Berlin Conference
Those Americans interested in attended the WEC, can sign up for Berlin where we can expand the seating. The VAT tax would not apply to non-Europeans.
Goldman Sachs a Target for Hiding Greek Debt?
The story of people starting to look at suing Goldman Sachs over hiding Greek debt is starting to make thepress. We do most certainly live in interesting times. The Independent is now reporting that a leading adviser to debt-riven countries has offered to help Athens recover some of the vast profits made by the investment bank Goldman Sachs at the expense of the Greek people. Let’s see if this materializes after 2015.75.Absence of Socialism v Austerity & Gold Standards
There have been many attempts at creating a gold standard and this notion that money should retain a value yet simultaneously people want to earn more with rising wages and assets values. Even Merkel’s “austerity” is a derivative of this idea that money should be somehow tangible in value yet simultaneously Euroland allows for perpetual debt growth of 3% each year.
Those who believe money should be some store of value fail to grasp that you cannot have money which retains a purchasing power when assets and wages rise. They want to make profits measured in money yet money is to remain the same. This is just insane and you might as well join the Fantasy Island Club. You cannot have austerity and economic growth simultaneously. It is illogical. This fictional idea that austerity is the answer and a gold standard produced periods of economic stability have no support in historical fact.
So why do people believe that when gold coin circulated as money somehow there was no inflation? Was it fact that gold circulated as money, or the fact that socialism and deficit spending did not exist before the Great Depression? Are people distorting history to confuse the majority? This idea of austerity is certainly destroying Euroland. Are we just all living in Fantasy Island?
Previously, gold standards collapsed with time because no matter what system there was, money depreciates in purchasing power with economic expansion. If we assume stability existed was just because of gold, then people will assume returning to a gold standard will somehow restore price stability. An honest review of the past shows there was no such period exists where gold produced a steady growing economy from a stable price perspective. New discoveries of gold sent it value plummeting in purchasing power terms. There was massive waves of inflation even under a gold standard which were the basis of Kondratieff’s cyclical discoveries.
Furthermore, we have to be careful in making these sort of assumptions that are completely wrong and we must also realize that the surrounding facts were different during the 19th century compared to the 20th century. Obviously, the 19th century predates socialism and that charged the economic dynamics. The assumption now under socialism is to rob those who have more and create utopia. That concept did not exist before during these periods of alleged price stability. Government is now an antagonist within the economic mix and ideas of austerity or returning to some gold standard under the modern day socialistic state are just impossible and highly delusion if not lethal.
Can you imagine if everything was converted to gold? The bondholders would love it for this would be a huge profit to them since they would be repaid with dollars that bought more than when they purchased the bonds. Creating a gold standard would be Greece on steroids. Greece was forced to convert their drachma debt to euro and the euro then doubled in value resulting in their inability to repay. The exact same thing would happen by returning to a gold standard.
William Jennings Bryan’s famous speech during the 1896 presidential elections that were anti-gold standard reflected the problem of austerity. Trying to maintain a gold standard created what was clearly deflation.
The difficulty in understanding how the economy functions between deflation and inflation produced the worst depression in American history – the Long Depression between 1873 and 1896. The Great Depression of the 1930s was deeper, but short lived compared to the 19th century. This is what we are faced with in Euroland – a depression of a minimum of 13 years as prices rise, disposable income declines with rising taxation, and lower economic growth.
Is Tsipras an Idiot or a Fool?
The left wing of Syriza Party of Greece is starting to question what Prime Minister Alexis Tsipras is up to. Merkel is demanding that austerity FIRST before any loans. Additional murmurings behind the curtain claim that Merkel wants a list of all assets owned by Greece. If Merkel think that she can seize Greek assets upon a default, she is risking the total collapse of Euroland in short order.
The entire world is now against Merkel and her drive for austerity. There is no possible way she will prevail in Europe for her policies have no end game. All she is doing is trying to support the bondholders at the expense if the public.
There are those with the Syriza Party of Greece who are now calling for resistance against the results of the Euro Summit . It is amazing that Tsipras is betraying the Greek people after calling a referendum. The end game here is looking more and more like a collapse in Euroland ahead.
The Misconception of Deflation v Inflation
Some people have a very hard time understanding that we are in a massive deflationary spiral. Some people think that simply because prices may rise that means it is inflation and not deflation. They only see prices, not disposable income and certainly not economic growth and unemployment. Prices rose sharply following the OPEC oil price hikes. But the sharp rise in energy crowded out other forms of spending so you ended up with rising prices that had nothing to do with a speculative economic expansion, but a deflationary contraction they called STAGFLATION – rising prices and declining economic growth.
This is like Hillary saying vaguely that she will press corporations to raise wages. Great plan which, as always, means absolutely nothing and illustrates she has nothing to offer. Hillary reveals her position that government is never the problem. If you want to raise NET DISPOSABLE INCOME, lower taxes. Raising wages, as she argues corporations should do, will escalate people moving them to higher tax brackets and soon all benefits will come into play with Obamacare. As always, nobdy in government ever talks about reducing the size of government waste and corruption.
Household income will soon be defined as everyone living in the same house – kids and all. Perhaps you will have to pitch a tent and make the kids sleep outside with the dog to avoid “household” income tax increases. The deflation is not the lowering of prices, it is the lowering of economic activity which can also includeSTAGFLATION where prices rise but there is no economic growth. So be very careful. If you only look at prices rising and ignore the fact that your disposable income is declining, you will be in for a very rude awakening.
No comments:
Post a Comment