Month: October 2009

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Quantitative Easing Does Not Mean Inflation

Printing money into the economy would normally precipitate inflation. This isn’t happening and won’t happen because the money isn’t going into the economy. It’s going into the banks. The banks are their own world now, they only interface with the wider economy. If they choose not to use this money as a base to create more money into the broader economy then there will be no inflation as the broader economy has no more money in it. They choose instead to address their own internal problems, applying the printed money to their own self-inflicted wounds. The banks played with fire, and burned the world. Handed the first aid kits to multiply and pass around, they prefer to keep them for themselves.

This will continue for as long as the government chooses to hand over newly-printed money to the banks. In their vaults, they don’t have red ink, they have black holes. The securitisation of debt means it was sliced and diced, reackaged, redistributed so many times it will be impossible to either determine who owns what or how much is actually owed.  The only realistic way to deal with this, then, is to treat it as infinite. That’s impossible. It couldn’t end. We’d be feeding it printed money foever, and it wouldn’t make a dent. This appears to be the Bank of England’s policy though. Hmmm. I suspect this is because they’re utterly clueless about what to actually do and this disguises that fact by making it look like they’re doing something. Everybody fusses about the potential significance of what they’re doing (inviting inflation) but miss the real significance (they have no solution to the ongoing crisis so they’re stalling). They can keep this up forever, and it looks as though they will, but it won’t solve the problems of the economy (which is that it isn’t designed to work for us in the first place) and it won’t precipitate inflation either.

BB

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In The Forest – Economics

The Keynes School of economic thinking, Adam Smith, the Austrian School… all these are what I call “In the forest” economics. We’re here in this forest, so we have to reorder things in our best interest.

I say, no we don’t. We shouldn’t even be considering that at all.

We don’t because this would be like hens in a battery farm trying to reorder things so that the battery farm worked in favour of them, not the farmers. It’s like trying to accept something wholly artificial, contrived, designed specifically to serve the needs of those who built it, as somehow being the natural environment for those imprisoned within it. Just tweak it this or that way, they say, and it’ll be ok. More taxes, less taxes. Different taxes. Occasional taxes. Part-time taxes. Tax reliefs. That’ll fix it, say these economics schools, from deep in the forest. Then it’ll work.

I say that’s nonsense. The system wasn’t designed to work in favour of the people in it, but in favour of the people who run it. We suffer an imposed culture and an imposed econom model. They aren’t ours. They didn’t naturally develop here. They were imposed.

The basic societal model is Roman. We first saw it here when – surprise! – the Romans conquered us. We first saw the national currency then too. This was introduced so we could be taxed. It facilitates trade, true, but over and above, handled right it enriches any party having control over the money supply. That used to be the Romans, now it’s the banks.

Effectively, then, we’re now conquered by the banks, who have lately (in historical terms) resurrected the old Roman economic model. Internationally, too, not just here. It doesn’t matter how you tweak and twiddle this arrangement, adding or subtracting this or that tax. The ultimate beneficiaries are still the banks. No matter what we do, we cannot amend the existing system so it works in our favour. We need “out of the forest” economics, then. This isn’t our forest, this isn’t our system. If we’re going to develop something that works in our favour, in favour of we who live in it, we’re going to need to get out of this one completely.

BB

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Selling England By The Pound

The government propose paying down the National Debt by selling off assets such as the Tote, The Dartford Crossing, the Student Loan Book, etc.

This is wrong in so many ways.

You don’t sell your assets off cheap when you have no money because then you’re left with no assets and no money. It’s financial mismanagment on a colossal scale.

Then there’s the National Debt itself. It shouldn’t exist. It should never have existed. The government ‘borrows’ money from banks that the banks don’t have in the first place. They make it up out of thin air. They do this under license from the government. They then demand to be paid interest on top of the original money. Where is that supposed to come from? It’s clearly impossible. This is what we live in. Ridiculous.

If the government can grant a license to a third party to create money electronically, it can do the same thing itself. It could do it at no interest, and grant it to deserving parties like businessmen, or it could create money at low interest, and similarly grant it to businessmen. Under the first scheme everyone would still have to pay taxes, under the second scheme, arguably we could do away with taxation and simply fund everything needed from the interest repayments.  

Both ideas are mathematically feasible, in fact, many alternatives to the present oppressive system are.

Why do we keep the present one?

It favours the wealthy. They have the reigns of power, and they ain’t giving them up.

Except that they are, because they’ve lost them from their hands. It’s got away from them, they’ve lost control of it all.

They’ve killed the golden goose.

They’ve over-milked the cow.

The fleas have killed the dog.

The parasites – are you getting this? – have killed the host. 

So, it’s over anyway. All this nonsense about this scheme or that scheme the politicians are blathering on about… it’s all just to make it seem like it’s somehow business as usual.

It isn’t.

We face a future we aren’t prepared for and our glorious leaders are trying to pretend isn’t happening.

Be afraid.

Be very afraid.

BB