Friday, February 27, 2009

The Economic Crisis - The Underlying Cause

There is a widespread belief that what we are currently witnessing is an economic crisis resultant from a financial/banking crisis. It may come as a complete surprise to many to find out that what we are witnessing is an economic crisis that has led to a financial crisis. The current problems in the world economy have a different underlying cause to that which is widely discussed.

I have previously discussed the underlying causes of the current economic crisis, but thought it might be time to update the analysis, and also consider the actions of governments in light of the real underlying reason for the crisis. The focus of the post will be on UK and US, as most readers of the blog come from these countries, but there are many points that might be applied to other countries. As an introduction to the underlying cause of the crisis, I will quote from a post from last year.

The first element to consider is that of the entry of the emerging markets into the world economy. I have dealt with this in the posts 'Why Do Economists Get it so Wrong?' and 'The Root of the Problem'. The argument, at its most basic, is that there has been a massive input of new labour into the world. The labour was always there, but the key difference is that the emergence of these economies has seen capital and technology, and access to markets, become available to this previously underutilised workforce.

The result of this change has seen the available labour force available in the world roughly double in the last 10-20 years. This is nothing short of a revolution in the world economy, but few economists have understood what it really means. This is best expressed in simple terms of an example (using made up figures but referencing the real events) to make the point clear.

If we imagine that (to pick an arbitrary date) in 1990 there were 100 units of labour and 100 units of commodity utilised by that labour, and an available 120 units of commodity capacity (not all utilised), we can see a benign situation. It is a situation in which the commodity supply exceeds demands. We can see this, for example, in the long period in which oil prices were so low for so long. Now, if we jump to 2008, we see the oil prices spiking. This is because, whilst the supply of commodities such as oil has been increasing, they have not been increasing at the same rate as the available supply of labour. Let's call the supply of units of commodity in 2008 a total of 140, to pluck a number out of the air. At the same time we now have 200 units of available labour. At this point, it is apparent that there is a mismatch.

The question arises as to why it is that the problem did not hit at the point where labour first exceeded the supply of commodity. This is because the labour entering the market was not as efficient at utilising the resource as the original labour. It is the catching up, the increase in both the efficiency of the new labour, and the increase in the use of the output of their own labour that has tipped the world into the current situation. (note: I have split the original post into more paragraphs to aid readability)

I think it may be helpful to expand on this post, and give some real examples for illustration. The best example of the problem can be found in oil, as it is still so central to economic activity. In 1997 output was around 75 million bpd, and output had only climbed to about 85 million bpd in 2007 (a chart here shows the output - not a good source but the chart is usefully clear and conforms to charts from better sources). Copper has seen higher growth in output from around 11 million tons to 16 million tons over the same period, but this would still suggest that the growth is still probably not matching growth in labour.

However, not all of the commodities have seen a similar pattern to these examples, with iron ore output nearly doubling over the same period. Whilst this might suggest that there is no problem, it is necessary to remember that countries such as China have been growing infrastructure at an astounding rate, such that their demand for steel will be exceptionally high in comparison with a 'developed' economy (take a look the pictures of Pudong in Shanghai, or Chongqing and you will get a visual sense of one source of demand).

At its most basic, we have a situation in which there are more units of labour, but less units of commodity available to service each unit of labour. In this situation we have a situation of competition for the finite amount of resources, and competition means winners and losers. What we have is a zero sum game in which the utilisation of resource in one place means that it is not available in another place. In such a situation resource will distribute away from the losers towards the winners. However, it is not a winner takes all situation, but rather a competition to see what proportion of the resource is allocated where.

At this point, you may be asking a very reasonable question. You might be asking how, if there is such competition for these resources, the prices of these resources has sunk along with demand for the resources. The answer to this question goes to the very heart of the economic crisis, and why we are witnessing the current economic collapse.

Once again, I will try to summarise a summary of what has happened, before expanding on the ideas. I strongly recommend that you read the original posts (e.g. here), but hope that this summary will serve as an introduction.

The summary of the situation is that the emerging economies lent their new found wealth from their increasingly large workforce into the West, and in doing so allowed the emergence of the so called 'service economy', or 'post-industrial economy'. The lending was built on an unfounded belief that, because the West had been economically dominant for so long, it would always be in a position to pay back the lending. The problem with the lending was that there were no productive wealth creating opportunities to soak up the money, (e.g. investment in manufacturing was being directed towards the emerging economies themselves) such that the money pouring into countries like the UK and US was directed into asset price inflation (real estate), consumption and consumer credit, and excessive government borrowing.

In addition to the emerging economies, we need to add in the flood of money from Japan through the carry trade (I explain this and how the Japanese central bank was responsible for this here). On top of this, the rising demand for oil sent oil prices ever higher, and some of those profits were also recycled into the economies of the UK and US. All of this represents a 'wall of money' pouring into the UK and US that fed the credit and housing bubbles.

All of this lending has had a dramatic and powerful influence on the shape of the world economy. In particular the world economy has been shaped around a perception of growth in wealth in countries like the UK and US, whilst the real growth in wealth has been taking place elsewhere. This takes a little explanation, and starts with the idea of the multiplier effect.

The multiplier effect is where consumption of one 'thing' drives further activity throughout the economy. If we imagine that I spend money in a restaurant, that spending will help do many things, such as pay for the produce, the rent of the building, investment in equipment and pay for staff salaries. If we just look at the payment of salaries, that payment will then be used to pay for other things, and that in turn will pay for the salaries of other staff, who will then use that money to pay for other things and so on....In other words, that single transaction of paying for a meal will result in lots of activity through the economy.

This is all very well, but the problem arises that GDP is widely used as a measure of the success of an economy. The problem is that GDP measures activity in an economy, and this has led to a false perception of growth in the wealth of the US and UK. The reason for this is that activity based upon an increase in borrowing shows up as activity in the same way as any other activity. There is no distinction between sources of the activity. However, borrowing does not represent wealth, but represents the foregoing of future wealth. It is the consumption now of future added value from labour.

A good illustration of how flawed GDP is as a measure of wealth is the example of Hurricane Katrina. This disaster saw the destruction of large amounts of infrastructure, and that destruction necessitated the replacement of infrastructure. That replacement would appear in GDP figures as a growth in activity, and you have a situation in which destruction appears as economic growth. In summary, the huge amount of borrowing in the US and UK appeared as economic growth. There is a perception of growth in wealth in these countries, but the reality is that much of the activity taking place was at the expense of future wealth.

This perception, or I should say illusion, of wealth was to have some dramatic effects on the shape of the world economy. This is best illustrated with some examples.

The first example comes from a conversation with a friend about 2-3 years ago. We were sitting in a restaurant, and I pointed out the large numbers of expensive cars in the car park. There were several BMWs and Mercedes, and other luxury brands, and I asked how it was we could see so many expensive cars. Even ten years before, such cars were relatively rare.

It was actually a rhetorical question, as I was well aware at the time, the reason why they were there was as a direct or indirect result of the credit bubble. If we think of the multiplier effect lifting activity across the economy, we can see that some of the money that paid for the cars was resultant from all of the activity created by borrowed money. As such, when we looked at those cars, they were at least in part the result of borrowed money.

If we then think of the impact of this on the wider world economy, we can see that this will have had a broad effect. For example, this means that there would be investment in additional dealerships to service the demand, and the increase in sales would see additional investment in the manufacturing of companies like Mercedes, and this in turn would encourage investment in the Mercedes suppliers and so forth.

A more mundane example would be the additional money in the pockets of each individual as a result of the borrowed money flowing through the economy. Some of that money for one individual might have been used for home improvement, such as the purchase of new lighting for their house. This lighting that was purchased would likely have been manufactured in the Chinese city of Zhongshan, where there are hundreds of lighting factories. This individual purchase would be one of many that cumulatively saw the investment in ever more factories in Zhongshan to service the overall consumer demand in the UK and US. Each of these factories in turn would have its own suppliers of goods and services, and those suppliers would have their own suppliers and so forth.

Furthermore, the cumulative purchases of lighting would contribute to growth in retail that services home improvements and decoration in the UK and US. This in turn would increase employment in these sectors, which would then have those individuals spending money on other purchases, further raising the activity in the economy.

Such examples illustrate that, as borrowed money flows through the UK and US economy, it shapes the wider world economy to service this credit fuelled activity. The world shapes itself around the consumption. As such, the world economy has been shaped by an illusory perception of growth in wealth.

It is here that we come to the first problem, which is what happens when the illusion vanishes, and when the lending stops. Huge swathes of the world economy are suddenly seen to be pointing in the wrong direction.

I have recently discussed the benefits of deflation, and the effect of this on economic development. However, in the case of the misdirection of resource, there is the potential for a less pleasant (but necessary) form of deflation. This is not deflation resultant from efficiency gains (higher output from each unit of labour), but rather deflation resultant of collapsing markets. As the economy shifts into its new shape, there will be significant overcapacity in industries with a now insufficiently large market.

This overcapacity will lead to fierce price competition before the bankruptcy follows. As such, price deflation should be relatively brief and painful as industries realign to a more sustainable size. In the US and UK, this is being seen in the collapse of the service economy, along with a knock on effect of the suppliers of goods and services into the service economy. If we take the example of retail, they are having to increasingly fight on price, as they chase a diminishing pool of money available for consumption. Some will survive the price competition, others will not. When those that do not survive disappear, there will be a shrinkage in other sectors. A simple example is that demand for shop fitters will fall, such that they will then have to compete on price. These effects will ripple through the wider economy. If we look at our Chinese lighting manufacturers, we will see the same effects.

In all of these cases, what is taking place is destruction of large swathes of economies. This destruction represents the investment of capital, which is in turn the investment of surplus of value of labour. Put another way, this is the destruction of savings. In order to understand this, we only have to think of an empty lighting factory in Zhongshan, with machines standing idle. The idle factory represents the destruction of the accumulated surplus of value of labour. The shops we see with peeling 'closing down sale' posters represent the same phenomenon.

This massive contraction across so many sectors of so many economies is at the heart of the economic crisis. Quite simply, the structure of the world economy was pointing in the wrong direction, and it is now paying the price for that misdirection, which is a massive destruction of capital, which is the destruction of savings.

'What if' the massive wall of lending into the Western economies had never taken place?

I ask this question because it illustrates the severity and depth of the problems that are now becoming apparent. If we think of what would have happened had we not seen the massive lending into the UK and US, and many other credit fuelled economies, we can start to see the shape of the world economy that might emerge.

I will use China as an example of the 'what if' for the big creditors and exporters. In the case that China had not diverted the massive savings into the West, and had used that money internally, then the situation would be very different. The first thing is that the RMB would have risen against the $US, as the ongoing purchase of US debt was one of the reasons for the ongoing strength of the $US. With such a shift, the exports to the US would not have been so large, meaning that the export growth model would have disappeared, and the growth in China would have needed to be more balanced towards internal growth. This is not to say that Chinese exports would not have grown, but the scale of exports would have been smaller.

Alongside this, China would still have steadily accumulated savings which would then have been available for investment within China, which could have seen accelerated growth within the Chinese economy. In all cases, there would have been more money available for consumption within China, and money would have represented a real increase in the living standards of Chinese people. Their savings would have been invested in a sustainable way, and they might have used more of the surplus of value they produced for other things such as health care.

in the 'What if' scenario, what we have is a picture of more balanced and sustainable growth. It would be a model in which China would still have made a major impact on the world economy. It is not possible to drop so much labour into the world market, without a corresponding increase in resource, and for no effects to be felt. Without the amount of resource increasing fast enough, whatever happened, China was going to take a share of the utilisation of resource from the OECD. The big difference would have been that the effect of the shift in resource utilisation would have become visible as it occurred.

What that visibility would have represented for the UK and US would have been a long and painful recession. As manufacturing shifted to China, there would have been rising unemployment, and pressure on real wages to compete with China. This would have been enacted through adjustment of the currency between China and the US and UK. Instead of this process, as fast as the manufacturing jobs were disappearing, they were replaced with the jobs created in the shift to the 'post-industrial' or service economy, paid for out of borrowing. This hid the reality in the shift of real wealth. It allowed the massive misdirection of the world economy into servicing Western consumption.

The reality would have been that Western real wages (in terms of what they could purchase) would have fallen, whilst Chinese real wages would have risen. It would have been a situation where the wages in the two countries would have moved closer together. This is not to say that they would have met in the middle, as the West still had the capacity in industries that could add more value per unit of labour than China, and this would take a long time to change.

This moving together of salary levels would be representative of a more even distribution of wealth, and that distribution of wealth would have had a wider impact on the world economy. At a time when individuals were purchasing SUVs they should have been purchasing small cars. At a time when they were going on expensive overseas holidays, they should have been spending that money at home on domestic holidays. These are generalisations, and discount the variable distribution of wealth, but illustrate a central point. If we take the SUV example, the US car industry expanded production in this area, when the underlying economic drivers were suggesting they should have been investing in small cars. However, this reality was still not visible. They responded to the immediate market signals which were based upon credit driven growth, and are now left with capacity that will never be utilised.

As it is, the what if scenario did not happen, and the result is that the world economy is indeed pointing in the wrong direction, and going through a painful correction as a result. As such it is worth examining what the situation actually is.

The first point is one that I have already explained. Even as I am writing there is a massive ongoing process of destruction. The legacy of that destruction is that there will need to be fresh accumulation of capital, which means savings, in order to transition from the collapsed economic model to a model that better reflects the real distribution of wealth in the world.

In a simplistic example, it might mean that the world market has shifted towards demand for Tata Nano cars, rather than Toyota Corollas. It might mean a smaller market for luxury brands, such as Gucci. It might mean many changes. However, I can not say what those changes might be, as they will be determined both by the redistribution of wealth between countries and within countries. For example, if the Chinese model were to continue as it is, there would be both a relatively large market for luxury cars, a very large market for the Nano, and a medium market for the Corolla. The only certainty is that the shape of markets is changing.

Another certainty is that this move, this transition to the new shape of the world economy, will require significant amounts of capital. This will be needed to rebuild and transition companies to meet the new market demands. The only source of this capital is from savings, and the key to the future is therefore reliant on the accumulation of savings being invested in new productive output to meet the new market demands.

If we look at the big exporting countries like China and Japan, we see that they already have amassed significant capital, and look to be in a position to make the transition rapidly. However, all is not as it seems. In some respects, the growth in wealth in places like China is as illusory as the growth in the wealth of the UK and US was. The way in which countries were accumulating wealth was through lending to countries like the UK and US, and it is here that the illusory nature of their accumulated wealth becomes apparent.

The problem that creditor nations like China and Japan have is that, having exchanged their goods for overseas paper (debt), it is not entirely clear what they can do with such paper. If they sell the paper, they will quite literally destroy the value of the paper, as there is now more and more paper being issued - more than demand can ever soak up. When supply outstrips demand, prices fall, and the addition of sales of any of the existing paper into a market of increasing supply and diminishing demand will simply cause the value to plummet. As such, the paper has little real value, as it can not be exchanged for anything. It is not wealth, but the appearance of wealth.

When the big creditor countries were lending into the UK and US, they were making assumptions that these countries were able to service the debt. The reality that has been exposed in the financial crisis is that there is simply not enough output in these countries to service the debt. It returns to the problem that everybody looked at the GDP growth in the UK and US and thought that this represented growth in wealth.

What we have in reality seen is the consumption within the UK and US of the capital accumulation of overseas countries, with a commensurate rise in GDP as a result. When countries like China and Japan lent money, it was utilised for consumption, and consumption represents the destruction of capital. It is quite literally consumed. The best way to illustrate the consequence of this consumption of the capital of others is through an analogy.

Imagine lending money to a businessman, and later finding that he was spending all of the money on 'parties' and other forms of consumption. You will eventually realise that, without his investing the money in some kind of productive activity, there will come a point where he will be unable to pay it back - he is spending your capital. The US and UK have been having the equivalent of a 'party' using the money borrowed from places like China. As a result, much of the paper held by China has rapidly lost its value. With the borrowed money being utilised for consumption, there has been little investment in output that might repay the lending in value added goods and services.

At its most basic, when a person buys a plasma television made in China using borrowed money, at some point in the future they must repay that purchase with a value of labour with an equivalent value to the plasma television (+the value of the interest). However, instead of investing the money in a way that might help create that value, there has been a move away from development of such investment into investment that utilises labour to service the 'party' (shopping malls, personal trainers, restaurants, entertainment etc.). The shape of the UK and US economies has adapted to facilitate debt fuelled consumption, rather than new wealth creation.

The party is now over, and both sides are looking with regret at this massive consumption of capital. In the case of the creditors to the UK and US, they have seen how their previous lending was spent on the 'party' and are now wary of lending any more to such irresponsible and profligate countries. They no longer want to pay for the 'party'.

More worryingly, in the US and UK, not only has there been a massive consumption of the value of labour of overseas savers, but both economies have also seen a massive contraction in their own savings rates in favour of consumption. As such, both economies are left with a massive hangover of debt, which commits future added value from labour into servicing the debts, meaning that there will be less for accumulation of capital. Both economies have little capital base and the situation exists where both countries must produce enough surplus value to both service debt, and build a new base of capital.

To say the least, it is a very, very painful situation. At the very time when the US and UK need to make huge adaptations in their economic structures, they have nothing with which to undertake the process, and large amounts of what they might produce will go to servicing overseas debt. The US and UK are both entering a more competitive world with nothing left in their armouries. Returning to the 'what if' scenario, this is one of the major differences. If the US and UK had not binged on borrowing, they could have utilised their capital to adjust their economies as the new competitive threat emerged. As it is now, both countries are in no shape to meet the competition.

It is at this point that we come to the actions of both governments, and at this point we should be feeling knots in our stomachs.

The problem confronting the UK and US are the same. In both cases, their economies are transitioning to their real level of wealth. In both cases they are massively in debt, and have very little capital with which to rebuild there economies into the correct shape. Despite this gloomy picture, there is a bright side. Both economies still have large numbers of companies that create significant value, and that value has the potential to start to replace the capital base for each country. Such a process of rebuilding capital would be tough, and would see some very hard years ahead, but would eventually provide a route out of the current crisis.

However, what we see from the government is action which will actively prevent any further formation of new capital, and will see a growing future outflow of money that might have contributed to rebuilding the capital base.

The first problem is that the government is pouring ever more money into insolvent banks in an attempt to move time backwards. I often read that the intention is to save the banking system. However, it is not to save the banking system, but an attempt to save a banking system. In doing so, they are borrowing and foregoing huge amounts of future capital accumulation in order to save an insolvent banking system.

The next problem is that, in borrowing so much money, they are denying the availability of that capital to businesses that might start the process of transition of the economy to the new economic situation. The amount of savings, both domestic and international, available is finite. This means that every $US that is put to use for government borrowing is not available for business. At a time of a massive shortage of capital, governments are taking ever greater slices of what is available.

If we then look at what the governments are using this money for, we can see that (over and above the bank bailouts) they are using it for various 'stimulus' measures that amount to spending. Nobody is hiding that the aim is just to get individuals into employment, any employment, with a view to encouraging them to resume consumption. In all of the government policy, the aim is a resumption of consumption.

If we then think of the underlying problems, we see that this is the worst of all possible outcomes. It is not consumption that is needed but savings, such that there is the capital available for economic restructuring.

If we think back to the idea of the 'party', the governments are trying to tell overseas lenders that when they borrow to encourage the resumption of consumption, it is different to consumers borrowing directly for consumption. They are borrowing to try to make up for the shortfall in consumer borrowing, and trying to restart the party. A perfect example can be found here from the Bank of England:

So it is too early yet for us to assess how far this relaxation in monetary policy is providing support for consumer spending and other elements of private sector demand. (p16)
However, whoever is doing the borrowing, it still adds up to yet more consumption, which is the very thing which led to the incredible severity of this crisis.

All the while governments are trying to borrow more to keep the party going, they are also actively discouraging saving. It is well illustrated in the Telegraph, which recently reported on the problems for savers in the UK, with large withdrawals taking place:

As the Bank of England has reduced interest rates to a 300-year low, many savers have seen the return on their money fall to almost nothing. The figures were the latest evidence that savers, who outnumber borrowers by six-to-one, had been cut adrift by the Bank of England, which cut interest rates from 5 per cent in the middle of last year to just 1 per cent in an attempt to stimulate the economy.
The “cash drain”, as the BBA described it, was also a worrying symptom of rising unemployment. People who had lost their jobs were being forced to dip into their savings to pay for everyday expenses.

At the very time that they should be encouraging saving, they are discouraging saving. On top of this, both governments are toying with quantitative easing, otherwise known as printing money. In doing this, they are imagining that they can create new capital. However, all they do is provide a tax on every single unit of currency, as all that happens is that part of the value of the old currency is transferred to the new. This new currency then ends up in the hands of government, who then spend it. Part of that transfer of value will come from savings, further diminishing the availability of capital for investments, and transferring that into government consumption.

At the heart of all the government activity is the failure to recognise the underlying causes for this crisis. All it would take is to direct some of their clever PhD qualified economists to examine the relationship between labour supply and commodities, and the underlying reality of the world would emerge. They would see the reality that we are in a zero sum game, and that reality would translate into an acceptance that wealth has moved away from us. They would then see that the only way that we could return to wealth will be to restructure our economies to meet the new challenges.They would, or surely must see, that this needs capital, and the only source of capital is savings.

Instead, they are continuing on a delusional path, as if nothing has changed in the world. That delusion is driving their every action, and the longer the delusion lasts, the more long and painful the adjustment will be. Their borrowing and money printing adds nothing to the wealth of the countries, but just consumes more capital, and more future capital.

The one certainty in all of this is that the governments can not magic new capital into existence. They can not support the entire economic structure through borrowing, will power and optimism. There is a real world out there, and the only solution is to face up to it.....

Note 1: Regarding the ongoing saga from the Bank of England regarding my questions on the detail of the policy of quantitative easing (QE-Printing money), I have had an email from the BoE requesting a 'chat'. I have asked if they can give me a number to call, and will see what the chat is about.

In the meantime, it seems Edmund Conway has been given further details on the policy of QE, though he does not give his actual source. These are two key passages from his article:

The Bank's governor, Mervyn King, will be granted approval by the Treasury within days to create up to £150bn in new money in the coming months to buy up verything from corporate bonds to government debt. It will pave the way for the Bank's Monetary Policy Committee effectively to "start the presses" at its interest rate setting meeting this Thursday.


But, more significantly, the Bank will indicate in an exchange of letters with the Treasury that it intends to pump a significant amount of cash into the markets, by buying commercial paper and corporate bonds alongside gilts. The amount it is likely to spend on these purchases will probably be around £5bn-£10bn a month.
If you read the article, you will notice that none of it is attributed to any source in the BoE, and it is all therefore unofficial. I am very suspiscious of Edmund Conway who has said the following:
Those of us who have signed up to the idea that the Bank of England should start printing money have done so on the proviso that that money is pulped as soon as any hints of inflation start to surface.
I did not think it was the purpose of commentators and journalists to 'sign up' for policy, but to investigate, analyse and explain policy. What exactly is meant by 'signed up'????

I am genuinely puzzled that these commentators have 'signed up' to this policy. Can they not see the only solution - which is to stop borrowing, cut back on expenditure, and return the UK government to levels of expenditure that can be sustained.

This QE policy will destroy the UK economy, and is no different to what has happened in Zimbabwe. However many clever economists line up in support, the BoE is printing money to pay government expenses, and that is exactly what happened in Zimbabwe. Once started, there is no turning back, and no return to normal policy as suggested by Conway in his articles.

When money is created, it is done through the purchase of an asset. This is done by the BoE simply placing a credit for x amount of money in the account of a broker. In this way money is created. In order to do remove this money, the asset must then be sold, and the credit into the BoE 'disappears' along with the created money.

In the current economic climate, there are very few potentitial buyers of UK bonds out there. We then have to ask who exactly will be buying when the BoE wants to sell the bonds. Their action is to dilute the value of the £GB, and this is more likely to make UK government bonds even less attractive.

Furthermore, look at the ever expanding government borrowing requirements. Who is going to be lending all of this money. The amount of borrowing is growing ever faster...the only way the government will be able to keep up its commitments will be through money printing from the BoE to purchase ever more bonds....are the politicians going to ask for the policy to stop?? And with an election around the corner....

MADNESS. This is sheer madness and the press have 'signed up' for it.

I will keep you updated on progress, and will wait to see if anything official whatsoever comes out of the BoE. However, in the meantime, everything remains very, very opaque despite the article cited above. It all just confirms my belief that the UK government is bankrupt, and is using money printing to attempt to avoid default, and avoid failing to pay for its operations. Very worrying indeed....

Note 2:

I hope the above post makes sense. It is quite long, and I hope that I have not made any silly errors and without an editor, this is always quite possible. If you see an error/problem, feel free to point it out. I will not necessarily change the error, as I follow a principle of never changing a post without a note once it is published (though occasionally cheat on this if I see an error immediately after publication). However, it will help flag this for other readers.

Note 3: As you will notice, this is a long post, so I do not have time to respond to comments on this occasion. Apologies for this.


  1. Now, if we jump to 2008, we see the oil prices spiking. This is because, whilst the supply of commodities such as oil has been increasing, they have not been increasing at the same rate as the available supply of labour

    There is no doubt that increased demand from China and India has had some effect on prices.

    The question is: how much?

    Unfortunately, the massive price spike in oil from 2007-2008 cannot be explained by that alone. In fact, it may not have been the major factor at all.

    There appears to be abundant evidence that oil demand was not exceeding supply in 2007 2008.

    There is in fact a smoking gun: a price rise on September 22, 2008 when oil rose about $25 in one day.

    I quote from a CBS news investigation:

    If anyone had any doubts [about the role of speculators in the price of oil], they were dispelled a few days after … [a Congressional] hearing when the price of oil jumped $25 in a single day. That day was Sept. 22.

    Michael Greenberger, a former director of trading for the U.S. Commodity Futures Trading Commission, the federal agency that oversees oil futures, says there were no supply disruptions that could have justified such a big increase.

    "Did China and India suddenly have gigantic needs for new oil products in a single day? No. Everybody agrees supply-demand could not drive the price up $25, which was a record increase in the price of oil. The price of oil went from somewhere in the 60s to $147 in less than a year. And we were being told, on that run-up, 'It's supply-demand, supply-demand, supply-demand,'" Greenberger said.

    A recent report out of MIT, analyzing world oil production and consumption, also concluded that the basic fundamentals of supply and demand could not have been responsible for last year's run-up in oil prices. And Michael Masters says the U.S. Department of Energy's own statistics show that if the markets had been working properly, the price of oil should have been going down, not up.

    "From quarter four of '07 until the second quarter of '08 the EIA, the Energy Information Administration, said that supply went up, worldwide supply went up. And worldwide demand went down. So you have supply going up and demand going down, which generally means the price is going down," Masters told Kroft.

    "And this was the period of the spike," Kroft noted.

    Did Speculation Fuel Oil Price Swings?

    Moreover, there is evidence of not just excessive speculation, but oil price manipulation:

    "Who was responsible for deregulating the oil future market?" Kroft asked Michael Greenberger.

    "You'd have to say Enron," he replied. "This was something they desperately wanted, and they got." ….

    Asked why they wanted a deregulated market in oil futures, Greenberger said, "Because they wanted to establish their own little energy futures exchange through computerized trading. They knew that if they could get this trading engine established without the controls that had been placed on speculators, they would have the ability to drive the price of energy products in any way they wanted to take it."

    "When Enron failed, we learned that Enron, and its conspirators who used their trading engine, were able to drive the price of electricity up, some say, by as much as 300 percent on the West Coast," he added.

    "Is the same thing going on right now in the oil business?" Kroft asked.

    "Every Enron trader, who knew how to do these manipulations, became the most valuable employee on Wall Street," Greenberger said.

  2. Lord Keynes:

    Yes, you can get spikes in prices, such as from fears over war. However, oil can not be stored in any quantity without massive costs. As such, the trend in prices is more important than single days.

    Speculation might make a brief impact, but the medium-long term in prices is driven by supply and demand. Oil prices are finally determined by delivered prices, and these will finally be determined by actual output set against demand.

    If output is x and demand is y, the only thing a speculator can do is gamble on the change in one or another. There is no way to manipulate either the supply or demand, unless you are a producer (OPEC). With an output measured at about 70 million bpd, there is no way that there is storage available to significantly effect prices.

    A while back, there were super-tankers parked outside of Singapore, and that probably represents the only way that supply could be manipulated - but prices still fell.......even that volume could not make the difference....

    As for 'gigantic needs' comment, this is not the way prices work. Prices may remain relatively flat right up to the point where demand exceeds supply. It is only then that the bidding up of prices will really occur. The closer to demand exceeding supply, the greater the rate of price increase.

    Think of it this way:

    Month 1 s=10 d=8 price = 1
    Month 2 s=10 d=9 price = 1
    Month 3 s=10 d=9.5 price = 1.2
    Month 4 s=10 d=9.8 price = 1.4
    Month 5 s=10 d= 10 price = 1.7
    Month 6 s=10 d=10.3 price = 2.0

    I am sure that some clever economist will have a formula for this, and would do a better job of the model, but it is only going to be at the point that demand is reaching and starting to exceed demand that prices go up.

    Think of it as food. If there are 100 people and enough supply to feed 105, what happens as the number of people to be supplied moves towards the point where some will starve? People will start bidding up the prices to secure their supply.

    In the case of food, the price will go sky high as demand reaches the point at which starvation is the alternative to not purchasing.

    For other commodities, the same effect will take place. Food just illustrates the mechanism.

  3. Yes, you can get spikes in prices, such as from fears over war.

    So in fact this is a concession that factors other than basic supply and demand can influence prices?

    I would like to know how you explain the price hike of $25 in one day?.

    However, oil can not be stored in any quantity without massive costs.

    But what if investment banks actually own, not lease, distribution facilities such as pipelines and production facilities including refineries:

    An explosion in the number of participants in the energy-trading world has led to an increase in so-called physical trading.
    Dominant commodity traders such as Morgan Stanley and Goldman Sachs Group Inc. long have had strategies to own or lease fuel-storage terminals, oil tankers and power plants to give them more flexibility to hold onto inventory or sell it at opportune moments.
    More recently, those Wall Street firms have taken physical trading to new levels with bids to buy, not lease, distribution facilities such as pipelines and production facilities including refineries. Hedge funds also have gotten into the game of dealing in physical energy and even metals assets.

    Ann Davis, Tracking the Numbers / Street Sleuth -- Case Raises a Tough Query: When Do Traders Cross Line? Wall Street Journal, 30 June 2006

    Speculation might make a brief impact, but the medium-long term in prices is driven by supply and demand.

    But the private and public research says that demand was going down late 2007 and early 2008:

    A recent report out of MIT, analyzing world oil production and consumption, also concluded that the basic fundamentals of supply and demand could not have been responsible for last year's run-up in oil prices.

    Where is the evidence that China's demand actually increased in this period?

    There are 3 sources for the this stameent:

    1. An Mit report

    2. U.S. Department of Energy's own statistics

    3. the Energy Information Administration

    These (apparently respectable) sources say the precise opposite of your assertion that demand was increasing.

    If output is x and demand is y, the only thing a speculator can do is gamble on the change in one or another. There is no way to manipulate either the supply or demand, unless you are a producer (OPEC).

    But the extremely complex way oil futures are traded today apparently means that

    The large purchases of crude oil futures contracts by speculators have, in effect, created an additional demand for oil, driving up the price of oil for future delivery in the same manner that additional demand for contracts for the delivery of a physical barrel today drives up the price for oil on the spot market. As far as the market is concerned, the demand for a barrel of oil that results from the purchase of a futures contract by a speculator is just as real as the demand for a barrel that results from the purchase of a futures contract by a refiner or other user of petroleum. ….
    By purchasing large numbers of futures contracts, and thereby pushing up futures prices to even higher levels than current prices, speculators have provided a financial incentive for oil companies to buy even more oil and place it in storage. A refiner will purchase extra oil today, even if it costs $115 per barrel, if the futures price is even higher …. In turn, once major oil companies and refiners in North America and EU countries begin to hoard oil, supplies appear even tighter lending background support to present prices.”

    F. William Engdahl, Perhaps 60% of today’s oil price is pure speculation

    In other words, it is not just speculators who are doing the hoarding, but oil producers themselves.

    Prices may remain relatively flat right up to the point where demand exceeds supply. It is only then that the bidding up of prices will really occur

    What if the demand is, as noted above, actually artificially caused by oil futures contracts.

    It is artificial demand.

  4. Lord Keynes:

    With regards to the war example, it might create a brief spike, where there is speculation on prices, but once the oil is seen to be flowing as normal, the price will settle. Those who speculated meanwhile face losses....

    As for owning the infrastructure, this will make no difference. For example, the only way that leasing a pipeline can make a difference is if you shut off the pipeline. That would be very expensive and very visible. How else would it work? In order to raise prices, whatever way you look at it, you must constrain supply.

    You say:

    'In turn, once major oil companies and refiners in North America and EU countries begin to hoard oil'

    But how much can they hoard for how long??? Just keep in mind - 75 millions + bpd output of oil per day...

    Oil is big bulky stuff that is expensive to store, and expensive to handle. If you want to manipulate gold prices, 'yes', if you have enough money, you can buy it and store it. But oil, where 75 million + bpd are produced per day....

    You suggest that futures can effect oil prices. Yes, they can, but these oil prices are not the prices that will be paid on delivery. Lets say that supply is 100 units and demand is 90 units, and this does not change. The oil price at that moment in time $US 100.

    Let's say that the people are buying oil futures at $150 for 1 month's time (Note, this is not an option, so there is commitment to buy). The month passes and supply is still 100 and demand still 90. The person with the future pays $US 150 per barrel.What are they going to do with it?

    They now own a barrel of oil - but there is the same supply and demand that saw prices at $100. Has this individual's overpayment for the oil changed the price of oil for delivery, or will they still have to sell it at the prevailing market price?

    How have they changed the price?

    If I go into a shop and pay 1.5 times the ticket price, it does not mean that I can leave the shop and get that 1.5 times the ticket price when I try to sell on the item. That item will have a price set by the wider market, and my overpayment will not alter the price.

    Returning to the payment of $150 a day, the speculator will take a bath, and the oil producers will be mightily pleased....

    You can quote 1001 sources that say otherwise, but I have yet to see any mechanism for price manipulation that would work outside of OPEC (restricting supply).

    The threat of war situation illustrates the point. The speculators are gambling on a price rise due to future restriction on actual oil delivered. Only then will they win...

    I hope this clarifies the issue.

    P.S. You may note that the people who were predicting $US 200 per barrel could quote lots of authoritative sources in support of their contentions....At the time of these predictions, I relied on reason, and predicted a fall to $60-80 (which turned out to be too small, but at least I was in the right direction). I based this on future supply and demand (you can find the prediction in my blog entries for June/July 2008).

  5. Mark, it makes perfect sense to me to think of money as 'tokens for labour'. However, if we substitute this metaphor into a statement such as:

    "Another certainty is that this move, this transition to the new shape of the world economy, will require significant amounts of *labour* (capital). This will be needed to rebuild and transition companies to meet the new market demands. The only source of this *labour* (capital) is from savings"

    ... it sounds wrong. No matter how much money we had apparently saved in the past, it would only be bits of paper which represented the 'wrong kind' of labour anyway i.e. 'service industry' labour. Why would anyone want to exchange their real and present labour for our saved 'funny money', especially if they were busy re-structuring their own economies? It seems to me that the world economy has already been 'reset'. All previous savings, debts and reserves of currency are now just illusions.

  6. Lemming:

    I agree that, as long as governments continue on the path of destruction of the value of money, it becomes worthless. I am sure as a regular reader that you will have read my discussions on a fixed currency, which is to avoid this problem.

    There is nothing wrong with money being representative of service. If I sell you a service of cleaning your car for a litre of milk, that can be represented in money. The money denotes an exchange in the value of our labour. Money can represent a future cleaning of your car as well.

    However, as things stand, perhaps you are right that the destruction of both savings and debt might represent a reset, or at least a partial reset. However, the process has a way to go I would not agree that it **has** been reset.

    I remember you suggesting a reset as a solution a long time ago. I think I mentioned at the time the underlying cost of such a is not a good way out of this mess, but appears to be happening by default.

    Nice to see you adding some comments again.

  7. Off topic I know, but thought should post.
    In the following story is the first time I have noticed a mainstream journalist mentioning the new clause in the banking Act referring to abolition of the weekly return.
    Unfortunately the journalist seems to think obscuring the truth a good thing to "stop bank runs" and other panic, and tries to pillory Robert Peston for telling the truth about Northern Rock

    Since have seen you post in comment section of guardian CE, maybe you could add to the debate and show another interpretation to the weekly return's abolition.

  8. Anonymous:

    Thanks for the link. You may wish to add a comment yourself, or link to one of my posts on the subject. I would think that the credibility of the link would be enhanced by being posted by a person other than the person that writes the blog (I would guess that many CiF commentators will know that this blog is written by the same person as my CiF name).

    I would not normally suggest adding a link, but am quite keen to get people writing to their MPs about QE.....

  9. Very interesting post as usual.

    I suppose I am thinking just now, what courses of action are open to us as individual UK (or US) citizens?

    You have already been inciting us to act on QE by writing to our MPs.

    What other courses of action are available to us? I am thinking of money, investment, savings, jobs etc.

    Obviously there is not a direct correlation between personal success and system success though I feel they probably do meet up in the long term on average - e.g. people.

    So what things that are within the powers of ordinary citizens, will make a difference? Working in manufacturing rather than finance or services? Working within ones own community in a social (non renumerative) way to help people live more sustainably?

    Not expecting answers but just thinking aloud

  10. Cynicus and Lord Keynes: an informative analysis of the reasons for oil price volatility can be found here:

  11. From 2007 to 2008, the price of oil went from $69 a barrel to nearly $150.

    So again I ask the question where is the hard evidence that demand doubled in that time?

    With an output measured at about 70 million bpd, there is no way that there is storage available to significantly effect prices.

    Not according to this:

    "Index Speculators have now stockpiled, via the futures market, the equivalent of 1.1 billion barrels of petroleum, effectively adding eight times as much oil to their own stockpile as the United States has added to the Strategic Petroleum Reserve over the last five years.
    Today, in many commodities futures markets, they are the single largest force.15 The huge growth in their demand has gone virtually undetected by classically-trained economists who almost never analyze demand in futures markets."

    1.1 billion barrels of oil?
    We are expected to believe that
    this would have no effect on prices?

    With regards to the war example, it might create a brief spike, where there is speculation on prices, but once the oil is seen to be flowing as normal, the price will settle.

    But then throughout 2007 and 2008 there was endless talk of war with Iran.

    Let's say that the people are buying oil futures at $150 for 1 month's time (Note, this is not an option, so there is commitment to buy). The month passes and supply is still 100 and demand still 90. The person with the future pays $US 150 per barrel.What are they going to do with it?

    They now own a barrel of oil - but there is the same supply and demand that saw prices at $100. Has this individual's overpayment for the oil changed the price of oil for delivery, or will they still have to sell it at the prevailing market price?

    How have they changed the price?

    I notice you deliberately exclude options from this analysis.

    What about oil swaps? And paper trading?

    For instance:

    Approximately 60 to 70 percent of the oil contracts in the futures markets are now held by speculative entities. Not by companies that need oil, not by the airlines, not by the oil companies. But by investors that are looking to make money from their speculative positions," Gilligan explained.
    Gilligan said these investors don't actually take delivery of the oil. "All they do is buy the paper, and hope that they can sell it for more than they paid for it. Before they have to take delivery."
    "They're trying to make money on the market for oil?" Kroft asked.
    "Absolutely," Gilligan replied.

    In a five year period, Masters said the amount of money institutional investors, hedge funds, and the big Wall Street banks had placed in the commodities markets went from $13 billion to $300 billion. Last year, 27 barrels of crude were being traded every day on the New York Mercantile Exchange for every one barrel of oil that was actually being consumed in the United States.

    So there was really more to it than just arbitrage trading. It appears that the big investment banks were actually trying to corner the US oil market, taking advantage of Clinton-era deregulation to control the lion's share of domestic oil trading, then using commodities swapping to lock in low to moderate oil delivery prices while encouraging investor enthusiasm that pumped billions of dollars into the oil futures market and allowed speculators to wildly increase futures prices. If you're sitting on reserves swapped at $65/bbl that could sell in six months for $145/bbl, that's some serious money.

  12. Mark, thanks for your reply to my comment. I think what I'm getting at (although I haven't quite got my head round it yet) is that if we substituted "tulips" (once a very valuable commodity) for money, and accumulated vast 'savings' of them in warehouses, we might one day find that "drawing upon" those savings was pretty useless. Isn't that the situation we have at the moment?

    And is it the case that saving only appears to work when the economy (pyramid scheme) is in the expansion phase, because in reality when the world saves money it's not storing up something real, to be drawn upon in times of need, but is merely releasing money for 'investment' in expansion of the economy. If the economy stops expanding and/or everyone attempts to cash in their savings at once, the notional savings evaporate.

  13. pocmloc,

    As Paul Hawken said in 1994 or Jagdish Bhagwati said last week, the restorative economy that should emerge from the rubble must build cost into price.

    Look at garbage. Really... In fact while you're reading Hawken, get yourself a copy of On Garbage as well, for a fantastic exposition of the sans-cost culture of thinking that has led to the creation of our mountains of garbage (you might think of debt as garbage in this context also).

    A key concept running through commentary on any of the big issues facing human-kind now is (the unfortunately hackneyed) 'sustainability' - we have unsustainable levels of debt, we have unsustainable lifestyles...

    If you're looking at business ideas you might look at things involving waste - how to reduce waste, what to do with it, advising people on waste, recycling or trading waste. There are thousands of examples of these things in action - from disposable nappy composting systems to large scale worm farms (and these are just the literal translations of the concept) they mostly qualify as restorative, and they mostly all have a long-term future.

  14. Terrific, lucid little essay CE.

    And forvive me, but i have to say a welcome return to form after last weekends 'wine glass' story, the point of which I just did not get. Mainly because I thought there was an over concentration of emphesis on 'labour' and 'technical effeciency' while supplies of energy (to heat the glass) were presumed to be freely available.

    While the shift of wealth from occident to orient is relevant and vitally important, the fact that the world is at or near the limit of natural resource production is just as important. For starters it is why this current crisis cannot be compared with the Great Depression.
    We cannot devalue and 'work to grow' our way out of this mess, because this would require the harnessing of vast quantities of 'cheap enough energy'. While we may have plenty of physical oil, it ain't 'relatively cheap enough'.
    I find the importance of this point easier to understand if oil is considered 'labour' - 1930-1970's easy cheap oil was analagous to 'slave labour on a massive scale'.
    That is not the case today.

    As you so eloquently point out, we should have anticipated this situation and been better prepared.

    Farmer John

  15. Money as DEBT. the video of 47 mins,is an easy grasp of the credit bubble/FF banking system.
    And why it must come to an end.

  16. Red,

    expanding your idea of looking at sustainability and reducing waste, I believe we have to view 'energy' as the new money.

    Every year so much solar flux is captured in a form useful to man. This captured energy is supplemented by 'mining' solar flux from generations past.
    The former gives a limit to a sustainable 'level of being'- i can't say growth because a lot of 'just being' is maintenance.(Analagous to why adults have to eat.)
    The latter 'mined energy' can be used, but only in a short-term plan. And we have used most of it already.

    Susan George in her book "How the Other half Dies" (circa 1979) made the following observation.
    The Fulani tribe of sub-saharan Africa herd cows that sustain them via blood(letting), milk, meat and hide. For every calorie 'invested' herding the cows, 50 calories were harvested.
    Meanwhile, at the other extreme, by the time cornflakes are in the bowl (including intensive ag, transport, processing, marketing, packaging, distribution, retail etc) 40-50 calories have been invested to produce 1 food calorie.

    Things have to change.

    Farmer John

  17. I think this blog should evolve into what to do when the "shit hits the fan". If, as looks likely, the worst does happen, then there are no prizes for being correct, and indeed no accolades - not that im saying you are looking for any!

    However, if this blog is to be on continues use then as a social took it should look to evolve into a repository of information.

    This makes for good reading - The Five Stages of Collapse -

  18. CE,
    When you have this little 'chat', make sure people know where you are and when you can be expected back. I'd hate for you to disappear.


  19. Sadly I agree with everything you say
    It is easy to see why the politicians are doing what they are doing
    Politicians go into politics - at least labour or democrats to "do something about it" and to be seen not to be doing anything would be fatal electorally
    But I agree with you that they are just making matters worse
    It is hard to see how it will end, but today's collapse in the market is starting to show the way

  20. Cynicus, a few thoughts provoked by this post:

    Speaking of the UK & the US you said that 'Both economies still have large numbers of companies that create significant value, and that value has the potential to start to replace the capital base for each country.' I fear that all may not be as it appears. Many large companies are transnational enterprises, so that although headquartered in London or New York they conduct much of their manufacturing (i.e. wealth creating) activities in Asia and Latin America. In this situation should their wealth creation be seen as 'belonging' to the country in which the wealth is created or the country in which the country is legally incorporated? Moreover, I see little reason to believe that the management of these companies has any concern whatsoever for where they create wealth so long as their company prospers. The question becomes more complex if one takes into account the numerous offshore subsidiaries that transnationals have created for tax purposes.

    Later on you rhetorically comment 'I did not think it was the purpose of commentators and journalists to 'sign up' for policy, but to investigate, analyse and explain policy. What exactly is meant by 'signed up'????' By 'sign up' in this context I understand something along the lines of 'uncritically presenting the official line for public consumtion' - aka writing propaganda.

    'It all just confirms my belief that the UK government is bankrupt, and is using money printing to attempt to avoid default'. I wish I could disagree with you.

  21. Perhaps press opinion is changing...

  22. Cynicus

    The " little chat " sounds ominous. I expect that they may try and " persuade " you to sign up to the propoganda.

    Keep telling it like it is.

  23. I have found an excellent threat analysis from November 2008 -

    Apologies if has been posted and discussed before, I wonder if you could comment about what it mentions in its conclusions about "printing of money is manifest in this broadband internet and high performance computing age, via the complex securities and instruments that private financial institutions created and sold between 1995 and 2007" "Banks and brokers were, in effect, printing their own proprietary issues of "money" via complex securities and as a result their supply of money grew to exceed by at least one order of magnitude the money printed by central banks"

    It is arguing that there already was some inflation in the system from private companies, and that this is interacting with other things deflating and causing the volatility seen in the markets.

    Do you think the data supports such an argument, and also how does the deleveraging of the toxic derivatives effect the level of inflation and how does it interact with the effects of QE?

    The "Eight Bubbles" it references -
    are larger than I expected - especially the USD 1,144 Trillion for all derivatives worldwide, and I knew it was extremely high.

    Assuming these estimates are at all accurate, just how can they be paid back short of every country printing money, in which case why not just write them off as it seems impossible to pay them all back and the chances of a collapse grow more and more it goes on.

    I know I must be missing some of the picture here, because it seems insane that they are risking collapse of the whole system and the impoverishment of millions of their own subjects and the subsequent social unrest that would follow. Surely it is time to wind the clock back and write off a debt that cannot be repaid.

    lefty feep

  24. Following on from comments made after the post on deflation, I feel the suggestions of a forum seem a good one. As others have said CE attracts a large following of like minded people who recognise that the current economic model is broken and what we need is new thinking. A forum would provide a useful space for people to contribute ideas and allow new thinking to develop.

    I along with many others see the narrow minded pursuit of economic growth as completely unworkable. It appeared to be possible when the world seemed endless and plentiful, but it is now apprent that it is not. The doubling of the world workforce without a commensurate increase in the supply of commodities and the subsequent oil price spike CE has alluded to has demonstrated this. Whilst one day we will begin to get over this readjustment-induced depression the global economy is going through a similar situation will likely occur - a sudden sharp rise in the oil price will cause industrial economies to once again bounce back from the wall and into recession. How many times could this be repeated until it heated up an already militarily charged world and lead to some form of inter state conflict?

    I believe even sustainable economic growth is an incorrect way of looking at allocating the earth's scarce resources as it is growth itself which is unsustainable. The earth has reached a point where no more growth is possible. Economic growth should no longer be the measure of a county's worth; it should be replaced with the goal of achieving sustainable human development through maximum economic efficiency.

    Under such a model, those nations that can utilise the resources available to them most efficiently will produce the greatest output and therefore will be the most wealthy. So the paradigm would shift from that symbolized by the industries of the early twentieth century where economic growth presupposed an infinite amount of resources and resulted in massive waste to the uber-fine tuning of production thereby maximising the output per given inputs.

    Echoing comments made by pocmloc and Red I recall reading an article in the mainstream media a number of months ago about how in the future the price of plastics will rise to such an extent that a container of yoghurt will be worth more than the yoghurt itself. It also stated that the contents of land fills from the 1980s onwards are well documented and it won't be long until we will be mining them for the plastics they contain! The article listed companies in the UK which already recycle plastic containers and one is able to recycle them for re-use in packaging for food. It is innovation and technological development bred out of necessity like this that will surely give countries the edge in the future.

    With regards to energy, a project called Desertrec is already getting underway. It aims to set up concentrated solar power (CSP) systems across the deserts of the Middle East and North Africa to supply large amounts of Europe's energy needs via an HVDC grid, simultaneously creating purified water for local populations across arid regions. It is said that in a single year one square kilometer of desert receives the same energy as that contained in 1,500,000 barrels of oil.

    Even in the wasteful societies of the Middle East, government ministers are realising that whilst the economics of renewables do not provide incentive in themselves, the energy renewables would provide domestically means they could sell the gas currently consumed by local populations for many times what they currently receive thereby generating additional revenue.

    This economic readjustment could provide the ideal opportunity for countries to change their outlook, cooperate and work together to achieve common goals of sustainable development. The alternative is they can carry on focusing on outdated notions of economic growth (only one aspect of human development), selfishly usurping resources and inevitably end up squabbling over what remains.

    Mark, ask if you can record your 'chat' so there is some sort of record of what is said.

  25. On Banking Regulation and the Financial Crisis

    I have argued before that one of the causes of the financial collapse was the deregulation of the banking sector.

    The proof of the success of this system was that from 1945 to the early 1980s there were no massive and destructive asset bubbles of the type that become endemic from the 1980s:

    The most notable … [aspect of 1930s financial regulation] was the 1933 Glass-Steagall Act, which prohibited the same financial company from being both a commercial bank and an investment bank.
    The Glass-Steagall wall was devised to prevent a repeat of the 1920s' scams, in which banks made speculative investments, turned the debts into securities, and sold them off to unsuspecting investors with the blessing of the bank. With Glass-Steagall, commercial banks were tightly supervised and given access to federal deposit insurance, to keep savings secure and prevent runs on banks. Investment banks, meanwhile, were not government-guaranteed and were free to do more speculative transactions for consenting adult customers. But Roosevelt's newly created SEC subjected securities markets to much tighter structures against self-dealing and insider conflicts of interest ….
    If you fast forward to 2000, much of this protective apparatus has been repealed. Regulators who didn't believe in regulation and a compliant Congress have allowed financial engineers to evade what remains. In the 1980s, regulators began allowing exceptions to Glass-Steagall. In 1999, Congress finally repealed it outright, permitting financial supermarkets like Citigroup to operate any kind of financial business they desired, and profit from multiple conflicts of interest. The scandals that pumped up the dot-com bubble of the late 1990s, as well as the most flagrant cases like Enron, and the crash that followed, were the result of the SEC and the bank regulators ceasing to police conflicts of interest.

    Robert Kuttner, The Bubble Economy: The financial meltdown is the logical consequence of deregulation.

  26. Professor Michael Hudson is an economist who used to work for Standard Oil. He also predicted the current crash well over a decade ago. He says, on his website:

    "The U.S. press prefers to blame Chinese, Indian and other foreign growth in demand for oil and raw materials. This demand has contributed to the price rise, no doubt about it. But the U.S. oil majors are receiving a windfall “economic rent” on the price run-up, and are not at all unhappy to see it continue. By not building more refining and shipping capacity, they have created bottlenecks so that even if foreign countries did supply more crude oil, it would not be reflected in refined gasoline, kerosene or other downstream product prices.

  27. A new trend in Greece.

    A group of 10-20 hooded people (labeled anarchists by the media) enters a super market (usually a big brand). In a couple of minutes, they take all the food they can get and go out ignoring the market's security. No employee cares enough to make a fuss. They go out and give the food to people passing by, usually elderly people.

    I never heard anyone complaining about them. They did that around a dozen times already and all I can hear, is people applauding.

    Reporting from Greece,


  28. Cynicus, I'd be interested in hearing what you think the best course of action for people in the UK at the moment would be, both from the points of view of their own personal security and what would be best for the UK.

    For the UK is it better if individuals save, allowing banks to lend out the the money in turn, or if people spend their savings instead, purchasing without going into debt, possibly allowing the seller to lessen their debt?

    From a personal point of view should people in the UK be looking to weather the storm, or bug out to another country (are any other countries really in that much better shape, other than China or India?). Can the storm even be weathered?

    Bit new at all this :)

  29. The vast majority of website operators don't have the guts to allow this post, anything like it, any searchable lines, or links. They have been deleted more than 90% of the time. The vast majority of syndicated talk radio hosts are screening their calls and won't allow this topic. The vast majority of callers don't have a clue. We are in big trouble. The truth is so Earth shattering, that no public figure has the guts to acknowledge it. Very few have the guts to allow a statement anything like this in their forum. The truth is being suppressed. We are in much more serious trouble than we have been told by any public figure. Don't be fooled by fluctuating economic indicators or short term market stability. The entire foundation of our economy is crumbling. Get ready people. Get your affairs in order. Get your households in order. Get your communities in order. Be prepared. This is no 'correction'. This is no ordinary recession. This won't be just another Great Depression. This will be much worse. Save this post now before it gets deleted.

    Sometimes, I wonder why I bother fighting so hard for the little guy. Whats the point if they are too stupid to listen? Say that reminds me.

    Amazing. The worst economic and cultural crisis of all time will go down in history horribly misunderstood. What a pathetic bunch of ignorant fools we have become. Consumer junkie credit card morons. Perfect little victims.

    Don’t believe one optimistic word from any public figure about the economy or humanity in general. They are part of the problem. Its like a game of Monopoly. In America, the richest 1%, now hold ALMOST 1/2 OF ALL UNITED STATES WEALTH. Unlike ‘lesser’ estimates, this includes all stocks, bonds, cash, offshore accounts, and material assets held by America’s richest 1%. Even that filthy pig Oprah Winfrey acknowledged that it was near 50% in 2006. Naturally, she put her own ‘humanitarian’ spin on it. Calling attention to her own ‘good will’. WHAT A DISGUSTING SELF-CENTERED SELF-PROMOTING HYPOCRITE SLOB. THE RICHEST ONE PERCENT HAVE LITERALLY MADE WORLD PROSPERITY ABSOLUTELY IMPOSSIBLE. Don’t fall for any of their 'good will' ‘humanitarian’ CRAP. ITS A SHAM. THESE PEOPLE ARE CAUSING THE SAME PROBLEMS THEY PRETEND TO CARE ABOUT. THE EQUATION THEY STAND FOR ABSOLUTELY CAN NOT WORK. Ask any professor of economics. Money does not grow on trees. The government can’t just print up more on a whim. There are serious concequences for doing so. Regardless, there is always a relative limit to the wealth within ANY economy of ANY size. So when too much wealth accumulates at the top, the currency looses value, the middle class slip further into debt, and the lower class further into poverty. A similar rule applies worldwide. The world’s richest 1% now own over 40% of ALL WORLD WEALTH. This is EVEN AFTER you account for all of this ‘good will’ ‘humanitarian’ BS from celebrities and executives. ITS A SHAM. As they get richer and richer, less wealth is left circulating beneath them. This is the single greatest underlying cause for the current US recession. The middle class can no longer afford to pay all the bills or sustain their share of the economy. Their wealth has been gradually transfered to the richest 1%. One way or another, we suffer because of their incredible greed. We are talking about TRILLIONS of dollars which have been transfered FROM US TO THEM. All over a period of about 30 years. Thats Reaganomics for you. The wealth does not ‘trickle down’ as we were told it would. It just accumulates at the top. Shrinking the middle class and expanding the lower class. Causing a domino effect of socio-economic problems. But the rich will never stop. They just keep getting richer. Leaving even less of the pie for the other 99% of us to share. At the same time, they throw back a few tax deductible crumbs and call themselves 'heros' or ‘humanitarians’. Cashing in on the PR and getting even richer the following year. IT CAN’T WORK THIS WAY. Their bogus efforts to make the world a better place can not possibly succeed. Any ‘humanitarian’ progress made in one area will be lost in another. EVERY SINGLE TIME. IT ABSOLUTELY CAN NOT WORK THIS WAY. This is going to end very much like a giant game of Monopoly. The current US recession will drag on for years and lead into the worst US depression of all time. The richest 1% will live like royalty while the rest of us fight over jobs, food, and gasoline. So don’t fall for any of this 'good will' 'humanitarian' BS from Hollywood, Pro Sports, and Wall Street PIGS. ITS A SHAM. Remember: They are filthy rich EVEN AFTER their tax deductible contributions. They get richer as we speak. They absolutely will not stop. Greedy pigs. Now, we are headed for the worst economic and cultural crisis of all time. Crime, poverty, and suicide will skyrocket. SEND A “THANK YOU” NOTE TO YOUR FAVORITE MILLIONAIRE. ITS THEIR FAULT. I’m not discounting other factors like China, sub-prime, or gas prices. But all of those factors combined still pale in comparison to that HUGE transfer of wealth from poor to rich. Anyway, those other factors are related and further aggrivated because of GREED. If it weren’t for the OBSCENE distribution of bottom line wealth within our country, there never would have been such a market for sub-prime to begin with. IF IT WEREN’T FOR THE OBSCENE, UNREASONABLE, ILLOGICAL, AND IMMORAL DISTRIBUTION OF UNITED STATES WEALTH, THERE WOULD NOT HAVE BEEN SUCH A MARKET FOR SUB-PRIME AND THERE WOULD NOT HAVE BEEN A COLLAPSE IN THE HOUSING MARKET. Sub-prime did not cause the problem. It only accelerated the outcome. Make no mistake. The housing market would have been in decline by now with or without sub-prime. Which by the way, was another trick whipped up by greedy bankers and executives. IT MADE THEM RICHER. Along with many investors, developers, and public figures. Including three of the most greedy, disgusting, hypocrite pigs that have ever lived. The credit industry has been ENDORSED for years by Oprah Winfrey, Ellen DeGeneres, and Dr Phil. In fact, they specifically endorsed Countrywide by name. IT MADE THEM RICHER. In order to fully appreciate this, you must realize what a rotten trick Countrywide had up their sleeve to begin with. How it was ENDORSED by OPRAH WINFREY, ELLEN DEGENERES, AND DR PHIL. How incredibly irresponsible they were. How they decieved and betrayed their own loyal fans. How they were PAID FOR IT. How they contributed to the artificial rise and accelerated fall of the US housing market. Not only by concentrating so much wealth. Not only by flaunting their own extravogant lifestyles. Not only by promoting this unrealistic concept of 'bigger, better, faster, upscale' EVERYTHING. But also by endorsing sub-prime. How many middle class dreams were shattered because of their GREED. Don't believe what you've heard from them or any other filthy rich public figure. THEY ARE LIARS. It wasn't just about irresponsible lending, borrowing, local banker bonuses, or weak oversight. That was going on BEFORE sub-prime. It was actually much more cruel and calculated. Orchestrated from the top down. 'Predatory lending' is just that. Their plan was to give easy credit to millions while the housing market was still high, inflate the market even higher in the process, reap a few years worth of payments from unsuspecting middle class buyers, allow them to accumulate little or no equity, lie in wait as those homes increased in value, then jack up their rates making it near impossible for those middle class buyers to make the payments on time. At which time, those middle class buyers would be evicted, their dreams shattered, and their homes forfeited. Which by then, until mid '07', would be even higher in value and re-sold for a higher price. The plan was to be executed primarily while the market was strong. Leaving all those previous buyers with NOTHING to show for all those payments made. This incredibly cruel and calculated plan was orchestrated in part by Countrywide. THE SAME COUNTRYWIDE ENDORSED BY OPRAH WINFREY, ELLEN DEGENERES, AND DR PHIL. IT MADE THEM RICHER. It also made many of their loyal fans homeless. What a rotten, disgusting trio of greedy, self-serving, self-promoting, hypocrite pigs. What a rotten, disgusting, immoral way to turn a quick buck. To make as many people as possible love you. Then tell those love-sick people to run out and buy a product or service because you say so. Because you were PAID to endorse it. Without the slightest regard for the downside or anything but your own obscene bottom line. Thats why they did it. GREED. Now, there are similar ties between every major industry, every Fortune 500 company, and nearly every public figure. IT MAKES THEM RICHER. It also drives up the cost and consumption for nearly every product, service, and resource on the market. So don’t fall for their ‘good will’ 'humanitarian' BS. ITS A SHAM. NOTHING BUT A CALCULATED, TAX DEDUCTIBLE, MARKETING PLAN TO RAISE THE VALUE OF THEIR OWN IMAGE. If you fall for it, then you’re a fool. If you see any real difference between the moral character of a celebrity, politician, attorney, lobbyist, executive, or card shark, then you’re a fool. No offense fellow citizens. But we have been mislead by nearly every living public figure. We still are. Even now, they claim to be ‘hurting’ right along with the rest of us. As if gas prices actually effect the lifestyle or bottom line of a millionaire. ITS A LIE. IN 2007, THE RICHEST 1 PERCENT INCREASED THEIR AVERAGE BOTTOM LINE WEALTH AGAIN. Most of these financial assets are on the books. Others hidden. Material assets aren't always disclosed. But make no mistake. America's richest 1 percent keep getting richer. On average, they are now worth almost $5,000,000 each. Thats an all time high. As a group, their net worth is over $20,000,000,000,000. THATS OVER TWENTY TRILLION DOLLARS. Another all time high. Which by the way, is much more than the entire middle and lower classes combined. Also more than enough to pay off our national debt, fund the Iraq war for a decade, repair our infrastructure, and bail out the US housing market. Still think that our biggest problem is China? Think again. Its the one percent club. That means every big name celebrity, athlete, executive, entrepreneur, developer, banker, and lottery winner. Along with many attorneys, doctors, and politicians. If they are rich, then they are part of the problem. Their incredible wealth was not ‘created’, ‘generated’, grown in their back yard, or printed up on their command. The lion's share was transfered FROM US TO THEM. Directly and indirectly. Its become near impossible to spend a dollar without making some greedy pig even richer. Don’t be fooled by the fall of the stock market, industry losses, lower profit margins, bank failures, or the occasional reported loss of a millionaire’s fortune. Overall, they just keep getting richer. They do so with little or no regard for their own industries or the economy as a whole. They are obsessed primarily with a desire to accumulate more personal wealth. They absolutely will not stop. Still, they have the nerve to pretend as if they care about ordinary people. ITS A LIE. NOTHING BUT CALCULATED PR CRAP. WAKE UP PEOPLE. THEIR PRIMARY GOAL IS TO WIN THE GAME. The one percent club will always say or do whatever it takes to get as rich as possible. Without the slightest regard for anything or anyone but themselves. Reaganomics. Their idea. Loans from China. Their idea. NAFTA. Their idea. CAFTA. Their idea. Outsourcing. Their idea. Downsizing. Their idea. Sub-prime. Their idea. High energy prices. Their idea. Oil ‘futures’. Their idea. The commercial lobbyist. Their idea. The multi-million dollar lawsuit. Their idea. The multi-million dollar endorsement deal. Their idea. $400 cell phones. Their idea. $200 cell phone bills. Their idea. $200 basketball shoes. Their idea. $30 late fees. Their idea. $30 NSF fees. Their idea. $20 DVDs. Their idea. $50 event tickets. Their idea. $30 books. Their idea. $400 PC operating systems. Their idea. $60 video games. Their idea. Obscene health care charges. Their idea. Subliminal advertising. Their idea. Commercial brainwash plots on TV. Their idea. Vioxx, and Celebrex. Their idea. Excessive medical testing. Their idea. The MASSIVE campaign to turn every American into a brainwashed, credit card, pharmaceutical, medical testing, love-sick, celebrity junkie. Their idea. IT WAS ALL THEIR IDEA. IT MAKES THEM RICHER. All of the above drive up the cost of living, shrink the middle class, concentrate the world’s wealth and resources, create a domino effect of socio-economic problems, and wreak havok on society. All of which have been CREATED AND ENDORSED by celebrities, athletes, executives, investors, developers, entrepreneurs, attorneys, and politicians. IT MAKES THEM RICHER. So don’t fall for any of their ‘good will’ ‘humanitarian’ BS. ITS A SHAM. NOTHING BUT TAX DEDUCTIBLE PR CRAP. In many cases, the ‘charitable’ contribution is almost entirely offset. Not to mention the opportunity to plug their name, image, product, and ‘good will’ all at once. Which is usually done just before or after the release of their latest commercial project. IT MAKES THEM RICHER. These greedy pigs even have the nerve to throw a fit and spin up a misleading defense with regard to ‘federal tax revenue’. ITS A SHAM. THEY SCREWED UP THE EQUATION TO BEGIN WITH. If the middle and lower classes had a greater share of the economic pie, they could easily cover a greater share of the federal tax revenue. They are held down in many ways because of greed. Wages remain stagnant for the vast majority because the executives, investors, developers, celebrities, athletes, attorneys, politicians, and entrepreneurs, are paid millions. They over-sell, over-charge, under-pay, outsource, lobby, re-locate, cut jobs, and cut benefits to increase or preserve their own obscene personal bottom line. They do so even at the expense of their own industries. Even after you account for the fall of the market and lower industry profit margins, the richest 1 percent still keep getting richer on average. Simply because their wealth is drawn from the majority in many ways. Not necessarily at the same rate, but still in their favor. They continue to reap more than they spend down or 'give back'. They have done so for many years. As more United States wealth rises to the top, the middle and lower classes inevitably suffer. This reduces the potential tax revenue drawn from those brackets. At the same time, it wreaks havok on middle and lower class communities and increases the need for financial aid. Not to mention the spike in crime because of it. There is a domino effect to consider. Caused primarily by a constant transfer of wealth from poor to rich. IT CAN’T WORK THIS WAY. But our leaders refuse to acknowledge this. Instead they come up with one trick after another to milk the system, feed the rich, and screw the majority. These decisions are heavily influensed by the 1% club. Every year, billions of federal tax dollars are diverted behind the scenes back to the rich and their respective industries. Loans from China have been necessary to compensate in part, for the red ink and the multi-trillion dollar transfer of wealth from poor to rich. At the same time, the feds have been pushing more financial burden onto the states who push them lower onto the cities. Again, the hardship is felt more by the majority and less by the 1% club. The rich prefer to live in exclusive areas or upper class communities. They get the best of everything. Reliable city services, new schools, freshly paved roads, new lighting, sidewalks, drainage, upscale parks, ect. The middle and lower class communities get little or nothing without a raise in basic service charges or a local tax increase. Which, they usually can’t afford. So the red ink flows followed by service cuts and lay-offs. All because of the OBSCENE distribution of bottom line wealth in this country. Anyway, when you account for all federal, state, local taxes, and fees, the middle class actually pay about the same rate as the rich. The devil is in the details. So when people forgive the rich for their incredible greed and then praise them for paying a greater share of the FEDERAL income taxes, its like nails on a chalk board. I can not accept any theory that our economy would suffer in any way with a more reasonable distribution of bottom line wealth. Afterall, it was more reasonable 30 years ago. Before Reaganomics came along. Before GREED became such an epidemic. Before we had an army of over-paid executives, investors, celebrities, athletes, attorneys, doctors, entrepreneurs, developers, lobbyists, and sold-out politicians to kiss their greedy asses. As a nation, we were in much better shape. Strong middle class, free and clear assets, home equity, savings, widespread prosperity, stable job market, lower deficit, ect. Our economy as a whole was much more stable and prosperous for the majority. WITHOUT LOANS FROM CHINA. Now, we have a more obscene distribution of bottom line wealth, and resources than ever before. We have a sold-out government, crumbling infrastructure, energy crisis, home forclosure epidemic, credit crunch, weak job market, weak middle class, weak US dollar, 13 figure national debt, and 12 figure annual shortfall. The cost of living is higher than ever before. Most people can’t even afford basic health care. ALL BECAUSE OF GREED. I really don’t blame the upper class in general. At least not as a group and not without exception. No economy could ever function without some reasonable scale of income and wealth. But it can’t be allowed to run wild like a mad dog. ALBERT EINSTEIN TRIED TO MAKE PEOPLE UNDERSTAND. UNBRIDLED CAPITALISM ABSOLUTELY CAN NOT WORK. TOP HEAVY ECONOMIES CAN NOT BE SUSTAINED. THEY ALWAYS COLLAPSE. Bottom line: The richest 1 percent will soon tank the largest economy in the world. It will be catastrophic. Like nothing we’ve ever seen before. The American dream will be shattered. and thats just the beginning. Greed will eventually tank every major economy in the world. Causing millions more to struggle, fight, starve, suffer, and die. Oprah, Angelina, Brad, Bono, and Bill are not part of the solution. They are part of the problem. THERE IS NO SUCH THING AS A MULTI-MILLIONAIRE HUMANITARIAN. EXTREME WEALTH MAKES WORLD PROSPERITY ABSOLUTELY IMPOSSIBLE. WITHOUT WORLD PROSPERITY, THERE WILL NEVER BE WORLD PEACE OR ANYTHING EVEN CLOSE. GREED KILLS. IT WILL BE OUR DOWNFALL. Of course, the rich will throw a fit and call me a madman. Of course, they will jump to small minded conclusions about 'jealousy', 'envy', or 'socialism'. Of course, their ignorant fans will do the same. You have to expect that. But I speak the truth. If you don’t believe me, then copy this entry and run it by any professor of economics or socio-economics. Then tell a friend. Call the local radio station. Re-post this entry or put it in your own words. Be one of the first to predict the worst economic and cultural crisis of all time and explain its underlying cause. WE ARE IN BIG TROUBLE.

    So what can we do about it? Well, not much. Unfortunately, we are stuck on a runaway train. The problem has gone unchecked for too many years. The US/global depression is comming thanks to the 1% club. It would take a massive effort by the vast majority to prevent it. Along with a voluntary sacrifice by the rich. THATS NOT GOING TO HAPPEN. But if you believe in miracles, then spend your money as wisely as possible. Especially in middle and lower class communities. Check the Fortune 500 list and limit your support of high profit/low labor industries (Hollywood, pro sports, energy, credit, pharmaceutical, cable, satelite, internet advertising, video, and music, cell phone, high fashion, jewelry, ect.). Cancel all but one credit card for emergencies only. Call the provider and demand a lower rate. Be persistent. You may get it. (By the way. I gave this piece of advice long before NBC. I'm not looking for kudos. I'm telling you that NBC is directly affiliated with the credit industry. They could have given you this piece of advice years ago. Instead, they stood by and allowed their parent company, sister companies, and network sponsors to RIP YOU OFF. Even now, they give the occasional 'good guy' financial advice only because they are pressured to do so. They carefully balance every piece of 'good guy' advice with their primary goal to GET YOUR MONEY. Which is why their 'good guy' advice is so often followed by a plug for one of their sister companies, sister channels, network sponsors, or coorporate partners. For example: They tell you to pay down your credit card debt. Good advice. They should have given it years ago. Then, they tell you to GET MORE CREDIT CARDS and use them. Bad advice. One week Jean Chatzky tells you to avoid the 'free credit report' scam because it is always followed by a monthly service charge. Good advice. They should have given it years ago. The following week she stands by as her paid fellow advisor strongly implies for you to have your credit monitered on a monthly basis and praises a caller for doing so. Bad advice. This is actually a plug for one of their network sponsors, coorporate partners, or parent company. The praise is nothing but a psychological trick. DON'T FALL FOR IT. Don't take ANYTHING they say at face value. Instead, read between the lines. Carefully weigh every piece of 'good guy' advice given against their primary goal. THEY WANT YOUR MONEY.). If you need a cell phone, then do your homework and find the best deal on a local pre-pay. You may be able to get one for as little as $10 a month. Don't text. The charge may seem low at the time but their profit margins are obscene. If you want home internet access, then check for a locally based provider. They can be found in nearly every city nationwide. Otherwise, use the least expensive big name provider, and share accounts whenever possible. If you need to search, then use the less popular search engines. They usually produce about same results anyway. Don't pay for any internet download. Their profit margins for such data transfers are obscene. Don’t pay to see any blockbuster movie. Instead, wait a few months and rent the DVD from a local store, borrow it, or buy it USED. Then loan it to a friend or family member. If you prefer the outing, then choose a film produced by the lesser known studeos with lower paid actors. If you want to see a big name game or event, then watch it in a local bar, club, or at home on network TV. Don’t buy any high end official merchandise and don’t support the high end sponsors. If its endorsed by a big name celebrity, then don’t buy it. If you can afford a new car, then make an exception for GM, Ford, and Dodge. If they don’t increase their market share soon, then a lot more people are going to get screwed out of their pensions and/or benefits. Of course, you must know by now to avoid those big trucks and SUVs unless you truly need one for its utility. Don’t be ashamed to buy a foreign car if you prefer it. Afterall, those with the most fuel efficient vehicles consume a lot less foreign oil. Which accounts for a pretty big chunk of our trade deficit. Its a reasonable trade-off. Anyway, the global economy is worth supporting to some extent. Its the obscene profit margins, trade deficits, and BS from OPEC that get us into trouble. Otherwise, the global economy would be a good thing for everyone. Just keep in mind that the big 3 are struggling and they do produce a few smaller reliable cars. Don’t frequent any high end department store or any business in a newly developed center or upper class community. By doing so, you encourage greedy developers, make them richer, and draw vital support away from industrial areas and away from the middle and lower class communities. Instead, support the local retailer and the less popular shopping centers. Especially in lower or middle class communities. If you can afford to buy a home, then do so. But go smaller and less expensive. Don’t get yourself in too deep and don’t buy into the newly developed condos or gated communities. Instead, find a modest home in a building or neighborhood at least 20 years old. If you live in one of the poorer states, then try to support its economy first and foremost. Be on the lookout for commercial brainwash plots on TV. They are written into nearly every scene of nearly every show. Most cater to network sponsors, coorporate partners, and parent companies. Especially commercial health care. In particular, high profit pharmaceuticals and excessive medical testing. These plugs are countless, calculated, and VERY well written. They have brainwashing down to a science. DON'T FALL FOR IT. Get off the couch and take care of your body the way nature intended. There is no substitute. If you must see a doctor, then DEMAND that he/she give you more than 5 minutes of their undivided attention. Otherwise, dispute their unreasonable charges. Be prepared with written questions about your condition and get them answered one at a time. If they refuse, then dispute their unreasonable charges. If they prescribe excessive medical testing then ask if they personally own the equipment or if they are paid a commission for each test. If they find nothing new or signifigant, then dispute their unreasonable charges. If they prescribe a pharmaceutical, then ask for a generic. Better yet, concider a change in lifestyle or simple tolerance. If they still recommend the name brand pharmaceutical, then ask about any financial ties or conflict of interest. If they get offended, then dispute their unreasonable charges and consider a new doctor. If you must drug away your sniffles, worries, jitters, aches, and pains, then at least do your homework. Be aware of the possible side-effects ahead of time. Don't be surprised to find yourself back a week or two later feeling worse. In which case, you should dispute their unreasonable charges. If you are diagnosed with another medical condition, then ask your doctor what he/she has done to rule out those possible side-effects. Otherwise, dispute their unreasonable charges. Don't let any greedy doctor treat you like a number, make you wait an hour, or rush you out of their office. Otherwise, dispute their unreasonable charges. Don't fall for this CRAP that doctors have no choice but to over-book their time or over-charge their patients because of high overhead. ITS A LIE. YOUR DOCTOR IS MOST LIKELY A MULTI-MILLIONAIRE. So don't fall for their CRAP. Demand their undivided attention and respect. Afterall, they took an oath. If you have the opportunity before being admitted, then check the record of your hospital. Check to see if they have been investigated or sued for providing unnecessary treatment, excessive medical testing, or fraudulent billing. Dozens have already been caught doing so. Do all of the above regardless of your coverage. Don't force your employer to cover the obscene and often fraudulent charges of a corrupt health care industry. By doing so, you make the problem worse. Keep your guard up when watching ANY talk show. These people are not your friends. They are not your advocates. They are paid actors hired to get your attention and your money. Some of them are also executive producers (Oprah Winfrey, Ellen Degeneres, and Dr Phil.). Nearly every word, smile, and stupid joke is rehearsed ahead of time. Including those which take place so often during what appear to be 'technical oversights' (Today Show. Even their stage hands are mixed in behind the scenes so that you can hear them laugh at every stupid joke.). Its all fake. Its all calculated. These people are not trying to make the world a happy place. They are trying to entertain you only because their marketing studies have shown that you are more likely to drop your guard and support their sponsors. Nearly every segment is about marketing some over-priced product or service. They will use any excuse to plug a gadget, fashion item, travel destonation, university, drug, medical test, surgical procedure, movie, TV show, book, magazine, song, website, ect. Almost all of it over-priced. Almost all of it resulting in higher profits for their sponsors, partners, and parent companies. DON'T FALL FOR IT. Big business is fine on occasion depending on their product, ethics, employment, profit margins, and profit sharing. Do your homework. If they are screwing up our economy or society, then don't pay them for it. If you want to support any legitimate charity, then do so directly. Never support any celebrity foundation. Don't be fooled by the sale of baby photos, lies about percentage of income donated, or praise from other well known public figures. Celebrity foundations are CRAP. They spend most of their funding on PR campaigns, exotic travel, and super high end accomodations for themselves. Thats right. Filthy rich public figures have been jet-setting the world in the name of 'humanity' for years. Riding in personal jets, staying in super-exclusive resorts, and living it up in exotic locations around the world the likes of which most people could never afford even if their lives depended on it. They bring along agents, advisors, publicists, hair, make-up, wardrobe, lighting, and photo crews who are also in it for themselves. They are paid six or seven figures for their part to schedule, manage, document, showcase, praise, and publicize the 'good will' of said public figures and their respective industries. Every possible expense is passed of as 'incidental' or 'necessary' and billed right back to some 'foundation' named after said public figure and/or respective industry. Every possible tax deduction is claimed. Which are incredibly vague and diverse thanks to our sold-out government. Deals are cut with major networks who agree to praise the 'good will' or 'humanitarian' effort of said public figures and plug their latest commercial project around the same time. Others from around the world pick up the story and save these industries billions in advertising every year. Resulting in higher profits and paychecks for the 1% club. When its all said and done more wealth is transfered from poor to rich. NOT the other way around. So don't support any charity named after a living celebrity. Don't be fooled or inspired by any photo you see in a magazine, any clip on TV, any affiliation, or any short term short sighted progress report. Instead, go to and look up a top rated charity to support your favorite cause. Its all there. For example: 'Habitat For Humanity' is a top rated charity. They have been for many years. They operate with a low overhead, volunteer workforce, and donated materials. They have built homes for the less fortunate in nearly every city nationwide. Including New Orleans. They do so as we speak. No similar effort can match their progress hour for hour or dollar for dollar. So there is no legitimate reason to support a slower, less efficient effort represented by a filthy rich Hollywood actor who flies in on a personal jet, takes most of the credit, and makes a deal with a major network for plugs just days before the premier of his latest film or DVD release. By doing so, you support not only the inefficient effort, but also the filthy rich actor. Concentrating more wealth and dumbing down our society further in the process. Instead, support 'Habitat For Humanity'. Its not perfect. It is affiliated with some big business. However, it is MUCH more efficient, effective, and less corrupt than 'Make It Right'. The difference is profound. In general, support the little guy as much as possible and the big guy as little as possible. Keep your own greed in check. Don't play the big stakes lottery games, and don't invest only for profit. Don't believe for a second that you can get rich and still manage to keep your soul because you can't. Don't believe for a second that you can concentrate even more of the world's wealth and somehow 'give back' enough to make up for it because you can't. If you do come into a fortune, then give away the bulk of it to a legitimate cause or directly to others who have far less. Do it quickly before that big money turns your heart black. Find the courage and do it. STAY OUT OF THE 1% CLUB. Encourage others to do the same. Their standard is obscene, unjust, illogical, and immoral. There is no excuse for it. Do your part to reverse the transfer of wealth away from the rich and back to the middle and lower classes. Otherwise, there will be no economic recovery EVER. Unfortunately, there is no perfect answer. Jobs will be lost either way. Families will go cold and hungry either way. Innocent children will starve and die either way. But we need to support the largest group of workers with the most reasonable profit margins. We need to stand for a more reasonable distribution of income, bottom line wealth, and resources. We need to support LEGITIMATE charities (Check that list at This is our only chance to limit the severity or duration of the comming US/global depression. In the meantime, don’t listen to Bernanke, Paulson, Bartiromo, Orman, Dobbs, Kramer, Pickens, Larson, O'Reiley, Limbaugh, Bruce, Ingraham, or any other public figure with regard to the economy. They are all plenty smart but I swear to you that they will lie right through their rotten teeth. IT MAKES THEM RICHER. These people work for big business. They are sponsored by big business. The ‘experts’ they cite also work for big business. They invest in big business. They are all motivated primarily by their obsessive desire to accumulate even more personal wealth. THEY WILL LIE RIGHT THROUGH THEIR ROTTEN TEETH. So don’t fall for their tricks. Instead, look at the big picture. The economic problems we face have been mounting for well over 20 years. All of them caused or aggrivated by a constant transfer of wealth from poor to rich. Soon, it will cause the worst ever GLOBAL DEPRESSION. Its not brain surgery. For the mostpart, Its simple math. Like I said, you are welcome to copy this entry and run it by any professor of economics or socio-economics. Go ahead and do it. Ask them specifically about the link between the distribution of wealth and economic stability. If thats not good enough, then look up what Albert Einstein had to say about greed, excess, extreme wealth, and its horrible economic and cultural concequences. Then call any syndicated talk radio show. Tell the screeners that you would like to discuss the concentration of wealth. Mention the views of Albert Einstein with regard to this issue. Your call will be refused. FLAT OUT REFUSED. The vast majority screen their calls and won't allow this topic. Try any local talk radio show. You will face massive opposition there as well but at least they will take your call. Be prepared. These people are very good debators. The vast majority are die-hard capitalists. If they take offense, they may insult you, talk over you, try to re-define your own statements, or call you a 'socialist', 'marxist', or 'communist'. They often use these words to refer to anyone who points out the flaws of unbridled capitalism. They may follow with the old "socialism/marxism doesn't work" line. Maybe, they should take a closer look at whats happening in the world and see that unbridled capitalism doesn't work either. The heavy concentration of wealth is it's fatal flaw. We need a compromise. A relatively free market system with a minimum wage, a maximum wage, a progressive tax policy, and caps on personal wealth. Any little step in that direction would be a start. If you get the opportunity, then confront any politician or public figure in any forum. Ask them to confirm or deny the concentration of wealth and the relation if any to economic stability. Watch them squirm. They will not give you a straight answer because most public figures are filthy rich. They simply will not acknowledge the ugly truth. GREED KILLS. IT WILL BE OUR DOWNFALL.

    Its already underway. A massive campaign to divert our attention. Trump, Buffet, O'Reiley, Dobbs, Winfrey, Pickens, Larson, Norris, Branson, Bohannon, Limbaugh, Coulter, Clinton, Hannity, Ingraham, Bruce, Bloomberg, Doyle, and several other well known filthy rich public figures have been running their mouths about the economy. Finally admitting a hint of severity after years of denial. They even have the nerve to FINALLY acknowledge the possibility of a US/global depression. Still, they refuse to acknowledge the single greatest underlying cause. GREED. Instead, they focus on policies, procedures, and circumstances that were born FROM the underlying cause. GREED. They ramble on about 'sub-prime', 'toxic debt', 'junk bonds', and 'risky investments'. As if somehow all of this could have been avoided if those transactions had never taken place to begin with. What a joke. Those factors don't represent the underlying cause of this global economic crisis. They represent the effect of a shrinking middle class and massive consumer debt. CAUSED BY GREED. A MASSIVE TRANSFER OF WEALTH FROM POOR TO RICH. Otherwise, there wouldn't have been such a market for sub-prime to begin with. The debt wouldn't have been 'toxic'. The bonds wouldn't have been 'junk'. The investments wouldn't have been so 'risky'. By focusing on such factors, they attempt to divert our attention, limit our hindsight, disregard the OBSCENE concentration of wealth and capital, that shrinking middle class, the high cost of living, and the particular form of evil responsible for almost all of it. GREED. Dancing their way around the big picture. DON'T FALL FOR IT. Remember: Our national debt was way up BEFORE sub-prime. Consumer debt was way up BEFORE sub-prime. The cost of living was up BEFORE sub-prime. Wall Street profits were obscene BEFORE sub-prime. The middle class were loosing free and clear assets BEFORE sub-prime. Our infrastructure was in bad shape BEFORE sub-prime. Loans from China were taken out BEFORE sub-prime. The dollar was loosing value BEFORE sub-prime. All of this took place over a period of many years under both Republican and Democratic rule. All of it coincided with a transfer of wealth from poor to rich. So don’t let these cowardly, hypocritical, sold-out, partisan, filthy rich public figures divert your attention or limit your range of thought. THE CURRENT GLOBAL ECONOMIC CRISIS WAS NOT CAUSED BY A SINGLE POLICY, PROCEDURE, POLITICAL PARTY, OR ADMINISTRATION. IT WAS CAUSED PRIMARILY BY A MASSIVE TRANSFER OF WEALTH FROM POOR TO RICH. THIS ALSO REPRESENTS A MASSIVE CONCENTRATION OF CAPITAL WORLDWIDE. OTHERWISE, THERE WOULD NOT HAVE BEEN SUCH A MARKET FOR SUB-PRIME AND THERE WOULD NOT HAVE BEEN A GLOBAL CREDIT CRUNCH. MONEY DOES NOT GROW ON TREES AND IT DOES NOT JUST FLOAT AWAY. IT ONLY TRANSFERS FROM ONE PARTY TO ANOTHER. ALBERT EINSTEIN TRIED TO MAKE PEOPLE UNDERSTAND. GREED KILLS. IT WILL BE OUR DOWNFALL.

    A word for those who respond with the usual ‘I know more than you. I spell better than you. I talk like an economist. Look how smart, knowledgable, and articulate I am’ crap. Let me say this in advance. I don’t claim to be an expert in this field. I never will be. I'm still learning and I don't claim to be infallible. But I did go on record with these predictions long before any public figure uttered the word ‘recession’. I've done so 'on the air' and 'online'. Millions of you already know my voice from various local talk radio shows in several states and one syndicated. My first call was in September of '05'. I tried to explain that we will never have world peace without world prosperity and that we will never have world prosperity without a 'fair and reasonable pay-scale'. I also tried to explain the link between 'extreme wealth' and 'extreme poverty'. My call was immediately followed by attacks from so called 'patriots' who felt that my cause must have been to promote 'socialism' or 'bring down America'. Not warn her citizens. You may also remember me from various chat rooms criticizing the 1% club and Hollywood humanitarians in particular. If you search long enough, you will find my early postings online from ‘05' and ‘06'. At first, they were written specifically to fit within a few hundred characters. Including the first draft of this rant. It started with one short paragraph predicting a 'total collapse of the US economy'. Others included phrases like 'game of Monopoly', 'recession is inevitable', 'global recession', 'greed kills', and 'the worst economic and cultural crisis of all time'. Some of which were eventually included here. From day 1, I have tried to explain the link between extreme wealth, poverty, and economic instability. My internet account was eventually cancelled for posting 'spam' in response to articles about the economy. In December of '06', I predicted market instability by spring of the following year. I did so 'on the air'. In January of '07', I called another morning talk radio show and spoke with a guest host who was filling in for a well known public figure. Again, I specifically predicted growing market instability, the current US recession, and the subsequent US/global depression.Which by the way, will be the worst of all time by far. In February of '07', Allen Greenspan acknowledged a 'one in three' chance of a US recession. I immediately called another talk radio show and guranteed AGAIN that it was iminent. I criticized Greenspan and tried to explain that it was not about 'odds' but instead a very simple equation with regard to distribution of income and wealth. I also gave credit to Albert Einstein who went on record with similar views in 1949. As far as I know, he was the first to do so. By late spring of '07', the market was rattled and the economic 'stimulus' in the works. Which turned out to be around $160,000,000,000. THATS ONE HUNDRED AND SIXTY BILLION DOLLARS. Well over 1% of our GDP. Deemed appropriate at the time by our leaders. In fact, Bush went on record with a claim that it was based on a mathematical formula and proven strategy. They said it would work. I immediately predicted that it would have little or no effect. By summer of '07' the stock market was more unstable. The housing market in decline. Again, I predicted that it would get MUCH worse. In September of '07', I predicted that our government would have no choice but to acknowledge a US recession by October of '08'. I also assured the audiance that our economy would "go down in a ball of flames" because of greed and that no recovery would EVER take place without a more reasonable distribution of wealth and resources. I have made these predictions 'on air' and 'online' literally hundreds of times. The first call was in September of '05'. Made to a well known public figure with a large audiance. The first blog post a month or so later. Prior to that, I had never even seen one. In fact, my very first post to a blog was written specifically to warn my fellow citizens about the comming US/global depression. Which I was already convinced at the time would be SEVERE within a decade. That was in October of '05'. At the time, there were literally only a few of us worldwide posting any such prediction online. I'm talking maybe a dozen searchable links. This particular rant began with one short paragraph in '06'. Like the others, it was originally intended to fit within a few hundred characters. At the time, I was unaware of any blogs which allowed for longer entries to be posted anonymously. This paragraph was first written in early-mid '08'. Its been updated several times. There has also been a running debate on which began in October of '07' (don't click on their ads). In February or March of '08', I refered specifically to the bank failures of the Great Depression and predicted that it was about to happen again. At the time, I was one of only a few bloggers worldwide to go on record with any such prediction. This was still several weeks to months before Greenspan, Paulson, Bartiromo, Orman, Kramer, O'Reiley, Larson, Bohannon, Dobbs, Celeste or any other well known public figure had acknowledged even a hint of severity. It was also several weeks before Fanny May and Freddie Mac made the news. I also predicted in March that our markets would end the year much lower than they began. Which was still contrary to what we were being told by any public figure. I was allowed to post but when my predictions came true, the site operators went back all the way to October of '07' and deleted nearly every one of my previous entries (they missed a few.). Their motive was obvious. They wanted to 'erase' my credibility. is directly affiliated with NBC, GE, Universal Studeos, Countrywide, CityBank, Capital One, Oprah Winfrey, Angelina Jolie, Brad Pitt, Ellen Degeneres, Dr Phil, and others who I persecute by name. All of which depend on the constant dumbing down of society. All of whom are partially responsible for the current economic crisis. None of which or whom have the GUTS to acknowledge the single greatest underlying cause. GREED. In fact, those who epitomoze it (all of the above) want my big mouth SHUT. For 3 solid years, I have been ripping on the 1% club for their incredible greed and hypocrisy. From day 1, my call has been for a more reasonable distribution of income, wealth, and resources. My warning that without it, we would face the worst economic and cultural crisis of all time. Since then, I’ve gone on record against people like Greenspan, Bernanke, Paulson, Laffer, O'Reiley, Bartiromo, Orman, Kramer, Larson, and Dobbs. So far, my predictions have been accurate. The public figures DEAD WRONG. Afterall, not one of them acknowledged even a hint of severity in '05', '06', or '07'. When they FINALLY did this year, they all said something to the effect of "None of us saw this comming.". LIARS. There were a few of us typing our fingers to the bone trying to warn people. There were a few of us calling talk radio shows almost daily trying to warn people. I was one of them. Again, I don't claim to be an expert in this field. But I do understand simple equations, basic economics, and cultural trends. I also realize that mainstream views are DEAD WRONG and based on LIES told by filthy rich public figures who will say whatever it takes to serve their own interests. GREED. Afterall, what kind of incredible MORON could even glance at the numbers and somehow think the equation could work? What kind of incredible MORON could possibly hope to sustain an economy based on a constant transfer of wealth from poor to rich? What the hell did they expect to happen when the middle class finally ran low on money to spend on over-priced crap like everything that I mentioned in that first long paragraph? What the hell were they thinking of? I'll tell you what. RICHES. FILTHY STINKING RICHES. Thats what. Now, they are spinning themselves dizzy trying to divert our attention. Mark my words: They will never acknowledge the obscene concentration of wealth or the negative effect had on economic stability. They will never acknowledge the downside of their own incredible greed. They will all come up with one campaign or strategy after another to blame the other guy, the other administration, the other politician, the other party, the other policy, the other industry, the other country, ect. Whatever it takes to dumb down our society. They will NEVER have the GUTS to acknowledge the single greatest underlying cause for this global economic crisis. GREED. They won't even have the guts to acknowledge the views or predictions of Albert Einstein made way back in 1949. THOSE PARTICULAR VIEWS AND PREDICTIONS. Instead, they will produce their own big money/big business/big celebrity 'experts' who have the same motive to lie right through their rotten teeth. GREED. Its not their knowledge I question. Its their character. GREED. Like I said. This is not brain surgery. For the mostpart, its simple math. When you concentrate the world’s wealth, you also concentrate its capital, and shrink the middle class along with the potential market for every major industry. Homes go unsold. Bills go unpaid. Jobs are lost. Banks fail. More products go unsold. More jobs are lost. More banks fail. and so on. and so on. and so on. It happened 80 years ago in that order beginning with a concentration of wealth. It will happen again. This time on a catastrophic global scale. Throughout the cycle, the rich will panic and tighten their grip. Concentrating the world’s wealth and resources even further, getting richer in the process, and ensuring the collapse of every major economy worldwide. Think it can’t happen? Think again. GREED KILLS. IT WILL BE OUR DOWNFALL.

    Another thing. I don’t want credit for any of this. Otherwise, I would have given my full name a long time ago. I havn't. IT DOESN'T MATTER. I'm not selling a book and I'm not looking for any notoriety. At least not yet. I do have a plan to go public when my parents die. In fact, I have BIG plans for my inheritence. Every single penny of it. In the meantime, I don't want them to know about it. I also don't want them punished for my big mouth. Which is why I've gone out of my way to remain anonymous for 3 solid years. When I do go public, it won't be for profit and it won't be for popularity. It will be for a legitimate cause and NOTHING ELSE. In fact, I hope to be just one of many. A face in the crowd. In the meantime, I don't care who gets to say "I told you so." IT DOESN'T MATTER. As far as I’m concerned, you can put this entire rant in your own words and take credit for all of it. I don’t care. Just spread the word. Otherwise, the greatest injustice of all time will go down in history unchecked.

    By the way. The bailout won’t work. IT WON’T WORK. The plan fails to address the fundamental problem. The middle class don’t need more credit. They need a reasonable share of the economic pie. They also need a lower cost of living and a chance to catch their breath. They need a break from all of the psychological marketing tricks and mass market BS. Most of all, they need to wake up, see the truth, and take a stand. GREED KILLS. IT WILL BE OUR DOWNFALL.

    To my surprise, two public figures have found the courage to acknowledge this problem to some degree. On 11.07.07 former presidential candidate Ron Paul mentioned the massive transfer of wealth from poor to rich. He also hinted at the possibility of economic collapse. He did so on 'Face the Nation'. He was blacklisted almost immediately for doing so. On 9.28.08 former secretary of labor Robert Reich refered to the obscene levels of income inequality as part of a "recipe for disaster". He mentioned the richest one percent in particular. He did so on 'Late Night With Conan O'Brien'. As far as I know, Albert Einstein was the first to explain the link between extreme wealth and economic instability. He did so in 1949. He explained how the first Great Depression was actually caused by a massive transfer of wealth from poor to rich. He predicted that it would happen again. He also predicted much greater levels of economic instability proportional to much greater levels of income and wealth inequality. He was right. Amazing. The prosperity of an entire world is about to be compromised. Almost entirely because of greed. IT WILL BE OUR DOWNFALL.

    Another word about the first Great Depression. It really was a perfect storm. Caused almost entirely by greed. First, there was unprecedented economic growth. There was a massive building spree. There was a growing sense of optimism. There was a growing obsession for celebrities. The American people became spoiled, foolish, brainwashed, and love-sick. They were bombarded with ads for one product or service after another. Encouraged to spend all of their money as if it were going out of style. Obscene profits were hoarded at the top. All of this represented a MASSIVE transfer of wealth from poor to rich. Executives, entrepreneurs, celebrities, and share holders. By 1929, the wealthiest 1 percent had accumulated around 40% of all United States wealth. The upper class held around 30%. The middle and lower classes were left to share the rest. When they finally ran low on money to spend, profits declined and the stock market crashed. Of course, the rich threw a fit and started cutting jobs. They would stop at nothing to maintain their disgusting profit margins and ill-gotten obscene levels of wealth as long as possible. The small business owners did what they felt necessary to survive. They cut more jobs. The losses were felt primarily by the little guy. This created a domino effect. The middle class shrunk drastically and the lower class expanded. With less wealth in active circulation, banks failed by the hundreds. More jobs were cut. Unemployment reached 25% in 1933. The worst year of the Great Depression. Those who were employed had to settle for lower wages. Millions went cold and hungry. The recovery involved a World War and higher taxes on the rich. With so many men in the service, so many women on the production line, and those higher taxes to help pay for it, the lions share of United States wealth was gradually transfered back to the middle class. This redistribution of wealth continued until the mid seventies. At the time, the richest 1% reaped about 10% of all private income and held about 20% of all United States wealth. Far less than previous levels. The middle class had home equity, free and clear assets, and money in the bank. Most American households were secure with a single full time provider. Most retirees could enjoy their lives, live in their own homes, afford basic health care, and not have to worry about going bankrupt. THATS THE WAY IT SHOULD BE. The tide began to change in 1976. Jimmy Carter was blamed for a recession that was actually caused by a number of global circumstances including greed. Then a short sighted greedy little pig by the name of Arthur Laffer came along. Known for his famous 'Laffer Curve'. A simple and short sighted equation whipped up to increase tax revenues and profit margins without the slightest regard for ANYTHING ELSE. He convinced Ronald Reagan to campaign on and grant massive tax breaks to the rich and their respective industries. His half-baked theory was that by doing so, unprecidented levels of economic growth and revenue could be achieved. He was right. Unfortunately, he failed to see or acknowledge the big picture. He failed to understand or admit what should have been incredibly obvious after the first Great Depression. That 'economic growth' and 'actual prosperity' are two very different things. Jobs don't 'create' wealth. They only transfer it from one party to another. The devil is in the details. Reaganomics, gave the rich and their respective industries the incentive to 'expand' and 'create jobs'. But those products and services were over-priced and then sold or billed right back to the people. Often, without their knowledge, understanding, or consent. Certainly without a clue about how the economy REALLY works. All of this resulted in higher profits for those at the top and stagnant wages for almost everyone else. The cost of living went up right along with those obscene profit margins. The American people ended up working more hours just to maintain their standard of living. So with Reaganomics, the transfer of wealth from poor to rich was kicked back into high gear. Here we are 27 years later. Trillions in wealth and capital have been concentrated all over again. National and consumer debt are both at an all time high. The middle class are weak, the lower class flat broke, and the cost of living higher than ever before. The dollar is weak because too many of them have been hoarded and the government left with no choice but to print billions more backed up by loans from China. Its another perfect storm. THE BIG ONE. The largest economy in the world is about to go down in a ball of flames. Ground zero of a global economic crisis. CAUSED ALMOST ENTIRELY BY GREED. A MASSIVE TRANSFER OF WEALTH FROM POOR TO RICH. As a nation, we don't even see it because our entire culture has been defined by Washington, Wall Street, Hollywood, Pro-sports, and commercial health care. We have been led around like puppies by those with the worst possible motive. GREED. THEY WANT OUR MONEY. For the mostpart, we just bend over and let them take it. We have become their perfect little victims once again. A nation of consumer junkie, credit card, couch potatoe, drug and doctor morons. We spend most of our spare time on that couch getting brainwashed by greedy public figures who will say or do whatever it takes to get our money. Even worse, those public figures have re-defined any logical standard we ever had for 'good will'. Mother Teresa is dead. America's favorite 'humanitarian' is now a filthy rich multi-media pig who reaped a billion dollar fortune from the middle class by making damn sure they stay on that couch long enough to watch her show and read her magazine. Transforming them into pathetic, naive, love-sick fools who turn around and buy any product or service given away to a cheering studeo audiance or endorsed by their idol. The same goes for Ellen Degeneres, Dr Phil, Regis and Kelly, Rachael Ray, The View, and their respective demographics. Which by the way, are almost identical. Primarily, middle class housewives, retirees, and welfare mothers. Who have been shown through marketing research to spend most of their money and food stamps on over-priced CRAP advertised on TV or a TV show website ( Especially if that over-priced crap is endorsed by a 'hero' or 'humanitarian'. They are easy targets. Not like the rest of us are much less gullible. We're not. In fact, every filthy rich well known public figure and every major industry have followed suit with a similar marketing strategy. Dumbing down our society and cashing in on bogus promises to make the world a better place. They do it because they know it works. They also know that we are too stupid, short sighted, smitten, and love-sick to take a closer look at the world and see that they are wolves in sheep's clothing. To see that what they are doing is FALSE. For example: In the fall of '01', Jennifer Lopez was invited to take part in a music video for charity. The effort was hailed as a benefit for victims of AIDS and 9/11. Well, Jennifer Lopez doesn't do ANYTHING for free. She DEMANDED AND RECIEVED the following for her exclusive use: A 45 foot trailer with a TV, VCR, stereo, an assortment of CDs, a white dressing room with lavish all white decor, all white furniture, and an assortment of exotic fruits and desserts. All of this was necessary just to get her sorry ass in the studeo for 30 minutes. FOR CHARITY. Of course, the organizers are partly to blame for selling out to a 'diva'. In fact, I have my doubts about the entire project. Charity just isn't what it used to be. Most of it has gone commercial. SOLD OUT. Even the UN has become a PR firm for Hollywood and Pro-Sports. Going so far as to allow George Clooney access to the UN headquarters auditorium with his own camera crew. A F$#@$&% CELEBRITY. Of course, that footage was plastered all over the media weeks later right along with plugs for his latest Hollywood blockbuster. Like I said, the UN has become a PR firm. Most of their 'good will ambassadors' are filthy rich, hypocrite pigs who dumb down their ignorant fans, take as much of their money as possible, buy up mass acreage and multiple mansions, flaunt their extravogant lifestyles, jet-set the world, burn through limited life sustaining resources like there is no tomorrow, drive up the cost of living worldwide, and then run their mouths about 'poverty' or some other 'injustice' everytime their latest commercial project hits the market. They do it for publicity. They even have the nerve to run their mouths about 'global warming', 'conservation', and 'green' living. As if the example they set is anything but obscene. As if a roll of eco-friendly toilet paper somehow offsets the clear cutting of a dozen acres to build another F%$#$@# CELEBRITY MANSION. Of course, they have NOTHING to say about greed or economic injustice. NOTHING to say about the concentration of wealth and resources worldwide. NOT A SINGLE F%$#@#$ WORD. What a bunch of false heroes. These people have no real desire to make the world a better place. Their primary goal is to APPEAR as if they do. IT MAKES THEM RICHER. It also gives them a lame excuse to be such greedy, rank, filthy, disgusting, slobbering, squandering, hypocrite pigs. Amazing. EVERY big business, EVERY big celebrity, EVERY billionaire, and damn near every multi-millionaire on the planet have all taken up 'philanthropy' or 'good will'. Those with the most money, also have the most power, and influense by far. They own or influense every government, manage every major industry, and the lion's share of life sustaining resources. They literally rule our world. They always have. Still, every major problem of modern society gets worse by the day. The world's wealth is more concentrated than ever before. Her life sustaining resources are in high demand, more expensive than ever before, and squandered by the rich on extravogant living. Meanwhile, families loose their homes, retirees loose their pensions, heroes loose their lives, crime is up, and red ink flows in nearly every community nationwide. The global economy is in a state of crisis. The prosperity of an entire world is about to be compromised. Still, those with the most power, money, influense, and 'good will' promise to make it all better. If only we continue to buy any product or service with their name on it. IT IS A SHAM. GOOD WILL HAS BECOME BIG BUSINESS.

    The rich and famous do not want to be seen as 'pigs' or go down in history as 'villains'. They want to be seen as 'heros' and go down in history as 'humanitarians'. The market for their product has become global. The fan base has become global. Therefore, the 'humanitarian' effort and 'good will' PR machine has gone global. These 'humanitarian' efforts and 'good deeds' are not chosen to address the greatest need or injustice. They are chosen almost exclusively to appeal to the largest demographic for their respective commercial products. The largest fan base. Efficiency or effect is of little or no concern. Its all about PR, marketing, image, and fame. This is why so many of the rich and famous have taken up 'philanthropy' or 'good will' around the world. This is why so many have 'schools' or 'foundations' in their name. This is why so many play golf or appear on a TV game show for 'charity'. This is why so many sign motorcycles, other merchandise, or auction off their own 'personal effects' for 'charity'. This is why so many have TV shows with a 'charitable' gimmick. This is why so many arrange photo ops with wounded veterans, firefighters, or sick children. This is why so many have adopted children from around the world (Which they always pay others to care for full time. The hired professionals are sworn by legal contract to confidentiality. Not allowed to discuss or appear in public with the children they care for. Those 'photo' and 'interview' opportunities are reserved exclusively for the rich and famous 'adoptive' parents.). Its all about marketing, image, and fame. This is why we are so often reminded of their respective 'good deeds' or 'humanitarian' efforts shortly before or after the release of their latest commercial product. IT IS A SHAM. THERE IS NO SUCH THING AS A MULTI-MILLIONAIRE HUMANITARIAN. GOOD WILL HAS BECOME BIG BUSINESS.

    The point about our government printing up more money was that it can't be done "on a whim" and that there are serious concequences for doing so (weak dollar, higher gas prices, inflation). I never said that it can't be or hasn't been done at all. Afterall, those loans from China weren't infused in the form of Chinese currency. They were infused in the form of our own. Not given to the middle or lower classes but instead to the banks in the form of credit. Its done nothing but perpetuate the problem. It never has been and never will be the answer. Sorry if I wasn't explicit enough the first time. The original draft of this particular rant was written over 2 years ago and intended to fit within 300 characters. I've been updating it weekly for the last year or so. Responding to a constant line of BS from the media and inserting those updates where they seem most appropriate. Which is why I jump so often from one issue to another and back again. Anyway, I'm no English major. I don't think in paragraphs and I find it difficult to write in paragraphs. So if any of you want to re-organize or re-word this post, feel free to do so. Whatever it takes to make people understand.

    A new president will be taking office soon. Backed up by a heavily democratic congress who have all campaigned on a promise to raise taxes on the rich. Unfortunately, this will be too little too late. Nowhere near enough to compensate for the incredible corruption of both major parties. Nowhere near enough to pay for the bailout. Nowhere near enough to stop that runaway train. There will be no change for the better. Obama's financial advisers are pigs. Warren Buffet is a pig. Oprah Winfrey is a pig. Obama himself is a multi-millionaire politician married to a multi-millionaire attorney. He has already run the most expensive political campaign in history. Some of it squandered on a $400 lobster feast for his wife. Financed for the mostpart by ordinary people who can't even afford a $400 lobster feast. It happened on Obama's watch. Probably more than once. He even had the nerve to ask those ordinary people to help pay off the campaign debt of another filthy rich multi-millionaire politician PIG (Hilary Clinton). I will admit that Barack Obama seems to have more character than most of his colleagues. Certainly more than Clinton, Gore, McCain, Palin, Bush, Cheney, Romney, Schwarznenager, Palosi, Kerry, Guliani, Kennedy, Bloomberg, or Edwards. He was probably a very good down to earth man at one time. The same goes for Joe Biden. Not anymore. Afterall, John McCain was also a very good down to earth man at one time. A true American hero. NOT ANYMORE. Now, he is a filthy rich politician pig married to a filthy rich big business pig. SOLD OUT. Mark my words: Obama and Biden will do the same. Whatever moral character they may have left, will be lost or heavily compromised while in office. Like the others, their administration will be riddled with scandals of greed and corruption. Like the others, they will succumb to the greatest epidemic ever faced by modern man. By far, the most intoxicating element of modern society. Greed. Simply the desire to get as rich as possible. It has the potential to blacken any heart. Break the will of any human being. Influense any government. Corrupt any society. Those who succumb to it are lost forever. You can not get through to these people. You can not make them understand. No matter how bad it gets for the little guy. No matter how many families loose their homes. No matter how many people go cold and hungry. No matter how many innocent children starve and die. No matter how much blood is shed. NO MATTER WHAT HAPPENS. The rich will ALWAYS blame the other guy. They will ALWAYS say or do whatever it takes to secure their own extreme personal wealth. When they 'give back', its only because they expect more in return. They will NEVER compromise their own bottom line. They will NEVER jeapordize their position in the 1% club. They will NEVER stand for a more reasonable distribution of wealth and resources. They will NEVER acknowledge greed as a form of evil. They will NEVER acknolwedge the potential it has to ruin EVERYTHING. They will NEVER admit the simple truth. GREED KILLS. IT WILL BE OUR DOWNFALL.

    Ford, GM, and Dodge are begging the current admistration for some type of 'bridge loan' in order to avoid bankruptcy. The unions are begging for it. The people are divided. All because of a LIE. Again, we have been mislead. I'm not disputing their need. Its legit. I'm disputing the underlying cause. Competition my ass. China my ass. Japan my ass. Those factors are real but not fatal. They are also concequential. Not primary. Again, its GREED and CORRUPTION. Not only that of the auto executives and celebrities who demand millions to endorse the product (Toby Keith, Tiger Woods) but also within the health care industry. Thats right. Health care. The average doctor is a millionaire several times over. The average health care executive many times over. Both on average, are members of the 1% club. AGAIN, ITS THEIR FAULT. If it weren't for the OBSCENE health care charges, brainwash plots, and artificially inflated market, then the financial burden placed on Ford, GM, and Dodge wouldn't be anywhere near as high. They could easily match the labor of Honda, Toyota, and Hyndai who's workers are younger on average, more liberal, and not so demanding when it comes to 'health care'. In this case, the little guy is partly to blame for their incredible ignorance. They smoke, drink, get fat, fall for the most OBVIOUS health care scams, live by drug and doctor, kiss greedy doctor ass, drive up the cost of their own health care, demand full coverage, and then strike if they don't get it. Retired US auto workers on average are now causing their former employers to incur several hundred thousand dollars PER RETIREE in health care expenses over the span of their retirement. Those in the current workforce are partly to blame as well. Not for greed. Their wages are reasonable. But their health care demands are well in excess. If they would simply open their eyes, acknowledge the incredible greed and corruption within the health care industry, get off the couch, get off the pharmaceuticals, and take care of their own bodies, then their own cost of living would be lower, their health would be better, the market for their product would be higher, and the financial burden placed on Ford, GM, and Dodge would be MUCH lower. I'm not discounting other factors like gas prices, competition, and the US product line. But greed and ignorance wreak havok like no other elements of our society. They cause or allow the cost of living to rise and the middle class to shrink along with the potential market for every major industry. In this case, they also raise the financial burden placed on US auto makers. Mark my words: One or two of the big three US automakers will go bankrupt. They will do so regardless of any 'bridge loan'. Other well known foreign auto makers will follow. The entire manufacturing industry will become a shell of its former self. Millions of retirees will be cut off entirely. ALL BECAUSE OF GREED, CORRUPTION, AND IGNORANCE. The ripple effect is profound. IT WILL BE OUR DOWNFALL.

    The feds have reduced their interest rate to an all time low. IT WON'T WORK. The same goes for any potential bailout for the US auto industry or any other. IT WON'T WORK. IT ABSOLUTELY POSITIVELY WILL NOT WORK. I would bet my life on it a hundred times over. Again, our own leaders refuse to acknowledge the single greatest drag on our economy. The single greatest underlying cause for the global economic crisis. GREED. They all refuse to acknowledge the downside. That idiot pig Arthur Laffer refuses to acknowledge it. Greenspan, Bernanke, and Paulson refuse to acknowledge it. Bush, Clinton, Kerry, Gore, Obama, and Kennedy refuse to acknowledge it. Lars Larson, Tammy Bruce, Lou Dobbs, Mike Gallagher, Suze Orman, Bill O'Reiley, Maria Bartiromo, Jim Kramer, Rush Limbaugh, and Jim Bohannon refuse to acknowledge it. Bill Gates, Warren Buffet, Oprah Winfrey, Richard Branson, and T-Boone Pickens refuse to acknowledge it. The same goes for all of their filthy-rich billionaire friends. All of the above are hypocrite pigs who don't have the guts to admit the simple truth. This is not brain surgery. For the mostpart, its simple math. WE ARE IN THIS MESS BECAUSE OF GREED. The world's richest one percent are now so incredibly rich that there simply isn't enough wealth circulating beneath them to sustain the global economy. Its on the brink of collapse. IT WILL COLLAPSE. We are now entering what will go down in history as the worst economic and cultural crisis of all time by far. You think its bad now? YOU AIN'T SEEN NOTHING YET. NOTHING. Trillions more in wealth/capital will be concentrated (Not lost. Concentrated.). Many more banks large and small will fail. Tens of millions will loose their savings (Transfered from poor to rich.). Even FDIC accounts will be forfeited (Yes they will. Yes they will. Yes they will.). Every major industry will become a shell of its former self. Unemployment will reach unprecidented levels. Millions of retirees will be cut off entirely. The lower class will become dominant. The financial aid system will fail miserably. The vast majority of those in need will have no access. Crime, poverty, and suicide will skyrocket. There will be riots and random acts of violence at banks, hospitals, and government buildings. The next generation will be left to fight in the crumbling streets over a shattered American dream. The rest of the world will have it even worse. So don't blame innocent people from other countries you idiots. Blame the rich. Blame the government. Blame the health care industry. Then blame yourselves for being so stupid for so many years. We have allowed a particular form of evil to grow out of control, intoxicate our society, consume our government, wreak havok on our own economy and culture, RUIN any chance we ever had at world prosperity, and jeapordize the very foundation of modern society. At the same time, we have allowed those who epitomize it to get away with calling themselves 'heroes' or 'humanitarians'. Putting a happy face on greed and dumbing down our society further in the process. THAT MEANS YOU. So wake up fellow citizens. Grow a spine. Don't fall for all of this 'good will' 'humanitarian' BS from the rich. IT IS A SHAM. NOTHING BUT TAX DEDUCTIBLE PR CRAP. Instead, look at the bottom line. IT'S F#@&#%$ OBSCENE. NOW GET IT THROUGH YOUR THICK SKULLS YOU IDIOTS. WE ARE IN THIS MESS BECAUSE OF GREED. AMERICA'S RICHEST ONE PERCENT NOW OWN ALMOST 1/2 OF ALL UNITED STATES WEALTH. THE WORLD'S RICHEST ONE PERCENT NOW OWN OVER 40% OF ALL WORLD WEALTH. THATS WAY TOO MUCH. THESE PEOPLE ARE NOT HEROES. THEY ARE NOT HUMANITARIANS. THEY ARE DISGUSTING HYPOCRITE SLOBS. IT DOES NOT MATTER HOW MUCH THEY GIVE BACK. THEY STILL KEEP WAY TOO MUCH. IT CAN'T WORK THIS WAY. IT ABSOLUTELY POSITIVELY CAN NOT WORK THIS WAY. IT NEVER HAS AND IT NEVER WILL. GREED KILLS. IT WILL BE OUR DOWNFALL.

    1% CLUB PIGS: I've said it many times and I will say it many more. Greed is not the desire to break the law or intentionally oppress another human being. Greed is simply the desire to take more than your reasonable share of wealth or any limited resource. By doing so, you reduce the value of currency and raise the cost of living worldwide. You shrink the middle class and the potential market for every major industry. You expand the lower class and the need for financial aid. You cause a domino-effect of socio-economic problems. You literally cause innocent people to suffer and die. YOU MAKE WORLD PROSPERITY MATHEMATICALLY AND PHYSICALLY IMPOSSIBLE. It does not matter how much you 'give back'. It matters how much you KEEP. This is why I will go to my grave with nothing but bleeding and burning hatred for all of you. Thats right. I hate you and I'm not afraid to admit it. Afterall, its OK to hate a rapist. Its OK to hate a terrorist. I do. But I also hate wolves in sheep's clothing. THAT MEANS YOU. In fact, I consider the equation you stand for to be the greatest injustice of all time. It makes my f$#@&$# blood boil. Jealosy my ass. Low self-esteem my ass. Self-pity my ass. Anyone who still thinks that after reading all of this is a F&#@%$# MORON. You disgusting hypocrite pigs. I've noticed the little shots you've been taking at me, a few others, and the cause we stand for. The psychological stunts. Thats right Will Smith, Angelina Jolie, Brad Pitt, Today Show pigs, Regis and Kelly, Ellen DeGeneres, Dr Phil, Oprah Winfrey, Elizabeth Hasslebeck, Melissa Scott, Joyce Meyer, Lars Larson, Bill O'Reiley, Lou Dobbs, Ann Coulter, Tammy Bruce, Laura Ingraham, Rush Limbaugh, Sean Hannity, Jerry Doyle. I've noticed the crafty elusive statements you've been making about greed and subtle insults directed at those very few of us who stand against it. I also know that you're well aware of this campaign and that you're trying to shut it down. Of course, trying to do so in a manner that won't draw anymore attention to it. You've even gone out of your way to specifically attack 'anonymous' bloggers in general. As if we are somehow less credible without a registered account. I'm not the slightest bit intimidated by any of it. YOUR TRICKS WILL NEVER WORK ON ME. Mark my words: No matter what you say or do, I will spend the rest of my life persecuting all of you for the disgusting, obscene, unjust, illogical, and immoral equation you stand for. I won't break any laws. I won't harm one hair on your rotten heads. Its not that I don't wish you were gone. I do. But I would never jeapordize such an important cause with a criminal act. NEVER. My only realistic goal is to make as many people as possible understand. Including future generations. I hope they look back on these words and spit on your graves. Afterall, they won't achieve any degree of world peace or prosperity until after they acknowledge GREED as a form of EVIL. Not until they acknowledge it with a number or some type of material standard. In the unlikely event they ever do, I hope they FINALLY come up with a system that works for the vast majority. One with a reasonable pay scale and caps on personal wealth. Otherwise, their system will fail over and over again. Just like the one you stand for. It can't work this way. It never has and it never will. NEVER. NO WAY IN HELL. So mark my words: I will not make excuses for a single one of you. I don't care how smart you think you are. I don't care how talented you think you are. I don't care how pretty you think you are. I don't care how noble you think you are. I don't care what you think you've done to earn up to fifty thousand times the pay of a firefighter, soldier, farmer, teacher, cop, aid worker, cook, paramedic, truck driver, or garbageman. You're not worth it. I don't even care if your personal fortune fell out of the sky. If you're rich, I hate you. I don't care how much you 'give back'. I care how much you keep. Therefore, I will do everything within my power and within the law to expose your incredible greed and hypocrisy. If you want to break my will, then you're going to have to break my neck first. and if you pull a stunt like that, then a lot of people will know what happened to me and why. I've planned in detail for it. Most of you have no idea. Regardless, you pigs will not go down in history as 'heroes' or 'humanitarians'. Not if I can help it. We're in this mess primarily because of you. Its going to get MUCH worse primarily because of you. Thats what I believe and thats the message I intend to spread for the rest of my life. DEAL WITH IT.

    A few more words about our new president and how certain public figures are using him to divert our attention, dumb down our society, shut my big mouth, and discredit the cause I stand for. I said it during the presidential campaign, I said it again in November, and I will say it again now. Our new president has more character than most of his colleagues. Much more. In fact, he puts Bush, Cheney, Rice, Clinton, Gore, Palosi, Reagan, Carter, Romney, Schwarzenegger, Bloomberg, and Kennedy to shame. He also puts nearly every living public figure to shame. Including those who claim to support him. By politician, public figure, and 1% club standards, he is an angel. That being said, he is still a politician. Still a public figure. Still a member of the one percent club. Just a man. Like any other, he is a product not only of genetics but also of his environment. Like any other, he is intoxicated by certain elements of modern society. Including three of the worst. Fame, fortune, and power. All three have the potential to corrupt the mind, the heart, and the will of any human being. I can name only one who resisted the influense of all three. Mother Teresa died in 1998. The amazing standard she set died with her. Since then, an army of public figures and false heroes have sold out the very concept of 'good will'. Capitalizing on bogus promises to make the world a better place. The vast majority, on day one. The rest, along the way. Obama will do the same. Its just pathetic human nature. Put any man or woman on a stage or throne and something about them is different. Make any man or woman rich and something about them is different. I said it in November and I will say it again. Barack Obama was probably a very good down to earth man at one time. That was before the corrupt influense of fame, fortune, and power. Now, something about him is different. The same goes for Michelle Obama. They have already begun to sell out. Not only as necessary during the campaign because of our ignorant society and the fact that we won't elect ANYONE unless they look a certain way, dress a certain way, talk a certain way, kiss our babies, cut our taxes, tell us what we want to hear no matter how unrealistic, believe in God, follow a certain religion, support a certain industry, and show up on our favorite talk show with a fake smile, stupid jokes, and lame dance moves. That was bad enough. A sell-out necessary to get elected by a pathetic, ignorant, naive, short sighted, half-wit, couch potatoe, love-sick, celebrity junkie society. But also for profit before, during, and after the election. I already mentioned the $400 lunchtime lobster feast. Paid for mostly by ordinary people who were willing to cut into their modest bottom lines in order to help get their hero elected. SHE ATE IT. That was bad enough. Another sign of the times. As expected, its already getting worse. I have no problem with the armor plated presidential limo, the extra security, the inauguration, or the speech. I have no problem with the concept of a public celebration. But I do have a problem with the $35,000 ring, the $150,000 dress, the exotic crystal, the exotic food, the coorporate plugs, NBC, MTV, BET, Beyonce, LL Cool J, Miley Cyrus, and every other filthy rich big business/big money/big celebrity hypocrite pig who had the nerve to fly in on their personal jets, stand there lavished in gold, and jewels, and fur, and $10,000 suits and pretend as if they and Obama share a desire to make the country and our world a better, more stable, more peaceful, and more 'just' place for all its people. Once again, promoting their own interests, dumbing down our society, and dancing their way around the single greatest underlying cause for the global economic crisis. GREED. The single greatest threat to modern society. GREED. Filthy, rotten, disgusting, self-centered, self-serving, black-hearted, hypocritical GREED. By doing so, they divert our attention AGAIN at a crucial time when we need more than ever to finally acknowledge GREED as a form of EVIL. At a time when we need more than ever to understand how it burns through moral character, spreads like wildfire, jumps from one industry to another, one person to another, and wreaks havok on society worldwide. IT ABSOLUTELY POSITIVELY BEYOND ANY SHADOW OF A DOUBT WILL BE OUR DOWNFALL. All of this happened on Obama's watch. I understand that he didn't plan most of the details. But he did know about many. He stood by and watched that event sell out to the highest bidder. He also bought the ring. He didn't even have a word to say about the double standards or many ethical contradictions. Afterall, he got elected. It was no longer necessary to kiss so much big business, big money, big celebrity, 1% club ass. SELL-OUT. Now, that army of filthy-rich, self-centered, self-serving, self-promoting, hypocrite pigs are using Obama's hopefull words against those very few of us who know better. They even have the nerve to belittle and villianize people like me simply because we don't float around with happy uplifting thoughts and a smile on our face. They pretend as if our message can't possibly be legitimate if its expressed with anger, contempt, hatred, or fear. As if a 'positive' attitude is any match for that domino-effect of socio-economic problems caused almost entirely by GREED. I understand that Obama could never go on record with views anything like mine. He has no choice but to be tolerant of other filthy-rich and powerful public figures. I can even forgive the affiliation to some extent. I also believe that he truly does want some degree of government reform, ethics, accountability, peace, prosperity, stability, opportunity, and economic justice for all people. Like I said, by politician standards he is an angel. Which is probably the nicest thing I will ever say or even think about a rich and powerful public figure. I find it near impossible to hate the man. He is literally the only rich and powerful public figure on this planet that I don't hate. I also understand why he gave the uplifting speech. I really don't blame him for a single word of it. But I will not pretend as if a smile or 'positive' attitude is any match for that particular form of evil consuming our world. I will not choose 'hope' over 'fear' just because it feels nice. Of course, I want things to get better. Of course, I will try in vain to help make things better. Of course, I want something legitimate to celebrate. Something that we could all be a part of. Of course, I desperately want Obama to succeed. Of course, I desperately want all of my predictions to be proven wrong. I just don't see it happening. With or without Obama, we are still stuck on that runaway train. Its not going to be any better. Its not going to be alright. Not for the vast majority. Its going to get much worse and stay that way for a very long time. I fully expect to die knowing that I devoted myself to a cause which was lost from day one. Greed will always triumph over good will. The people will never take any real stand against it. The vast majority are pathetic, ignorant, naive, short sighted, brainwashed, pharmameutical, medical-testing, couch potatoe, credit card, love-sick, celebrity junkie, powderpuffs. Perfect little victims. I hate to say that about my fellow citizens but its the truth. Afterall, they didn't see this comming. I tried to warn them and they still didn't see it. Others tried to warn them and they didn't see it. Albert Einstein tried to warn them SIXTY F$#&#$# YEARS AGO. They didn't listen. They didn't see it. They did NOTHING to stop this or even slow it down. Even now, when the problem is so much more obvious. Even now, when the futures of their children are at stake. Still, they do NOTHING. Sometimes, I wonder if they are even worth fighting for. What the hell is the point? They will never listen. They will never wake up. They will never do simple math. They will never take a stand. There will never be economic justice. There will never be a more reasonable distribution of wealth and resources. Therefore, there will never be any degree of world peace or prosperity. Its only going to get worse. A LOT WORSE. GREED KILLS. IT WILL BE OUR DOWNFALL.

    The new stimulus won't work. The new money won't work. The new budget won't work. There may be a shallow revival later this year or next but it won't sustain itself. It absolutely positively will not work. Obama's efforts are revolutionary but they are too little too late. The opposition too strong. Which by the way, is not about national debt. Thats a lie. Nobody cares. Its about inflation. The rich are throwing a fit over government spending because when more money is printed, their money looses some value. They have some damn nerve. They already have too much money. Leaving the majority with too little. They won't give it up. They won't tolerate higher taxes. The equation they stand for absolutely can not work. Still, they have the nerve to throw a bloody fit over government spending unless its their own budget with their own pork, their own diversion of funds, their own tax breaks, and their own kick backs. Hundreds of billions worth. In which case, they are all for it. Afterall, inflation is fine with all of them as long as they end up with a net gain in buying power. Otherwise, they throw a bloody fit. This is why Democrats and Republicans always fight tooth and nail over government spending. Its not about 'patriotism'. Its not about 'fiscal responsibility'. Its not about the 'middle class'. Its not about the 'next generation'. Its about their own incredible greed. Of course the majority were better off under Clinton. They were also better off under Reagan. Even with a lower GDP, they will still better off. Only because that massive transfer of wealth from poor to rich was still in the early to mid stages. It began in the late seventies. It was accelerated under Reagan and again under Bush. Now, we have finally reached a tipping point. The majority can no longer afford to pay all of their bills and sustain their share of the economy. In fact, they are in debt to the tune of almost $2,000,000,000,000. THATS ALMOST TWO TRILLION DOLLARS. Obama's efforts are about re-distributing some wealth. He is one of the very few politicians to care about the majority almost as much as his own bottom line. Which is about the best we can hope for from any politician. Unfortunately, the rich won't give up anything. Even those who claim to support him won't give it up under any circumstances. This leaves Obama with no choice but to print trillions in US currency, water down all existing US wealth, raise taxes slightly on the rich, and tweak the budget slightly in favor of the majority. Hopefully, resulting in a gradual transfer of wealth from rich back to poor. Its a revolutionary effort. Very noble. Unfortunately, it won't be enough to stop that runaway train. The rich are too greedy. The opposition too strong. The government too corrupt. Obama himself will sell out before its all said and done. Mark my words he will sell out to the rich. That vital transfer of wealth from rich back to poor will not take place. Therefore, Obama will have no choice but to acknowledge a severe US depression by the end of his first term or shortly thereafter. There will be no economic recovery without a more reasonable distribution of bottom line wealth. The richest one percent must be willing to settle for less. A lot less. Otherwise, there will be no economic recovery ever. Not one of us will live to see it.

    We are being fed a constant line of BS from the media about 'lost' market wealth. Similar to the line of BS we have been fed for years about wealth 'creation'. NBC and their panel of paid 'experts' (liars) recently took a question from a viewer (it may have been staged) about market 'losses' and 'gains'. Their answer was downright vague and misleading as usual. Stock values don't simply represent our collective 'productivity' or 'hard work'. Otherwise, Ford, GM, and Dodge would be doing fine. Afterall, the cars got built. If their answer had been true, then we could all just work a little harder, produce a little more, buy a little more, and revive our own economy. We can't. Its not that simple. Their answer was CRAP. Another stunt to make it appear as if we're all in this together. That panel of paid 'experts' (liars), also refered to stock values as 'phantom' wealth. Thats not exactly true either. Otherwise, those shares could never be traded for any actual product or service (They are. They always have been.). They also wouldn't give the majority share holders such authority. So what did NBC and their filthy rich trio of paid 'experts' (liars) leave out? The ugly truth as usual. Corporate stock values are not 'phantom'. They actually represent past profit margins, current profit margins, accounting scams, bailouts, and the potential transfer of more dollars FROM US TO THEM. The only 'phantom' elements involved are the shady speculation and accounting scams. Which do effect those values but they still result in a transfer of dollars from one party to another. Otherwise, those fluctuating values are based on real world events. In the meantime, they are traded like an alternative form of currency. Eventually cashed in for market value. Just like gold and silver. Like any other form of currency, the richest one percent hold the lion's share. They currently own about 1/2 of the entire US market. The upper class own around 1/3. Foreign investors own around 1/8. The lower 90% of us own the scraps leftover. This equation has contributed to a constant transfer of wealth from poor to rich. Its been accelerating for decades along with obscene, record setting profit margins for big business. These record setting profit margins were mathematically impossible to sustain with a shrinking middle class. The housing and stock markets were impossible to stabilize long term. They were on a crash course with or without sub-prime. Which is why in part, the rampant speculation and accounting scams took place. Also why the 'mark to market' rule was changed. Which basically allowed traders to take their profits and disregard the potential liabilities that inevitably came with a concentration of wealth and capital worldwide. These were all stunts whipped up by the 1% club to artificially inflate and sustain the market at a time when the very foundation of our economy was crumbling. To sell out their own industries and convert capital into dividends, bonus checks, and golden parachutes. Now, the cat is out of the bag. The market has finally crashed. Those artificially inflated stock values have fallen on average by about 50% in the past two years. They are down worldwide. Which may lead one to believe that America's richest 1% are finally taking a loss. They are not. Those values are down not only because they were artificially inflated. But primarily because so many people are finally running out of money to give them. This is the single greatest underlying cause for the global economic crisis. Unfortunately no public figure has the guts to acknowledge it. When the filthy rich pigs (Bill Clinton, Jean Chatzky, Bill O'Reiley, Jim Kramer, Suze Orman, Maria Bartiromo, Lars Larson, Lou Dobbs, Warren Buffet, ect) talk about 'lost' market wealth, they fail to acknowledge that much of that wealth wasn't 'lost' at all. It was transfered to various members of the 1% club. These transfers took place before, during, and after the height of the market in 2007. In many cases, 'junk bonds', 'toxic debt', or 'artificial values' were left in their place. Otherwise, those pigs are primarily refering to lost 'business'. A slower transfer of wealth. There is a HUGE difference. Actual wealth doesn't just float away. Stock values fluctuate but they still represent a transfer of actual wealth from one party to another. Unfortunately, that transfer of wealth has been in favor of the rich for too many years. THEIR CURRENT PROFITS ARE DOWN ON AVERAGE BECAUSE THEY HAVE BEEN TOO OBSCENE FOR TOO LONG. THEY ALREADY OWN THE LION'S SHARE OF UNITED STATES WEALTH. A SIMILAR RULE APPLIES WORLDWIDE. MARKETS ARE DOWN BECAUSE THE WORLD'S WEALTH AND CAPITAL HAVE BEEN CONCENTRATED. AMERICA'S RICHEST 1 PERCENT NOW OWN ALMOST 1/2 OF ALL UNITED STATES WEALTH. THAT IS MUCH MORE THAN THE ENTIRE MIDDLE AND LOWER CLASSES COMBINED. THE WORLD'S RICHEST ONE PERCENT NOW OWN OVER 40% OF ALL WORLD WEALTH. THAT IS MUCH MORE THAN THE LOWER 90% WORLDWIDE. PROFITS FOR THE RICHEST 1% ARE DOWN ON AVERAGE BUT NOT GONE. THEY STILL GET EVEN RICHER AS WE SPEAK. THEIR INCREDIBLE WEALTH WAS NOT CREATED, GENERATED, OR GROWN IN THEIR BACK YARD. IT WAS TRANSFERED FROM US TO THEM. NOT ONLY THROUGH CORPORATE PROFITS BUT ALSO THROUGH INDIVIDUAL PROFITS. THE WORLD'S WEALTHIEST 1 PERCENT ARE NOW SO INCREDIBLY RICH, THAT THERE SIMPLY ISN'T ENOUGH CURRENCY CIRCULATING BENEATH THEM TO SUSTAIN THE GLOBAL ECONOMY. ITS FINALLY ON THE BRINK OF COLLAPSE. ANYONE IN THE FIELD OF ECONOMICS WHO STILL WON'T ACKNOWLEDGE THE SINGLE GREATEST UNDERLYING CAUSE FOR THIS GLOBAL ECONOMIC CRISIS IS EITHER A MORON OR A COWARD. ITS NOT BRAIN SURGERY. FOR THE MOSTPART, ITS SIMPLE MATH. THE RICH ALREADY OWN TOO MUCH OF EVERYTHING. STILL, THEY WANT MORE. THEY ABSOLUTELY WILL NOT LET GO OF THEIR INCREDIBLE GREED. THEY ARE USING EVERY ILLEGAL AND IMMORAL TRICK IN THE BOOK TO AVOID TAKING THEIR LOSSES. THEY DO SO WITHOUT THE SLIGHTEST REGARD FOR ANYTHING OR ANYONE BUT THEMSELVES. IT CAN'T WORK THIS WAY. IT ABSOLUTELY POSITIVELY CAN NOT WORK THIS WAY. IT NEVER HAS AND IT NEVER WILL. ALBERT EINSTEIN TRIED TO MAKE PEOPLE UNDERSTAND. GREED KILLS. IT WILL BE OUR DOWNFALL.

    Another word about wealth 'creation'. That term is horribly over-used. 90% of the time, it is a LIE. Nothing but smoke and mirrors. Actual wealth can't be 'created' without harvesting a new resource or making more efficient use of one. Even then, there is usually a lagging downside caused or aggravated by a further concentration. A gain here. A loss there. For example: If you develop or renovate one area, then some material wealth is 'created' on site. Local property values increase giving the illusion of a much greater or widespread 'creation' of wealth. Those who invest, locate, and develop usually do so for maximum profit without regard for legitimate need. They almost always follow the trend and do so in newly developed or renovated areas. Drawing vital support away from others. Cities and states have been competing in a giant rat race for years. Fighting tooth and nail for these investments regardless of any legitimate need. Giving big business, developers, and investors huge tax breaks and incentives at the expense of ordinary people. Even going so far as to evict home owners under the rule of 'eminent domain', lease commercially zoned property for $1, or subsidize a giant portion of their investment on the backs of middle class tax payers. These deals are always cut behind closed doors under the guise of 'economic development'. Others have no choice but to do the same just to keep their own remaining business. Otherwise, those jobs, residents, and revenue are lost (relocated). Some, regardless. Of course, the entire system would be more stable and prosperous for the majority if we would simply maintain and renovate our industrial areas and develop others only as needed. But that wouldn't make developers, investors, and politicians filthy rich. So the rat race has been run not on need but greed. Resulting in a net loss for the little guy. One area is unnecessarily developed. Deals are cut. Investors, developers, and politicians get richer. The people get F$#&$&. Another area falls apart. Jobs and revenue are lost (relocated). Property values decrease. Followed by a lag in city services and a spike in gang activity or violent crime. Before you know it, another Wal-Mart, mall, factory, or housing development is built where it wasn't needed to begin with. Meanwhile, another area is deindustrialized and more innocent people can't find a local job or even take a walk in their own neglected communities without fear of being mugged, raped, beat up, or killed. This is only one general example. Others hailed to 'create' wealth also have their downsides. Simply because distribution, consumption, and sustainability are almost never taken into account. 'Wealth creation'. What a joke. 90% of the time, it is a lie motivated by greed. Otherwise, any wealth 'created' is gradually concentrated in the hands of the few as usual. Again, the potential benefit for the majority or society as a whole is horribly offset by the incredible greed of the rich. IT WILL BE OUR DOWNFALL.

    The organized campaign to suppress the truth and divert our attention continues. Forbes has reported that many of the world's billionaires have lost bottom line wealth. They wen't out of their way to crunch all those numbers, draw their conclusions, and plaster them all over the media. Still no data for 2008 on the wealthiest one percent or the distribution of bottom line wealth worldwide. Why not? I'll tell you why not. Because they don't want us to make the connection. The current economic crisis was not caused by subprime, China, Japan, Mexico, the CRA, one bad policy, one administration, one major political party, or the other. These factors are only proximate at best. Not underlying. The current economic crisis was caused primarily by a massive transfer of wealth from poor to rich. In particular, the richest 1%. I realize there is some debate in the US over their share of her bottom line wealth. Some recent studies have shown it to be as little as 40%. Others near 50%. Nearly all recent studies have shown about 40% of the world's bottom line wealth to be held by the richest one percent. However, most studies to date have not included 'everything'. They refer only to one reported set of financial assets or another. They often take no stab at material assets or hidden assets. It is well known that various currencies, gold, silver, platinum, jewels, and other holdings are being hidden in secret accounts and vaults around the world. Well known but impossible to calculate. Also, when it comes to greed, fraud, oppression, corruption, or any other form of evil, history has shown time and time again that its almost always worse than first reported. The watered down results by then, are usually a year or two old. However, there is very little debate that wealth is being concentrated worldwide. Virtually every study shows it. The rate at which that wealth is concentrated has increased over the last decade or so along with record setting profits. It is incredibly obvious when you look around. For these reasons, I tend to believe the higher estimates. Regardless, it has become an epidemic worldwide. IT IS THE PROBLEM. Mark my words: Bottom line wealth may be fluctuating at the very top but its not comming back down to the majority where it belongs. When a billionaire looses a chunk of his or her net worth, it is almost always to other high ranking members of the 1% club. Not the majority. I would believe otherwise only with bankruptcy down, forclosure down, consumer debt down, unemployment down, home sales up, car sales up, middle class savings up, and a shrinking lower class. That would indicate a transfer of wealth from rich back to poor. Again, it can't be 'created'. It can't be 'stimulated'. It must be transfered from the rich and back to the majority. Otherwise, it won't work. That, unlike GDP, would indicate a healthy, stable, and sustainable US economy. On a global scale, it would be the single greatest step we could possibly take torwards world peace and prosperity. In which case, I would be thrilled to see my predictions proven wrong. I would gladly apologise for my rotten attitude. I would do so 'on-air' and 'online'. I would do my very best to apologise to every single critic. Including the filthy rich public figures I rip on. Its not going to happen. Wealth is still being transfered from poor to rich. Here in the US and also worldwide. Their stock values are down on average but their share of the world's bottom line wealth up on average. There is no doubt in my mind. There is also no doubt in my mind that the rich are converting and hiding assets around the world like never before. I don't claim to know half their tricks. But I do know they have many. They also have most of the world's leaders in their pocket. Almost all of whom will betray their own people on a whim and stop at nothing to get or remain as rich as possible. They absolutely will not let go of their incredible greed. IT WILL BE OUR DOWNFALL.

    Every major economy in the world will be in depression by 2015.

    1% CLUB PIGS: My right to remain anonymous is protected by federal law. If this right is violated, I will sue everyone involved and give 99% of the reward directly to my less fortunate fellow citizens. The rest, I will use to print and distribute more copies of this document. DEAL WITH IT.


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