To date I have been sent a link to a video of a white supremacist bouncing a coin an 'Amero' coin on a table whilst claiming that $US billions of the coins were being shipped to China (why ship coins - why not notes?). A second post recommended a Canadian journalist who was writing about the conspiracy. Before reading anything, I checked his details in Wikipedia:
'More recently Fulford has stated that the US have been able to alter the climate, and using high power microwave energy induce earth quakes including the Asian Tsunami, Japanese and Chinese quakes. The program he refers to is known as HAARP High Frequency Active Auroral Research Program'I read no further. So what is the secret that underlies the New World Order conspiracy theories?
The secret is actually revealed in the traffic statistics for this website. I have found that my original post on the subject is now the page that, by far, generates the most traffic from Google. No doubt this page will do the same, as it includes the words 'New World Order' and 'Financial Conspiracy.' In other words, there is a massive appetite for these conspiracy theories out there, and anyone who writes about it will receive traffic in return for their efforts. As a result, anyone seeking attention, wanting to boost their traffic, make money from writing a book, will do well from conspiracy theory.
Furthermore, it is much easier to generate content based upon allusions to conspiracy, than to do the hard work of actually trying to understand what is really going on. If you want instant fame, want to get attention, then a good conspiracy theory offers an excellent shortcut.
The real worry in the ease with which these conspiracy theories spread is that they distract people from looking at the reality of the situation. An even greater worry is that there are, in fact, real conspiracies out there. History shows us that occasionally people do conspire, and the problem with this ever expanding tide of conspiracy theory is that, when a real conspiracy does occur, nobody will believe it. Each of these faux conspiracies will undermine the credibility of individuals when they actually reveal a real conspiracy.
Enough on this subject. Unless somebody posts something which offers credible evidence, I will leave the subject alone. For the conspiracy theorists who land on this page, you may want to read here for a perfectly rational explanation of the financial crisis, though I offer the link more out of hope than expectation that it will be read. After all, it contains no men in smoke filled rooms conspiring.....
On a slightly related subject, I noted that Gordon Brown is making a trip to the Middle East. I say that this is a related subject as I will speculate that his public motive might be questioned, which is that he is requesting Middle Eastern countries to step in to help finance a recovery in general, and to step in with finance for UK business. It does make me wonder whether the underlying reason for the trip is to shore up lending to the UK government. For regular readers of the blog, they will know that I am suggesting that the UK government (and likely the US government) are probably going to have a severe crisis in a couple of months (effectively going bankrupt). I may be reading too much into Gordon Brown's trip, but it would fit the scenario that I have suggested. It may be that he sees the looming financing crisis, and is seeking funding for the government. However, this is only speculation.
Note 1: Thank you Kecsse for the comment and link.
Note 2: Another thank you for some interesting comments from Death To Bubble Addicts
Note 3: An anonymous poster has asked whether hyperinflation might be the outcome of the current situation. This is an interesting point as many commentators are suggesting a deflationary spiral. However, if there is a government financial crisis, then there is a real possibility that they will try to print more money as the only way of financing their activities, in which case hyperinflation will be the result.
Note 4: I have had a comment from an anonymous poster who asks for comments on the following options:
a. borrow more money from the Asians and Arabs and keep the party rolling ?Option a: The simple answer is that you should only borrow what you can expect to pay back. My problem with the borrowing is that it is going into spending, not investment. There is no sector of the economy that currently offers any prospect of growth in real wealth generating capacity to allow repayment of the debt. In other words, there is no way that the debts that are being generated now can be paid back. In such a situation, it is possible to continue borrowing for only so long before you are effectively bankrupted.
whats wrong with debt ? how much debt is too much debt ?
UK debt much lower than Italys ..but they seem to plod along just fine ?
what level of debt is sustainable ?
b. sell some family silver to the above gentleman and keep the party rolling ?
c. governments print some more money ..and just hand it out to the the desrving and needy(ie. senior bankers)
d. cut our cloth to match our pockets..shrink our lifestyles and shrink the state
Option b: I am not sure what family silver there is. If you mean selling UK companies, this is already happening with, for example, Baclays being financed by Middle Eastern money which, in the long term, will mean more companies will be at least partly owned by non-UK investors. This is not something new, but may well accelerate.
In the long term, foreign ownership often translates into loss of wealth for the destination country. Investment means expecting a return greater than the capital invested, which quite literally means that outside investors will, in the medium to long term, take out more than they put in. Were the investment going into wealth generating industry (e.g. exporters), then there would be a gain for both sides, but if the investment goes into, for example, retail then there is going to be a loss for the UK. This is a complex subject, which can not be summarised, but I have written more about it in 'A Funny View of Wealth.'
Option C: I have already commented on this, but the impacts of hyperinflation are pretty nasty. A quick look at the parlous state of Zimbabwe is a salutary lesson in why this is a bad idea.
Option D: This is the only realistic answer for the medium and long term. At some point the UK must learn to live within its capacity for wealth generation. The first problem is that the current level of spending by the state is hobbling the capacity of companies to compete with the emerging economies, and makes the cost of doing business in the UK too high. The second problem is that the state is only able to finance the current spending levels through borrowing. This is unsustainable, and the borrowing and spending is artificially propping up the economy, distorting the economy in the process, and distracting from the need to move to real wealth generation. Individuals will also need to learn to live within their means, but an economics blog is not needed to make this point.
Note 5: Thank you to all of the other commentators and the positive feedback. I am afraid that I have had to reduce the number of posts, due to other commitments, but hope to have more time in a couple of weeks. However, if there are any major situation changing events, I will try to post more.