Saturday, January 1, 2011

Happy New Year?

The current issue of the London Spectator is running an instructive, if remarkably gloomy, piece (behind the pay wall) by Johan Norberg. The whole thing is well worth reading, but this gives a flavor:
All governments are betting that they can keep borrowing such extraordinary sums at very low rates. But the markets may have other plans. Consider the evolution of this crisis. The crash happened because households consumed too much, sending their debts to the banks. The banks sent the debts to the governments — and, as we saw with Ireland, even governments might struggle to meet them. So they are sending their debts to the European Union. But to whom will the EU send the bills when its credit card is maxed out?
Greece and Ireland aren’t just illiquid, they are insolvent — and nothing is solved by taking new, bigger loans when they can’t pay the old ones. If Ireland or Greece default on their debt, forcing creditors to take steep losses, it might spook the markets and pull out a thread that unravels the garment.
Might? If it happens in 2011, there’s unlikely to be much might about it… 
More Here..

Hyperinflation Will Drive Gold to Unthinkable Heights

1 comment:

  1. America is a bankrupt failed economy that has abandoned capitalism .

    It is a CORPORATE STATE Kleptocracy .
    With its middle classes assets and savings being looted for the benefit of the ruling elite and their bankster agents as their only source of internal profits ,millions are unable to find employment.
    Capitalism is a society where money is invested as capital to make more money /profits in industrial production and in distribution/sale of the products as well as in various services including financial services and credit supply.

    To have a successful capitalism economic growth is required to service the accumulated re-invested capital from past profits .
    The US is now unable to create real internal profits and commodity goods that can be profitably exchanged as equal value for imported products .

    The US economy now resembles the economic collapse of the State Capitalist USSR that was unable to keep up its interest payments for foreign loans “the national debt” and collapsed into an insolvent mess, with its Union of States breaking away from the Federal State in a last ditch hope for economic survival.
    Americas ruling elite and international capitalist partners at the Central bank utilizing ‘free trade” propaganda , de-industrialised most commodity goods production in America and exported the industries and jobs offshore.
    The promise was that the strong dollar and oil puppet backed dollar hegemony system would create big profits in America from the sale of foreign cheap labor commodities and that all Americans would share in the cheap commodities plundered from the rest of the world . US military backing was used to back American control of other countries and ensure cheap supply of natural resources and the $ priced oil scam centered on the OPEC oil monopoly cartels.
    In the end America became a giant insolvant Ponzi economy running on credit ,its property and housing sector a fictionally valued bubble.
    Its central Bank had issued Trillions of US dollars to create a national debt by financing deficit spending for wars and services in America and years of trade deficts as well as bailouts for socializing the debts of the TBTF insolvant financial sector
    These debts are held by national and international bondholders and must be serviced with dividends from tax revenues .
    With no real growth in the economy and the government spending trillions in more printed paper ‘stimulus” to try and hold up the Ponzi and property bibbles , this is now an impossible task as government revenues are falling .
    America now must finance its government spending by its banksters buying up government treasury bond debts and the money created is handed out interest free to the banking sector to give them a chance to make a profit.
    Capital seeking real profits can not invest in such an economy.

    It can all only end badly in an inflationary death spiral or by a national default on the governments treasury and banksters debts.
    One alternative to decades of depression an attempt to pay down past debts may be a Jubilee year to kick off a fresh start for capital the other being socialist reconstrucion

    Jim Willie at the Golden Jackass explains the real cost to society and capitalism of free money. It is well worth a read. Quote:
    Many analysts have sought the underlying root cause for the systemic failure of the USEconomy, the US Banks, and the USFed itself.
    One can start in pursuit of answers by looking at the cause being a sequence of costly wars and the ensuing monetary inflation, followed by lost industry to globalization and price inflation. The Vietnam War had a powerful consequence of inducing Nixon to exit the Gold Standard…
    But the true singlemost cause of wreckage is the artificial low forced cost of money, the near zero cost of usury.
    The subtitle to that billboard is that CAPITAL IS TRASH.


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