Raleigh
Forum Replies Created
-
Posts
-
Simple versus complex (from page 25 of “The Illusion of the Perpetual Money Machine):
Interesting piece comparing forest fires in southern California with the Baja region in Mexico. Southern California fought every fire hard; Mexico didn’t, laissez-faire. The result? Southern California had few small fires, but frequent large ones – and Mexico had many small fires and essentially no large fires. Seeing this, they decided to try it in Yellowstone, leaving the fire to burn, but they had an inferno because Yellowstone had had strong fire suppression for decades, and there was tons of wood to burn.
“What was forgotten is that the favorable situation in Baja California stems from the self-organized dynamics between forest growth and fires that keep them in balance and that has evolved over many decades.”
When you artificially stop things that are way out of balance/whack, and then prolong this imbalance by propping it up, be prepared for one mother of a fire!
Ken – “A 4% yield on a UST would destroy the economy that these same people want to grow.” A 4% yield would end the banks who made stupid, stupid bets, and they don’t want to lose. Like a bunch of schoolyard bullies who change the rules of the game when things aren’t going their way.
“The United States’ non-financial sector credit is 2.6 times GDP, and China’s is 2.0 in the official system and an additional 0.3 to 0.4 in the gray market. When the interest rate is artificially kept low by one percentage point, all in the name of stabilizing financial markets or stimulating the economy, 24 percent of GDP in income, more than all the income for capital in a normal economy, is transferred from savers to someone else. This is the juice for financial crimes and misdemeanors.”
Elizabeth Warren has written a memoir. Re a dinner with Larry Summers:
“After dinner, “Larry leaned back in his chair and offered me some advice,” Ms. Warren writes. “I had a choice. I could be an insider or I could be an outsider. Outsiders can say whatever they want. But people on the inside don’t listen to them. Insiders, however, get lots of access and a chance to push their ideas. People — powerful people — listen to what they have to say. But insiders also understand one unbreakable rule: They don’t criticize other insiders.
“I had been warned,” Ms. Warren concluded.”
To be an insider is to be spiritually and emotionally dead. No other way to explain their behaviour. They are not listening, they don’t care, and they’re certainly not in fear of us.
I remember reading in a textbook (and I don’t know if it’s correct or not – it was just about two lines at the very end of the section) that the French Revolution began when the poor had no bread to eat, of course, but that it was really the merchant class who instigated it, not the poor. The merchants stirred up and organized the poor people. Anybody know if this is correct?
rapier – I agree. We just follow these economic or religious priests off a cliff. How do they ever get so much power? I was reading about women in the Philippines, six or seven kids, desperately wanting to buy birth control, yet the priests won’t allow it. WTF? The whole family is suffering, hungry, living in a one-room shack, and yet some representative of God says, “No, no, you can’t have that. I have spoken.” He needs to be told to jump off.
“Iron ore is among the commodities used in the so-called financing deals in the country, in which they are used as collateral for traders or companies to get funding for other businesses.”
Same thing with copper. What other commodities are they using? Gold?
“Just as with copper, traders use gold to short dollars, buy Chinese yuan, and make a gain on the interest rate differential. While the extent of the speculation is well-known regarding copper, gold’s role has been underestimated so far.
So far, China’s import of 1400 tons of physical gold from Hong Kong since 2011 (worth roughly $70 billion) has been attributed to demand from savers for investment or jewelry. The central bank was also rumored to have built up gold reserves in order to diversify its holdings of U.S. Treasury bonds.
In fact, it appears that the importing (and re-exporting) of all this gold had a much simpler motive. Profit.
Because of capital controls—you cannot buy yuan on the open market—traders devised an elaborate scheme involving Chinese and foreign banks to funnel dollars into the Chinese credit system. They would earn a much higher interest rate in China and also profit from the appreciation of the Chinese yuan.
Copper was used extensively because of its availability, but gold was popular because you can move larger notional sums and use up less space during shipping and storing.”
“In 2010, the Gini coefficient for family income in China was about 0.55 compared with 0.45 in the U.S. In 1980, the gauge in China was 0.30. A coefficient of 0.5 or higher indicates a severe gap between rich and poor, according to the report, which also said the Chinese government stopped releasing the data in 2000 when the gauge reached 0.41.”
Does that sound familiar, or what? Kinda like measuring ocean water for radioactivity after Fukushima; it’s just suddenly stopped off the west coast of North America. Same with so many other statistics.
When they don’t like the data, they just stop producing it, or manipulate it, wash it, spin it, and then hang it out on the line all fresh-like.
Why HELOC Resets Will Undermine Any Housing Recovery:
For three years, I have been writing about the looming home equity line of credit (HELOC) disaster. The media pundits paid little attention. Then a Reuter’s article about HELOCs resetting to fully amortizing loans appeared last month. Finally some commentators took notice of the problem. Unfortunately, most pundits have tried to reassure their readers that it will not be much of a problem. One influential writer actually said that many of these HELOCs were already paid off, refinanced or extinguished because of foreclosures and short sales. Really? What nonsense. […]
You had better prepare for what is coming in the next four years with the HELOC resets. Almost all of these HELOCs are second liens. When the borrower defaults on an underwater property with a HELOC, the loan is not simply written down. It is written off as worthless. Some of the largest banks will regret that they handed out millions of HELOCs during the bubble years.”
The Coming Mortgage Delinquency Disaster:
Just look at the two graphs!
Michael Hudson on Piketty: “Rich people in America don’t earn income, they make capital gains and capital gains are not in everybody’s income statistics, they’re not in the statistics basically that are reported. And the IRS, the Internal Revenue Service of the United States, only conducts a study of capital gains once every ten years or so, and countries like England and many European countries don’t even have a tax on capital gains, so they’re not going to appear in the statistics. […] One of the things that Piketty does not discuss when it comes to making fortunes is the role of debt, that most of these fortunes that have taken off since 1980 have taken off because of the increased debt leverage. As interest rates have fallen since 1980, you’ve had more and more bank credit going in to just bid up real estate prices, stock prices, bond prices, every kind of price, not to mention fine arts trophies that have gone with this.”
He says Piketty’s book is a good start. Good read.
He lambastes Krugman: “The simple answer is that Krugman is a neoclassical economist. Neoclassical means anti-classical. He does not recognise that there is such a thing as economic rent. He also got in a big argument with your Australian Steve Keen two years ago saying that banks don’t create credit. “All banks do,” Krugman said, “is lend out savings.” He said it’s inconceivable that a bank can actually create credit or inflate asset prices.
So Krugman is applauded by the right-wing to be their liberal of choice not because he understands the economy, but because he doesn’t understand the economy. If he understood how the economy worked he wouldn’t have won the Nobel Price, because that’s a prize for people pretending that there’s no such thing as economic rent; there’s no such thing as unearned income. And that’s why Krugman’s focus is on, well, the real problem is that these managers of companies are paid so much more and they earn so much more income. But he’s even wrong as to his statistics and, remember, he’s a professional bank lobbyist. He’s paid by the banks.”
Yikes!
https://www.nakedcapitalism.com/2014/04/piketty-wealth-gap-wakeup.html#comment-2037766
Here’s another journalist going after the New York Times, Michael R. Gordon, for a piece they ran on Monday. They ran a page-one piece on Monday, but backed down with a page-nine piece today (which of course no one sees); no apology. He gives a rather humorous take on Biden and Kerry, then says:
“…this deception and clumsy disinformation would all be laughable, except that what these lying thugs in Washington and in America’s newsrooms are doing is trying to prep Americans for military action in Ukraine…”
rapier – and add Libya to your list. I didn’t see the article you mention, but the situation is certainly on my radar.
“The United States is in the opening phase of a war on Russia. Policymakers in Washington have shifted their attention from the Middle East to Eurasia where they hope to achieve the most ambitious part of the imperial project; to establish forward-operating bases along Russia’s western flank, to stop further economic integration between Asia and Europe, and to begin the long-sought goal of dismembering the Russian Federation. These are the objectives of the current policy. […]
The pattern, of course, is unmistakable. It begins with sanctimonious finger-wagging, economic sanctions and incendiary rhetoric, and quickly escalates into stealth bombings, drone attacks, massive destruction of civilian infrastructure, millions of fleeing refugees, decimated towns and cities, death squads, wholesale human carnage, vast environmental devastation, and the steady slide into failed state anarchy; all of which is accompanied by the stale repetition of state propaganda spewed from every corporate bullhorn in the western media.
Isn’t that how things played out in Afghanistan, Iraq, Libya and Syria?
Indeed, it did. And now it’s on to Moscow. Putin’s survival and that of the Russian Federation depends to large extent to his ability to grasp the new reality quickly and to adapt accordingly. If he decides to ignore the warning signs hoping that Washington can be appeased…..So the first priority is simply to accept the fact that the war has begun. All future policy decisions should derive from that basic understanding.”
Read the article. I think the guy has got it about right. I’ve already blasted off an angry email to my lame leader, telling him to back away from what’s happening in the Ukraine. I’ll probably be on some terrorist list now.
This could get serious. If they push Putin – and they clearly want him to react – they’ll go after him and he’ll respond.
Good advice re using cash. I’ve been using it more lately, but I’ll kick it up a notch.
Poor water supply company in China, getting blamed for the bad water by the government. Hello, anybody in there? The water company didn’t purposely poison the water! It’s been the Chinese government that’s allowed this contamination to happen.
Re Putin – is he the next Saddam Hussein or Gadhafi? They’re just laying for that guy, wanting him to get angry. That way they’ll be able to legitimately move against him. Hard thing to do, keep your mouth shut until you need to speak.
Government policy becomes criminal behavior as soon as they start favoring one group over another. They need to be gathered up, all of them, and offshored. They no longer act for the good of their country, but for themselves. Of course, it’s probably always been that way. Charles Hugh Smith says the 60’s and 70’s were an anomaly. He’s probably right; shortage of labor or something.
Under the guise of “we need more people to pay for Social Security,” governments make sure wages stay low by bringing in more people (if they can’t offshore the jobs). Supply and demand doesn’t ever get a chance to assert itself to benefit workers, but it sure does in everything else.
From manipulated CPI to GDP to the lies we’re continually being told, what’s not criminal?
Re blatant lies:
“Indeed, in my four-plus decades in journalism, I have never seen a more thoroughly biased and misleading performance by the major U.S. news media. Even during the days of Ronald Reagan – when much of the government’s modern propaganda structure was created – there was more independence in major news outlets. There were media stampedes off the reality cliff during George H.W. Bush’s Persian Gulf War and George W. Bush’s Iraq War, both of which were marked by demonstrably false claims that were readily swallowed by the big U.S. news outlets.
But there is something utterly Orwellian in the current coverage of the Ukraine crisis, including accusing others of “propaganda” when their accounts – though surely not perfect – are much more honest and more accurate than what the U.S. press corps has been producing.”
https://smirkingchimp.com/thread/robert-parry/55402/ukraine-through-the-us-looking-glass
Here’s a guy that’s seen a real change in the level of lies your country and its mouthpieces tell you.
India is running out of water. Very good article.
“Today, the Punjab, whose name means “land of five rivers,” is running out of water.
The thump of well-boring rigs echoes across the plain. Farmers try to drive wells deeper than their neighbors’. The water table is dropping at a rate of about 3 feet a year.
High-intensity agriculture has exacted other costs: Exhausted or salt-contaminated soil, resistant pests and plumes of fertilizer and pesticides in streams and aquifers.
Similar problems have arisen around the world. Agriculture accounts for more than 90% of all the fresh water used by humans. Demand is so great that many of the world’s mightiest rivers no longer reach the sea year-round. Grain farmers in the top three cereal-producing countries — China, India and the United States — are pumping water from aquifers faster than rainfall can replace it.”At least it’s not something we need!
Paul Craig Roberts asked how the IMF was still so successful in getting countries to take out huge loans. His answer was that “they’re paid,” I assume in the form of bribe money.
Native peoples in Canada are different and must be frustrating to Harper. Money was never that important to them (gasp!), and they can’t be bought. How refreshing. I mean, to think they actually value the land, the environment more than money!
steve from virginia – then who do you think best represents what has happened? Post a link or two of articles you like (as long as it’s not Krugman).
I think Stockman is another voice pulling back the curtain on the fraud and lies we are being told. He may not be correct on everything (who is?), but I sure wish we had more people like him speaking up. We are not getting the truth from the media.
Post a link to an article you really admire. Ilargi and Nicole, I think you’re doing a superb job!
Chettt – “I only wish that the US were as cunningly effective at world domination as the folks at LEAP seem to think.”
I think they are cunningly effective. Smedley Butler, the most decorated Marine in history, describes fighting for U.S. banks in many of the wars he fought in.
“I spent 33 years and four months in active military service and during that period I spent most of my time as a high-class muscle man for Big Business, for Wall Street and the bankers. In short, I was a racketeer, a gangster for capitalism.
I helped make Mexico and especially Tampico safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefit of Wall Street. I helped purify Nicaragua for the International Banking House of Brown Brothers in 1902-1912. I brought light to the Dominican Republic for the American sugar interests in 1916. I helped make Honduras right for the American fruit companies in 1903. In China in 1927 I helped see to it that Standard Oil went on its way unmolested. Looking back on it, I might have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents.”
Confessions of an Economic Hit Man by John Perkins is a really good read. Shock Doctrine by Naomi Klein is excellent as well (and I couldn’t even finish reading all of it because it made me sick).
Who’s advancing, Chettt? If we got answers to Ilargi’s above questions, that would sure help, but I somehow don’t think they’ll be answered. Who is the one country who’s aggressing all over the world?
Re Colbert taking over Letterman’s show – if I were corporate America or an American politician/military official…..I would want to stifle Colbert. Perhaps this is what happened. But Colbert is not stupid, he would know this. I can’t imagine them holding him down. We will see.
It is a shame because he opened people’s eyes to what was happening. It could be their way of getting rid of the court jester.
I too am an incurable romantic, and that is the best part of me, it is all of me. In this world, it is the part I keep secret. I have been blessed to feel what you describe in your first three paragraphs, and it wasn’t wealth or material possessions that brought me there. If you in your life don’t ever feel that all clocks should be stopped at some point, then how can you say you have ever truly lived?
I like this line from Antoine de Saint-Exupery: “It is only with the heart that one can see rightly; what is essential is invisible to the eye.” I think there is a lot of heart out there; perhaps it has just been buried under the “visible”: assets, money, cars, and everything in the end that does not matter.
Maybe it’s as Marquez said: “Wisdom comes to us when it can no longer do any good.”
That was a good interview; enjoyed it. Woodward and Bernstein? The likes of them are gone, or held in abeyance. Paul Craig Roberts said he was a former editor of The Wall Street Journal, and he witnessed the change in the media. He said:
“…many of them know they cannot tell the truth, otherwise they’ll be fired. They know it’s pointless to take a story that contradicts the president or the secretary of state or the CIA or the NSA to the editor. He or she will look at you and say What are you crazy? Do you want to get us both fired? So they simply don’t bother. It’s quite a corrupt milieu, and it must be deadening to the soul. But that’s what it is to be a mainstream journalist today.”
Too many people are only listening to the mainstream media, and they really have no idea what the truth is. I agree with “one mind at a time”. My kids know the name of this site, and they tell their teachers, and the teachers talk in the staff room, and then they tell someone else…..and eventually the herd shifts. It just takes time.
It seems many women do not want to have more children, but they either cannot afford contraceptives or there aren’t any available.
“In neighboring Bihar, India’s poorest state, Gopalakrishnan recalled that he once helped transport doctors, nurses and equipment to a tent clinic, prepared to surgically sterilize 200 women. Ten times that many showed up.
“When it became clear we couldn’t register them all, they broke all of the furniture and chased the doctors away,” he said. “These were all women. Muslim women — with a desperate need.”
“They are members of the largest generation in history — more than 3 billion people worldwide under the age of 25. About 1.2 billion of them are adolescents just entering their reproductive years.”
With that much testosterone flying around, who knows where we’ll end up.
“According to United Nations projections, the number will rise to 9.3 billion by 2050 — the equivalent of adding another India and China to the world.
That’s an optimistic scenario, one that assumes the worldwide average birthrate, now 2.5 children per woman, will decline to 2.1.If birthrates stay where they are, the population is expected to reach 11 billion by midcentury — akin to adding three Chinas.”
Oh, man.
Ilargi – thanks for the “detail” re China’s population being 1.3 billion. I should have checked that; sorry. So China’s population has increased by 44% instead of 77%, if my calculation is correct, and the U.S. by 57%. Education is what will bring the population down, but I don’t know if there’s time. I don’t think there is.
To me, this is truly frightening. I guess I hadn’t really wrapped my mind around this, thinking it was still possible to rectify the situation. What the hell?
We’ve been lacking a predator, but I’m sure we’re going to get one.
A light bulb has switched on. Thank you.
Ken – 178 years! I guess I forgot to multiply by 5 and carry the 1. What if each couple of child-bearing age only had one child going forward, Ken? How long do you figure that would take to get down to 500 million, approximately, or even 1 billion?
Just checking the Wiki page, I see the world population hit 500 million in 1650, 1 billion in 1804, 2 billion in 1927, 3 billion by 1960, 4 billion by 1974, 5 billion by 1987, 6 billion in 1999, and 7 billion in 2012. That is a lot of productivity going on. A commenter had this to say about China’s one-child policy:
“China’s birthrate pre-policy was 5.8 in 1970 and 1.5 in 2013. The fertility rate has indeed fallen.
However, China’s population was ~900 million in 1970 and 1.6 billion in 2013. Given that a population can’t increase (excluding immigration and immortality) with less than a fertility rate of 2.0, most of the country clearly have had more than one child.
So the policy reduced the fertility rate, but the country still grew significantly.
Interestingly, despite the 1 child per family policy, China has grown proportionally faster than the US in the same time period.
China: 900 million (1970) to 1.6 billion (2013) = 77% increase
USA: 203 million (1970) to 320 million (2013) = 57% increase
We have a fertility rate of about 2.0 (40 yr avg), so we know that China’s actual fertility rate is greater than 2.0, not 1.0.”
So even a “one-child policy” really gets you “two” and change.
That non-linear option is probably going to present itself to us without us even asking for it. Nature will strike back.
Ilargi, you asked “what do we want” or “where do we want to go”. I’d like to see about 500 million people on this planet (that’s enough, isn’t it?). Of course, I don’t advocate killing anyone who’s already here, but just slowing the rate of birth enough so that we eventually reach this amount.
Then I envision using hydroelectric power only – no nuclear, no coal, no firewood. Solar and wind power, great ideas as well.
Anybody else have any thoughts on this? Why is it that we always need more growth? We slowly killing ourselves, or allowing our psychopathic leaders to do it for us.
Indus56 – sometimes I don’t post because Ilargi already does such a good synopsis; I’d just be repeating what he says. He does one heck of a good job at summing up what’s happening. Oftentimes I have to think about what he’s said, and by the time I summarize my thoughts and get ready to post, there’s another post up. I can’t keep up.
If you are worried about your children’s future, here’s a post to consider. The video is actually scary, and the chart shows where we’re heading if our industrial society continues on. Do watch the 27 minute video.
Then watch this video to see just how beautiful the world is and what a shame it would be to lose it. The music alone is worth it!
Putin thrown out of the G8, even though Russia had helped Ukraine to the tune of $35 billion. I wonder, if Trudeau was still PM, whether that would have happened. And Libya and…..
Canada is no more than an American puppet now. Trudeau certainly had his faults, but I know he would not have stood for what’s happening now.The Ukraine is boiling over. Most likely the split that was always there is just surfacing now, in bad economic times. When members of parliament behave like this, it’s no wonder it’s spilling out onto the streets.
https://www.theguardian.com/world/video/2012/may/25/ukraine-parliament-brawl-language-bill-video
The world really is an appalling mess, and the sad part is that you don’t have to look far to find evidence of this. It’s everywhere, a mad grabbing at air, or at anything that isn’t nailed down, like a self-strangulation. Sucking, stripping, extracting, over-populating, corrupting…..on and on. I don’t know where we think we’re going. Where is everybody going? Nowhere.
Just my happy thoughts on the day. Thanks, Ilargi.
BeezleyBub – thanks for your passion! We do not realize that every time we gain (cars/central heating/blah, blah, blah), we also lose something (life). Thank you for your comments and links, which will take some time to digest.
The ordinary Joe could be (but shouldn’t be) excused from seeing the big picture, but there are many who do know what’s going on, yet refuse to speak out, to act. Too much money in keeping quiet, I guess.
Don’t lose your passion!
Bertrand Russell: “Power is the ability to produce intended effects”. There has certainly been deliberate intent from Greenspan, Bernanke, Congress, Supreme Court, central bankers…..
“So, the first and most basic axiom about power leads to the first and most basic axiom for those who don’t want to be under the thumb of power structures: no matter what the society, and no matter how benign the new system you hope to create appears to be in theory, there have to be rival power centers to keep power from congealing. Big Government or Big Religion or Big Political Party can be as dangerous as Big Capital.”
Where is the rival power? The two political parties appear to be joined at the hip (there is no great fighting going on). Big Capital usually gives equal amounts of money to each major political party, and are well served by this. Big Religion? Nope. There is no rival.
“The second basic axiom concerning power is that the powerful always try to create an outside enemy, real or imagined, to bind the followers to the leaders.” That’s always present; powerful propaganda machine.
“The third basic axiom is divide and conquer. If the followers are not faithfully bound to the leader by the dread of the outside enemy, then leaders can stay in power by favoring some followers and punishing others.” Reward the risk-takers; punish the risk-averse.
“Fourth, provide the followers with bread and circuses.” Check.
https://www2.ucsc.edu/whorulesamerica/methods/studying_power.html
Where does the little guy even figure in the picture?
Diogenes Shrugged – Lanny Breuer, Assistant Attorney General of the United States, left his post last year after a Frontline piece aired, criticizing him for being soft on Wall Street. He’s been in and out of Washington before, previously Special Counsel to Bill Clinton.
It’s just one big revolving door between law firms/lobbying firms and the government.
Both Lanny Breuer and Eric Holder are from the same law firm, Covington & Burling LLP, both white collar defence attorneys. They were not about to go after their previous clients. They probably got their positions BECAUSE they wouldn’t go after them.
https://michellemalkin.com/2009/11/18/culture-of-corruption-holder-terrorists-covington-burling/
rapier – you are probably right. This is interesting: 2012 Follow the Money Chart for “Who owns the US government?”
Yowza! That’s a lot of money, and they have guns too.
Supreme Court ruled 5-4 today to “eliminate limits on how much money people can donate in total in one election season. […] In effect, it expands the loosening of campaign finance laws that occurred with the high court’s Citizens United decision in 2010 that eased campaign spending by outside groups.”
https://www.cnn.com/2014/04/02/politics/scotus-political-donor-limits/
Just great, more money. Is anyone starting to feel slightly strangled?
Ilargi, I do think that change is possible, but it’s going to take a catastrophic event to wake people up, and it’s going to have to knock their socks off. And even then, I don’t think they could handle too much change in the status quo. What do you think of Karl Denninger’s “One Dollar of Capital”? He seems to think it would stop all inflation, which might curtail growth a fair bit.
Great article! Getting money out of politics is THE first step that must occur. Everything else we can come up with follows from that.
“Mr Jiang sent a message saying “the footprint of this anti-corruption campaign cannot get too big” in a warning to Mr Xi not to take on too many of the powerful families or patronage networks at the top of the party hierarchy.”
And this is a former Chinese president!!! Did China provide the huge amount of stimulus after the financial crisis occurred because they were worried about peasant anger (from them losing their jobs), or was it done in order to bail the elite out, keep it all going until they could get their money out of the country?
These guys are just as bad, if not worse, than the scumbag politicians here, and their and their family members’ money is safe in the British Virgin Islands and other tax havens.
https://www.icij.org/offshore/leaked-records-reveal-offshore-holdings-chinas-elite#
Russia has been attacked so many times over the centuries, millions of lost lives. Of course they’re going to react when they feel threatened; history tells them they have good reason to be worried.
“Viewing the Ukraine Crisis From Russia’s Perspective”:
rapier – “A nice wad of cash and some pictures of Muzychko’s body probably did the trick.” So true. Thanks for the good laugh!
So long as people remain dependent on government handouts (and I can’t blame them – there are few good-paying jobs left), so long as people think it’s okay for their house price to be manipulated up (so they can borrow against it)…..so long as everybody is trying to get “something for nothing,” they will keep electing billionaire presidents who line their own pockets and those of their friends. So long as the population continues to think it’s okay for their government to interfere with sovereign countries the world over, dependent again on their government to get them “something for nothing,” nothing will change. Bread and circuses for all!
The ONLY thing that will wake people up is a giant upset in the status quo, a painful suffering. In fact, I don’t really think many people are even conscious at all. That’s what bread and circuses gives you – unconsciousness.
Apparently the steel sector has been very lucrative for many in China. You can see why these things are not quick to wind down; too much money being made.
“Firstly, the government owned mills buy their iron ore from a “friendly” trader at inflated prices and then split the profit.
This is a straight out procurement scam, which is common the world over. But it does provide an incentive for mills to keep buying iron ore even when the economics don’t work.
The second part of the play is a uniquely Chinese one and comes about due to the preferential access to cheap credit afforded to state owned enterprises.
Lou says state owned mills turn their expensive iron ore into steel, but rather than sell it immediately often use the product as collateral to borrow money from a state-owned bank.
This cheap credit is then lent to a third party – often a property developer or coal miner – with a hefty mark up attached.
“The plant does not make money, but those connected with it make huge profits,” said Lou, who has spent time at both Harvard and Oxford University.
“This has totally distorted the Chinese economy.”
Once again the distortion works on two levels – it inflates demand for iron ore and has resulted in chronic over capacity in the Chinese steel sector.
“As long as the mill is in operation you can play the game,” said Lou.”
Who would want to see this end?
Professorlocknload – they certainly have engineered a real estate bubble (mostly all cash deals by institutional investors/hedge funds or foreign purchasers [Chinese], as mortgage applications are way down).
“Applications are 35% below levels at the depths of the 2008/2009 recession. Applications are 65% below levels at the housing market peak in 2005. They are even 35% below 2000 levels.”
Ditto with the stock market. But you’re right, the world’s central banks are blowing bubbles for all they’re worth. Who’s benefitting? Those who can borrow first at next to nothing. For them, the music plays on.
Variable81 – thanks for sticking up for me and posting the opinion I did give. Appreciate it. I often just post a link because others say it so much better than I can, or they have a different opinion.
Ilargi – criticism noted and understood. Opinion? Hard to form one when there is very little transparency and so many dissenting articles. Some say what’s happening in the Ukraine is just to take our eyes off the ball (the financial crisis). Others say it’s the Shock Doctrine, IMF loans, privatizing the country; while still others say they’re trying to strangle Russia (which I think is the ultimate goal). One reason cited for the final collapse of the USSR was that the U.S. bankrupt them with cheap oil prices (and I do remember getting gasoline in the low 30 cent range for a good part of late 80’s/early 90’s.) Very difficult to see the principal reason; perhaps it’s all of the above.
It’s hard to separate the wheat from the chaff. Example: commodity prices are rising because there’s a genuine shortage, it’s the weather (ha!), or it’s speculation by commodity traders, or people putting their money somewhere because there’s nowhere else to go in order to get a return, or outright manipulation? Who do you listen to in order to form an opinion? Because unless your intuition is pretty acute, opinions don’t form out of nothing? Then you finally reach articles that get a little closer to the truth – hoarding of commodities in warehouses (i.e. Goldman Sachs/JP Morgan) or in Hong Kong/China. Probably all of the above again.
Even topics such as raising the minimum wage set my head reeling. Of course we should raise the minimum wage, some say, because that would help the “people”. Yes, it would, but it also keeps the game going, and do we really want to see that happen? Everybody gets more money, they go out and spend that money, demand rises, prices increase, and pretty soon they’re back asking for more money. But, hey, the game is kept afloat and the elite keep cashing in, the population increases because times are good, and along with that comes more polluting and strip-mining of the planet. Is that what we want? I mean, there comes a time when this particular way of life will have to end. Short-term versus long-term thinking. I tend to think long-term because I’ve got children that I want to see have good lives, and the way things are going I don’t see that happening.
No deep state? (It’s so much easier to absorb when you think others, other than the ones we see in the news, are behind the scenes.) In other words, what we see is what we get? Geithner was and is a little prick, along with the rest of the bankers? Nobody is pulling their strings? They’re the ones pulling the strings? Obama “is” actually a neo-con, he “has” aligned himself with psychopaths (the ones who are front and center), who are bent on bailing themselves out and continuing the fun? The Deep State is not deep at all – it’s right in front of our eyes? That probably is the case, but surely there has been a deep collusion among the central banks of Japan/China/U.K./European Union/U.S.
I do think they are keeping a lid on any insurrection by making sure the poor get shelter/food/bread and circuses (of course, it benefits the elite because 1) they keep the game going and 2) they greatly benefit from these programs themselves – ex. JP Morgan with EBT cards, etc.) There will be no uprising unless and until these programs cease. Savers have been thrown under the bus because they could be (who saves anymore?).
I also resent that I should even have to be paying attention to this sh*t. Whenever people are fighting for their lives, creativity is stifled. I’d much sooner be doing research in another field, but I find I’m drawn back into this crap simply because I’m trying to keep my head above water. The short-term thinking, psychopathic elite are fighting hard to maintain their system of looting (hey, it’s been good for them). Psychopathy is something I have done extensive reading on. Good luck to us! is all I can say.
Not much of an opinion, but there it is. Yes, I think it will fall apart eventually, but perhaps after Cory and I have already done so.
“Chronology of the Ukrainian Coup”
