tag:blogger.com,1999:blog-7820485130017459619.post7785650184868148965..comments2023-10-24T01:46:47.151-07:00Comments on CynicusEconomicus: Conspiracy and the Collapse of the UK Economy - and why the US will be nextUnknownnoreply@blogger.comBlogger20125tag:blogger.com,1999:blog-7820485130017459619.post-40732472207104704102011-06-29T00:12:41.505-07:002011-06-29T00:12:41.505-07:00coolcoolMariahttps://www.blogger.com/profile/15948115149015814935noreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-1886449348636218672009-02-17T10:10:00.000-08:002009-02-17T10:10:00.000-08:00Thanks for your lucid articles. I have a questio...Thanks for your lucid articles. I have a question regarding the printing of money. Doesn’t economic growth imply an increase in the money supply? If so where is the new money comming from?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-47361823284929949532009-01-30T17:21:00.000-08:002009-01-30T17:21:00.000-08:00But how would you have done it CE?Of course academ...But how would you have done it CE?<BR/><BR/>Of course academically you are absolutely right. But in practice... How would you have done it?<BR/><BR/>As Thomas Hobbes said, the first job of the state is to protect the people from the people. Suddenly saying to someone living in a democracy that they are going to have to downgrade their 4 bedroom house, professional job and BMW for a tent in a field, a horse and harvesting spuds for a living before the poo really hits the fan would incur a revolution whichever way you look at it, so how would you do it? The Chinese government's autocracy allows it to do what it wants with impunity, but the British government has to use smoke and mirrors... Its part of a culture that won't change until the poo really really does hit the fan... So I reckon the 'government bashing' smacks of a little bit of arrogance. Take the macro picture, encompassing all consequences, and if Thomas Hobbes was right, maybe they're not doing as badly as you think... Given the circumstances.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-86077229207018303802009-01-15T10:18:00.000-08:002009-01-15T10:18:00.000-08:00Really great blog! Please review our website at yo...Really great blog! <BR/><BR/>Please review our website at your earliest convenience. We need your help! <BR/><BR/>We are the REAL solution oriented team and have more solutions then any person or organization out there. If any <BR/><BR/>organization has more solutions to the problems plaguing our world than us, we will join that organization. <BR/><BR/>If not, then join us. <BR/><BR/>Sincerely,<BR/><BR/>Adam Vohrer<BR/>Vice President<BR/><BR/><A HREF="http://www.ccrg.info" REL="nofollow">Citizens Committee for Restructured Government </A> (CCRG)<BR/><BR/><A HREF="http://www.ccrg.info" REL="nofollow">www.ccrg.info </A>Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-23994772497703227472009-01-04T09:13:00.000-08:002009-01-04T09:13:00.000-08:00When you're calculating the scale of the indebtedn...When you're calculating the scale of the indebtedness of Britain, are you factoring in PFI/PPP commitments? <BR/><BR/>If you are, do you think that Gordon Brown (who engineered them, after all) can default on those commitments and buy up those schools and hospitals when outfits like Crapita are made bankrupt?<BR/><BR/>Or if you are not counting them, how do you think they change the picture?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-76850001616273120192008-12-31T11:29:00.000-08:002008-12-31T11:29:00.000-08:00On reading your v. interesting article, i was remi...On reading your v. interesting article, i was reminded of past situations in Argentina, and in this respect i am quoting a couple of brief paragraphs:<BR/><BR/>"In Argentina, workers are rioting for a reason. One in five workers is unemployed, and the gross domestic product has fallen by 25% since 1999. The Argentine peso, which for the last decade was worth a dollar, is now worth a quarter. The government has defaulted on its debt, and most banks are technically bankrupt. Financial and human flight is rampant. The Argentine provinces are printing their own currencies. Prices are rising and hyperinflation lurks. The nation has seen five presidents in six months.<BR/><BR/>And the International Monetary Fund, not to mention the U.S. government, has largely washed its hands of the country."<BR/><BR/>Excerpt from "Solution for Argentina Is Right on the Money", Los Angeles Times. Opinion.<BR/><BR/>By Laurence J. Kotlikoff and Juan Pablo Nicolini<BR/>June 30, 2002 in print edition M-5 <BR/><BR/>Yet, comparisons between Argentina and the UK are likely to stop here, since neither the territory size nor the availability for food manufacture and home grown crops are remotely similar...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-33623573819956887852008-12-23T13:01:00.000-08:002008-12-23T13:01:00.000-08:00Very interesting article and blog! I believe era o...Very interesting article and blog! I believe era of information makes this crisis worse. People can easier and much faster panic, because the bad news spread extremely quickly. Governments are not so irresponsible like during the Great Depression, but still many stupid things, just to show they "fight" the crisis...<BR/>LorneAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-60786333206239319312008-12-22T08:17:00.000-08:002008-12-22T08:17:00.000-08:00It's James Kunstler - It must be Monday."Legitimac...It's James Kunstler - It must be Monday.<BR/><BR/>"Legitimacy Dwindles"<BR/><BR/>http://jameshowardkunstler.typepad.com/clusterfuck_nation/2008/12/legitimacy-dwindles.html#comments<BR/><BR/>The first comment to Jim's post is worth a visit in itself.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-41753465986694941542008-12-22T05:23:00.000-08:002008-12-22T05:23:00.000-08:00http://www.telegraph.co.uk/finance/comment/ambrose...http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/3870089/Protectionist-dominoes-are-beginning-to-tumble-across-the-world.html<BR/><BR/>This link (and others I have read) seems to point to growing instability in Russia, China and other countries due to protectionist methods, and points out other countries taking similar steps.<BR/><BR/>It mentions the rioting in Greece, and while the trigger for the riots was the shooting, the underlying reason for discontent is the economic situation there. Also of note is the "sympathy" riots in France, Spain, and Italy.<BR/><BR/>Protectionist methods from some countries are going to clash with the goals of the globalist ideologies such as the US and UK, the World Bank etc, and are bound to lead to international tensions. (of course the globalist nations are just as quick to use protectionist methods when it suits them, and claim it is helping the global economy, but that is another matter) <BR/><BR/>While at the moment discontent in Britain is confined to our usual moaning, I see no reason why it would not end up with similar instability as the crisis gets worse, especially as it enters the public consciousness just how badly it is going to effect them, how the government has focused all its efforts at keeping the rich wealthy by exploiting everyone else, and the authoritarian methods to enforce such theft, such as the proposed powers to bailiffs to break into houses and restrain householders to collect debts.<BR/><BR/>http://www.timesonline.co.uk/tol/news/politics/article5375668.ece<BR/><BR/>The Government is showing none of the aspects of a "normal" democracy, as is shown by its excessive secrecy, lies, spin and arrogance. It's handling of the economy, and of the crisis has shown that it thinks it knows best, and hides its dealings to stop the population having a proper discussion about what the effects could be, as is so ably demonstrated by the change to the bank charter act to hide its money printing efforts.<BR/><BR/>This last cover up could very well be the final straw for people to take if hyper inflation does begin to take hold, or an already artificially inflated but under control sterling is tipped into hyper mode due to the general population finding out that the government is not disclosing how much it is printing, and the panic that could ensure from it.<BR/><BR/>Of course it is precisely due to worries about panic that the government is covering up its figures, but this could spectacularly backfire if said population finds out about the cover up just as inflation is too high to spin away as due to something else.<BR/><BR/>My fear is that due to the internet the news of the cover up cannot be suppressed, we are not in the days where the news was confined to a few newspapers which the government could quietly hush up for the good of the nation. The story is out now, and it cannot die without stopping all traffic, as someone somewhere can keep propagating it. While I dislike censorship, the timing of release of news can be critical, especially when it regards the economy due to the effect of confidence on it.<BR/><BR/>At some point the spin will not stop the possibility of dangerous inflation from sinking in to the minds of the population, and when it does, the fact that the government has covered it up is likely to cause the panic it hoped to dissuade, and thus the social instability unfolds. <BR/><BR/>There are only two real things we can do about this.<BR/><BR/>First, hope the government knows what it is doing and can control the inflation - It's record so far has not been impressive to say the least.<BR/><BR/>Second, preempt the panic by drawing the publics attention to the danger BEFORE the effects of inflation get to an unstable condition. If the government cannot hide what it is doing, and enough pressure is put on them by the public as well as informed economists, It may stop the rot before it brings down the house.<BR/><BR/>While the second option is just as risky as the first, the more minds aware of the problem means a public debate happens before the situation is unstable and panic caused by the news is mitigated by reasoned minds educating the public so they are more able to deal with it if it were to pass.<BR/><BR/>If my opinion makes sense to you, would you help spread the word to make it a reality? I will not start myself unless it got a consensus here, as to act on my own without input from others would be reckless.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-79753287825250458542008-12-22T04:06:00.000-08:002008-12-22T04:06:00.000-08:00It seems that Steve Tierney is trying to allude to...It seems that Steve Tierney is trying to allude to "socialism" in a way that is neither accurate or useful. I don't see how what is happening now connects to socialism (rather than facism, State corporatism, totalitarianism, fraudism ) in practice or theory -- no more than UK / US 'conservatives' have espoused financial conservatism for the last +/- 15 years. F.eks => Nouriel Roubini calls it the socialisation of losses and the privatisation of profits. <BR/><BR/>As CE suggests in the article, we are in desperate times -- it seems to me that any pretence at ideological motivations has been abandoned long ago. <BR/>It's a minor point, but there is so much irrelevant waffle, posturing, obfuscation and bullshit surrounding the financial crisis that accurate, definitions and thought should be used to describe and deal with it. <BR/><BR/>Using emotive terms like socialism or capitalism to describe what is happening seeks to hide the reality of our situation rather than reveal it. <BR/><BR/>I have appreciated your contributions, but found this one less intelligent than your previous posts.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-10928545648346864612008-12-22T02:23:00.000-08:002008-12-22T02:23:00.000-08:00Hi, I've been a regular reader of your blog for th...Hi, I've been a regular reader of your blog for the past few months and find it fascinating and chilling at the same time.<BR/><BR/>I know you don't like to give advice on this, but you seem like the best guy to ask- I've been working very hard the past year to save money and have around £15,000 tucked away. The idea of all my work turning to nothing with the pound crashing scares me, and I would really appreciate some advice about what would be (in your opinion I know) the best place / the best commodity to put my savings into to avoid their value being wiped out.<BR/><BR/>Thanks very much!<BR/>NickNickhttps://www.blogger.com/profile/17308151782583856088noreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-32853477273638765642008-12-21T10:31:00.000-08:002008-12-21T10:31:00.000-08:00Gordon Brown's government will spin and spin and s...Gordon Brown's government will spin and spin and spin this. They will spin it so hard that, like anything rotating that quickly, you wont even be able to make out what the pattern is.<BR/><BR/>The government will take ever greater control, borrowing more fake money to bail out more businesses and individuals. There will be some unrest, and so the many new laws implemented for 'our protection' will be used to keep control. <BR/><BR/>Instead of realising this is all their fault, the masses will think Gordon is 'saving them' from the chaos that would otherwise ensue.<BR/><BR/>As people become unemployed, they will gain benefits. As money gets tighter, they'll be made to work for their benefits. The more unemployed you get the more people will then be working for the government.<BR/><BR/>The government will spend huge amounts convincing everybody that, if we just work hard for the community, we'll be helping to pull our comrades out of the mire.<BR/><BR/>So what do you call a state where everybody is the same, working on behalf of the government, for subsistence-level supplies? Where government keep control with draconian powers? I'm sure there must be a name for that...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-20463162498729126662008-12-21T02:23:00.000-08:002008-12-21T02:23:00.000-08:00MarkI'm very much looking forward to your future a...Mark<BR/><BR/>I'm very much looking forward to your future article on the banking system. What I'm currently trying to understand is why most people think that the economy, as a system, is basically stable in the first place. <BR/><BR/>At some point in the past, someone decided that we should issue our money via fractional reserve banking which, on the face of it, cannot work without perpetual economic growth, despite the world and its resources being finite. You suggest that the UK's economy is really 30% smaller than its current GDP, yet maybe it is FRB that dictates that GDP can never be allowed to shrink to its natural level - which would solve the mystery as to why the government is behaving in the crazy way it is at the moment. Surely if the country as a whole was told that it had to return gradually to its 1998 or 1988 standard of living there would not be rioting on the streets, but maybe under FRB this cannot be allowed to happen; perhaps catastrophic collapse and then a resumption of growth from the low is the only such option available.<BR/><BR/>I hope that your future post on banking can confirm whether this naive interpretation of the FRB mechanism is correct.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-63651084252195102832008-12-21T01:35:00.000-08:002008-12-21T01:35:00.000-08:00Ok, I hold my hands up, I'm not savvi enough to ge...Ok, I hold my hands up, I'm not savvi enough to get a handle on this....but waddya think?<BR/><BR/>Something I've just come across.<BR/><BR/>Is there any validity in any of this?<BR/><BR/>________________:________________<BR/><BR/>"Some of those new financial poisons were called credit default swaps (CDS's), some sixty to seventy trillion worth that are currently reeking havoc with AIG, Lehman and Citigroup, as well as many hedge funds. But if you think these are bad, wait until you see what happens when interest rate swaps (IRS's) meet double-digit interest rates. It will be like "Frankenstein Meets the Wolf Man." This event will quite literally be a financial Armageddon from which none will escape.<BR/><BR/>Enjoy the low rates while you can, our fine Illuminist miscreants. When rates go into double digits, it will be like the sun going supernova. Hundreds upon hundreds of trillions in notional value are at stake when the interest rates do what they did in the early 1980's. When the huge imbalance between low fixed rates that have been exchanged for what will become astronomical variable rates starts to generate losses, the likes of which have never been seen before in the history of mankind, the IRS's will reach critical mass and start a thermonuclear chain reaction that will vaporize everything in their path."<BR/><BR/>http://www.theinternationalforecaster.com/International_Forecaster_Weekly/Toxic_Waste_Threatens_To_Poison_The_Nation_StateAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-1980979044479067462008-12-20T16:56:00.000-08:002008-12-20T16:56:00.000-08:00Just a note from across the Atlantic. Well writte...Just a note from across the Atlantic. Well written; I have not read any of your previous posts, however, I believe I will now. <BR/><BR/>More to the point, I would say that your view of the U.S. economy is too bright. Please review www.shadowstats.com, especially the Alternate Data page. Please note that most of the "SGS Alternate" data is simply defined by relatively recent goverment calculations of the past. <BR/><BR/>From my seat, I would say that the growth of the U.S. "Debtor Empire" has indeed seen an importation of inflation within the U.S. I would actually state the U.S. government and Federal Reserve have purposefully imposed on emerging nations in order to create a global Ponzi of the type you describe between U.K. banks and the government. <BR/><BR/>I would also assert that a loss of actual buying power of the dollar of greater than 90% over the last hundred years is rather disconcerting. <BR/><BR/>For an entertaining--if not depressing--read, try Empire of Debt by Bonner and Wiggin. <BR/><BR/>In anycase, I wish you well and good luck in these interesting times. <BR/><BR/>-L<BR/><BR/>P.S. I am not affiliated with either of the publications mentioned, I simply find them useful.Unknownhttps://www.blogger.com/profile/02459084265581167455noreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-77804953308453964932008-12-20T06:02:00.000-08:002008-12-20T06:02:00.000-08:00I posted the following joke on Robert Peston's blo...I posted the following joke on Robert Peston's blog back in October; it bears repeating:<BR/><BR/>"Crisis? What crisis?"<BR/><BR/>Mervyn King comes up to Gordon Brown and says, "I'm in terrible trouble! the Bank of England is nearly broke! I've only enough for next month's salaries and if I can't pay the rates, Boris'll be mad at me, and there's nothing coming in! What'll I do?"<BR/><BR/>Gordon thinks for a moment and says "Don't worry Mervyn. This is easy. Two things: first of all, don't tell anybody else. Second thing: get your printing presses going and print up as much money as you need. I can't really get any more off the taxpayers, you know."<BR/><BR/>Mervyn says, "That's a great idea Gordon! Why didn't we do this sooner! But, " he says, "supposing somebody comes to me with a twenty pound note, and says 'Can you give me twenty real pounds for this note, like it says on it?' - and I haven't got the money?"<BR/><BR/>Gordon says, "Well that could be a problem. I tell you what," he goes on," You can fix it with a wee change in the notes. Where it says 'Promise to pay the bearer...' just put 'We'll do our best...'"James McChttps://www.blogger.com/profile/03391246269150464186noreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-24197911216692946552008-12-20T03:46:00.000-08:002008-12-20T03:46:00.000-08:00cynicusAs always a well thought out and logical es...cynicus<BR/><BR/>As always a well thought out and logical essay.<BR/><BR/>Since it is now obvious how this is going to pan out, there is no way the govt will change direction now, in your opinion what sort of time scale are we looking at for the final collapse to occure. I'm assuming that the Quantitive easing proposed will be on a scale that will provide an immediate short term boost to the economy, thus delaying the inevitable collapse. Or it could be that this will spook the international markets so much that it will bring forward the collapse.<BR/><BR/>Either way, I'm factoring this scenario into the direction I'm taking my business so any comments from you will give me more food for thought.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-88606706942071006772008-12-20T03:44:00.000-08:002008-12-20T03:44:00.000-08:00Like a poster on your previous column, I wonder ab...Like a poster on your previous column, I wonder about the effect computer based economics and trading has on things. I remember an interesting documentary -forget the name right now - which showed how a big unexpected crash in the 90's was exacerbated by flawed economic models and automated trading making the crash worse by continuing as programmed and trading stocks that made the crash deeper.<BR/><BR/>Measures were put in place afterwards to be able to stop the automated trade, but if the economic theory is wrong, you can put the right figures in and still get the wrong answer, and if the economics are complicated enough that computer assistance is needed, and it gets the sums right for the short term, the trend will be to trust it for other calculations, even if some of the inputs are really only educated guesses based on theory.<BR/><BR/>Coupled with the divorce from economic reality - the other poster is right, money has gone from a real thing you can hold in your hand, backed by real resources, to abstract numbers on a screen - you get situations where people with difficulties understanding the complexities trying to understand an economy using tools that can give misleading results if the data is flawed, and trusting the tools too much as they have worked miracles before.<BR/><BR/>Computers are a powerful tool for certain but get the inputs wrong and the calculations will be flawed. Garbage in, Garbage out. Computer modeling breaks down by the famous "Butterfly Effect" in complex environments such as weather patterns, social or economic models, but many people can take it as gospel and not realize it can only predict broad trends, and must be verified constantly. <BR/><BR/>It makes me wonder if the economists have run models and based actions on them forgetting that their actions and others reactions change the economic environment itself, thus changing the effects of the model in unpredictable ways.<BR/><BR/>That said, some of the reaction of the UK and US seem to be based on more animalistic reasons ie panic after their delusions are shattered, their theories blown to pieces, and the stark reality of an imminent collapse.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-57614992203371776052008-12-20T03:32:00.000-08:002008-12-20T03:32:00.000-08:00Thank you for yet another well-argued post. I only...Thank you for yet another well-argued post. I only wish I could disagree with you but the facts are becoming clearer and clearer by the day now.<BR/><BR/>I think the UK government will find that the repeal of the 1844 Act has exactly the opposite effect to that intended. Once it becomes apparent that the printing presses are at full throttle the lack of transparency will spook the market and make it harder not easier to raise funds. Such an act can only be one of desperation and I search in vain for an alternative explanation to yours.<BR/><BR/>I made a similar point about the resemblance of Keynesian deficit financing to Ponzi schemes, pyramid selling, and chain letters in a comment on Polly Toynbee’s article in Comment is Free today. The link is<BR/><BR/>http://www.guardian.co.uk/commentisfree/2008/dec/20/unemployment-welfare-polly-toynbee<BR/><BR/>although I’m not sure the article adds much to the debate.<BR/><BR/>However I am now more than ever struck by the similarities with other declining or falling nations, most notably the ancien regime of pre-Revolutionary France. Bourbon policies and their consequences bear more than a passing resemblance to those now being followed by the British Labour government - deficit financing; uncontrolled government expenditure on non-productive items (then mainly military, now of course almost anything but); unaccountable government; tremendous growth in bureaucratic complexity; confusion of the national interest with the interest of the government; and the singling out of some classes for special treatment (then aristocrats who had tax exemptions, now the public sector with salaries, pensions and job security completely out of line with the rest of the population).<BR/><BR/>We all know how that ended...<BR/><BR/>PS your RSS feed on this post seems only to produce your notes, not the finished article. A glitch in the system, perhaps?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7820485130017459619.post-29195001627298599252008-12-19T22:38:00.000-08:002008-12-19T22:38:00.000-08:00Thanks for another valiant effort to untangle the ...Thanks for another valiant effort to untangle the means from the ends, or was it ends from the means? - As Blair once said.<BR/><BR/>As ever, when looking down on the situation, I still see no clear picture, only chaos and confusion with no coherent goal in sight.<BR/><BR/>Brown emerges triumphant (just like Bush) from behind the curtain to present himself as Caesar to the assembled press corps. (madness)<BR/><BR/>He is on a role, he is the anointed one to lead the nation out of this wilderness. In fact, through his wisdom and genius, we will emerge a stronger, braver nation, to quide the world to the sunlit uplands.<BR/><BR/>How can you counter that?<BR/><BR/>Meanwhile, back at reality, where is all this leading? What are they trying to do? Where is their light at the end of the tunnel? What is their big picture? When the dust has settled what will have changed?<BR/><BR/>It's madness to think that once the ship, SS Gt. Britain (which is terminally holed below the)waterline) has been righted, that everyone can climb back on board and resume partying.<BR/><BR/>So what has got to be different? What new direction is capitalism to take? Have they a plan B?<BR/><BR/>I dunno, you tell me.Anonymousnoreply@blogger.com