Starve The Bastards......

For many years we have all reached a resigned indifference to the way inflation figures are manipulated to suit the masters of the day. The end result is that GDP growth is overstated and adjustments to wages and pensions muted. This same scenario is now being witnessed with the unemployment figures. On the face of it unemployment is still below 10% but if measured in the same way as it was under administrations gone by it ranges from 15-20% in the USA.

Few things seem to be measured with any modicum of honesty these days. To make matters worse the deluge of "information" makes it difficult for us to separate the spam from the ham and our journey from the womb to the tomb seems to be taken in a hybrid vehicle that resembles a cross between a supermarket trolley and a trash can.

The deluge of information and the speed at which it is pouring out through the press, the television, the internet and the mail box (to name but a few sources) has reached the point that the masses rarely have the time to question its veracity. This same technique has been used with increasing propensity throughout the ages when it comes to the creation of paper and base metal money which unfortunately has been equated with wealth.

The addition of increasing quantities of tin to Roman coinage is well documented as are the inflationary outcomes of those actions. What makes the current economic crisis much deeper is that the fruits of the printing press have been distributed into the system by way of additional debt which together with the mechanism of credit creation has led to multiple layers of indebtedness which lack either the corresponding asset value and/or the cash flows to sustain the initial production of counterfeit wealth which craves interest payments from the borrowers. Individuals have been happy to borrow simply because they were allowed to and big investors were happy to buy mutton dressed as lamb because of the Gucci tags of CDO, SIV etc etc etc attached to them.

Everything in our society now revolves around promises that cannot be kept. Borrowers cannot keep their promises to service loans. Governments cannot with any measure of certainty make good on unfunded liabilities. The US cannot guarantee the Chinese that the value of their US dollar holdings will not be devalued and even worse it knows that it can never repay the Chinese the debt owing with anything of value. This goes on and on because virtually everything has been predicated on the availability of debt with no corresponding provision of real wealth as collateral. If China lent the USA its trade balances in return for a mortgage over Alaska, do we honestly believe that things would be where they are now? Furthermore, if someone could provide us with the figure for total trade debtors in the US economy one will see how business itself further stoked the fires of credit creation which in turn gave rise to a proliferation of unsound businesses and questionable business practices.

The promise of real economic growth, unemployment under 5%, pensions and free medical cover is a lie. If you believe this then you will also believe that wars will end, that famine will end and that Wall Street will become a charitable foundation for the poor.

Why can't they make promises that can be kept such as higher interest rates, higher taxes, restricted medical services, worthless pensions and more war? Well we know the answer to that and we know that those sorts of promises do not win votes.

The bottom line is that if we can't do something for ourselves, then neither can government when it comes to our wealth and well being.

That is why so many writers before me have recommended the standards set by gold and silver. They are not promises. They are realities that cannot be extinguished, duplicated or replaced by time or man. They require no valuation. It is all else that requires valuation.

Throughout the last decade the elixir of lower interest rates has been nothing more than the equivalent of universities lowering their entrance scores. There will be joy on the day of admission (loan approved) and even more joy on graduation day (loan spent) but when little Johnny operates on you, or starts to manage your pension plan; the joy quickly turns to grief.

Governments are now owned by corporations. Gone are the high ranking civic minded public servants of yesteryear. They are now replaced by publically funded corporate mercenaries that no longer answer to their constituency.

If anyone ever asks why Goldman Sachs et al do what they do, then the answer is simple; because they can and because they can get away with it. They are no different to most other people who commit crimes or misdemeanours or acts of dishonesty or unfaithfulness simply because they thought they would not be caught or punished.

Whether the current system is capitalism gone wild or socialism/Nazism creeping in, is irrelevant. The outcome either way is not civilized.

The only way to starve the bastards and save civilization is to deny them their two basic needs which are the creation of more debt onto the shoulders of the average Joe Blow and the mindless spending on items that have no value beyond the need for instant gratification. As I told my children some time ago, "the system is not interested in you unless you borrow or spend. If you are interested in the health of the system as well as your own well being, be careful what you borrow and how you spend."

Unfortunately the smoke and mirrors acts have convinced people that as individuals they are powerless. The truth is that we only need a critical level of mass consciousness to change things for the better. It won't be easy and it won't be perfect....but it will be better. In the meantime I still dream of the day that the bright but twisted minds of Wall Street will devise outcomes that do credit to their teachers and justice to their communities. In the meantime rest assured that all bailout and stimulus efforts are not for the purpose of restoring prosperity but only for the purpose of retaining power and prosperity in certain hands.

Until then....dum spiro spero.