and other central banks as pawn shops. They will lend you the five hundred dollars, but you have to let them hold onto your $2,000 Rolex watch. And they won’t lend you the $50,000 against that watch.

    Try going into a pawn shop and borrowing your purchase price for a hot beanie baby at their peak interest.

    They will laugh in your face.

    Yet that is exactly what the Fed does – especially for the corporate banking interests that roll up under Big Finance Capital, the people who control the Federal Reserve to systematically asset strip society and protect their corporate fronts while indebting nation states with unpayable debt.

    steve, Stockholm Syndrome is reversible if you would consider suspending your suspension of disbelief.

    BTW, the way to refute anything I say is to provide the data and logic that support refutation and provide examples, just like I’ve done. If you can’t, then the honest thing to do is admit to it.

    #3256
    TheTrivium4TW
    Participant

    ralfy post=2865 wrote: The problem isn’t that there is not enough money. Rather, there’s too much money: more than a quadrillion dollars, much of it consisting of unregulated derivatives.

    The problem, then, is far larger than Bernanke and the Fed. It is a global capitalist economy run by a few powerful global banks.

    Hi Ralfy, you in appropriately limit the Fed’s sphere is influence.

    The Fed is the Trojan Horse for the Architects and Controllers of the Federal Reserve and the structure of the monetary system.

    Those derivatives only exist because the Fed (actually the Controllers of the Fed) wanted them to exist.

    The Fed is much more than its individual policy decisions – THE ENTIRE SYSTEM exists at the behest of the Fed and its Architects and Controllers.

    It was the Fed that pushed for the end of Glass-Steagall and the Commodity Futures Modernization Act.

    Ultimately, it is the Architects and Controllers of the Fed who are to blame, so just evicting the Fed won’t do a lot so long as those con people stay in charge with all their fraudulent, ill gotten, crime syndicate wealth still in place.

    The game I see in play is…

    Steps:
    1. Blow a massive credit bubble (~25 years)
    2. Loot as much cash and bank credit as possible under the excuse of “saving the system” (this is where we are now)
    3. Execute a wicked deflationary bust to roll up society’s assets under Big Finance Capital corporate fronts.
    4. Let the American subjects wallow in abject poverty for a while.
    5. Promise some goodies to the American people but, alas, there has to be some strings attached, “for your safety.” Oh, and you have to roll up under this cool world currency system run by the same Big Finance Capital criminals who created our current fraudulent systems.

    Of course, they need to concurrently set up police states, destroy freedoms like the Bill of Rights and set up re-education camps for political activists.

    #3259

    bluebird post=2867 wrote: skipbreakfast said “I admire your commitment to getting the word out, RE. Once one begins to understand how serious things could get, it’s difficult not to think about it and try to impress upon others that they should at the very least take minimal precautions. But even getting friends and family to listen isn’t always easy.”

    2nd that.

    I have found that most of all people that I know are not receptive at all to the coming ‘doom and gloom’. Until they open their own eyes and ears, it truly is most difficult to spread the word.

    Although it can be difficult to spread the Word, it is not impossible. Over on the Diner we began in February with 14 Members and page hits of 80/day. It was a big deal to me when we hit 5000 Page views. Yesterday, we nearly hit 5000 page views in ONE DAY on the Diner. We are creeping up on triple digit membership now also.

    In addition to that, today we had join the Party the Brit Slogger John Ward. I read his Blog on a recommendation from Steve and invited him to cross post on the Diner. He is hilarious and he gives great detail about what is occuring over in Eurotrashland.

    So if you want to get the Word out, then PLUG THE LIVING SHIT OUT OF THE DOOMSTEAD DINER (and TAE also of course) 🙂

    RE
    https://www.doomsteaddiner.org

    #3264
    ashvin
    Participant

    Reverse Engineer post=2849 wrote: Again, I do not think any of these economists directly confronted the issue of limitations to the energy reserves of the world. The assumptions they make sometimes hold true in a world of surplus energy, but for the most part I do not think any of these economic theories are holding up too well as the energy inputs become scarce and expensive.

    Seeing as how the theories of Marx, Fisher and Minsky dealt with the breakdown of financial/industrial capitalism through wealth extraction, over-production, excessive leverage and euphoric speculation, I’d say they are holding up quite well right now (even though they did not focus on peak oil).

    Marx foresaw a crisis in Capitalism based on economic principles, and he was largely correct far as I understand Marx anyhow. The analysis is not complete though, because Avaialble per capita Energy puts even more stress on the system and undermines the Finance economy further. Basically, this just produces a Bigger and Better Collapse than Marx ever foresaw.

    Yes, that is definitely true. Any theory that ignores energy/resource abundance or scarcity is an incomplete one, and will fail to make precise predictions long-term. The point is that these theories are still useful when applied to our economic/financial/monetary system, just like Einstein’s relativity is still useful when applied to macro-scales, even though they are all incomplete (the latter much less so).

    #3265
    ashvin
    Participant

    TheTrivium4TW post=2851 wrote: As for Marx, did I miss it or did he also predict Stalin and Mao?

    Just askin’.

    Using Marx’s predictions about Communist utopia to discredit his predictions about capitalist meltdown. That has to be some sort of logical fallacy!

    The Straw Man is Ash.

    So now I have actually become “The Straw Man”?? I think you maybe meant Ilargi here, because he wrote this article.

    #3270
    bluebird
    Participant

    @Reverse Engineer – When people have opened their eyes and ears, they are receptive to reading and hearing about the crumbling of the U.S. empire, financial ponzi, worldwide bubble, poor infrastructure, etc, etc., in order to do some preparations.

    But the people that I know have other priorities, and unfortunately it is not reading blogs. None. I have tried many many times, and I have yet to get back any comment that anyone has read anything. When I mention that the stock market goes up and down, to be ready for the next downturn, people roll their eyes.

    My sister told me that she would never get out of the markets, because she would miss the gains when it goes back up. She is so busy taking exotic vacations that she has a professional financial planner to manage her portfolio. I’m the nutty sister who reads blogs.

    While I do keep trying to enlighten others, they will be totally shocked when the collapse comes. It will be epic.

    #3281
    einhverfr
    Member

    As for Marx, did I miss it or did he also predict Stalin and Mao?

    Isn’t that like holding Einstein (E-mc^2) responsible for the A-bomb?

    #3287

    einhverfr post=2895 wrote:

    As for Marx, did I miss it or did he also predict Stalin and Mao?

    Isn’t that like holding Einstein (E-mc^2) responsible for the A-bomb?

    Well, Einstein WAS responsible for the A-Bomb, since without the Theory the Bomb could never have been built to begin with.

    Similarly, the Soviet Union or Communist China could not have been built without the Theories of Karl Marx. They provided a philosphical underpinning for Revolutionaries to hang their hats on, but of course it all gets corrupted quite rapidly by the Evil of Money.

    The end result of course of the Theory is an A-Bomb which levels everything. The Revolutionaries who hung their Hats on Karl Marx’s Theories could not follow through with them, any more than the Theories in the Constitution the Founding Fathers created were ever really followed through with. They always get Corrupted by the Evil of Money and the Control of the Iluminati.

    No mater HOW good a system is (and I do not here promote any of these systems as really “good”), they do not function as designed in the Real World for innumerable reasons. A-Bombs and i fact H-Bombs do function pretty well though to do what they do, which is to DESTROY.

    In the words of J. Robert Oppenheimer,leader of the Manhattan Project, quoting the Bhagavit Gita:

    I am Become Death, the Destroyer of Worlds”

    So it has been with Capitalism and Communism both. Plagues on Humanity and Mother Earth, all subservient to the Evil of Money.

    RE

    #3288
    TheTrivium4TW
    Participant

    ashvin post=2879 wrote:
    Using Marx’s predictions about Communist utopia to discredit his predictions about capitalist meltdown. That has to be some sort of logical fallacy!

    The Straw Man is Ash.

    So now I have actually become “The Straw Man”?? I think you maybe meant Ilargi here, because he wrote this article.

    No, you aren’t a straw man, Ash, but you did use one and, based on your Straw Man fallacy, you accused me of using a fallacy when I did not. I didn’t use his lack of predicting Mao and Stalin to discredit his views on a capitalist meltdown.

    What did I write that gave you that idea?

    I didn’t say that at all. You just made that up out of whole cloth. What was the motivation that led to this false conclusion?

    In fact, I think he was correct that the “Capitalist system” (true capitalism, like true communism, is a myth – both are different forms of oligarchical dictatorships) would eventually melt down (technically, the oligarchs would rig the monetary, criminally blow a credit bubble, loot people under the con that they are trying to save the economy and then collapse everything to take control of it an dproclaim themselves rulers). In fact, I constantly explain exactly what methods are used to by the oligarchs to systematically rob people under the fallacy of “capitalism.”

    Even if we had a true capitalist society, my hypothesis is that it would go bad as the selfish people would then rig such a system to their advantage and everyone else’s disadvantage – ending in an oligarchical dictatorship.

    I didn’t argue against my own belief system, Ash, so what caused the “rush to judgement” on your part?

    But I also think the data shows Marx’s failures cost over 100 million lives. Lest you then accuse me of thinking that this makes oligarchical dictatorship capitalism better (when I didn’t say that)…

    …I think the “Capitalist” oligarchical dictatorship model has cost far more human lives than Mao and Stalin in the “Communist” oligarchical dictatorship model… just for the record. The oligarchs trick the people into thinking they are “free,” when they pretty much repeat the oligarch funded “consensus,” and then they set up systems that kill people by the 10s of millions every year. About 25 million die of starvation and malnutrition… millions more through corporate societal asset stripping wars and who knows how many with the toxic diet they promote.

    The real issue is that humanity is between a rock and hard place when human selfishness rules the day.

    Legitimately criticizing Marx in one area doesn’t mean that Marx didn’t have incredible insight in others. It just means he had a blind spot – a very big one at that – and since you didn’t point it out, I did.

    The lesson is that we all need to be very careful of potential blind spots – even if those who have a special genius in a particular area.

    #3289
    TheTrivium4TW
    Participant

    ashvin post=2879 wrote:

    The Straw Man is Ash.

    Hi Ash,

    You may have just pointed out the most bizarre thing I’ve ever written.

    I went back to read it in context and it makes no sense and you were completely unrelated to the topic at hand.

    I was trying to point out steve’s use of a straw man to describe a scenario different than what almost assuredly occurred.

    I would explain the specific term if I could, but I can’t.

    My bad for the Bizarre with a capital “B”.

    #3290
    alfbell
    Member

    The capitalists, communists, socialists, fascists, et al. have all made a total mess of things and have failed. Whether evil or well intentioned is irrelevant… they failed.

    No system will ever be successful until the human mind, and the spiritual being that utilized it, have been isolated and fully understood. Psychiatry, psychology, psychoanalysis, et al. have failed in this area as well. Very too bad because THIS is the key to man’s future survival.

    Find the source of evil and destructive intentions; the need to dominate; the need to destroy what another creates; man’s inhumanity to man; man’s illogic; man’s low level of morality; man’s “animalistic” tendencies; man’s inability to predict consequences; etc. and you will save mankind.

    #3291
    einhverfr
    Member

    RE:

    As I read it, Marx was largely advocating worker’s revolutions to build some sort of communistic system on top of existing Capitalist systems. This is the inescapable conclusion that arises from the total sum of his writings. Capitalism is a necessary stage (missing in the Soviet and Chinese experiments) and it serves as a foundation for what comes next via the Historical Dialectic theory. It seems to me that the case studies of Marxian thought really should be focusing on Scandinavia rather than Russia.

    I don’t think you can easily hold people responsible for how people abuse their works. Marxist thought did help shape the Russian and Chinese systems but their systems were certainly nowhere near what Marx generally talked about. These systems were built on a feudal (in the taxonomy of Marx) rather than a capitalist foundation and consequently they never stopped resembling that system.

    I am not a Marxist or a socialist btw. I just think it is important to break out of the way we think about some aspects of the past. There are Marxist thinkers who I respect (Wilhelm Reich for example, and his idea of work democracy), and I think Marxist criticism of capitalism is interesting and important. However, I don’t see Marx as offering solutions that achieve what is needed in the future.

    #3297
    Candace
    Member

    @ alfbell
    “No system will ever be successful until the human mind, and the spiritual being that utilized it, have been isolated and fully understood. Psychiatry, psychology, psychoanalysis, et al. have failed in this area as well. Very too bad because THIS is the key to man’s future survival.

    Find the source of evil and destructive intentions; the need to dominate; the need to destroy what another creates; man’s inhumanity to man; man’s illogic; man’s low level of morality; man’s “animalistic” tendencies; man’s inability to predict consequences; etc. and you will save mankind.”

    So if human kind is dependent on figuring out the mysteries of our souls and then acting rationally on our understanding, we are in a lot of trouble.  I think we’ve been working on that longer than we’ve been hunting and gathering or farming combined.

    Getting us all to agree to a rational response to our human predicament seems out of reach too.  If we agreed that human beings will never be consistently rational, that as individuals and groups we act at times on the better and worse angels of our nature could we even agree on a “ring-fencing” technique to keep us from killing off our habitat?  For instance, can we even get all humans to agree to not use or develop things that create radioactive waste?  As Nicloe Foss and others point out, we have to be responsible for and maintain infrastructure that will keep that toxic waste from contaminating huge areas, and yet we usually can’t keep anything going for extended periods of time.

    What I’m trying to figure out is if we all fail to be our best selves at least some of the time, are there any structures we can impose on ourselves that will at least keep us from causing massive damage to ourselves and the planet?

    @ Bluebird

    “My sister told me that she would never get out of the markets, because she would miss the gains when it goes back up. She is so busy taking exotic vacations that she has a professional financial planner to manage her portfolio. I’m the nutty sister who reads blogs. 

    While I do keep trying to enlighten others, they will be totally shocked when the collapse comes. It will be epic.”

    I think the herd mentality is really hard for people to buck.  My sisters at least partially “get it”.  But at the same time still stay with the status quo on things like taking on debt to send my niece and nephew to college or keeping their retirement in the stock market.

    For instance, my sister thinks it is a really bad idea for my niece and nephew to take on debt to go to college and yet because of our culture and the sense that my niece and nephew will be labelled “failures” (by themselves as well as others if they don’t go to college) they go along with taking on what looks to me as unrepayable debt.  At present sitting on the sidelines isn’t seen as getting out of the way of the crash, it’s seen as someone who gave up on him/her self.

    So I find myself giving into the lesser angels of my nature wanting a “crash” to come down good and hard so I can be vindicated in my superlative foresight:).

    But then I remind myself that I’d be screwed because I live low, but what I live on is still very dependent on the current system.

    #3301

    alfbell post=2904 wrote: The capitalists, communists, socialists, fascists, et al. have all made a total mess of things and have failed. Whether evil or well intentioned is irrelevant… they failed.

    No system will ever be successful until the human mind, and the spiritual being that utilized it, have been isolated and fully understood. Psychiatry, psychology, psychoanalysis, et al. have failed in this area as well. Very too bad because THIS is the key to man’s future survival.

    Find the source of evil and destructive intentions; the need to dominate; the need to destroy what another creates; man’s inhumanity to man; man’s illogic; man’s low level of morality; man’s “animalistic” tendencies; man’s inability to predict consequences; etc. and you will save mankind.

    All these systems failed because they all use MONEY. Money is the source of all the Evils you mentioned. It is the ROOT of all Evil. Eliminate MONEY, and you will Save Mankind.

    RE

    #3305
    Glennjeff
    Participant

    alfbel,

    That psyco-spiritual is actually known albeit spread out thin across multiple disciplines. At an individual level it is also knowable, but takes a lifetimes full effort for the ordinary person to even approximate. Even though we pretty much conquered our physical environment 50 years ago we can’t get out of that “survival is a terrible and cruel struggle” motivation. Our tragic flaw.

    Thing is WE, the human collective, is a bit of an abstraction, humans are actually individuated autonomous souls mostly asleep, collective action is predominately accidental or enforced by the bullies. We don’t do murmuration.

    A good hard reset may just provide an opportunity to change course toward some fabled Golden Age, Age of the Sixth Sun or Age of Aquarius type thingy.

    One of those terribly painful life changers like surviving canver and chemotherapy to find you’ve come out the other side with a much healthier and happier perspective, which is what my wife reports.

    That is me attempting optimism and that date with December 21 is looking on schedule.

    #3306
    Glennjeff
    Participant

    RE,

    Sorry to quibble but money has no conscience or awareness or motivation and therefore not capable of manifesting evil. It is the Religion of Money which is practiced by us who-mans, our conceptualsations and lusts in regard to it where the problems arise. We all know what fundamentalist and extremist religions create.

    #3314

    Glennjeff post=2920 wrote: RE,

    Sorry to quibble but money has no conscience or awareness or motivation and therefore not capable of manifesting evil. It is the Religion of Money which is practiced by us who-mans, our conceptualsations and lusts in regard to it where the problems arise. We all know what fundamentalist and extremist religions create.

    Disagreed. It doesn’t need conscience or awareness or motivation, it is an emergent property of the system.

    RE

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