The depression continues

Just like when aristocrats in France 1792 heard “off with their heads” and couldn’t believe it, our current leaders are not really up to speed.

Likewise are economists, pundits and journalists oblivious to what is going on.

You see in the world of Keynesianism and mainstream thinking two wrongs are regarded as truths.

First it is the GDP scam whereas all that matters is to keep GDP numbers up and climbing or, in the worst case scenario, laying still. This is wrong on so many levels, but maybe worst is how they think that borrowing and printing money in order to consume services and goods is always good for the economy, it keeps GDP up, surely that’s great? Nope.

Secondly they think that government intervention, control and regulations can fix problems that were created by government intervention, control and regulations.

Hardly a single politician thinks that the market (you) can handle things on its own. If banks fail, it was too few or the wrong regulations. If businesses crumble government need to step in and help. If people riot government need more control over our lives.

And so when things now look as bad as they have ever in the history of mankind, they have no answer other than the usual borrowing, printing, regulating, intervening and control. Nothing else exists.

Also they don’t really see the danger. I’ve used the Tsunami likeness several times and it is very accurate. At sea you may hardly notice a Tsunami, but comes the shoreline and whopidoda… In the same way our elected suits don’t see it, or pretend it isn’t there.

In other words it isn’t surprising to read that The People’s Party in Latvia, the largest group in a five-party coalition, walked out amid disputes over how to cope with the country’s severe problems. And the Greek debacle, that anyone with half a brain could see coming a mile away, is only another thingy that could have been avoided.

Tim Geithner, the US treasury secretary, told the House Financial Services Committee yesterday (2010-03-23) that taxpayers are likely to face "very substantial" losses from the government's takeover of home mortgage giants Fannie Mae and Freddie Mac. Who would have thought eh?

Japan issued another stimulus the other day (I don’t even count ‘em anymore) probably thinking that this time it will work. That it didn’t work the other 75 (or so) times is ignored.

The UK government with the one-eyed Scotsman at the helm is now spending over 50% of GDP, which may not sound so bad for a Swede if it wasn’t for the fact that the deficit is 12.6% and rising.

Meanwhile Portugal is starting to pull on the brake, and in Ireland all public service salaries will be cut by an average of 13.5 per cent, a fine try, but hardly enough. Spain is facing eminent danger and I would like to argue that Italy is about to collapse but somehow the Italians seem to coop as usual, at least for the time being.

In Germany 4 elderly people, the ringleader was 74y old, have been convicted to years of imprisonment for kidnapping an investor that squandered their money. This sort of thing are about to be common occurrences, just as shootings from gone postal workers.

Remember the boss-nappings in France? How about the demonstrations in Iceland, riots in Greece or that police officer in UK that knocked out a woman for carrying a orange carton during the protest last year? Well, they killed a guy too, will see much more of that as well.

Maybe all this seem a bit unreal for most of you, and I get it, you’ve been living on borrowed time for so long that you hardly understand why now would be any different than before. I referred to this post the other day, and if you haven’t checked it out yet, do so, that post from another blogger really tells you all you need to know.

And what you need to know is; the game is up.

No amount of government borrowing will save us now. They cannot print their way out of this. No regulation, intervention or fascist control-grid can save the day.

I want you to keep an eye open because when one of the big ones, it doesn’t really matter which one, really starts to fall they will all fall. The derivatives scam is global, the toxic assets are overwhelming pretty much every bank on the planet, the printing have been massive all over, and everyone is borrowing from each other and from themselves on unprecedented levels. So when one crashes it will create a domino effect and a very long depression.

Well, the depression is already here, it started over a year ago, the mainstream morons haven’t figured that out yet.

And don’t kid yourself; this will be really, really bad.

Just as before and still today, we will hear about ‘green shoots’ or they will cable out some news about new stimulus packages, or lower interest rates down even further, maybe even pay for borrowing. They will use the spin-doctors and the pundits to argue that it will be a tough a year or two, but they will fix it. China will save us. The US is the strongest nation on the planet and will make it.

It is all lies.

Until we face the music, get rid of all the toxic assets floating around and do the complete opposite of what we’re doing today, nothing will change.

The way out is to let the collapse happens and welcome it. We need a couple of years of despair wherein we can flush out the system, cut taxes, eliminate government intervention, raise interest rates and let our economies contract 10-15% for a while. We need prices to plummet down and the big banks to burn and crash.

Wouldn’t this be bad? Yes it would, but we would manage. Sure we would suffer for a while and the riots will scare the living daylights out of most of us, but that’s what needs to be done. People are resilient; they will find a way to survive, if we let them.

Our masters don’t want to hear this, they still think they can avoid such calamities, but they can’t. It is better to acknowledge our dilemma and act responsibly rather than to increase the problems while whistling a jaunty tone, but the masters of our faith will not hear about it. They are all-knowing and with just another regulation they will fix it…

Some countries, like my own birth nation Sweden, are in better shape. They can manage a year or so because they haven’t been as reckless, but that’s only temporarily. As said, this will go global and when trade becomes non-existent and all the big players are defaulting, no-one will be spared.