ROLLING BACK THE LANGUAGE OF ECONOMICS - Part 2 : STIMULUS

Various Western governments have introduced stimulus plans. These measures have also been called 'quantitative easing' (QE) among other things but basically they amount to printing money.

The mirage created with QE is that the central banks created electronic money out of thin air and used that to buy their own government's bonds. These bonds are basically IOUs and in time the governments will have to repay those debts to the central banks with interest. When the payments are recovered the central banks will then electronically destroy the imaginary money.

This process of printing money causes a devaluation of the 'fiat currency' due to the laws of supply and demand. If you make more of it, each piece of it is worth less.

As the majority of all money 'exists' only in a digital form, it can also be argued that what is actually being printed is digital debt.

The problem with introducing a stimulus is that you have to maintain that stimulus for a significant period as global markets take time to react to the change in the economic system. By maintaining that stimulus, the system can become dependent on it. This happens when a sick person is treated with stimulus drugs. They can soon become addicted to the stimulus and side effects appear. The side effects can be harmful. Even more harmful than the original disease.

These unorthodox processes are hitherto untried and untested, and it is only because it is mathematicians offering these 'solutions' to governments and banks that any credibility at all can be given to the process.

WARNING !!! These are the same breed of mathematicians that sold the financial services industry the ideas of complex derivatives including 'securitization of mortgages' and 'credit default swaps'. Watch out for Global Banking Crisis II, coming to a town near you soon.

99ers SET TO TAKE OFF !

In the United States, unemployment benefits are only paid for a maximum of 99 weeks or just less than 2 years.

After that period, that's it. You're on your own.

After the banking crisis of Autumn 2008, unemployment began to soar. Every week the number of unemployed rose. These job losses continued for 55 weeks at a weekly increase of between 50,000 and 200,000 per week.

The worst period was from November 2008 to October 2009. But even since October 2009, the number of new jobs created has never exceeded 50,000 per week.

The net effect of all of the above statistics is that from December 2010 there are likely to be around 50,000 people losing their benefits every week. This figure will get significantly worse up tom around April 2011 when around 200,000 people will lose their benefits every single week.

It remains to be seen what such large numbers of disenfranchised people will do about this over the coming months.

Keep 'em peeled!

GROWTH – The Capitalists’ mantra !

Why does everbody think that 'growth' will save us from our economic woes. I say growth was a major contributor to our current situation.

Growth is bad.
Nature does not like it and neither should we.

Growth kills.
In nature, a differential equation exists that ensures that nett growth equals zero.
Example: Predatory animals need to maintain their body weight within very fine limits to avoid starvation. Too big = too slow. Too small = too weak.

In humans, for weight read wealth.

Humans think they are brighter than nature. Durrrr !

We are dinosaurs !

GDP = Greed, Desperation and Panic.

Because most people are always 'spent out' and more some, the only way to create growth is to increase the number of spenders.

The only way to increase the number of spenders is by redistributing the wealth to create a larger mass of consumers. But that in itself causes sustainability issues.

It’s about time that the mythical concept of growth was abandoned, and redistribution was implemented by governments.

Its a shame that communism happened about 100 years too early. A modern command economy producing solar cells, mass permaculture, EVs etc instead of unwanted tractors and weapons might just work.

Uh Oh !!! Hippy alert.