"The whole idea is that the pound goes down

We are certainly creating enough imaginary pounds for the value to drop. Trouble is, the europeans and americans are doing it even faster and its a case of which is the best horse in the glue factory. Bond yields are irrelevant too since they are all part of the imaginary fiat wealth governments are trying to keep on the road.

I am not sure our ability to export to Europe is that relevant: They won't have any money to buy our goods anyway. A weakening pound versus commodities will just hurt us even more. Our only hope is to create stuff that doesn't need commodities such as computer games or high tech engineering widgets. I also think we should be going for a land grab in places like Africa and Kurdistan where commodities can be had cheap and there are growth prospects.

Its nothing to do with Cameron. He just inherited a crock from GB and there is little he can do. Our position on Europe is pretty irrelevant too - the whole euro project is likely to come crashing down very soon together with all the bureaucracy it entails.

It's a fiat money race to the bottom. So far, the dive is coordinated between central banks so it's affect is muted. All they had to do really is to control the price of gold. Which they do. Every single day.

The overwhelming majority of people haven't clued in. The monetary system has failed. Trying to fix it at this point is like trying to put toothpaste back in the tube.

The fractional reserve money system was designed to fail at some point, after all it's a ponzi scheme. The time is now when there's no growth to pay the coupon. Greed accelerated the process. The consequences of the banking system leveraging to insanity, outpacing organic growth multiple times.

The euro was designed to fail at some point. The time is now when the huge imbalances it creates among the 17 EZ member sovereigns can no longer be hidden or prolonged.

As an added bonus we're getting wars for oil and rare earths, staged revolutions for oil, depression in Greece, hyperinflation unfolding in Belarus and Hungary, fascism in Italy, recessions in many other sovereigns, a technically insolvent ECB, and the FED try to control this collapse by flushing the world with liquidity.

Solutions are not up to Cameron, Merkel, Sarkosy, Obama, etc. The minute Ben Bernake loses control of this thing (and I must admit, so far he's managed to park the world's biggest vessel between the edge of the cliff and the shoals in the middle of the biggest storm with barely a scratch on it), the jig is up. It's just a question of time, and it's not 10 years away. Get over it.

I was not thinking of competing for exports to Europe. Some are saying they are massive trading partners of ours others saying they are irrelevant. Whatever. I was thinking of all exports. Europe does trade with the whole world and if its goods are cheaper they will benfit.

Can computer games and widgets float a whole economy? And the idea that we will rule the world of thingummy bobs and Super Marios is begging the question. As does the creativity in our education system.

More wars and more arms sales could help. I'm agin it.

Thanks for your help Men and Wyk I hate the idea of not seeing what really going on.
Finally showing my ignorance does "fiat wealth" mean all the money inventing schemes that govts and banks come up with?

melv Joined: 19 Feb 06
Replies: 3250 07 Jan 12 08:48   

Bonkers. No one has a clue have they.

Except you of course, reel your head in ffs, you're just a glorified guesser like everyone else.

just a glorified guesser like everyone else.

I beg your pardon!!!!!!! There's nowt glofied about me

However if you think we will be back to the good old borrow borrow spend spend spend days flogging each other overpriced capuccino's in the next 10 years please back it up.

If you think that there is not going to be continued job losses, continued falls in spending power and continued rises in the costs of unemployment including govt "schemes" please back it up.

I say we will not be back to "My house price is inflating I'm rich!!" because even if there is some sort of recovery we will have been through such a harrowing time that nobody will get away with trying to cause another borrowing frenzy.

Or even wierder if you think that the UK becomes an indstrial manufacturing and exporting country again..ever.... please back it up. I am a northerner and I have seen with my own eyes the landscape changes from the 1950's to now. There is no going back. This is not a guess its bleedin obvious.

If of course you live in inner London it will be different there. But there will be immense gaps between the haves and have nots and I predict more riots.

I admit I do not understand why house prices have not collapsed. I am clueless on that. Except to say interest rates cannot be raised.

For house prices to collapse, there would need to be high inflation?

House prices are part of the game.

'Fiat' means 'created by decree'. Originally money was just a receipt for gold lodged in a bank somewhere, ie it had something to back it up. Once we came off the gold standard then money was just created out of thin air, principally by the banks when they granted people loans while only holding a few percent of the amount in deposits. With QE it is just created by the government and then used via the BOE to buy government gilts, thereby keeping the price of gilts up and the yields low. If this sounds like a big fiddle then it is because it is.

House prices will collapse once QE stops and interest rates are forced to rise. It would be a terrible time now to buy a house - you could be in negative equity for the next 15 years.

I think the high tech industries are quite lucrative, but they only need to employ a small number of very able people. There are not much use for general working class sort of people. If there are no capuccino type jobs going for them then I don't know what they will do. I would say reopen the coal mines but most people are not so daft as to want to do that kind of work any more.

I agree that the future is grim here and I am looking to head off to warmer climes.

House prices will collapse once QE stops and interest rates are forced to rise.

This was my thinking. Also the ultraprivatisation of the rented sector seems to be holding prices up
so renters end up subsidising high house prices. How ironic people desperate to own their own home are proping up high prices of their landlords property by the very rent they pay.

What will stop QE ending? The only thing I can think of is war.

melv
Date Joined: 19 Feb 06
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When: 08 Jan 12 16:16
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House prices will collapse once QE stops and interest rates are forced to rise.

This was my thinking. Also the ultraprivatisation of the rented sector seems to be holding prices up
so renters end up subsidising high house prices. How ironic people desperate to own their own home are proping up high prices of their landlords property by the very rent they pay.

Although I agree with the sentiment, I find that an odd way of phrasing it. I would say that in countries with a high social housing stock, the government is subsidising renters, not the other way around. I wouldn't call renters paying market price a subsidy.
Having a large social housing stock is vital to maintain a measure of equality and basic living standards.

wykhamist2
When: 08 Jan 12 15:47

[...]

I think the high tech industries are quite lucrative, but they only need to employ a small number of very able people. There are not much use for general working class sort of people. If there are no capuccino type jobs going for them then I don't know what they will do. I would say reopen the coal mines but most people are not so daft as to want to do that kind of work any more.

I agree that the future is grim here and I am looking to head off to warmer climes.

I think we need to get our heads round that fact that getting people into employment is not the be all end all for a healthy economy. As more and more things are automated, there is less work to do. It's unlikely that nothing new will be created to fill the void though, in areas like service, consultancy, science and also volunteer work.

Wealth comes from job destruction rather than job creation.

It's probable that within our lifetime, working will no longer be seen as something that's culturally required. As wealth increases, the entire population will be heirs to a public fortune. If all this wealth was too concentrated in the hands of those who produce it or merely 'run the machinery', the outcome would not be politically stable.

I do think that barring a cataclysmic event like a World War or natural disasters of biblical proportions, the human race will continue to progress, and even things like hyperinflation and defaults will only slow it down by a decade or two. To say that for the first time in ages the next generation will be worse of than the current one is a bit silly I think. They may go through a very tough period, but over a lifetime, they will almost certainly be far better off.

Why do people find it so hard to wrap their head around the fact that continued growth is not possible on a planet with finite resources? Food will not magically appear on our tables, and cheap Oil won't magically come out of the ground to continue being the lifeblood of the economy and the monetary system.

What did we do in the face of a slowdown when this reality was beginning to exert itself? We tried to cheat the system. Our financial sector geniuses motivated by greed decided to far outpace organic growth. Wealth was no longer created by goods and labour, it was created in fictitious paper wealth passed around the financial system, outpacing real organic growth by many multiples. Of course anything that can't be sustained wont be sustained, organic growth came to a screeching halt and the monetary system was unraveling because of it (bank assets turning to dust).

What did politicians and bankers do? They must protect their precious status quo of course. Bankers start creating money out of thin air to fill the hole created in the financial system by defaulting paper. Your government starts to borrow on your behalf, whether you like it or not, because *you* can no longer borrow and the system will collapse without growth - growth through debt creation is necessary to pay the coupon on existing debt. THIS IS THE STAGE WE ARE AT TODAY.

But like always, anything that can't be sustained, won't be sustained. It's just a question of time......and not a long time at that.

What's coming is not nirvana, it's the dark ages on steroids, the nuclear version.

Hilary Clinton was quoted saying that the next round of wars will not be fought over Oil, they'll be fought over food. She is right.

This stuff is not rocket science FFS, and we're now four years into it. There's no excuse for anyone still not getting it at this point....unless of course you are the pea-brained love couple.

barring a cataclysmic event like a World War

Thats 4 of us mentioned the end game war scenario. I can well imagine idiotic yanks considering their defences capabable of surving a big one and after that starting growth all over again. I can also imagine the Chinese also having made defensive preparation and  using the formula "They can't kill us all".

I am no cospiracy theorist but I think this type of talk is worth it to wake people up; get their attention and finnaly agree what do we really vaue about human life on earth and work together for the good of all. Before we start firing the missiles.


Wake up. Its not going "back to normal" in a couple of years.

For the most part, I agree with the tone and direction of your post and I would like to add this:

1. It's not the "yanks", or Obama, or Cameron, or Merkosy, or Russia, or China that will decide how this unfolds. It's the banking cartel. All the politicians are tools and the "yanks" are merely an enforcement tool.

2. There no such thing as "returning to normal" EVER. Those who keep posting about "muddling through" until "normal" returns are ignorant of history, but mostly the power of the exponential function.

The jig is up. The system was designed with an end date. All we are witnessing now are the final gasps of a dying system that's being kept on life support by those who benefit the most by prolonging it just a little bit longer.

it s always been like this. the world hasnt got finite resources, as the more progress we reach, the easier we do new discoveries. think of columbus and the americas, the dutch and the indies...reading this forum sometimes you wd get the impression nothing happened in the last 50 yrs, as if the industrialization and modernisation of asia didnt happen. as if we werent able now to pick up oil from under the oceans ( ok ok, with some troubles i admit ). as if technology and culture hadnt been helping us to produce more food from the same lands compared to the past. as if internet never happened. nooo, we just created subprime mortgages and toxic banking products....
fractional banking exists since hundreds of yrs ( sweden comes to mind ), and although with some hiccups due to human greed, the system always worked and helped the creation of welfare. just look at the nations where credit has been banned ( muslim countries for example, or southern conservative-catholic europe for centuries ) and see how less developed they re compared to the north of the world.
this is a liquidity and credit crisis, not a technology or production crisis.
the world will go on and keep growing, while some paper wealth will be destructed ( whoever owns bonds and banking stocks already knows what im talking about ), which is a good way to transfer money from richer to poorer strata of the society.
how will we grow? dunno, guess 'colonization' of africa, a full continent underdeveloped, we ll drill oil from the artic till the day we ll realize the solar or wind energy will be sufficient for our needs, maybe we ll do like doc in back to the future and fuel our cars with banana skins :-)
technology will help us connect better without having to travel all the times, education will be more freely available, new ways to fight diseases will be found, we ll finally go to the moon and discover is full of metals, i dont have the crystal ball but im sure the world will be very different from what is now; the mistake the human race has always made is to think the status quo is the only world possible.
happy 2012 to all.

Hope you are right Johnny; and technofix is commomg  up any time now. Can we just get it clear wether you are an invisible hand fan. Ie that mankinds just more or less does the right thing and invents the right stuff without thought as if by magic and in the end and there is nothing to get a grip of here.

I am not knocking all of the posys you have mentioned. However there
are a few down sides over the last century of capitalism. 2 world wars millions dead in Russia and China to name but 4. These are not mere bagatelles; are you happy to wave them away as you sail off on your technology dream boat.

I'd be shocked by your "lets exploit africa" plan as if no-one is living there. But I'm not that shocked as China seem to be miles a head on us already on that one.

First of all, welcome back, and a happy 2012 to you too.

Now let me inject some reality into your post that reads like a fantasy novel, complete with a "they lived happily ever after" ending.

the world hasnt got finite resources

This statement is absurd by definition. It's a finite world THEREFORE it has finite resources. The science fiction of going to the moon and finding all kinds of metals (how about oil, do they have oil?) is just that.....science fiction. I imagine bacteria in a petri dish think they don't have finite resources either until the start bumping right up to the glass.

as if we werent able now to pick up oil from under the oceans ( ok ok, with some troubles i admit )

No one said we have run out of oil, only that we have run out of cheap oil. Unless you think we are drilling 5 miles to the ocean floor and other 5 miles into bedrock to get it out just for the hell of it. It's the EROI that will decide this, not availability. But the real issue is that we have built a monetary system that relies on exponential growth to pay the coupon. If you don't understand this simple concept, then you don't understand how the monetary system works. And this exponential growth has all been on the back of cheap oil. Cheap oil is gone. FOREVER. The current system can no longer work. PERIOD.

this is a liquidity and credit crisis, not a technology or production crisis

No one said this is a technology or production crisis, I have no idea where you read that. And this is NOT a liquidity and credit crisis. This a monetary system crisis, triggered through stalled growth, and massive debt overhang (a solvency problem, not a liquidity problem).

how will we grow? dunno, guess 'colonization' of africa, a full continent underdeveloped, we ll drill oil from the artic till the day we ll realize the solar or wind energy will be sufficient for our needs, maybe we ll do like doc in back to the future and fuel our cars with banana skins

You forgot to include green unicorns **** gold bars and rainbow colored skittles.


i dont have the crystal ball but im sure the world will be very different from what is now; the mistake the human race has always made is to think the status quo is the only world possible

There is no return to the status, we have crossed the rubicon. There is no muddle through, the monetary system is a ponzi scheme and all bankers knew that at some point it would fail. But most important of all, there is no miracle technology that will replace the lifeblood of the economy, the support behind the stunning growth we've enjoyed the last 50 years, the key ingredient in just about all things we have (and eat).....OIL.

The jig is up. Get over it.

hi melv
of course we had some bad events in the past, i am not trying to remove them from my optimistic view. but progress in mankind has meant even a progress in the way we fight wars now, civilian casualties are rare and when they happen we all get outraged about them. wars are fought live on cnn, with interviews to the general in command from both parties, carpet bombing dresden style or atomic m'rooms like in hiroshima wont happen again. between the 1st world and 2nd world war only 20 yrs passed by, now we re enjoying a calmer world since almost 70yrs. internet, readiness of information and communication, ease of travel has made the world smaller and (therefore) more united and homogeneous. china and japan were arch enemies?now they sign exclusive trade agreements; france and germany never spent more than 25yrs without fighting agst each other? now they are together taking europe by hand as two caring parents. 
for what concern africa, first i mentioned it quickly en passant, but what i mean is that the planet is stressed but no way near full capacity utilization, if there are still entire continents untapped. china is ahead of the game there? and who said that mankind is britain or the western society?
americas were discovered and first exploited by spain and portugal, north america was a colony...now we have the usa as a superpower and spain and portugal are just some sort of piigs. i repeat, the mistake is to think the status quo is the only possible world!
incidentally this is way i think the west is going down. we re obsessed with the idea of wealth ( or status quo ) preservation ( read this forum, for example ), but no one seems to be obsessed about wealth creation, or progress. i dont want to pick up on someone in particular ( as this forum has become a children playground ). but when a 20something guy who believes in the end of the banking system, prefer to work in a (tesco)bank and accumulate few ounces of silver, rather than give himself a proper education, learn a new trade or profession, start a new business...well that says everything about how lazy, unmotivated and spineless the west has become. luckily ( or not ?) this is not the case everywhere else.

I read as far as this and stopped.

but progress in mankind has meant even a progress in the way we fight wars now, civilian casualties are rare

What planet do you fecking live on?

Are you aware that the most conservative estimates put the number of Iraqi civilian deaths at 300,000?

This brought memories of your (in)famous "it would be calamitous for bank stocks" if the Greek public wasn't pushed into depression and destitute statement. Now I remember why I stopped debating with you.

Feck, this is getting to be a bit too much on here.

arghhhh, why any comment has to become a source of arguments for you? cant you say i agree or i disagree and leave it like that? do we always have to split hairs? 300k ( or 150k probably, depending what you read ) are a huge number, but is it comparable to hiroshima ( considering it s a death toll on a 8 yrs timespan ) or 55million deaths of ww2? is the world showing progress even in the most barbaric activity? i think yes, you think not. lets move on.
about the other bit, i cant recall what you say, do you know what thread was it on so that i can re read. contrary to you, i do have a life ( and some work to do ) outside the forum.

why any comment has to become a source of arguments for you?

The short answer is I hate garbage. Consider it a character flaw of mine when I can't read absurd rubbish like "the world hasn't got finite resources" and keep quiet.

But the last one goes waaaay beyond that. You are considered one of the "enlightened" ones one here, so to shamelessly post government propaganda against all evidence and in complete disregard of the loss of innocent human life is inexcusable.

As always though, your positions change like jello once challenged. So now, it's not that "civilian casualties are rare", they just weren't as bad as say hiroshima, or the great loss of life in a war that engulfed most of europe. This is some backtracking and miles away from your original assertion that now "civilians casualties are rare".

Try telling that to the Iraqi mothers who lost innocent children. Or perhaps those were "brown" children, so who gives a toss.

It's not a life you need, it's an awakening.

wow wow wow, you do need some help. re read my post and try to get the gist of it. war is fought differently these days, fact. i mentioned hiroshima and dresden in the same sentence. by the way, most of the iraqis death are due to suicidal car bombs and not due to americans or british bombing cities like basra or bagdad with no consideration for civilians..trying to see the difference.
anyway, you now want to look like the only one with a consciousness and social awareness. how this new trait of yours fit with the rest that we know for years? i mean, i dont know if you realise, but you do sound racist against whoever dont shop at harrods! take it easy man, and dont take every post as somthing you need to argue against. if you have too much time on our hands, try a new hobby, go out, talk to real people, and dont get obsessed by this forum.
see you in few months, im already bored of this kindergarden.

most of the iraqis death are due to suicidal car bombs and not due to americans or british bombing cities like basra or bagdad with no consideration for civilians


You are truly and utterly totally clueless, brainwashed by government propaganda. RESEARCH the numbers yourself, don't believe what they tell you, and use something you have NEVER been able to display on this forum...CRITICAL THINKING.

Also, never realized that my wife's penchant of shopping at the food court ay Harrod's makes me a racist of all things. That's a new one for my lexicon.

Trust me I'd rather not see you in a few months, I lost whatever little respect I had for you after this round of rubbish you posted.