The Capital Crisis

While the G20 worship the generation of false wealth we are forced to accept Governments that defer the costs of progress in favour of far more false wealth as a solution. The holy grail of a system that has cheated itself to the Nth degree is becoming a groaning machine capable of blowing gargantuan bubbles to solve the crises of accumulating need of the many to sponsor the largess of the very few.

These huge mountains of debt – what did they buy exactly? Where are the assets? Consumption is not an asset but it is seen as the path to salvation. Growth is not growth when it is only capital expansion in the face of long term poverty. It is the system itself that is out of control, the way in which the steam valves we call markets are manipulated and political decisions that flow from the rationale of a committee of naked emperors.

Producing exponential movements in capital exchange is seen as a solution. UBS recently learned the hard way the equation that for every winner there is going to be many losers can be reversed. What sucked Lehman dry was bad mathematics and a total disregard for consequences, an aggressive form of global gambling is simply not going to solve the actual dilemma the markets face. What we are measuring is not real economic growth, it is a deferment of responsibility.

As the markets fall capital moves away from reality and into assets that are deemed safe. The market mechanism is a great tool that has been badly abused by greed to the power of political expedience.

American Default?

Legislation of a debt ceiling does not absolve the US from its obligations.

UPDATE: The 14th Amendment of the Constitution clearly states that Congress must not default on its obligations.

While the USA frantically tried to save the world with a nuclear arsenal they could never use and military overspending on wars that did no good, we see the East’s rise to financial domination by engaging huge numbers of lowly paid workers to export in a way that nobody was able to compete with. If you want something manufactured, get it done in China has been the wisdom of the past 60 years. Market forces!

The agenda of the lever pullers seems to be to froce the USA to default and evade repayment. By making it effectively illegal for the USA to meet its obligations, the USA will have to default. The net effect of the USA not borrowing any more is being described in philosophic terms – what would the result be?

I think the answer to that not yet knowable. But certainly creditor nations will invest elsewhere and perhaps it will be the final straw that breaks US economic hegemony. Time for a new deal?

If Obama was to be effective, he needed the Democratic support in his first two years. Sad that they fiddled while the midterm elections were lost. Back to American isolations, anyone?

Guardian article

Australian Government Clean Energy Policy

Is this a refreshing change in tactic – is Australia leading the world in creating a future that it is reasonable to invest in, the crumbling economy based on oil will ultimately fall over.  Oil will get more and more expensive in political and economic relationships.  It will undo China as it has undone many Western economies.  It has been a growth industry and will continue to be until it starts to become more expensive to drill it than other methods – and if those other methods are non-polluting, that is a distinct advantage.  If they are free of excessive cost, or have no operating costs (an efficient means of collecting solar energy) beyond capital costs (interest) and maintenance, it means that power is a flexible commodity like much open source software that oils the wheels of business and life in a general sense improving life for all.

 

Economic solutions

Greece and Portugal can sell their gold reserves, the price is very high and that fuels speculation. By putting their gold onto the market gradually, they can keep up with loan repayments. Government spending is necessary during a recession or businesses could change their behaviour. Like paying taxes. Like buying gold reserves and opening offices in countries like Greece.

The rise of the global corporate has enabled cross border legal theft of taxes from the economies of many countries. Is this a pressure from the one-world-government Bilderberg conference confirming years of conjecture by “conspiracy theorists”? Or is the intent to create corporations that exist outside the rule of law? What will stop them becoming feral when even under the auspices of the US government, we had rife corporate misdealings such as Enron and MCI who falsified accounting information to keep share prices suspended higher than they should have been, attracting investment they basically ended up wasting. Or Lehman Brothers who made very irrational decisions with bound to fail one day securitization deals. Corporate theft by Bernie Maddoff happening right under the collective noses of law enforcement, the Inland Revenue Service, the banks and Wall Street.

What if a multi trillion global corporation falls into the hands of corruption? How will that damage every nation states’ progress and growth? Or is that already happening – for example who is motivated to write thousands of computer viruses? Corporate criminals would have the skills. The Mafia probably do not. The West (and Google) point fingers at the Chinese Government. Corporations are more likely to gain from harming their competitors. Is there a war between China and the West? Not really, no. No evidence of that, but are there corporations who have proven they are not to be trusted? Lots.

So instead of regulating the high flyers to merely protect the public from expedential uninsurable risk they pose, why not regulate corporations at the international level to make them more responsible to trade balances and the well being of all?

Why not give the very largest corporations humanitarian projects and social responsibility?

America can get out of debt tomorrow. How? By selling its corporations.

Real Progress

All this focus on the economy may mean we take our attention off the real issue. All the focus on sectional interests and pressure groups that drive the climate change agenda, instead of actual planning to change things that must change is distracting humanity from its mission, its meaning and its life.

Real progress follows talking about it, only if plans are made real without all the political watering down of meaning that occurs.

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On the Brink of Economic Disaster

The last great empire builders – the UK and the USA appear to be on the brink disaster due to the collapse of debt financing.

Due to the mountain of debt compared to productivity mainly in the private sector, the banking crisis looks like it inevitably will move to the next stage despite the extraordinary generousity by Governments of tax payer reserves into the banking sector.

It seems that our addiction to capital is an addiction to “productivity free” capital – in other words the acceleration of capital growth over the past thirty years has been a belief system based on attributed value rather than real value. Notice how your house got more and more valueable?

Continued in End of Empire on DisturbingTrends: predicting future politics