Are we sleep-walking out of Europe ?
Posted by: Don Atkinson on 09 February 2016
Media interest seems to be focused on the trivial matter of "in-work benefits" to migrant workers from Europe.
Very little informed discussion of the benefits and consequences of us remaining part of Europe v the benefits and consequences of us leaving.
Or am I just not tuning into the appropriate TV channel or overlooking some "White Paper" that is on sale in WH Smith ?
Dr Mark posted:
- a lot of jargon, not a few quite impressive acronyms and one hell of a lot of vitriol directed towards financial institutions and politicians in general
You obviously have quite a chip on your shoulder about bankers and politicians in general, and you certainly are not a fan of low interest rate economies. Something must have triggered this position of yours, but I can't help wondering what you feel is the answer to our predicament. Or are we, as you seem to suggest, simply "doomed", with the BREXIT being one final (very small, you would contest) straw in the overall gloomy apocalypse to come in Europe? - and the rest of the world?
Is there someone in the background who will ride in on a white charger to rescue us, or is the only answer a state of all out anarchy to blow away the "corrupt system" that has brought us to this point?
"And as for "all" bankers - it's the system. If you don't take the big risks you won't keep your job...not that there aren't plenty of self-serving scumbags willing to gamble with other peoples' money in the banking industry".
I take it that you don't like bankers or the Banking Industry. Like I said in my previous post, there are 'good' and 'bad' everywhere you care to look, and there are many financial institutions out there who have always adopted a low risk strategy and who now have a zero appetite for risk in respect of investment strategy. They are certainly not all "self serving scumbags".
I don't know much about the position of banks in the US, but the large banks in the UK are certainly not seriously under-capitalised, although the fallout from BREXIT has made, and will continue to make, a quite significant dent in this respect.
There are a number of statements I would like to query in your last few posts, but can you just clarify one thing for me?
Are the fund managers (whom you don't appear to like very much) part of the problem for buying up "overvalued" bonds? After all, you would have us believe that they have no alternative to doing that, if they want to retain their jobs. So, are they really "self serving scumbags", or are they just innocent puppets in the evil game being played out by the World's central banks and their political cronies?
But seriously, I would be very interested in your view as to how we change things for the better. We really can't resolve our problems by sending all of our politicians and bankers to jail, can we?
I should add that, although sorely tempted, even I wouldn't propose sending Boris Johnson or Michael Gove (and their self serving positions in the BREXIT referendum) to jail for the damage that they have done to the UK and EU economies by their actions.
Now, Nigel Farage? Well, that might be a different matter altogether.
now blame something else apart from themselves.
Pcd posted:The EU economy was in a sorry state before Brexit then I suppose they can
now blame something else apart from themselves.
But, they are us.
We are part of the EU and we're doing OK. (or should that be we WHERE doing OK)
Hmack posted:I should add that, although sorely tempted, even I wouldn't propose sending Boris Johnson or Michael Gove (and their self serving positions in the BREXIT referendum) to jail for the damage that they have done to the UK and EU economies by their actions.
Now, Nigel Farage? Well, that might be a different matter altogether.
I would put all three in Jail, never mind proposing to do so. (and probably a few more to boot)
But it would only be after a proper trial in which lies and deceit were fair game if necessary to secure a conviction.
After all, once the trial is over and they are on their way to jail, we could always simply brush off our lies and deceit with a casual "well, I should never have said that, should I ?", But they would still have to go to jail because..........we made a decision.
HMack - any "chip" is because these people are literally threatening the lives and livelihoods of millions and millions of innocent people, so as to engorge themselves. I have nieces and nephews that I love very much, and I fear for the world they will live in when they are my age.
"We really can't resolve our problems by sending all of our politicians and bankers to jail, can we?" - And why the hell not? If you or I perform a crime and defraud people we would certainly find ourselves getting fitted for an orange jump suit (in the USA anyway...I don't know what prison fashion is across the pond).
After all, the crime that pays is the crime that stays. Why wouldn't they do it again (as they are doing) - there was no down side to the situation 8 years ago and the taxpayers got handed the bill...not to mention the many thousands of fraudulent foreclosures here where the necessary documents for the bank to do what they are doing are illegal, forged documents. This is not an opinion, it is a FACT, because some people are beating the banks on foreclosures now, but it takes a lot of work and knowledge that Joe Average doesn't possess...and the banks know that and are counting on it.
Even people who legitimately bought houses had their life savings wiped out. I myself am an unwilling landlord because the last house I lived in is underwater, and not because I overbought (the house only cost $106,000), or had an exotic, stupid interest only, negative amortization, adjustable rate mortgage - 30 year (or less) fixed is the only way I roll. But if I wanted to sell it I would need to bring about $15K to the table. (Even after making 8 years of payments and having put a decent down payment on it.) So I rent, and keep it afloat that way, losing money overall, and hope that some day I can dump it. Others had it far worse - and lost everything.
I know people who were ready to retire 8 years ago, and after that melt down, had much of their savings wiped out, and are still working now. But banks execs still got their enormous bonuses - everyone screamed about it for 5 minutes and nothing was done. (Hey, what ARE Kim and Kanye up to anyway?) Getting a bonus instead of going to jail is not much of a deterrent from where I sit.
Historically banking was a conservative, "boring" business, but the recent decades have morphed it into something quite other than that, and the Central Bankers appear to really see themselves as "masters of the universe" and in cahoots with politicians take VERY good care of the top 1% (or 2% - whatever) while fleecing the rest of us. One could think of it as a "parasitocracy" - where they serve the needs of the Deep State that truly runs things, and does so to the benefit of its cronies.
The banks here in the US are not in such good shape either; just not as acutely in trouble as the Italian, Spanish, etc banks. That's why I only use B of A for basic paycheck deposit and bill paying - my (meager) savings I keep in a credit union, which is not part of the "regular" banking system, and these institutions are MUCH better capitalized and do not play cowboy with their deposits - more in the old banking mold. (Of course the banks are always lobbying the politicians to hamstring the credit unions with regulations - because it interferes with their game.)
A bank charter is a license to print money because as the politician above stated, banks are able to lend money they never actually had. Quite a racket actually. You have $100, get to lend $1,000, and ostensibly collect 5% interest on $1,000, which really means you got $50 in interest while actually only having $100...so you earned 50% interest on the money you actually had.
And politicians in the USA have been able to spend in unlimited fashion, ever since 1971 when Nixon ended the Bretton Woods agreement. So they spend money they don't have and stick your grandchildren with the bill. That is nothing short of criminal - kids are born into the USA already "owing" tens of thousands of dollars each.
If interest rates floated to where they would based on the laws of supply and demand they would rise significantly, and these governments would already be in default, because the interest alone would sink them - so they screw us to keep themselves afloat.
Most people think that inflation is the price of goods rising. Incorrect. It is the value of your money decreasing, as the central planners overspend, run up too high a debt, and then devalue the currency so as to inflate it away. Then you and I pay more for a car, or a loaf of bread, or a SuperNait...it is a stealth tax. These criminals are desperately trying to gin up inflation because they know they have overplayed their hand.
Pensions can't get yield. Income investors (e.g., retirees) can't get yield. Savers can't get yield. So they can either go further and further into the hole, or they have to take more risk...and take it in a bubble market. Eventually many (most?) will likely get wiped out. But rest assured the blame will be placed on ANYTHING but where it belongs - on reckless, foolish, greedy, crony-driven monetary and fiscal policy. It will be the Brexit. Or Freexit. Or Putin. Or Syria. Or "speculators" (a favorite).
The solution in part is a return to sound money, limiting fractional reserve banking, jailing those who flaunt the system and I think a properly regulated free market economy NOT built on excessive debt.
Problem is, it may be too late. You don't slow down the Titanic after you've hit the iceberg...
And the point is, the Brexit didn't pull the UK out of economic Shangri-La. Far from it. And the world of economics is in uncharted territory right now - no one can say with certainty what exactly or when, but it's all an interconnected house of cards.
What are banks for? (Or, fractional reserve banking explained - DrM)
'Punch' Magazine - 3rd April 1957
Q: What are banks for?
A: To make money.
Q: For the customers?
A: For the banks.
Q: Why doesn't bank advertising mention this?
A: It would not be in good taste. But it is mentioned by implication in references to reserves of £249,000,000,000 or thereabouts. That is the money they have made.
Q: Out of the customers?
A: I suppose so.
Q: They also mention Assets of £500,000,000,000 or thereabouts. Have they made that too?
A: Not exactly. That is the money they use to make money.
Q: I see. And they keep it in a safe somewhere?
A: Not at all. They lend it to customers.
Q: Then they haven't got it?
A: No.
Q: Then how is it Assets?
A: They maintain that it would be if they got it back.
Q: But they must have some money in a safe somewhere?
A: Yes, usually £500,000,000,000 or thereabouts. This is called Liabilities.
Q: But if they've got it, how can they be liable for it?
A: Because it isn't theirs.
Q: Then why do they have it?
A: It has been lent to them by customers.
Q: You mean customers lend banks money?
A: In effect. They put money into their accounts, so it is really lent to the banks.
Q: And what do the banks do with it?
A: Lend it to other customers.
Q: But you said that money they lent to other people was Assets?
A: Yes.
Q: Then Assets and Liabilities must be the same thing?
A: You can't really say that.
Q: But you've just said it! If I put £100 into my account the bank is liable to have to pay it back, so it's Liabilities. But they go and lend it to someone else and he is liable to have to pay it back, so it's Assets. It's the same £100 isn't it?
A: Yes, but..
Q: Then it cancels out. It means, doesn't it, that banks haven't really any money at all?
A: Theoretically..
Q: Never mind theoretically! And if they haven't any money, where do they get their Reserves of £249,000,000,000 or thereabouts??
A: I told you. That is the money they have made.
Q: How?
A: Well, when they lend your £100 to someone they charge him interest.
Q: How much?
A: It depends on the Bank Rate. Say five and a-half percent. That's their profit.
Q: Why isn't it my profit? Isn't it my money?
A: It's the theory of banking practice that...
Q: When I lend them my £100 why don't I charge them interest?
A: You do.
Q: You don't say. How much?
A: It depends on the Bank Rate. Say a half percent.
Q: Grasping of me, rather?
A: But that's only if you're not going to draw the money out again.
Q: But of course I'm going to draw the money out again! If I hadn't wanted to draw it out again I could have buried it in the garden!
A: They wouldn't like you to draw it out again.
Q: Why not? If I keep it there you say it's a Liability. Wouldn't they be glad if I reduced their Liabilities by removing it?
A: No. Because if you remove it they can't lend it to anyone else.
Q: But if I wanted to remove it they'd have to let me?
A: Certainly.
Q: But suppose they've already lent it to another customer?
A: Then they'll let you have some other customers money.
Q: But suppose he wants his too..and they've already let me have it?
A: You're being purposely obtuse.
Q: I think I'm being acute. What if everyone wanted their money all at once?
A: It's the theory of banking practice that they never would.
Q: So what banks bank on, is not having to meet their commitments?
- YOU GOT IT!
Absolutely stunning summing up of the root cause of the world's financial woes..................apparently published in 1957, how accurately prophetic this is.
The media is full of concerns over the UK's economy, apparently at it's lowest since the last worldwide financial crash, with brexit being linked as the root cause.
Do folk not appreciate that there's big money to be made by the corporate options investors, whichever way the markets and currencies move....................often controlled by these same money men..........and women...........(Christine Lagarde, head of the much respected!!! IMF, you've been found out, and you will be required in court soon)
One only has to look at the solvency positions of many of the players in the European banking system, (whilst most UK banks are, thankfully, not in the poo to the same extent), to realise that the blame lies firmly with the Shylocks who have consistently put profit above all else. 
DrMark posted:What are banks for? (Or, fractional reserve banking explained - DrM)
'Punch' Magazine - 3rd April 1957
Q: What are banks for?
A: To make money.
Q: For the customers?
A: For the banks.
Q: Why doesn't bank advertising mention this?
A: It would not be in good taste. But it is mentioned by implication in references to reserves of £249,000,000,000 or thereabouts. That is the money they have made.
Q: Out of the customers?
A: I suppose so.
Q: They also mention Assets of £500,000,000,000 or thereabouts. Have they made that too?
A: Not exactly. That is the money they use to make money.
Q: I see. And they keep it in a safe somewhere?
A: Not at all. They lend it to customers.
Q: Then they haven't got it?
A: No.
Q: Then how is it Assets?
A: They maintain that it would be if they got it back.
Q: But they must have some money in a safe somewhere?
A: Yes, usually £500,000,000,000 or thereabouts. This is called Liabilities.
Q: But if they've got it, how can they be liable for it?
A: Because it isn't theirs.
Q: Then why do they have it?
A: It has been lent to them by customers.
Q: You mean customers lend banks money?
A: In effect. They put money into their accounts, so it is really lent to the banks.
Q: And what do the banks do with it?
A: Lend it to other customers.
Q: But you said that money they lent to other people was Assets?
A: Yes.
Q: Then Assets and Liabilities must be the same thing?
A: You can't really say that.
Q: But you've just said it! If I put £100 into my account the bank is liable to have to pay it back, so it's Liabilities. But they go and lend it to someone else and he is liable to have to pay it back, so it's Assets. It's the same £100 isn't it?
A: Yes, but..
Q: Then it cancels out. It means, doesn't it, that banks haven't really any money at all?
A: Theoretically..
Q: Never mind theoretically! And if they haven't any money, where do they get their Reserves of £249,000,000,000 or thereabouts??
A: I told you. That is the money they have made.
Q: How?
A: Well, when they lend your £100 to someone they charge him interest.
Q: How much?
A: It depends on the Bank Rate. Say five and a-half percent. That's their profit.
Q: Why isn't it my profit? Isn't it my money?
A: It's the theory of banking practice that...
Q: When I lend them my £100 why don't I charge them interest?
A: You do.
Q: You don't say. How much?
A: It depends on the Bank Rate. Say a half percent.
Q: Grasping of me, rather?
A: But that's only if you're not going to draw the money out again.
Q: But of course I'm going to draw the money out again! If I hadn't wanted to draw it out again I could have buried it in the garden!
A: They wouldn't like you to draw it out again.
Q: Why not? If I keep it there you say it's a Liability. Wouldn't they be glad if I reduced their Liabilities by removing it?
A: No. Because if you remove it they can't lend it to anyone else.
Q: But if I wanted to remove it they'd have to let me?
A: Certainly.
Q: But suppose they've already lent it to another customer?
A: Then they'll let you have some other customers money.
Q: But suppose he wants his too..and they've already let me have it?
A: You're being purposely obtuse.
Q: I think I'm being acute. What if everyone wanted their money all at once?
A: It's the theory of banking practice that they never would.
Q: So what banks bank on, is not having to meet their commitments?
- YOU GOT IT!
Nice 
.....but a bit long-winded and coming from Punch, might be better placed in the "Best Jokes" thread. But thanks. Really.
Those of us who have seen Mary Popins, know just how easy it is to create a "Run" on a bank. You've only got to demand "Tuppence" in a big loud voice and of course every investor will immediately demand all their money back and the system collapses.
Of course here in the UK about 8 years ago, IIRC it started with a "run" on Northern Rock.
And we all know that lending money to Banks or the Government will never see your investment grow in real terms. They are relying on inflation to pay you back with something worth less than you lent.
Providing everybody is "reasonable" the system sort of works. Everything in moderation.
But where is moderation these days ?
We can all hope that Spielberg will make a decent movie out of it ! Something like BREXITAGEDDON.
TOBYJUG posted:We can all hope that Spielberg will make a decent movie out of it ! Something like BREXITAGEDDON.
BREXIT AGED DON.
You're telling me somebody's going to make a movie about me ?
I know I am biased and vexed. That’s no excuse. Leave won. Not fairly or squarely. But they won. And democracy demands that we Leave.
If only it were that simple. If only, since the referendum result, we had been showered with enthusiastic reminders of all the good times ahead. But if we have been I must have missed them each and every day. So what is this Government doing ?
The leave campaign was championed on a number of differing fronts. These ranged from a complete and utter withdrawal from the EU with absolutely no further EU immigration at all and (consequently) no Trade Agreement with the EU – I think Farage and Gove were in this group.
Others favoured a less traumatic departure, with Trade Agreements and possibly controlled immigration. Whilst yet others were promoting the concept of a Trade Agreement with free movement of EU Citizens to/from the UK.
Similar arguments prevailed over existing EU “Rules” with some wishing to abandon the European Court of Justice and others leave the European Court of Human Rights.
In summary, the c.17m Leave Voters cast their votes on a wide range of future scenarios.
The c.16m Remain Voters were cast largely on the basis of the Status Quo.
The PM and Government appear to be aiming for a Leave Scenario based on a Trade Agreement, Free Movement of People but leaving the ECoHR and (inevitably) the ECoJ
Whichever combination of options the Government takes, they will not deliver a large proportion of the Voting Population’s expectations.
Let me be generous and suggest that their combination of options will meet about 1/3 of the Leave Voter’s expectations (and virtually none of the expectations of the Remain Voters hopes)
ISTM that the Government is deliberately moving to a situation where 5/6 of the voting population is going to be disappointed or even angry. This doesn’t seem to me to be a sensible plan.
Comments welcome !
Don Atkinson posted:The PM and Government appear to be aiming for a Leave Scenario based on a Trade Agreement, Free Movement of People but leaving the ECoHR and (inevitably) the ECoJ
Don - I don't think the "plan" is even that coherent - and I still think that getting out of free movemnt in some form will need to be delivered. There will be various things floated for some time yet that probably won't come to fruition.
Nothing to disagree with there, Don. I can only add as an utterly choked Remainer that, fairly soon after the referendum result was declared, Angela Merkel stated (I paraphrase), The EU cannot be cherry-picked, you cannot have access to the single market without free movement of people.
I can't see this playing well in the tabloids and the Maily Telegraph. Trouble ahead, as you say.
C.
Chris Dolan posted:Don Atkinson posted:The PM and Government appear to be aiming for a Leave Scenario based on a Trade Agreement, Free Movement of People but leaving the ECoHR and (inevitably) the ECoJ
Don - I don't think the "plan" is even that coherent - and I still think that getting out of free movemnt in some form will need to be delivered. There will be various things floated for some time yet that probably won't come to fruition.
Hi Chris,
Yes, I agree, it's a bit early yet for a "Plan". That will take time to develop and to test the "water" so to speak. No point having an exit plan that can't really be implemented by mutual agreement within the EU. My point being, that whatever the "Plan" turns out to be, an awful lot of Leave Voters are going to be disappointed.
As for "Free Movement" I would have thought that numbers of voluntary migrants would substantially reduce when (or indeed if) their right to benefits ceased. I presume that the tapering off of benefits for a few years as "negotiated" pre-referendum by Cameron would simply evaporate to the point where no benefits were made available, or at least the "reduced" benefits that Cameron negotiated would apply indefinitely.
I think your analysis is pretty fair, Don. However while some who voted leave did so for clear reasons, and those reasons vary, I think it also true that quite a few voted leave as something of a protest vote, being fed up with the current class of leading politicians which across party lines all favoured the status quo. I suspect most of those 'protest' voters had no clear idea of what they wanted from 'leave' so I also suspect they won't be satisfied with how it turns out. If the opposition parties get their act together by the time of the next general election it will be interesting to see if any try to reach out to that group and create a manifesto for the disaffected, rather as I think Trump is trying to do with seemingly (scarily?) some success in the USA.
Christopher_M posted:Nothing to disagree with there, Don. I can only add as an utterly choked Remainer that, fairly soon after the referendum result was declared, Angela Merkel stated (I paraphrase), The EU cannot be cherry-picked, you cannot have access to the single market without free movement of people.
I can't see this playing well in the tabloids and the Maily Telegraph. Trouble ahead, as you say.
C.
Hi Chris,
I agree. I'm pretty sure TM (the PM) is moving in the direction of a Trade Agreement plus the Free Movement of people. This will not go down too well with Gove, Farage and their Voters. And hence my point that whatever she does, the vast majority of Voters are going to be disappointed (pi**ed off as they say). In this particular scenario, she is only going to please (say) about 1/3 of the Leave Voters - and nobody else !
Not a good position when facing a general election. So who is going to follow-on and take the negotiations forward assuming the Conservatives as we know them, don't win the next election. Step forward Diane Abbot and Jeremy Corbyn, or...............?
As you say, Trouble Ahead !!
I do wish some "Leavers" would chip in and cheer us all up by drawing our attention to all the benefits that lie ahead in this brave new world of ours...................please ?
My post crossed with yours, Don. It seems were thinking along the same lines.
MDS posted:I think your analysis is pretty fair, Don. However while some who voted leave did so for clear reasons, and those reasons vary, I think it also true that quite a few voted leave as something of a protest vote, being fed up with the current class of leading politicians which across party lines all favoured the status quo. I suspect most of those 'protest' voters had no clear idea of what they wanted from 'leave' so I also suspect they won't be satisfied with how it turns out. If the opposition parties get their act together by the time of the next general election it will be interesting to see if any try to reach out to that group and create a manifesto for the disaffected, rather as I think Trump is trying to do with seemingly (scarily?) some success in the USA.
Good points there Mike.
Seems like some of us looking further ahead the implementation of Article 50.
MDS posted:My post crossed with yours, Don. It seems were thinking along the same lines.
yes Mike, on both counts.
And Chris as well.
DrMark posted:HMack - any "chip" is because these people are literally threatening the lives and livelihoods of millions and millions of innocent people, so as to engorge themselves. I have nieces and nephews that I love very much, and I fear for the world they will live in when they are my age.
"We really can't resolve our problems by sending all of our politicians and bankers to jail, can we?" - And why the hell not? If you or I perform a crime and defraud people we would certainly find ourselves getting fitted for an orange jump suit (in the USA anyway...I don't know what prison fashion is across the pond).
After all, the crime that pays is the crime that stays. Why wouldn't they do it again (as they are doing) - there was no down side to the situation 8 years ago and the taxpayers got handed the bill...not to mention the many thousands of fraudulent foreclosures here where the necessary documents for the bank to do what they are doing are illegal, forged documents. This is not an opinion, it is a FACT, because some people are beating the banks on foreclosures now, but it takes a lot of work and knowledge that Joe Average doesn't possess...and the banks know that and are counting on it.
Even people who legitimately bought houses had their life savings wiped out. I myself am an unwilling landlord because the last house I lived in is underwater, and not because I overbought (the house only cost $106,000), or had an exotic, stupid interest only, negative amortization, adjustable rate mortgage - 30 year (or less) fixed is the only way I roll. But if I wanted to sell it I would need to bring about $15K to the table. (Even after making 8 years of payments and having put a decent down payment on it.) So I rent, and keep it afloat that way, losing money overall, and hope that some day I can dump it. Others had it far worse - and lost everything.
I know people who were ready to retire 8 years ago, and after that melt down, had much of their savings wiped out, and are still working now. But banks execs still got their enormous bonuses - everyone screamed about it for 5 minutes and nothing was done. (Hey, what ARE Kim and Kanye up to anyway?) Getting a bonus instead of going to jail is not much of a deterrent from where I sit.
Historically banking was a conservative, "boring" business, but the recent decades have morphed it into something quite other than that, and the Central Bankers appear to really see themselves as "masters of the universe" and in cahoots with politicians take VERY good care of the top 1% (or 2% - whatever) while fleecing the rest of us. One could think of it as a "parasitocracy" - where they serve the needs of the Deep State that truly runs things, and does so to the benefit of its cronies.
The banks here in the US are not in such good shape either; just not as acutely in trouble as the Italian, Spanish, etc banks. That's why I only use B of A for basic paycheck deposit and bill paying - my (meager) savings I keep in a credit union, which is not part of the "regular" banking system, and these institutions are MUCH better capitalized and do not play cowboy with their deposits - more in the old banking mold. (Of course the banks are always lobbying the politicians to hamstring the credit unions with regulations - because it interferes with their game.)
A bank charter is a license to print money because as the politician above stated, banks are able to lend money they never actually had. Quite a racket actually. You have $100, get to lend $1,000, and ostensibly collect 5% interest on $1,000, which really means you got $50 in interest while actually only having $100...so you earned 50% interest on the money you actually had.
And politicians in the USA have been able to spend in unlimited fashion, ever since 1971 when Nixon ended the Bretton Woods agreement. So they spend money they don't have and stick your grandchildren with the bill. That is nothing short of criminal - kids are born into the USA already "owing" tens of thousands of dollars each.
If interest rates floated to where they would based on the laws of supply and demand they would rise significantly, and these governments would already be in default, because the interest alone would sink them - so they screw us to keep themselves afloat.
Most people think that inflation is the price of goods rising. Incorrect. It is the value of your money decreasing, as the central planners overspend, run up too high a debt, and then devalue the currency so as to inflate it away. Then you and I pay more for a car, or a loaf of bread, or a SuperNait...it is a stealth tax. These criminals are desperately trying to gin up inflation because they know they have overplayed their hand.
Pensions can't get yield. Income investors (e.g., retirees) can't get yield. Savers can't get yield. So they can either go further and further into the hole, or they have to take more risk...and take it in a bubble market. Eventually many (most?) will likely get wiped out. But rest assured the blame will be placed on ANYTHING but where it belongs - on reckless, foolish, greedy, crony-driven monetary and fiscal policy. It will be the Brexit. Or Freexit. Or Putin. Or Syria. Or "speculators" (a favorite).
The solution in part is a return to sound money, limiting fractional reserve banking, jailing those who flaunt the system and I think a properly regulated free market economy NOT built on excessive debt.
Problem is, it may be too late. You don't slow down the Titanic after you've hit the iceberg...
And the point is, the Brexit didn't pull the UK out of economic Shangri-La. Far from it. And the world of economics is in uncharted territory right now - no one can say with certainty what exactly or when, but it's all an interconnected house of cards.
Dr Mark,
Your summary above, and in particular your reference to miss-selling of mortgages and foreclosures on a massive scale following the financial crash eight years or so ago simply has no parallel in terms of scale in the UK, and probably not anywhere else in Europe either. You may have a grievance on this count in the US, but I don't think you can attribute similar blame on the banks and politicians on a global scale.
"Most people think that inflation is the price of goods rising. Incorrect. It is the value of your money decreasing, as the central planners overspend, run up too high a debt, and then devalue the currency so as to inflate it away. Then you and I pay more for a car, or a loaf of bread, or a SuperNait...it is a stealth tax. These criminals are desperately trying to gin up inflation because they know they have overplayed their hand".
Now I am slightly confused. Inflation is the price of goods rising! (or even the value of money decreasing - I really don't care how you care to view it). However, my understanding is that the central banks in the UK and Europe are doing their level best to keep inflation low, and not "gin up inflation" as you suggest above. The people who have a legitimate grievance about this situation are those who rely on their savings, and reasonably high associated interest rates as an income, or to supplement their pensions.
I guess there are too many political, financial and cultural differences between the US and the UK & Europe for our debate to make very much sense to either of us.
Strange. You may deduce from my position in a number of my posts that I am an admirer of politicians and bankers. Well, I can tell you that is certainly not the case. I view many politicians (not all) with the same disdain as I view most of the tabloid press. I also think that the reward system (in respect of both salaries bonuses) for banking executives is obscenely high in proportion to the reward that most of the banking personnel are granted. However, this is not unique to the financial sector. It applies across the board in most corporate organizations.
I agree that something has to be done about this, but unfortunately the prospect of a political party that is willing to take some action on this coming to power in the foreseeable future is remote in the UK. It is non existent in the US. The prospect of Donald Trump getting into power in the US is far a more frightening prospect to me, and I would hazard a guess, to most of the free world than the UK withdrawing from the EU.
Don - I thought at the time that your original post was fairly pointless, because I thought there was no chance of a referendum coming out in favour of BREXIT. Unfortunately, I got it completely wrong. Your fears were proven to be justified and we have indeed "sleep-walked" out of the EU. Sad, sad times!
I also thought (once he had announced his candidacy) that the possibility of Donald Trump getting anywhere near the White House was virtually non existent. I thought that there was no way that this person could possibly be the choice of the Republican Party, let alone the majority of people in the US. Unfortunately, now that he has won the Republican nomination I am beginning to have my doubts.
I normally would not comment on election matters in another country, but in this case I will make an exception. In the event that Trump comes to power in the , we "ain't seen nuthin' yet" The adverse effect on the state of the Global financial markets and economies will make BREXIT look like a walk in the park.
What 'exciting' (a euphemism for many more appropriate adjectives) times we live in!
Holy smokes - I don't have time to answer every point, but I'll try to summarize the problem:
In terms of an economic crisis, debt is pretty much debt. It can be US mortgages (which remembered were securitized & sold all over the world to things like a Norwegian Teachers' Pension Fund, etc) or anything else - and in addressing the US mortgage issue, they have literally emptied their guns - the only card they know how to play has already been played as hard as they practically know how and the situation is not responding. So they borrow even more, and more bogus money (more correctly "currency units" - by expanding credit)...floods the system. But much of the money (like a s**t load of it) is NOT GOING TO GET PAID BACK - it's gone. And these central banks are on the hook for a lot of it..and adding to that ferociously all the time now.
With all the "money" (i.e., credit) we should have seen massive inflation, but very little has occurred - some consumer goods (including Naim), but commodities are at long term lows and have been for a while. They need inflation to inflate away as much of the debt they have accumulated as possible. Bu the economy is stagnant - what they have done hasn't gotten things moving - so they print more money, and buy more bonds with it, and still nothing is happening. Their balance sheets have exploded, and their capitalization ratios are horrible...and much of that which is currently counted as an ":asset" on the balance sheet is actually going to be worth nothing in the end.
And the bond market is overheated, and yielding negative...and none of this is going to end well. You can take that to the bank, as it were.
All a currency represents is a measuring stick where the increments or units of measure are not static. It is from currency that we get inflation - high prices are the symptom, not the disease.
Central Bankers and their political cronies HATE deflation more than anything. (Of course, they don't want real high inflation either, but given the choice they will choose that any day over deflation. See many recent examples.) Because they are short the currency (by being incredibly in debt) they cannot afford to go into debt further by having to pay back "dollars" (it's a measuring stick, remember?) that are worth more than the ones they borrowed...or they will default.
The United States government is already $60 TRILLION in debt - that figure right from the US Treasury's own paperwork...no "tin foil" conspiracy theory - it is a published fact. The EU is similarly indebted, and their own regulations were supposed to limit the amount of QE but Draghi has openly stated he will "take extraordinary means" to prevent deflation. The bond markets are WAY overheated - it's just the US mortgage crisis, only on the steroids of being countries instead of companies...and many companies are going to get wiped out too...there is SO much bad credit all over the financial markets.
There is a ton more I would write but I just don't have time - again, the Brexit is not going to be the cause of the UK's woes - this impending disaster will be, and it is going to take place with or without you in the EU, and the EU will likely feel it as much or more than anywhere in the world. I am actually in favor of an EU - just not the one that exists at present...which as an aside appears to have as part of its unwritten charter advancing US State Dept foreign policy interests I might add.
And FWIW, on the economics, I hope I'm wrong - bit I don't see how, and neither do a lot of other smart people who aren't puppets of the system like much of the MSM financial news.
Tump would be a disaster, but he'll never get elected (of course I thought there would never be a Brexit). Anything bad you could say about him I will agree. But DON'T think that Clinton is any better - anyone who thinks so clearly doesn't know who is running her and whose bidding she will do. She will be a foreign policy disaster - and the war will take place on YOUR doorstep, not the US'. We have 2 people running who shouldn't be allowed with a mile of the Oval Office. It's the most depressing thing in current events ever. Human garbage of the first order both of them.
Good night HMack - have a good Monday.
Bit of a long shot, but Owen Smith says if he get's the Labour Party Leader job,
and there is a General Election later this year,
he will have an EU re-vote if Labour wins and he becomes PM...
Two chances there i think, no chance and fat chance, but it has to be said; an EU re-vote would be a silver bullet cure to escape from the tremendous mess the fluke Leave win vote has triggered.
Debs
naim_nymph posted:Bit of a long shot, but Owen Smith says if he get's the Labour Party Leader job,
and there is a General Election later this year,
he will have an EU re-vote if Labour wins and he becomes PM...
Two chances there i think, no chance and fat chance, but it has to be said; an EU re-vote would be a silver bullet cure to escape from the tremendous mess the fluke Leave win vote has triggered.
Debs
That would be absolutely fantastic, but unfortunately, far 'too good to be true'.
There's very little chance of an election taking place at all this or next year, let alone an election that can be won by the Labour Party.
Still, I got the BREXIT result totally wrong, and I got the meteoric rise of Donald Trump completely wrong. Let's hope I manage the hat-trick, and I am also completely wrong about the prospect of a Labour Party win at a General Election later this year.
Somehow, I think we are clutching at straws.
Hmack posted:naim_nymph posted:Bit of a long shot, but Owen Smith says if he get's the Labour Party Leader job,
and there is a General Election later this year,
he will have an EU re-vote if Labour wins and he becomes PM...
Two chances there i think, no chance and fat chance, but it has to be said; an EU re-vote would be a silver bullet cure to escape from the tremendous mess the fluke Leave win vote has triggered.
Debs
That would be absolutely fantastic, but unfortunately, far 'too good to be true'.
There's very little chance of an election taking place at all this or next year, let alone an election that can be won by the Labour Party.
Still, I got the BREXIT result totally wrong, and I got the meteoric rise of Donald Trump completely wrong. Let's hope I manage the hat-trick, and I am also completely wrong about the prospect of a Labour Party win at a General Election later this year.
Somehow, I think we are clutching at straws.
Indeed, but please don't give up. Keep trying to think of possibilities.Something might emerge. Consider the following three examples :-
- Parliament is duty-bound (I think) to consider the c.4 million petition for a second referendum. A second referendum won't happen, but something might emerge.
- A group of lawyers is trying to force the Government to debate "Leave", taking into account other factors as well as the referendum Vote. They argue that only with an Act of Parliament should Article 50 be triggered. Again something might emerge.
- The Poison Dwarf might somehow block or frustrate a move to Leave.
I think public pressure and making sure your MP knows the depth and strength of your views might, just might, help tip the balance. But for sure, if we all just quietly moan in the background, Brexit will go ahead despite clear knowledge of the dire consequences.