Wednesday, December 12, 2012

Links 12/12/2012

- MUST READ: Apple to Relaunch Manufacturing in US, Net Result +200 Jobs; Lights Out 

- PRINT MORE MONEY - the new head of BOE, a former Goldman Sachs executive, is already hinting at more QE

- Cox and Archer: Why $16 Trillion Only Hints at the True U.S. Debt. What cannot be repaid, won't.

- Recovery? What recovery? The US trade deficit increased in Octobe.

- Only In California: School Owes $1 Billion On $100 Million 'PayDay' Loan. Actually, the worst part of it is that it's NOT just California...

- Bolton grandfather sets himself on fire after amassing secret loans and credit card debts of £150,000

- Chart: Unsold Cars Are Piling Up, Mainly American Ones

- Acquisitions/Monopolies forming everywhere: Delta Buys Virgin Atlantic Stake for $360 Million

Chevron’s standing order: no sitting down on the job (in order to increase productivity)

- Work till you drop- Stakhanov style: Putin Restores Worker Award of Soviet Era  SEE ALSO

- Welfare, like everything else, is AN INVESTMENT. For example, noone wants to give away hi money to someone who is going to spend it on drugs and alcohol, because that would be "a bad investment". But if someone needs some money in order to get back on his feet, start a business that is, at least in theory, a good one, then it would be "a good investment" to give him some money, as part of "the welfare state". The problem today, from a capitalist's point of view, is that we have many people who have no jobs and are receiving free benefits that are coming out of our pockets, but these people have no chance of finding a job, or starting a business of their own. So, the "welfare state" looks like "a bad investment". Check this out: "she is better off on benefits" and would not get a job unless she could continue her luxury lifestyle". SEE ALSO: Free phones and internet access for the unemployed

- The Internet Is a Dud

- Capitalism is about taking risks, you invest resources (time, money, labor, energy, physical resources, etc), and if there is a demand for the product you produce, then you will do well. If not, you will go bankrupt. At least that's the "free-market" version of capitalism, which of course doesn't last long, because sooner or later, monopolies start forming, and since they can control the market, they can enforce their will on the rest without much risk. Still, taking a chance is an integral part of capitalistic growth, and without it there can be no growth: Japan's Fear of Risk Is Getting Dangerous

- China is buying up every hard asset it can find: PetroChina to buy BHP's stake in Browse LNG project  

- U.S. warns Russia about fronting for Iran banks in SWIFT Only problem is Russians don't care what America thinks, and they don't care about violating the embargo any more.

- Rosneft -TNK Deal Nears Completion - Rosneft will control 1/3 of crude output in Russia

- China's New MIRV Ballistic Missile Is A Big Deal

- Africa is growing/intergrading into the global market - there is even a monopoly board game to prove it :-) As in all the developed capitalistic countries, Africa now is run by a few oligarchs, and this is why the classic board game of monopoly can now be applied to Africa as well.

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Monday, December 10, 2012

Links 12/10/2012

- Let's print some more money! That will certainly solve all of our problems, right? Central Banks Ponder Going Beyond Inflation Mandates.
Just a quick note on 'money' (=currency) creation: If the newly created currency corresponds to newly created wealth, then, this is NOT inflationary, because the newly printed money are NOT printed "out of thin air". So long as there is growth/production of new wealth, there are more products (which are also of higher value), and there is more and more 'specialized labor', for maximized productivity (the more 'specialized' you are at something, the more productive you are at it). So, this leads to more trade transactions (because there a re more products), and a lot of these new transactions are about products of higher value (for example a new computer has higher value than an old one, it is 'better') ==> As a result, it is logical to create new currency, in order to complete these new transactions (we are talking about a capitalistic society obviously).
Today, we live in an era where everyone is printing 'money' by the trillions, without it corresponding to increased production of wealth. This is the very definition of 'inflating one's currency', and states around the world, especially in the West, have no intention of stopping (why would they? Money-printing is the only way for them to save the bankrupt banks and impoverish the) workers ==> People will stop accepting payment in a currency that is constantly being devalued ==> Hyperinflation.

- World risks fresh credit bubble, Switzerland's BIS warns
Foodstamps Soar By Most In 16 Months: Over 1 Million Americans Enter Poverty In Last Two Months

- Protectionism is on the rise: Tit-for-tat, EU takes Argentina to WTO SEE ALSO: Russia Sticks a Fork in U.S. Pork

- Car plants are shutting down in Europe (because less and less people can buy a car there), BUT the opposite is true for China, where more and more people can afford to buy a car.

- China spent record $57.2bn on outbound acquisitions this year - China has a lot of dollars, that are constantly depreciating in value, so it prefers to spend them in buying HARD assets (gold, energy resources, etc. SEE ALSO:
Huawei Sets Up in Nokia's Back Yard
AIG to sell up to 90 percent of ILFC to Chinese group

- Turkey is not affected by the embargo on Iran Turkeydoes not comply with the US-Western embargo unilaterally imposed on Iran, America's influence is fading away, no?

- EDUCATION: Skills shortages are getting worse even as youth unemployment reaches record highs. The capitalists have A LOT OF unskilled workers who accept poverty wages of 1-2 dollars/day. So, if you have no real "skill", they just don't care about you. They are interested in skilled workers, who are more productive. But as the market is changing at a rapid pace, very few people will actually be able to make a living in the long run...

- EDUCATION: Sony Loses Science Talent as Student Resumes Go to Dairies

- Bloomberg buying the Financial Times? Talk about concentration of the media...
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Sunday, December 9, 2012

Links 12/09/12

- EU has long considered the Nabucco gas pipeline a priority project needed to break its strong reliance on energy from Russia, and USA has been backing the project - but now Nabucco is fading away, because RWE AG (a GERMAN company) is backing off the project. Germany has sided with Russia, no? RWE Exit Deals Blow to European Gas Pipeline 

- MUST READ: USA - Exporting Gas And Oil Will Not Erase The Trade Deficit

- Japan - "Let's print some more trillions": BOJ Has Done Too Little, Says Potential Contender for Governor.
Here's Krugman's "explanation" for this non-stop printing of money: "..the U.S. government can't run out of cash (it prints the stuff).." .Can you spell "hyperinflation"?

Giant Platinum Coins Will Not Save US Finances

- Walmart: "Not Financially Feasible" To Take Minimal, Legally Required Steps to Save Workers' Lives. Well, the workers in China are more competitive BECAUSE OF the lack of safety measures, adequate wages, etc. So, every capitalist is now thinking that these things are a liability, no?

-  China continues to spent its dollars on buying up HARD assets, especially gold, energy and land: Canada Approves Controversial Oil Company Sale To China

- Analysis: SE Asian governments gamble on making cheap labor less cheap

- Here's an example of how the "liberal age" of capitalism is coming to an end - Ivy League Cracks Down as Students Spiral Out of Control: “Colleges have been in an arms race to prove to students that they’re cool and give more freedom than the others, Now, maybe the pendulum is starting to swing the other way.”

- Unemployment statistics in USA are being blatantly manipulated: NFP: +146k (What?)

- Turkey Missile Deal Moves Ahead, With Limits - German Cabinet Approves Two Patriot Batteries for Syria Border Zone, Far Less Than Ankara Sought 

- Japan Deploys Anti-Missile Shield Against North Korea Rocket

- Canada Rejects The Pricey F-35 Joint Strike Fighter

- "There is no such thing as a free lunch" - getting something for nothing is obviously NOT a situation that can last forever, no? Here's an example: Google to Rein In Free Version of Software

- TECH: By the numbers: The Demise of PCs

- TECH: On Legacy iPhones and Cannibalization (This article is far more interesting and it has far wider implications than its name suggests)
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Friday, December 7, 2012

Links 12/07/2012

- Europe and Asia coming together (after all, Europe wants Asia's goods/services and Russia's energy, and Asia-Russia want Europe's goods and services, and its technical know-how, so now that America is no longer able to control Europe like before (due to its decline), Europe & Russia/China are a perfect fit for each other): Land bridge to boost Asia-Europe trade:"Trade between China and Shanghai Cooperation Organization members will be greatly boosted, thanks to Eurasian countries' efforts to improve the transportation channel of a new Eurasian land bridge linking China and Europe, experts have said.". SEE ALSO: Putin to visit Brussels as 'Eurasian Union' leader

- Asia, China in particular, is investing in hard assets, like land, energy, and of course gold: Record Asia Oil Takeovers Match U.S. Pace for First Time: Energy. SEE ALSO: Bank of Korea Raises Gold Holdings as Central Banks Buy

- Southeast Asia at a Crossroads on Wages: This is a "paradigm shift", as the "Western consumer" is dying, and the exporting nations (Asia + Germany) need to find someone else to consume all the goods and services that were previously exported to the West. At the same time, the Asian workers are starting to demand better working conditions, and better wages, which would make them 'better consumers' I suppose, but at the same time, the capitalists never like giving more to the workers. But if they don't, who is going to buy all these goods and services?

- BTW, Apple is set to return some Mac production to U.S. in 2013, because wages are going up in Asia, and down in the West, so maybe it is preferable to return there (let's not forget that Apple will also save money on shipping costs, and that Apple will also be able to sell more iMacs if they are "made in USA", because some people in the West will gladly pay more money to support their national economies). After all, protectionism is a rising trend (SEE ALSO:  Trade wars, protectionism, military spending and war; Who is Nikolai Bukharin?)

- Meanwhile, back in the PIIGS nations: Jackpot In Italian Lottery: Supermarket Job - a supermarket has come up with a novel way of hiring. According to Germany's Mittelstands Nachrichten, customers who spend over EUR30 will receive a lottery ticket and the grand prize winners will be given "temporary part-time assistant jobs" at the supermarket. You are not competitive enough -> No investments -> You are left to starve to death -> If and when the wages level drops to a Bulgarian-like level, maybe the capitalists will start reinvesting there. For now, unemployment will continue to rise

- And it's not just the PIIGS nations, it's the entire West that is not competitive enough (with the exception of Germany, where things are noticeably better in terms of how competitive the labor force is). Here's something from England for example: Students Become Strippers

- Financially Sick Firms Often Grant Bonuses in Months Before Bankruptcy Filing. "So what if I led the company to bankruptcy? I am the boss, so I will take my big fat paycheck and the rest of you can go to hell for all I care!"

- Santa-Claus is coming to town (if you've been a good little banker that is) -  more free bailout money coming to the insolvent banks from Santa-FED: Fed to launch fresh bond buying

- The City of London should be deposed as the euro’s main financial centre so the single currency club can “control” most financial business in the eurozone, France’s central bank governor has said.

- China is on the rise, but, much like the West a century ago, during the Guilded age, China will too experience a series of crises. The difference is that China will emerge stronger (like the West emerged stronger from the crises of the past century), because China attracts capital investments, and this means that China will continue to grow, despite the crises. Here's an interesting piece by M. Pettis on China's growth : Three cheers for the new data?

- Gambling has been around for many many years, and it tends to increase in times of crisis, as people become more desperate in  looking for ways to make money. So, it is "a good investment", and this is how Facebook (and Zynga) will become profitable: By incorporating an online gambling service..Many investors think that Facebook's business model is bad, because it is not making any money, but if they were to offer an online gambling service, things will change...(NOTE: I am not advocating gambling -quite the opposite actually- I am simply pointing out how the whole thing works)

- Intel probed the market by announcing the death of socket #CPUs - when they saw that people hated the idea, they backed off

- Germany used to have some "moral standards" when it came to selling arms to other countries. But "moral standards" are a liability in times such as these - so, Germany is now selling arms to everyone
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Monday, December 3, 2012

Links 12/03/2012

-MUST READ: 2008? That’s Ancient History, Right? (see also Leveraging/Deleveraging: “Give me a lever long enough and a fulcrum on which to place it, and I shall move the world”)

Memories are short, and 2008 is ancient history. Consumers can’t suppress their urge to consume. Lenders can’t suppress their urge to lend. We’ve learned nothing from the last boom-bust. We are repeating it, piling error upon error.
“People will spend more of their equity,” Chris Christopher, an economist at IHS Global Insight in Lexington, Mass., tells Bloomberg. “It won’t be as much as they spent when prices were gaining at a rapid pace in 2005 and 2006, but it should have a positive impact on consumer spending.”
As you may have detected in Mr. Christopher’s statement, bankers (speaking of short memories) are back in the business of making home equity lines of credit — HELOCs — and consumers are ready to ramp up the good life again [...]
[...] Of course, this increase in home prices is a temporary mirage, as empty homes and those occupied by strategic squatters are held off the market by legal kinks in the foreclosure hose. ZeroHedge estimates that an additional 2.5 million homes should be for sale. For now, millions are living in homes mortgage-free “just to perpetuate the illusion that ‘housing has rebounded,’” writes ZeroHedge.
The problem with this consumer debt is that while analysts cheer on the consumer purchases, the debt is what market analyst Robert Prechter calls unproductive. Three years ago, Prechter pointed out in his Elliott Wave Theorist newsletter that banks had been lending to consumers at the expense of businesses [...]
[...] Only business loans are self-liquidating. Healthy businesses generate cash flow that can pay off debt, while consumer loans “have no basis for repayment except the borrower’s prospects for employment and, ultimately, collateral sales,” Prechter wrote.
Lines of credit to businesses are provided with the understanding that the business borrowers will “revolve the debt,” borrow to pay vendors and employees and then pay down the debt as their customers pay them for product. Thus, the debt is directly tied to the business firm’s production. The funds tend to be borrowed only for short periods of time. Credit, in this case, aids a business in potentially earning entrepreneurial profits, which build capital, which ultimately fuels economic expansion.
Conversely, consumer debts are not self-liquidating, but instead stay on the banks’ books for long periods of time, with payments being made only to service the interest and pay down very small portions of the loan principal balance [...]

- OIL is still King (and it will continue to be King for the foreseeable future, because it is a lot cheaper than green energy (which has a long way to becoming financially viable, for the moment it only exists because of government subsidies at the expense of the people who pay increased energy bills to sustain the green energy industry) and easier to use/store than gas or nuclear energy): IT'S OVER: Why Everyone Is Losing Hope For Green Energy

- Regardless of the various political games between America and Europe, that's what happens when you try to deal with everything by using more and more money-printing: You lose credibility - European Rescue Mechanism Loses AAA Rating

- Ever played Monopoly? (yes, the classic board game). The game starts out as a "free market", but it always ends up creating monopolies/oligopolies. In fact, the only way for this game to end is to form a monopoly, where one player controls the "market" and everyone else goes bankrupt...Here's the latest news on the real-life monopoly game we are all playing: 4 Companies Provided Half of SPX 2012 Earnings Growth

- And talking about monopolies and oligopolies, the few big players in the market are destroying or acquiring everyone else, just like the board game - here's the latest example of an acquisition by google: Google Is Going On An Acquisition Spree To Compete With Amazon

- And the more concentrated property and wealth become, the more necessary it becomes for those who own it to protect it by all costs, even if it means destroying the competition by not allowing it to compete and create a better product - here's the latest from the "patent wars" on 'intellectual property' and more (SEE ALSO  Intellectual property rights and "patent wars"):
- TECH: Asia is being incorporated into the global market, and they are growing (in a capitalistic, non-equal way of course) $25 tablets, $2 mobile data plans, and zero margins–how the internet is about to gain 3 billion new users

- TECH: Staples Will Offer In-Store 3D Printing

- This is old news: Detroit on the Verge of Insolvency, Again

- Free-trade is good, but if we can't compete, we'll just not gonna use it: EU okays free trade talks with Japan while protecting cars (SEE ALSO  Trade wars, protectionism, military spending and war; Who is Nikolai Bukharin?)
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Friday, November 30, 2012

Links 11/30/2012

- Japan used to be the best at technical innovation - now they are the best at...printing money, they do it all the time! But much longer will it last? Japan Approves Modest yet another Stimulus Package. SEE ALSO: Special report: After a bashing, BOJ weighs "big bang" war on deflation
Oh, and what about the japanese stock market?  The capitalists, especially the bankers, are of course loving this new round of QE, because they will get a new bailout package, disguised as "a stimulus package to help solve the unemployment crisis" - hence the big move upwards in Japan's stock market after these news... 

- BOE (the Central Bank of England) has just found a new multi-billion "black hole" in the British banking system. So, another round of QE is to be expected soon, and then another, and another, etc..Money printing from here to eternity then, at least until the rest of the world decides that it will no longer accept payment in currencies that are continually being debased...

- China Moves Forward in Opening Gold Market: No surprise really, they are simply getting ready for the day of reckoning for western currencies.

- China’s Oil Quest Comes to Iraq: Let the Americans fiht it out, let them stent all of their money in fighting all these wars an become hated all across the globe, while a the same time China is signing one business deal after the other, in Iraq, in Africa, etc. securing the natural resources they need (energy, land, food, raw materials, etc.).

- Turkey's gold exports continued to surge in October, confirming Ankara is still using the commodity to pay for Iranian gas and circumvent sanctions as U.S. lawmakers mull a package that could specifically target the complex trade. GOLD-FOR-OIL (instead of dollars-for-oil): That is a game-changing deal worth thinking about for the future, as the oil-produsing nations are increasingly rejecting the dollar as means of payment for oil...

MUST READ, via The Economist: Not what it used to be: American universities represent declining value for money to their students
[...] there is growing anxiety in America about higher education. A degree has always been considered the key to a good job. But rising fees and increasing student debt, combined with shrinking financial and educational returns, are undermining at least the perception that university is a good investment.
 [...] Concern springs from a number of things: steep rises in fees, increases in the levels of debt of both students and universities, and the declining quality of graduates. Start with the fees. The cost of university per student has risen by almost five times the rate of inflation since 1983 (see chart 1), making it less affordable and increasing the amount of debt a student must take on. Between 2001 and 2010 the cost of a university education soared from 23% of median annual earnings to 38%; in consequence, debt per student has doubled in the past 15 years. Two-thirds of graduates now take out loans. Those who earned bachelor’s degrees in 2011 graduated with an average of $26,000 in debt, according to the Project on Student Debt, a non-profit group.
More debt means more risk, and graduation is far from certain; the chances of an American student completing a four-year degree within six years stand at only around 57%. This is poor by international standards: Australia and Britain, for instance, both do much better.

Despite so many fat years, universities have done little until recently to improve the courses they offer. University spending is driven by the need to compete in university league tables that tend to rank almost everything about a university except the (hard-to-measure) quality of the graduates it produces. Roger Geiger and Donald Heller of Pennsylvania State University say that since 1990, in both public and private colleges, expenditures on instruction have risen more slowly than in any other category of spending, even as student numbers have risen. Universities are, however, spending plenty more on administration and support services [...]
Also worth checking out: Online schools spend millions to attract students

- LOL, 7$ for a cup of coffee? If the people can't even understand this simple scum, how can they understand the far more complex scums that exist out there? Starbucks offering a $7 cup of coffee, since drinking coffee at Starbucks is about "more than just coffee", it's about "being cool", and this is why Starbucks is able to trick you into giving them 7$ for a cup of coffee. It's the same thing with Apple's overpriced iPhone, which costs way more than all the other smartphones, beacause it is not just 'better', but it is also 'cooler'. Is it a coincidence that Apple has yet to release a cheap smartphone? Apple's phone is about being "being the best", so if Apple releases a cheap version of the iPhone, then owning an iPhone will no longer being associated with "being the best". It will be like owning a Samsung phone, or an LG phone, etc - let's face it, "everyone" can afford a "regular" smartphone, so noone is really impressed when you own a Samsung or a LG (even if it is a great phone). But "everyone" is impressed when you own an iPhone, right? Anyway, I'm getting carried away here, so I'm stopping.

- TECH: Bend me, shape me: Flexible phones 'out by 2013'

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Thursday, November 29, 2012

Links 11/29/2012

- China is getting ready for A world without America at the helm - You have to check out the graphs on this article, they are GREAT (although the article itself is way too China-biased, as it was published in the Asia Times): Post-US world born in Phnom Penh

- Yawn: More money-printing coming from the FED (Well, how else are they gonna save the banks from bankruptcy, and at the same time reduce the workers wages, if not by money-printing from here to eternity?).
A useful note would be to always check out Jon Hilsenrath's articles on the Wall Street Journal, as he is the 'journalist' the FED has selected to talk to when they want to convey something to the public.

- And since America is gonna to hyperinflate the dollar, what else is there for those who have savings and want to preserve them but gold?
How Do the Chinese View the Gold Market?
Indians hoard 20k tonnes gold worth record $1.16 trn

- Poverty, bankruptcies, unemployment are rising in America, the "housing bubble" is still going strong, and since the educational system is not really producing workers that are "competitive enough" in the global market, America now has an "education bubble", as students cannot repay the investment they made when they borrowed money to go to college:
Growth In College Tuition Vs. Growth In Earnings For College Graduates
Pennsylvania's Capital Is Drowning In Debt And Likely To Threaten Bankruptcy Again
Surprise: Right After The Election, New Home Sales Tumble From Downward Revised Two Year High
MCDONALD'S STRIKER: 'They're Not Paying Us Enough To Survive'

About those unemployed/underemployed workers: In Spain, they are even having lotteries where the winner gets a job, and the others starve to death. I guess that gambling will never die, in fact it will grow in times such as these, because it gives you [false] HOPE. A few workers will get a job through this lottery system, the others will remain unemployed, but everyone accepts this system, because everyone hopes that "maybe I will be the one that wins the lottery".

ALL the major banks will be saved (via austerity AND money printing). Of course, all this money-printing inflates the currency and erodes the people's belief in this currency's credibility->The people start moving away from that currency-> hyperinflation. This is something that is happening everywhere across the West. However, Germany has other plans, as it is in relatively better shape than all the others. So Germany will accept printing money to save the banks (including the German banks) from bankruptcy, but it will require the PIIGS nations to become little more than protectorates. Furthermore, Germany is NOT going to print "unlimited" amounts of euros, like America is doing, so the euro will be a better choice for those who want to protect their savings. So, more and more "big-time" investors will start opting for the euro instead of the dollar, and this has the Americans worried, because they know that in the long run, they are screwed: Germany displaces China as US Treasury's currency villain.

The Arctic ice cap is melting - Excellent news for energy exploration/drilling/transportation. MELT IT ALL, who cares about the enviroment and all that 'unimportant' stuff (?!): Gas tanker Ob River attempts first winter Arctic crossing.

- TECH: Intel 'preparing' to put an end to user-replaceable CPUs - From now on, the CPU will be permanently attached to the motherboard, and the user will NOT be able to upgrade it or replace it if it breaks down. And since Intel is now pretty much a monopolist (AMD is on the verge of bankruptcy), they will have their way...In reality however, most people prefer laptops and smartphones nowadays - most people don't change their CPUs, they don't even know how. So, most people won't even know the difference. The only 'player' in the CPU market that could hurt Intel, especially in the 'low-budget CPU'market, is ARM, the company that designs CPUs that are not very strong (but are strong enough for simple tasks) and are already used in smartphones, tablets, etc.
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Tuesday, November 27, 2012

Links 11/27/2012

- India and China Deepen Economic Ties

- Saudi Arabia: King's Rumored Death and the New Line of Succession

- Intel Views Indonesia as a Lifeline - The West buys gadgets (until it runs out of money), but Asia is growing, no?
Desktop and laptop sales to millions of first-time computer buyers in Indonesia are likely to bolster revenue at Intel Corp. and offset some of the ground lost in more-mature markets where consumers are turning to tablets.

 The sales of desktops and laptops that use Intel's chips are expected to surge in Southeast Asia's largest economy as rising incomes enable more people to buy computers. Intel has been struggling in more-developed markets, where the most demand growth is coming from sales of smartphones and tablet computers that don't use Intel's processors.

Everyone is doing it, because this is a great way to be competitive. And everyone knows this:
- NOT JUST APPLE: Samsung Under Fire For Allegedly Giving Employees 16-Hour Workdays, One Day Off Per Month

-  UK: Increasing numbers of working people live in poverty, report finds. This is "great" (!), this means tha tmore and more people are becoming desperate-> They are becoming willing to work for less money ("they are becoming more competitive") -> The profits of the capitalists that will employ some of them (those that actually survive this ordeal) will be higher. Sacrifice an entire generation (the "lost generation" as they are already calling them), in order to gain cheap labor force for the future!

- TECH/Innovation: Harnessing Energy From the Body to Run Devices
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Friday, November 23, 2012

Links 11/23/2012 + A story from Bulgaria:Welcome to your future dear PIIGS worker

  • Brent to eclipse US crude as world oil benchmark (livemint)
  • Iran doesn't like the dollar - in fact, Iran has been calling for an end to the current "petrodollar" system for years, and this is obviously the biggest reason why America has branded it as a "terrorist-state": Iran urges use of alternative currencies in global trade (PressTV)
  • Saudi Arabia Plans $109 Billion Boost for Solar Power (Bloomberg) - Why sell your oil now, when you can just save it for the future, when the "petrodollar" system is over and oil has been reprices MUCH higher in dollar terms (as the dollar is heading for hyperinflation and everyone who is everyone knows it)
  • What about all those alternative power sources? Well, they are not proving to be as efficient as we once hoped them to be, so, at least for now, we all "have to" pay the price by substituting winds and solar farms, as they cannot be profitable enough by themselves: Energy bills to rise by £170 a year to fund wind farms
  • China today confirmed the first successful carrier landings of its J-15 fighter aboard its first aircraft carrier the Liaoning (BusinessInsider)

And what about the West's demise? Here are some of the latest news:
  • After France, Britain's AAA credit rating returns to the spotlight (Telegraph)
  • There are still more than a million young people not in education, employment or training (Neet) in England, despite a dip in the numbers (BBC)
  • Greek Milk Costs More Than Anywhere Else In Europe As Suicide Rate Rises By 37% (ZeroHedge)

As a bonus, here is a very interesting article from Bulgaria: 40.000 Small Businesses in Bulgaria To Go Bankrupt by End-2012.
What does this article show us? Well, it shows us that the model that the ruling class are trying to enforce in the PIIGS countries, if not everywhere ( = improving the competitiveness of the workers by reducing their wages), will never bring back growth. Bulgarian workers are really cheap, but there are even cheaper workers in others countries, so, without any specialized training and education, these workers have a very hard time to find a job, and when they do, they get really low wages...Welcome to your future dear Western worker
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Thursday, November 22, 2012

Links 11/22/2012

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Wednesday, November 21, 2012

A few thoughts on the matter of deficits: Do they matter or what?

Family and financial problems have prevented me from updating this blog, and I also have to prepare from moving from Greece to Australia, so my free time is limited.

However, I just read a couple of articles that caught my eye, and I'd like to share a few quick thoughts on the matter of deficits:

Britain's official public deficit climbs higher

Public sector net borrowing soared to £8.6 billion ($A13.28 billion) last month, the Office for National Statistics said in a statement on Wednesday.
That compared with £5.9 billion ($A9.11 billion) in October 2011.
Market expectations had been for public borrowing of £6.0 billion in October, according to analysts polled by Dow Jones Newswires.
Everyone knows that almost all Western nations have been running trade deficits for decades know, and that it was once -famously- said that "deficits don't matter". This may sound strange, but I kind of agree: 

It's not the 'deficits/debts' themselves that matter, rather than the 'ability to repay these debts in the future through future productivity" that actually matters. For example, there are no people that would loan me 1.000.000$, because noone seriously believes that I will be able to produce enough wealth in the future to repay such a loan. But there are a lot of people that would gladly loan 1.000.000$ to APPLE, because they think (rightly or wrongly so) that APPLE will be able to produce enough wealth in the future to repay this loan (+ interest of course, why else would the bondholders loan the money?). 

The problem today is that most corporations (AND countries) have very little (or zero) CREDIBILITY (i.e noone believes that they will be able to repay their loans). 

This is why deficits didn't used to matter, but now they do: People used to think that "countries are always able to repay their loans", so they are always credible, and thus "their deficits don't matter [because they will be able to repay their debts in the future through future productivity]". Now, their credibility is gone, so now "deficits matter"...

Here's another interesting article, from the NY Times:

A Call for Japan to Take Bolder Monetary Action 

For years, proponents of aggressive monetary policy have offered this unusual piece of advice as a way to end Japan’s deflationary slump and invigorate the economy. Print lots of money, they said. Keep interest rates at zero. Convince the market that Japan will allow inflation for a while.
Japan’s central bankers long scoffed at such recklessness, which they feared would ignite runaway inflation. But now, the bank’s hand could be forced by an unlikely alliance of economists and lawmakers who have argued for Japan to take more monetary action after more than a decade of weak growth and depressed prices. 
Championing their cause is the former prime minister Shinzo Abe, who is favored to return to the top job after nationwide elections next month.
Japan’s monetary pump-priming is “like a morphine addiction that is getting worse,” Ryutaro Kono, chief economist for Japan at BNP Paribas, said Tuesday. “Fiscal or monetary policy doesn’t have the power to create new value” for Japan, he said.
Unfortunately, Japan is not the only Western nation that is doing this. It has been doing it for several years now, and it is probably reaching "the end of the road": More and more people are noticing that Japan, and most Western nations actually, are no longer producing a lot of products that the market actually wants and is willing to buy (i.e. "competitive products") [*].

So, what do these countries do? Well, they can't seem to be able to innovate their way out of the crisis by creating new, valuable products, so they start printing more and more money: This way, they decrease the wages of the workers, making them more competitive, and thy also use the newly-printed money to recapitalize the banks. Here's something from one of my previous posts:

1) Capitalism is based on the exploitation of the workers by the capitalists.

2) After the collapse of the former USSR, all the workers of the Soviet block + the Chinese workers were intergraded into the labor marker that truly became global.

3) Capitalists off-shored production to Asia, as the workers of those countries could be exploited much more so than the workers of the West (as the Western workers had achieved some important victories through a century of labor struggles, that inhibited the capitalists ability to exploit them).

4) As the industrial base of the West was diminishing, capitalism became more "leveraged" and credit-based, as it needed more and more "banking loans" to keep the system going:
-If a factory was closed down, either because the owner off-shored production to Asia or because it just couldn't compete against the cheaper goods that were made in China, the workers of that factory could still get a job, or start a business themselves, by getting a loan from the banks.
-The workers wages have stagnated for a long time (link), but they could still "afford" a new house, by getting a mortgage. And they could also afford rising tuition fees for their children's education, by getting a student loan. And they could even a new plasma TV set, by getting another "consumer's loan". And the list goes on and on.
-This meant that the construction workers could find a job (thanks to all these mortgages), and the companies that produce this plasma TV set and the merchants who sell this TV would make a profit. So, there would be a job for those who make these TV sets, or sell them.

5) The problem with all this is that the houses that the people live in are not "their" houses, they belong to the bank. And if you can't make your payment on your mortgage, then the bank kicks you out. Can all these debts be repaid? No, of course not.

6) So, the Western workers earn relatively low wages, and are deeply in debt, as they had to keep the system going by "overconsuming" for a very long time. And it's not just the workers, entire states are heavily indebted and cannot possibly repay their debts.

7) As the people cannot get any more loans, capitalism can't keep growing. No jobs for the construction workers, factories close down as noone can consume all the good that they produce, etc.

8) But as these debts cannot be repaid, the banks are also in trouble, as they have to write down heavy losses. This is a very heavy blow for them, as they are ALL bankrupt, just like Lehman Brothers.

9) The difference is that, unlike Lehman (and a lot of smaller banks), the rest of the banks were saves through endless bailouts. Let's not forget that the banks have become bigger than ever, as capitalism needed more and more credit. So, the bankers have the politicians in their pockets, and they managed to get the money they needed (from us). After all, they are "too big to fail", whereas we are not, we are "replaceable". So, all the wealth of our societies is being redirected to the banks, in order to cover their losses, leaving the rest of us to starve.

10) But the banks need a lot of dollars. Trillions and trillions of them. So, this "money" is being "created out of thin air" (quantitative easing - money printing). This process of money printing has being going on for many decades now, ever since Nixon abolished the gold standard. The system needed more credit, and so it became more leveraged. The gold standard was interfering with capitalism's need for increased leverage, so they abolished it. And now that the banks have to be bailed out, they are printing even more money than before - here's a great chart:

11) All this newly created "money" (currency) goes to the banks, so that they won't have to face another "Lehman-type" moment, or even a global collapse of the entire banking sector. But this newly created 'money' isn't based on newly created wealth (new products/services), nor on wealth's"monetary counterpart", gold (gold, as we have already explained, is the "monetary representation" of wealth, as capitalism has a tendency to monetize everything, and so all goods and services have a value that can now be expressed through gold, in order for the people to be able to exchange them in the market (buying/selling).

As all this newly created "money" is not based on new wealth/gold, it is simply a way to debase the currency and redistribute wealth:
The banks get bailed out, by getting all the newly created "money", and the workers get paid less (as the value of the currency in which they are getting paid is being diminished). This is necessary for the capitalists, who get to save the banks, and improve the "competitiveness" of the working class. The destruction the currencies is a sacrifice that they have to make, in order to save the banking sector from collapsing, and at the same time to reduce the wages of the wokers, so that they become "more competitive", thus attracting capital investments.

13) One of the greatest "side-effects" of this process of "money printing" is that fewer and fewer people want to own/use the various currencies, as they can easily understand that these currencies will lose a lot of their current value in the future. More and more capitalists turn to gold for protection of their wealth, as they realize that gold is the one thing that will always remain constant. So, China, Russia, the oil states (and many other rich "players") are buying gold, and they are trying to dump the dollar when they trade with each other. The oil states have a "special role" to play in all this, because if and when they reject the dollar as a means of payment, the world will experience a great "oil crisis", much bigger than the 1973 oil crisis (which was the first time the oil states publickly rejected the dollar and demanded to be paid in gold, as they obviously didn't like America's decision to abolish the gold standard in order to print as many dollars as the USA wanted).

13) The West is obviously caught between a rock and a hard place. But saving the banks and impoverishing the workers are the top priorities, so this process of "money-printing" will continue, despite the various obstacles, twists and turns. Money printing is today a "systemic necessity" for capitalism, and there is not much point in putting the blame solely on Bernanke, Obama, Bush, the FED or their English/Japanese/European counterparts (The Europeans are also printing money, although Germany does not need the same amounts of "money-printing" as the rest of Europe, as the German workers are already very competitive, thanks to their high productivity. But Germany also accepts the need for money-printing, as it is the only way to save the banks from their "toxic loan situation". And they are VERY WELL PREPARED for the coming destruction of the dollar (hyperinflation), as the euro-system has combined the European nation's gold, making it the "least bad" option in a world of fiat currencies that are being massively debased).

14) But gold is not just an inflation hedge or a deflation hedge - it is a measure of trust in the system: The reason why gold was considered to be a "fringe investment", or even "a thing of the past" is because there was a lot of trust the system's ability to grow. The capitalists don't really like gold's stability, because capitalism wants to constantly expand. So, the capitalists prefer investments that return a profit for them, like starting a business, or investing in stocks, etc.. If and when the economy is doing well, then businesses make profits, investing on stocks is also profitable, etc. So why buy gold? Why would anyone want to save his capital for another day, when he can invest his capital today, and make a lot of money?

15) Things change however, and today the capitalists are not very confident that the economy will grow in the future (there is no trust in the system). There is enough capital concentrated in the hands of a few oligarchs, and there are many cheap workers in Asia - and yet the capitalists are NOT willing to make a lot of investments (especially in the West, where the workers are "too expensive"). As the workers lack the necessary "purchasing power" to buy things, it is obvious that a lot of products will not be consumed (because the people are too poor to buy them).

16) But the capitalists prefer to let the workers starve to death, even if this aggrevates the crisis on the short-term. The more desperate the workers become, the more inclined they will be to accept serfdom (or "increased competitiveness", as the capitalists see it). So even if a few capitalists get killed in the process ("coladeral damage"), the end result will be great for the rulling class, as they will have created an "ultra-competitive" world, where a few oligarchs own almost everything, and the workers work for scraps (->more profits for the capitalists). It is only then that they will start investing again (especially in the West). Until thw workers accept working for scraps, the capitalists will not invest.

17) In order to achieve this goal, the capitalists need a safe place to store their capital: GOLD. Once the workers have become "desperate enough" to accept serfdom, the "business cycle" can start again, and they will invest some of their gold in productive investments. But until they feel confident that they will make a profit, they choose to save their capital for the future - and gold is the only thing that will not lose value when everything else is collapsing.

[*] Don't get me wrong, the West is still producing a lot of great products, but, with the notable exception of Germany, they are all running trade deficits (i.e. the goods they buy from the market have a greater market price than they goods they sell on it. Note: Please notice how I used the term market price instead of market value, because these two things are not the same, unless for example you honestly think that footballs players are worth all these millions of dollars that they get. But that is another discussion, for another time).

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Monday, June 4, 2012

VIDEO: Planned Obsolescence ("The Lightbulb Conspiracy")

This video is well worth an hour of your time: Yes, there are many documentaries out there about over-consumption, consumerism, etc, but this one stands out from the rest, in that it makes this excellent observation on the world economy: Our economy is based on over-consumption and consumerism, even planned obsolescence of products, and cannot function if the people were to overcome these "bad habits".

The documentary uses the life expectancy of a light bulb or a printer to show how companies are trying to lower the life expectancy of their products. After all, if products were designed to endure for ever, there would be no need for us to work long hours - the global economy would collapse and unemployment would soar, unless of course we were to work for only a few hours a day. But that would be terrible for our rulers, who would probably be made obsolete.

Please remember this MUST-READ article from Orion Magazine:
[...] Just ten years later things looked very different. Cars dominated the streets and most urban homes had electric lights, electric flat irons, and vacuum cleaners. In upper-middle-class houses, washing machines, refrigerators, toasters, curling irons, percolators, heating pads, and popcorn poppers were becoming commonplace. And although the first commercial radio station didn’t begin broadcasting until 1920, the American public, with an adult population of about 122 million people, bought 4,438,000 radios in the year 1929 alone.

But despite the apparent tidal wave of new consumer goods and what appeared to be a healthy appetite for their consumption among the well-to-do, industrialists were worried. They feared that the frugal habits maintained by most American families would be difficult to break. Perhaps even more threatening was the fact that the industrial capacity for turning out goods seemed to be increasing at a pace greater than people’s sense that they needed them.
It was this latter concern that led Charles Kettering, director of General Motors Research, to write a 1929 magazine article called “Keep the Consumer Dissatisfied.” He wasn’t suggesting that manufacturers produce shoddy products. Along with many of his corporate cohorts, he was defining a strategic shift for American industry—from fulfilling basic human needs to creating new ones.

In a 1927 interview with the magazine Nation’s Business, Secretary of Labor James J. Davis provided some numbers to illustrate a problem that the New York Times called “need saturation.” Davis noted that “the textile mills of this country can produce all the cloth needed in six months’ operation each year” and that 14 percent of the American shoe factories could produce a year’s supply of footwear. The magazine went on to suggest, “It may be that the world’s needs ultimately will be produced by three days’ work a week.”
Businessmen were not happy about this prospect -> Read the rest of the story here:

Anyway, back to the documentary, here is a short description of it (via imdb):
Once upon a time..... products were made to last. Then, at the beginning of the 1920s, a group of businessmen were struck by the following insight: 'A product that refuses to wear out is a tragedy of business' (1928). Thus Planned Obsolescence was born. Shortly after, the first worldwide cartel was set up expressly to reduce the life span of the incandescent light bulb, a symbol for innovation and bright new ideas, and the first official victim of Planned Obsolescence. During the 1950s, with the birth of the consumer society, the concept took on a whole new meaning, as explained by flamboyant designer Brooks Stevens: 'Planned Obsolescence, the desire to own something a little newer, a little better, a little sooner than is necessary...'. The growth society flourished, everybody had everything, the waste was piling up (preferably far away in illegal dumps in the Third World) - until consumers started rebelling..
And here's a wikipedia article on  Planned Obsolescence:
Planned obsolescence or built-in obsolescence in industrial design is a policy of planning or designing a product with a limited useful life, so it will become obsolete, that is, unfashionable or no longer functional after a certain period of time. Planned obsolescence has potential benefits for a producer because to obtain continuing use of the product the consumer is under pressure to purchase again, whether from the same manufacturer (a replacement part or a newer model), or from a competitor which might also rely on planned obsolescence. 
In some cases, deliberate deprecation of earlier versions of a technology is used to reduce ongoing support costs, especially in the software industry. Though this could be considered planned obsolescence, it differs from the classic form in that the consumer is typically made aware of the limited support lifetime of the product as part of their licensing agreement.

For an industry, planned obsolescence stimulates demand by encouraging purchasers to buy sooner if they still want a functioning product. Built-in obsolescence is used in many different products. There is, however, the potential backlash of consumers who learn that the manufacturer invested money to make the product obsolete faster; such consumers might turn to a producer (if any exists) that offers a more durable alternative.

Estimates of planned obsolescence can influence a company's decisions about product engineering. Therefore the company can use the least expensive components that satisfy product lifetime projections. Such decisions are part of a broader discipline known as value engineering. 
Origins of planned obsolescence go back at least as far as 1932 with Bernard London's pamphlet Ending the Depression Through Planned Obsolescence. However, the phrase was first popularized in 1954 by Brooks Stevens, an American industrial designer. Stevens was due to give a talk at an advertising conference in Minneapolis in 1954. Without giving it much thought, he used the term as the title of his talk.
From that point on, "planned obsolescence" became Stevens' catchphrase. By his definition, planned obsolescence was "Instilling in the buyer the desire to own something a little newer, a little better, a little sooner than is necessary.
The term was quickly taken up by others, but Stevens' definition was challenged. By the late 1950s, planned obsolescence had become a commonly-used term for products designed to break easily or to quickly go out of style. In fact, the concept was so widely recognized that in 1959 Volkswagen mocked it in a now-legendary advertising campaign. While acknowledging the widespread use of planned obsolescence among automobile manufacturers, Volkswagen pitched itself as an alternative. "We do not believe in planned obsolescence," the ads suggested. "We don't change a car for the sake of change."
In 1960, cultural critic Vance Packard published The Waste Makers, promoted as an exposé of "the systematic attempt of business to make us wasteful, debt-ridden, permanently discontented individuals."
Packard divided planned obsolescence into two sub categories: obsolescence of desirability and obsolescence of function. "Obsolescence of desirability", also called "psychological obsolescence", referred to marketers' attempts to wear out a product in the owner's mind. Packard quoted industrial designer George Nelson, who wrote: "Design... is an attempt to make a contribution through change. When no contribution is made or can be made, the only process available for giving the illusion of change is 'styling!'"
Planned obsolescence tends to work best when a producer has at least an oligopoly.
Before introducing a planned obsolescence, the producer has to know that the consumer is at least somewhat likely to buy a replacement from them. In these cases of planned obsolescence, there is an information asymmetry between the producer–who knows how long the product was designed to last–and the consumer, who does not. When a market becomes more competitive, product lifespans tend to increase. When Japanese vehicles with longer lifespans entered the American market in the 1960s and 1970s, American carmakers were forced to respond by building more durable products.
Types of obsolescence
Technical or functional obsolescence

The design of most consumer products includes an expected average lifetime permeating all stages of development. Thus, it must be decided early in the design of a complex product how long it is designed to last so that each component can be made to those specifications.

Planned obsolescence is made more likely by making the cost of repairs comparable to the replacement cost, or by refusing to provide service or parts any longer. 
Systemic obsolescence

Planned systemic obsolescence is the deliberate attempt to make a product obsolete by altering the system in which it is used in such a way as to make its continued use difficult. New software is frequently introduced that is not compatible with older software.
Style obsolescence

Marketing may be driven primarily by aesthetic design. Product categories in this case display a fashion cycle. By continually introducing new designs, and retargeting or discontinuing others, a manufacturer can "ride the fashion cycle".
Obsolescence by depletion

When a product consumes a resource, as when a computer printer consumes ink and paper, it is generally understood that this is unavoidable. But some products also consume related resources that need not be consumed. For example, a 4-colour inkjet printer that is used mostly for printing in gray scale and seldom in colour, may be pre-programmed to deplete colour inks while printing black, so that the colour cartridge(s) must be replaced more often.
Innovation is important - it's almost as important as "creative destruction". This is probably the reason why Steve Jobs was so important - he was a capitalist, but he was a capitalist of a dying breed of capitalists: He was an innovator, a creator of new markets, instead of a technocrat who simply fired his employees by the thousands each time his company wasn't doing well because of the luck of innovation (think HP, Nokia, etc.). Of course, Apple's early products (the Macintosh, the mouse, etc.) were much more "useful" that its current products (the ipad, etc). Apple is now essentially relying on the desire of "the common people" to feel special by owning a fashionable item they don't really need (style obsolescence). If all those ipad owners were to stop buying the newest ipad model, Apple would collapse (and the same thing applies to most of the other companies as well). So, "Planned Obsolescence" is the only way for them to rmain in power, and for us to remain poor and unsatisfied.


Here's the documentary:

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Friday, June 1, 2012

Gold and the jobs report: If you only knew the power of the dark side

Well, in case you haven't noticed, is once again over 1600$/ounce. This "sudden" move was triggered by the US May Jobs Report, which Marketwatch described as "disappointing":

U.S. stocks sink after disappointing jobs report
Stocks on Wall Street fell sharply on Friday after a disappointing U.S. jobs report and downbeat data from China and Europe raised serious concerns about the health of the global economy.
“Disappointing payroll data in combination with mounting external risks obviously increase the pressure on the Fed to apply further stimulus,” wrote Bernd Weidensteiner, an analyst at Commerzbank AG, in a note, with the euro-zone sovereign debt crisis being the main external risk.
So, there is no recovery after all, is there? The US Jobs Report can -and is- be manipulated. Especially during the last few months, the "Bureau of lies and scams" as The Burning Platform nicknamed it has been working overtime in order to persuade us that the recovery is real - here is an article dated 05/04/2012:

The employment report from the BLS just hit the wires.

The unemployment rate FELL to 8.1%. This is the lowest level in years. All hail Obama and his fantastic management of our economy.

So let’s look at how we achieved this reduction in the unemployment rate. Here is a link to the data:

Here are the facts:
The working age population rose by 180,000 people
The number of employed people DROPPED by 169,000.

Hmmmmm. Wait a second. If there are more working age people in the population and less employed people, a critical thinking individual might wonder HOW THE FUCK did the unemployment rate DROP?

Oh don’t worry your mind over such trivialities. Our friendly drones at the BLS have it all figured out. You see 522,000 Americans willingly decided their lives were so fulfilled and their financial situation was so good, they decided to kick back and leave the work force.

The country has another new record. There are 88,419,000 of us who don’t want or need a job. The participation rate of 63.6% is now at a 30 year low, back to levels before many women joined the workforce.

But wait a minute: IF the government can manipulate the jobs report, why didn't they do it this time around? Well, this is where the plot thickens, as they say. Here's Jesse on the subject:
I looked over the Jobs numbers earlier this morning, and checked the usual suspects. Imaginary additions were 204,000 which are right 'in the groove' for the normal pattern we see for May each year.
If anything the seasonal adjustment was shaded to the downside, meaning that it would have not taken much or been out of the norm to have taken away LESS jobs in the seasonal adjustment, and brought in a report that was in line with expectations.
So why put out a weak number when one could have statistically justified a stronger number?  Besides 'sand-bagging' now with an eye to the second half of the year?
There are an important set of central bank decisions coming up, including the FOMC meeting shortly after the Greek elections at mid month. This weak Jobs number gives Bernanke the cards he needs to play in responding to the evolving crisis.
And you know what that means.
And this is why gold and silver diverged so hard this morning to the upside. They had been artificially pressed down for the May-June contract expirations, and some might say to lessen the impact of their rally when the inevitability of QE became evident.
I am just wondering how the Feds will try and spin it.
Gentlemen, start your presses. But try not to be too obvious about it.
It's easy to pin it all to Bernanke and the FED - but as we've explained before, if you really want to find the root of all evil, you'll have to search harder:

In a nutshell, the bankers have been handing out one loan after another, in order to substitute for the industrial capital's flight to Asia: The West's productive base has been shrinking for quite a while now, but the loans handed out out by the bankers have been masking this uncomfortable truth for all these decades So, the multinationals have been getting richer and richer by exploiting the -massively underpaid- Asian workforce, and the banks became bigger and bigger (they are now "too big to fail", and Goldman Sachs's CEO even considers himself as doing God's work - talk about hubris).

But the economy reached a point where the Western worker simply couldn't pay for his mortgage (that's a bit of an over-simplification, but you get the point). So, now the banks are in trouble as well, because if they can't collect the money they were supposed to collect from the recipients of those loans, they are bankrupt (ALL of them). Let's not forget Lehman's collapse, not to mention the hundreds of other (smaller) banks that have gone bankrupt in USA over the last four years.

But, as we all know, most banks are being rescued via your -and my- money. But the banks need a lot of money. Well, I know that they have already received huge bailouts, but that's not enough. Banks are failing in Europe (now it's the Spanish banks, then Greece again, etc) and in USA, stocks are going down, and it seems like everything is about to collapse.

But guess what - no matter how much the banks need, money can be printed in today's economic system - and they will.

States all over the world have been printing money for quite some time now, and they continue to do so. Savings the banks is more important than preserving the value of their currencies, so...they will inflate these currencies. And as more and more people realize this, these currencies will hyper-inflate, as noone will want to trade ("loss of confidence") in a currency that keeps losing value compared to gold, the only thing that will remain stable, as it always does.

[By the way, did you hear about China and Japan's deal to trade with each other in their own respective currencies, instead of using the dollar? Or maybe about China's deal to buy oil from Iran in exchange for yuan, instead of dollars? Oh, and guess what, China and Russia are no longer buying a lot of US bonds, are they? They are however buying gold...]

As for the workers, printing money is a great way for the ruling class to stealthily lower their wages, making them more "competitive". After all, they do have to compete against the dirt-cheap Asian labor-force, don't they? So, they only way to go forward, according to our rulers, is for us to become really poor, and for them to receive huge bailouts, making them even more powerful than they already are. This is the only way they will return to the West for investments - until the workers accept "modern serfdom", the capitalists will simply let them starve. Hunger will take care of the rest. And since our rulers are already doing God's work, they could even declare themselves to be Gods, like the Pharaohs. And why not? Their will is our command, isn't it?

But this process of debasing the currency has to be completed "one step at a time". If they print everything at once, everyone will be on to them, and things will get out of hand. So, they first let the stock market almost crash, and then they "save the day", by printing more and more money. This has already happened a lot of times, and it will probably continue to happen in the future, in both USA and in Europe (Europe is an even more complicated case, since it is a monetary union of many different States: Germany is letting everyone else crash, and only then they allow the ECB to print money (in order to save the German banks among others). But before Germany agrees to money printing, they always hold a conference, where they propose a few new treaties, that give them more and more control over their fellow eurozone members protectorates. So, it's a bit more political in the eurozone compared to the situation in USA, but the economics of it are pretty much the same, and  the ECB will also print money sooner or later, and one way or another).

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