Monday, April 9, 2012

It's Been A While...

This is the first post in some months... but it's not that I've been away or extraordinarily busy.  Rather, I've been "digesting" all that has been happening around the global debt crisis, particularly in Europe.

There's no need to analyze the eurozone's debt woes - this is a horse that has been beaten to death so many times already, and by so many informed, misinformed and "deformed" commentators,  that I feel I have nothing original to add. 

Instead, I will once again revert to my oft-repeated thesis: that this here "debt crisis" is but a symptom of a wider, more virulent disease, and that by focusing on it, rather than trying to confront its deeper causes, we are making things that much worse for ourselves and our children.  What good does it do to provide daily doses of aspirin to a patient with pneumonia?  Yeah, the fever will go down, but the patient will eventually die.

And this is exactly what we have been doing... at least, that's what my stomach is saying after "digesting" the news for these past months.  So... It's the (real) economy, stupid!! .. is today more apropos than ever before.  Politicians, economists and even "smart" businessmen are constantly looking for monetary fixes (i.e. liquidity) to what is a fundamental, paradigm-shift problem.  Earth to Everyone: It can't be done.

Look at Europe's scape-pigs: Portugal, Italy, Greece, Spain... but also Ireland, the UK - even France (and Germany won't be far behind once China dips).  Everyone is mired in doom and gloom and the (real) economy is going absolutely nowhere.  Austerity, reform, restructuring, debt forgiveness... it has all lead to precisely.. nowhere.  Unemployment is very high (23% in Spain, 22% in Greece, etc etc) and still rising, earned income has tanked, productive investment has collapsed... I can go on and on.  But in one word, the real economy absolutely sucks (pardon my french).

We desperately need a serious Paradigm Shift.  Quit stroking the bankers and start stoking the fires - or, rather, start spinning the windmills, laying out the solar panels, drilling the geothermal wells, building the electric economy...

It almost doesn't matter what, but the when must be NOW.


  1. Come on, do the maths. If we take the UK, unemployment benefit with all the bits comes to around 12K a year. So if we get one unemployed person back to work, that is 12K saved. On top with get taxation. Now most of these jobs will be minimum wage. So that's 2.5K in taxes on top. Yep the poor get taxed here. So what does that mean?

    For each million back to work (so long as you don't spend money to do so), makes the government deficit 15 bn better off.

    Given a 150 bn deficit in the UK, its not going to make much of a difference.

    As for Green schemes, they are all premised on one thing. Getting the government to screw people over to make money.

    ie. Rent seeking. No difference from failed bankers demanding handouts or the boogey man will come.

    So if you take the real debt in the UK, its 6 trillion.

    Last year that was 150 bn overspend, plus 350 bn increase in debts. Total 500 bn.

    Tax revenues, 550 bn.

    You can't get growth by spending, to decrease the debt. It doesn't work, it just increase the debt.

    Even inflation doesn't work because the debt is primarily linked to infaltion

  2. Paradigm shifts are definitely not the specialty of people in power or governments. Change must come from dedicated individuals as has always been the case.

  3. The FUSA has been at 22% unemployment and bottom bouncing for what, two years?

  4. HA... Hell, Welcome back! I haven't been as obsessed with economics for the last few years, so I rarely check in here. Coincidence that I checked in today and you wrote something.

    I don't think you and I could think more alike!!!!!!!

    I just can't bring myself to write articles anymore because of all the existing noise. I'm not adding anything new. ...and the people that get it right already say what I am also regurgitating. So why add to that noise??

    Although I do enjoy picking apart how much "wrong" that is being spewed. ....but sometimes I wonder if the "wrong" is truly "wrong".

    It's like economics has become fictional writing for last few years. Facts can be used -or not- when telling these current stories.

    ...and if fact is no longer "the fact" and fiction is allowed to become the new fact, then maybe it's not so wrong???

    I say this because we all know it's a confidence game. ...and if the facts no longer can show any signs of confidence, then what other choice do you have but to fictionally create your facts, and subsequent confidence, and new reality???

    When the ground game of fiat currency lives in this fictional world of valuation, and all parts of that creation of fiat are derived from debt/promises... and all "assets", stocks, etc. are part of this vicious cycle.... then what do the facts matter?????????????


    All the best,
    Miss America - Rich Hartmann


    Confidence/hope is always last to go, isn't it? :)

    Yeah, Rich you and I are on the same track... you put it best: "why add to the noise", indeed.

    I'll try to find something "original" to write, however. Talking to my yellow duckie (this blog) is often quite profitable, if only because it makes me justify my thoughts before they become writtten words...


  6. "Change must come from dedicated individuals as has always been the case."

    Isn't that the truth... thx Camabron.

  7. Hate to break it to you Holmes, but the time for saving Europe with a "green energy" boondoggle was about five years ago.

    Right now the debt crisis is progressing too fast. Bad debts will rock/impoverish/break up Europe before any workable energy program not massively dependent upon subsidies can be put in place.

    No, this is not an Anglo-American consipracy. The fallout will rock the anglosphere as much as it will Europe, if the anglosphere itself can hold together that long.


  8. Well, Sid... this blog is now almost six years old... :)

    In my opinion there isn't any "right" time to go the "green" energy route (I prefer "sustainable" to "green", btw). It's really a matter of how society wishes to structure its economy, i.e. it's not an economic issue, but a social one.

    H. (for Holmes ;)

  9. Well, Hell, taking it for granted that "sustainable energy" or whatever you want to call it is a social choice (and I think you are right) - developing this energy will require time, confidence and money.

    Europe is short of all three of these at the moment.

    Had Europe launched such a project five or so years ago, back when there was risk capital in abundance and people who actually believed the the Europroject and the various Eurogovernments (and doubters kept their thoughts to themselves), and if these energy development projects had enough force behind them, then *maybe* they would be bearing fruit fairly soon.

    But they didn't, and to try and launch such a scheme as the latest Salvation of Europe now would be like unto the Sioux launching a crash weapons program in 1875, or like Japan staking its future on the launch of a military reconnaissance satellite in 1945.

    Incidentally, what I do not understand is why growing lipid biomass using blue-green algae does not work better. It seems like sort of the obvious path, but what do I know?


  10. SidFinster said..."developing this energy will require time, confidence and money."

    The first two, certainly. Money... well, given that today's money is a wholly artificial construct, created out of thin air, that's the "easiest" of the three.

    The really hard part is overcoming the huge entrenched interests surrounding the fossil fuel business - easily the biggest business in the world.

    THAT'S where society comes in, via the democratic process.. assuming, of course, that society as a whole can understand the difference between the Gillette razor model and a permanent hair depilation...


  11. Hellasious,

    Shoot me an email please,

  12. Actually, "money" and its value are also dependent upon confidence. Simply creating "enough" money to fund sustainable energy projects will surely collapse confidence in that money and render it worthless. History gives us plenty of examples of hyperinflation brought about that way.

    What will be required to save Spain or whatever is going to take far more brutal steps, something like after the Spanish Civil War:

    Think default, nationalization, leaving the EU and imposing capital controls and tariffs.

    Spain will also need to develop a source of uranium so that the bankers and developers can be sent to the uranium mines.

    Note that this is just damage control. Discussion of the future whether based on sustainable energy or what comes later. In my feline view, it is too late to build that future upon the current system, and vested energy interests have nothing to do with it.

  13. Good to see you back