Thursday, February 11, 2010

Sweden - prior to, throughout and after the looming depression

This is mainly an outline of what’s to come and is constructed after the certainty of the future financial meltdown of this planets economic system. This is predictions based on the most benign interpretation of how things look right now.
Things will crash, there’s no question about that anymore. What we need to ask ourselves is “when?” and the follow-up; “How bad will it be?”.

We can, from Sweden’s deep dependent on foreign trade, conclude that when the shit hits the fan, passes through it and get splattered all over - it will make my birth-nation suffer severely. To make things worse almost all of the real wealth-creation within Sweden’s borders is reliant on having selling markets. In other words a worldwide depression will hit very hard both in short and long term.

There are other worrisome structural faults that will further enhance such a crisis. As example Sweden’s labor market is very rigid and few are those willing to move many miles to get a job. The taxes are still extremely high and government interventions are pretty much total from the cradle to the grave. The government is already today pressing the limits of public expenditure with too much borrowing and deficits. In addition the central bank, just as all of their counterparts, is doing pretty much everything wrong fueling the bubbles and increasing inflation.

To make matters even worse many of the big banks are already kneeing down under the pressure of massive losses in the Baltic States. Despite both getting bailed-out and handed a couple of hundreds of billions for free, the banks are still not cooping.

The mortgage bubble and the coming interest rate hikes will increase defaulting levels hence put further weight on the banks. So there’s no question that many of them will not survive the coming depression. Also, nothing has really been done to revolutionize any of the fundamentals in desperate need of change.

So when America, Portugal, Spain, UK, Japan and many others crashes and burns, this will mean serious trouble for Sweden.

On the plus side the Swedish government haven’t gone totally crazy with the borrowing, printing and manic spending as many other governments has. Sweden also have a decent savings rate, still bad but not as horrible as the US for example. The current administration also managed to sell off some publically owned companies which lowered the public debt and made a small contribution to a better future. The populace is pretty well educated, company taxes are in comparison low and there’s a history of manufacturing and production that will come in handy.

And maybe most important; Sweden isn’t part of the Euro-zone and has at least some coverage for future pensions, something many continent countries does not.

Presumably our enemies can keep the charade going for an additional year, so let’s assume that the real crash and burn happens during the summer of 2011. If so, Sweden will by then have another government of the more socialist variety which, of course, will make things even worse.

The problem with any government facing such a dire situation is that no matter what they do they are doomed. If they do the wrong thing they will prolong and enhance the crisis, if they do the right thing the crisis may be shortened but their very lives might be in danger.

And so I believe we will get a bi-partisan government just like during World War II. They will announce this as a way of “standing up for Sweden”, “Working for the common good” and with similar baloney. Journalists will celebrate such news and pundits will applaud saying it is necessary to see so called conservatives rule together with so called socialists. All of it will be lies, of course, but they need to show a good face to the public so they avoid the worst riots.

As the crisis rages on and people get more and more frustrated it will lead to more sympathies towards radical –isms’ which will lead to a great upswing in political violence and so the jackhammer from the government will come down harder and harder. The little freedoms we have left will go out the window. You think they are fascists comes to internet today? You think that a couple of cameras are bad? Pfffff… you’ve not seen anything yet.

How it will end? It’s hard to say today, they will never do the right thing, at least not fully, that’s for sure. And people are too stupid to elect any real alternative. But let’s be positive about it and say they partly do the right thing and from the ashes of our industries new companies are created. If that happens and the world hasn’t plummet down into WW III, maybe Sweden will be bouncing upwards again 10-15 years from now. And if so, better equipped and with better fundamentals then most other countries. So it’s not all bad, and maybe, just maybe this suffering generation and the coming generation will have learn that statism, socialism and state planning of the economy doesn’t work.

So, what is the real problem and how can we fix it?

Basically it can be stated that everything our elected frauds have been doing is wrong and mostly the complete opposite of what needs to be done.

When they borrowed shitloads of money - we should instead have cut expenditures. When they cut interest rates down to zero - we should instead have increased it with a couple of percentage. When they printed billions of new bills - we should instead have tightened an already very loose money-policy. When they accumulate debts to scary heights – we should instead have been saving money and/or cutting taxes. And NOT A SINGLE bailout should have been paid out.

Any mainstream economists reading this will start scratching his head and, from his point of view, come to the conclusion I’m either a madman or know nothing of economy, this because in his eyes this would have crashed our economy and started a massive ‘credit-crunch’.

To a degree he would be right. If we would have done what I believe is the right course of action it would have lead to an even worse situation than we had and still find ourselves in. We would also see a massive drop in borrowing, hardly anyone would be buying real-estate and many banks and bad companies would have went out of business. GDP would have dropped with 15-20 percent.

What cornflake economists, Keynesians and mainstream pundits don’t realize is that this is the point!

We need this to purge the system from toxic assets, drive out badly kept companies and ruin horrific fraudulent banks.

And you out there need to realize that the only thing keeping us afloat at the moment is fictitious markets, grossly overvalued alongside ridiculous government policies. When this stuff is withdrawn, which it hast to be, then comes the next bang. Because the problems are still there! They haven’t fixed anything, only swept it under the rug and while doing so worsening the problems.

However, my suggestion wouldn’t all be bad, on the contrary, because if this was implemented savings would go way up which in turn makes money available to investments and real wealth-creation. It would stop all the looting being done from financial institutes and banks. It would create a real market with no bubbles and people would quickly learn to adopt themselves to a non-fictitious way of life.

But the real benefit of this would be that within a year, a year and a half, it would be over. GDP would start going up again, jobs coming back, and new better run banks would take the old ones place and we would close to have eliminate inflation. Within three years Sweden would have been the leading economy adjustable after size and growth.

Sometimes you need to swallow that pill to get better. Sometimes you need to sleep, take a step back or reevaluate a way of life. The medicine might taste bad, but to get back to 100% health that temporarily bitter taste is a necessary evil.

If we after (and during) this crisis sold out all public owned companies, eliminated 97% of all laws and cut taxation in half (or preferably more) we would soon, very soon, be the richest country on the planet. Hopefully we can then take the next step and thrash the central bank as well as the phony fiat money and yet again resort to real money. And then we could write a constitution more direct and much more absolute than the American one, but with the same basic intent. In doing so eliminate the enemy class completely and finally Swedes would be free, happy and much richer than anyone else.

This is all a pipe-dream of course, in reality nothing of this will come to be. But this is the alternative as I see it.

Instead we will live with the boom-and-bust cycles that come with statism. Even IF their scheme were to succeed again i.e. things gets back to ‘normal’, it would only take another couple of years and we would crash again and so on in a never ending circle. We will also have to adjust to fascist internet regulations. We will need to accept that our income continues downward and that the elitists continue to fuck our arses with rusty appliances.

We need a revolution and a complete remodeling of our economy.

To make things clear to you all; our current situation has very little to do with capitalism, but it also has very little to do with the ideology of socialism.

We live in a mixed economy wherein big business, politicians, journalists and banks together rule all. This enemy class with their GramscoFabiaNazi ideology have created or are about to create fascist societies and the only ones that matter are the big, the rich, the powerful and, of course, the government. Statism would probably be the most correct term to use.

There are many socialist solutions being proposed and implemented, but that’s mainly to shut up the far lefties whom, idiots as they are, think they are getting more of their shiny happy fluffy heaven. At the same time the elitists keep some capitalism around, just to have something to loot.

The problem, however, is that sooner or later there’s nothing left to loot and with no one happy and with a totalitarian base the elitists only way out is to resort to violence. And this is the scary and very probable future we’re facing.

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