tag:blogger.com,1999:blog-7820485130017459619.post6595925259079729933..comments2023-10-24T01:46:47.151-07:00Comments on CynicusEconomicus: Anti-Austerity in EuropeUnknownnoreply@blogger.comBlogger14125tag:blogger.com,1999:blog-7820485130017459619.post-49829269765336725542012-05-22T12:43:42.314-07:002012-05-22T12:43:42.314-07:00To Cynicus, a country that lives within its means...To Cynicus, a country that lives within its means has exports and imports that have equal or positive monetary value. Let's say England exported fifty billion pounds (the monetary unit, not weight) worth of stuff in the 1920s and imported forty billion pounds worth of stuff, Cynicus would say that England was living within its means. Once money (monetary unit;value) is put aside and accurate calculations are made about how much physical matter was entering England from other countries and how much was leaving England in the 1920s, the reality, I suspect would be different. If energy and energy products are factored out, I would not be surprised if England imported more material than it exported, that's the only way it could have seen a rise in living standards and population. Despite the fact that England sent its excess population to the New World, total population continued to rise and while industrial farming has something to do with supporting a large population , I suspect that it wasn't enough. The same could be said about manufacturing. Over time, England's manufacturing sector probably became so dependent on imports from overseas markets that it began to make more sense for the majority of manufacturers to have manufacturing be off-shored and relocated to areas closer to the raw materials. Over time, England's energy dividend has become depleted, to the point it has become a net importer of energy and this is bad, because it erodes England's power--it's ability to import more than it exports--and therefore, its living standards. Its former colonies, now all grown up, want trade on more even terms, and they find that England has very little that they want. You see, the former colonies have their own STEM workers, their own natural resources, and their own manufacturing sectors. England's culture and universities have become its most significant source of employment (and possibly revenue), since wealthy foreigners are still willing to pay a premium for English cultural products and education. Those who are not employed in England's cultural sector and educational sector, are supported indirectly by debt or the savings of the old, because very few people are employed in anything that creates new wealth, which in my definition is increasing the availability of energy, minerals,freshwater, soil, food,stuff like that. Eventually, the savings of the old will dry up, the debt will spiral out of control, and England could be cut off from foreign imports. Then, England, would find out what living within its means would look like. A country living within its means is not under austerity. It's being self-sufficient in terms of food and energy and whatever it thinks is vital for daily existence. This would result mean no imports, because imports would only go to sustain a larger population than England's domestic economy could keep alive, fed, and clothed before it began living beyond the means of the country. A country living within its means would also export very little. One of the reasons why trade deficits won't go away is because they are reflections of trade imbalances (as I've said before, even if there's a positive trade balance, it doesn't mean a country can't import more than it exports). Trade imbalances are the only way large populations(by historical standards) with a growing elderly population and relatively high consumption patterns can exist in England and elsewhere. Europe's current strategy to deal with debt is to import even more "cheap labor (skilled or otherwise)" from abroad without considering whether that labor is going to help them reduce imports or create more wealth (my definition of wealth, of course.).A Real Black Personnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-68770483194639668652012-05-20T19:35:59.970-07:002012-05-20T19:35:59.970-07:00All wealth comes from the environment. If real wea...All wealth comes from the environment. If real wealth came from workers, capitalists or benevolent governments, there would be colonies on the moon already. The reason why there are no colonies on the moon and is because there are no resources to sustain human life on the moon, let alone industrial activity. Any resources required to sustain life on the moon would have to be imported at an expense so great, that it would not worth doing and that's why it's not being done. It's not worth doing for the government, or the private sector. There's no real difference between a government, or a wealthy person. Both of them can "create wealth" ,in the true sense, of harnessing available resources, as long as the return on investment is positive. Wealth doesn't come from tax-payers, or even humans, it comes from the environment. It's common knowledge that humans can find many ways to turn the raw materials from Mother Nature into things that humans can use but Mother Nature is clearly limited in what it can provide to a growing human population with growing material aspirations, however it seems both the pro-austerity and anti-austerity believers think economic growth can continue forever, even as the energy inputs required for economic growth and industrial society are becoming more expensive (the return on investment is shrinking).A Real Black Personnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-22521937689891245102012-05-15T09:24:37.560-07:002012-05-15T09:24:37.560-07:00I agree with 'Anonymous' (May 9th comment)...I agree with 'Anonymous' (May 9th comment); this is one of your best posts yet. You patiently (through increasingly gritted teeth!) encapsulate the brutal truth of the situation.<br /><br />Such are the times we are in, I cannot begin to guess how Greece is going to pan out. Whoever predicts right though will make a killing at this high-stakes poker table. <br /><br />Greece to blink and uphold its debt agreements (or as good as)? - bank shares rocket.<br /><br />Greece to bluff, lose and exit the Euro? - bank shares plummet.<br /><br />To buy or short? It's the $64,000 question!<br /><br />BobAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-74569645723845971072012-05-13T15:42:21.309-07:002012-05-13T15:42:21.309-07:00I did find it amusing that the election results in...I did find it amusing that the election results in Greece and France were described as the public 'voting against austerity'. Who knew one could vote oneself richer? We have been missing a trick. We must all vote for Ed Millipede and Blinky Balls, and we will all be rich. Simple.<br /><br />What of course the populations of France and Greece are really voting for is someone else to be poor(er) so they can be rich(er). The someone else being either other taxpayers (either in the same country or those of another country), or lenders (particularly the foreign ones) as actually repaying debtors in anything other than devalued currency doesn't occur to socialists.<br /><br />Put like that 'voting for against austerity' is less of a moral protest against poverty, and more of a selfish, self absorbed strop by people who are fabulously wealthy by global standards, and would continue to be relatively wealthy even if their standards of living were halved.Sobershttps://www.blogger.com/profile/11407417389022146963noreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-26666217603879148072012-05-10T23:18:30.965-07:002012-05-10T23:18:30.965-07:00The starting point, it seems to me, is to ask what...The starting point, it seems to me, is to ask what "wealth" is. <br /><br />Wealth is not money. Money is a means of measuring wealth, it is a definition of wealth but it is not wealth. <br /><br />My view is that wealth is stuff that makes life more comfortable. <br /><br />We are more wealthy in the UK than the people of many other countries because we live more comfortably. We have brick-built houses with central heating, electric lighting, mains water and drainage. These, and many more everyday aspects of our lives, are the result of producing stuff. Part of the result is direct, such as producing bricks to make houses, and part is indirect such as producing more bricks than are needed and exchanging them for copper pipes for heating systems. In turn, someone had to produce those copper pipes and he turned them into bricks for his house by exchanging them for bricks. Money is the measuring device used to exchange bricks for copper pipes and copper pipes for bricks but it has no real value of itself, money is paper and metal tokens that have value only insofar as they can be exchanged for other things (including services people consider worthwhile such as healthcare, or having someone come in to do the ironing). <br /><br />The vast majority of economic activity in any country that operates above a subsistence level of human existence is derivative of the original production of stuff. That derivative economy is real and sustainable provided, always, that enough stuff is being produced. <br /><br />In a developed economy the number of producers of stuff is vast, as is the economic activity that derives from their original production. Problems come when the amount produced is insufficient to generate enough tokens (money) to pay for all the derivative activities people want to enjoy. By definition the monetary value of derivative economic activity vastly outweighs the monetary value of original productive activity - the brickmaker has £100 spare, he spends that £100 in a shop, the staff of the shop have £100 (let's ignore tax for the moment) to spend in other shops, the staff there have £100 to spend and so it goes on. When the brickmaker can only get £80 for what he previously sold for £100 (or finds himself with increased costs that result in him having £80 profit rather than £100 from the same quantity of bricks), each string of shop workers has £20 less to spend, thereby reducing incomes in a thousand different places. <br /><br />I believe what I have said above to be nothing other than plain common sense. No fancy economic theories are involved, I have tried to set out a simple real life example of actual economic activity. <br /><br />You cannot generate wealth otherwise than by producing stuff and, I believe, the only sustainable level of economic activity in any economic unit (be it a country or a Euro zone) is the level of activity deriveable at any given time from the stuff that each unit produces. The amount that can be derived is determined by millions of little people not by governments or international organisations of supposed experts. It will change from time to time as personal tastes and choices change and as technological developments are made. <br /><br />Greece produces very little and its derivative economy is out of all proportion to the level of wealth it generates. Its current economy is unsustainable and everyone knows it but too few politicians have the courage to say so. Votes in an election cannot change facts. The fact is that Greece produced sufficient wealth for about two-thirds (and I am being generous) of its current total derivative economic activity. The cure for the ills of the Greek economy is not austerity but realism. It is a painful realism because once people enjoy life at a certain level of comfort it becomes the norm. Greece is a flat-screen nation with the wealth of a twelve-inch cathode ray tube.TheFatBigothttps://www.blogger.com/profile/17255526385076528633noreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-13558819949368992112012-05-10T12:01:23.310-07:002012-05-10T12:01:23.310-07:00"wealth is, in the end, created by creating a..."wealth is, in the end, created by creating a framework in which individual endeavour creates real wealth. This individual endeavour, whether from a bricklayer or a the CEO of a multinational, is the real source of wealth creation. They make products and services that people want, and can pay for the goods and services as a result of their own individual endeavours. The relative success of these individual endeavours, in aggregate, in terms of productivity, and in relation to other countries, determines the real wealth of a country. Not borrowing"<br /><br />this is the lesson we will learn eventually. outstandingly simple yet powerful post CEronanpeterhttps://www.blogger.com/profile/13375024006869462385noreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-86530709226391577162012-05-10T08:31:05.658-07:002012-05-10T08:31:05.658-07:00Barnacles
"Reading for a certain Blinky Balls...Barnacles<br />"Reading for a certain Blinky Balls and his Ladyboy wife?"<br />You made me laugh, well done SirAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-64547216396294520492012-05-10T06:08:42.408-07:002012-05-10T06:08:42.408-07:00In terms of a lender, why not just use your centra...In terms of a lender, why not just use your central bank like the UK has? i.e. printing money to fund the illusion.Ianhttps://www.blogger.com/profile/07155273950757113241noreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-27568001738594846592012-05-09T22:54:54.633-07:002012-05-09T22:54:54.633-07:00I admire CEs relentless effort,year in year out, t...I admire CEs relentless effort,year in year out, to keep pointing out in his articles over and over the same thing, always trying to approach the subject from a different angle, hoping to wake up our deeply deluded "intelligentsia", but I am afraid they are so sunk in the trivia of complexities and sofistication that the simple law of production vs consumption is far beyond their so called intelligence. I am afraid we are heading for something really big. Riots in Greece are just a little taste of things to come.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-81849850216527334952012-05-09T01:13:41.802-07:002012-05-09T01:13:41.802-07:00Excellent article, which again, tells it like it i...Excellent article, which again, tells it like it is.<br /><br />The key point here is that someone will eventually pay for this wanton spending. The people who pay will be twofold:<br />1. The upper/middle-class over-65's (who own 80% of the UK's non-corporate wealth - mainly in the form of houses, pensions funds and savings)<br />2. The youth - their future earnings have been spent by the current generation of politicians and socialists.<br /><br />As for the elderly, they will protest by voting against mainstream parties (as they are doing in Europe). As for the youth, they will grow up, become angry and then vent their anger on our generation. Expect to be tried for crimes of financial treason in the future!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-78385629186847904882012-05-08T04:48:47.895-07:002012-05-08T04:48:47.895-07:00I really like this short post because it addresses...I really like this short post because it addresses an angle that I think you frequently gloss over, namely, the lenders. Can you give us your analyses from the lenders' perspective of more often please? I, for one, find it refreshing.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-64702948059231634022012-05-08T03:46:00.160-07:002012-05-08T03:46:00.160-07:00There is a source of wealth: savings from savers a...There is a source of wealth: savings from savers and pensioners. Surely currency debasement is the only politically acceptable option.Charles Darkehttp://economiccollapse.co.uk/noreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-43395192616377439122012-05-07T23:51:22.414-07:002012-05-07T23:51:22.414-07:00Dear Mark,
Thanks a lot for the write-up !!
Jacq...Dear Mark,<br /><br />Thanks a lot for the write-up !!<br /><br />JacquesMoranihttps://www.blogger.com/profile/04613367285090421382noreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-23911549596718610562012-05-07T23:14:27.942-07:002012-05-07T23:14:27.942-07:00Sir, one of the best argued posts I have read upon...Sir, one of the best argued posts I have read upon this whole subject.<br />Simple, direct and too the point.<br />Reading for a certain Blinky Balls and his Ladyboy wife?<br />Well done.Barnacle Billhttps://www.blogger.com/profile/17257546424880537005noreply@blogger.com