The world is going broke

[easylikesunday]

Interesting...

http://www.youtube.com/watch?v=m6FNYvC4uyM

 

[c-unit]

Yep. This is what happens when you have a system of paper money that isn't backed by anything real. Central banks around the world printing money is equivalent to hidden taxation (through inflation) and theft - stealing purchasing power from those who have earnt it.

'Tis what happens when governments and regulatory authorities interfere with market forces

To me, the real problem is peoples misconceived fear of deflation. Deflation is actually a healthy thing, and reflects increasing productivity and economic capacity. Inflation is unhealthy, reflects loss of purchasing power and encourages consumption over investment.

 

[nioka]

Of course it is. The pyramid selling program relying on growth through lending that is out of proportion to actual production will see to that.

 

[Slipperz]

Glad I'm in good company

 

[easylikesunday]

Peter Schiff, who features in the video I posted above made several predictions in 06/07 about the current recession.

Check out this video as he talks about whats ended up happening. He is basically 100% accurate, all the while the "expert economists" laugh at his claims..

http://www.youtube.com/watch?v=2I0QN-FYkpw

BTW, how do you embed videos?

 

[Smurf1976]

We have a financial "industry" growing way out of proportion to real production in the economy. If that were in a human or animal, it would be commonly referred to as cancer.

 

[Agentm]

 

[explod]

And our wonderful US of A is leading the way. Following extract from Dan Norcini. For the entire article go to JSminsite on the following link:-

http://jsmineset.com/

The funny money has made its way into the commodity sector driving food prices to unseemly high levels once again just as what happened in 2008. Corn is now within spitting distance of $5.00, wheat is more than $7.00, soybeans are over $10, sugar is over $0.24/pound, cotton is closing in on $1.00, coffee is up near $2.00 pound wholesale ( a 13 year high), cattle are just shy of $1.00/pound, bellies are trading over $1.50/pound for fresh product. In short, the consumer is on the verge of watching his or her’s disposal income decimated by high food prices at the very time that a record number of Americans are on food stamps and are either unemployed or underemployed.

I shudder to say it but based on what I can see of the price action across the commodity sector today, an evil has now been loosed upon the land that portends the eventual ruin of the middle class.

The only bit of saving grace is that energy prices have not YET begun moving up alongside the rest of the commodity complex. I think it is only a matter of time however before the crude complex gets involved. When it does, home heating bills, home cooling bills, industrial energy costs and gasoline prices will join the list of soaring costs nationwide.

The one-two knockout punch of higher soaring food cost and higher energy costs will finish off the consumer whose wages have been stagnant for longer than I can now remember.

 

[nioka]

We have a financial "industry" growing way out of proportion to real production in the economy. If that were in a human or animal, it would be commonly referred to as cancer.

That is the way I think of the finance industry. "A cancer on the productive side of the world."

There is a tendancy for discussion on the cost of maintaining the aged section of the population. What is the real cost to society of maintaining such a large portion of the overpaid section that is not productive?. In that section I include myself. The profit I am making through trading in shares is out of proportion to the effort and investment these last three years. In my case at least I pay my way in my old age and some of my profit has gone/is going to help some not so fortunate.

The stock market is manipulated by vested financial interests that rely on constant turnover to milk the system. Today is promoted as a "down" day after three "up" days for no real reason. A couple of "down" days will trigger stop losses and cause a third. Then they will come out with some "good" news and promote buying again. The trading will create charts on stocks that traders will use and say "I told you so". So after a period the charts will do their own promotion of up and down days and give the turnover that the brokers want. All the time being unproductive and a burden on those that are producing something of value.

 

[Smurf1976]

What is the real cost to society of maintaining such a large portion of the overpaid section that is not productive?

It's not just the financial cost. Think of how many very smart people, with well above average intelligence, spend their days shuffling money around for no net gain to society. If it wasn't for the financial cancer, these people would be top doctors, engineers etc doing all sorts of wonderful things from which we would all ultimately benefit in some way.

100 years ago it was engineering, science and so on. Medical breakthroughs, mass adoption of cars, electricity, aviation etc. Now it's all about the charts, with anything else that happens to occur being viewed in the context of how it relates to trading and finance, rather than the reverse.

The energy industry is a classic example. Electricity these days is all about trading, with actual power stations and transmission lines merely the means of facilitating that trading. And we've built quite a few new lines at huge cost, and a few power stations as well, that are "needed" for no reason other than to facilitate that "trading". The lights would still be on if they hadn't been built, but the "market" wouldn't operate nicely without them and so they were built. There's a cost in all of that - and you're paying it with every power bill, as is every business that actually produces something of real value. Just one of the many "taxes" we're all paying in order to facilitate the financial markets.

 

[nioka]

It's not just the financial cost. Think of how many very smart people, with well above average intelligence, spend their days shuffling money around for no net gain to society. If it wasn't for the financial cancer, these people would be top doctors, engineers etc doing all sorts of wonderful things from which we would all ultimately benefit in some way.

You make a valid point. It is an angle that I had not given much attention. The more I think about it the more I understand the importance. Half my neices,nephews and grandkids suddenly became a bigger loss to society than I had previously thought. This topic is bound to get some lively family discussions in the near future.

 

[explod]

You make a valid point. It is an angle that I had not given much attention. The more I think about it the more I understand the importance. Half my neices,nephews and grandkids suddenly became a bigger loss to society than I had previously thought. This topic is bound to get some lively family discussions in the near future.

It was encapsulated in the works of Karl Marx.

The trouble is that no one has ever wanted to believe there would be limitations one day. That day is getting very close in my view.

 

[nioka]

It was encapsulated in the works of Karl Marx.

Suddenly there becomes a worrying angle although Marx must have been right on the odd occasion.

 

[explod]

Suddenly there becomes a worrying angle although Marx must have been right on the odd occasion.

He was misrepresented, misinterpreted and never well understood. His tenet was socialism not communism. Keynes consumerism created the distortions.

I have experienced socialism working very well during my time in Sweeden. That experience changed my outlook a great deal. Interesting too that their economy and currency is currently one of the strongest. Engineering expertise is second to none and in spite of the cold they love life.

 

[Smurf1976]

The trouble is that no one has ever wanted to believe there would be limitations one day. That day is getting very close in my view.

Totally agreed there.

If you don't think there's a limit, to anything, that just means that you haven't either found or calculated it yet.

 

[Tanaka]

The US government has produced 4 surplus budgets in the last 40 years... :shake: ...China hasn't seen a deficit in over 16 years! I'll let you guys draw the conclusions.

 

[Sunder]

It's not just the financial cost. Think of how many very smart people, with well above average intelligence, spend their days shuffling money around for no net gain to society. If it wasn't for the financial cancer, these people would be top doctors, engineers etc doing all sorts of wonderful things from which we would all ultimately benefit in some way.

That's not entirely true. Efficient markets are required to ensure efficient allocation of labour. It's necessary for someone in London to connect an Australian coffee maker with a Brazillian coffee grower in an efficient way - say through commodity markets, rather than have individual representatives from each buyer go over there to face cartels, or buying cartels like Woolworths force lower prices off starving farmers.

Likewise, if China can produce widgets cheaper than Korea, then the finance people can make sure China gets more capital and raw materials than Korea through forex, capital markets and commodity markets.

However, there can be too much of a good thing, when self-reinforcing speculation distort prices, and misdirects labour efforts.

We are in a period of "too much of a good thing".

 

[nioka]

He was misrepresented, misinterpreted and never well understood. His tenet was socialism not communism. Keynes consumerism created the distortions..

I'm not a socialist. I believe in benevolent capitalist system. A system where you are rewarded for effort and enterprise but fairly rewarded. The current system is out of balance.

Lets face it we are not all equal. Some have more "brains" than others, some have talent some do not, some have brawn. Everyone should have equal opportunity, the rest is up to them.

 

[prawn_86]

I'm not a socialist. I believe in benevolent capitalist system. A system where you are rewarded for effort and enterprise but fairly rewarded. The current system is out of balance.

Lets face it we are not all equal. Some have more "brains" than others, some have talent some do not, some have brawn. Everyone should have equal opportunity, the rest is up to them.

I agree. A capitalist system with basic rights (education, health etc) provided by the gov is my ideal model.

Personally i am one of those who do not contribute to society in a meaningful way. I simply move money from one place to the other with no real net gain. Pays well though

 

[explod]

I'm not a socialist. I believe in benevolent capitalist system. A system where you are rewarded for effort and enterprise but fairly rewarded. The current system is out of balance.

Lets face it we are not all equal. Some have more "brains" than others, some have talent some do not, some have brawn. Everyone should have equal opportunity, the rest is up to them.

Sweeden as my example allows for the talented and hard working to prosper more and there is indeed an entrepreneurial wealthy class, my Rotarian hosts were certainly part of that. A basic difference is that the essentials to basic survival are state run. E.g water, power, education and health care. They have for example 2 years of compulsory military training where discipline and skills are the focus.

Its the very big money people (multinational or monopoly levels) who do not like a more equatible system and of course they have the lobby power over governments in a system like ours and the clout to unduly control the mass media philosophy too.