Wednesday, July 27, 2011

Facts of the ages – what you should know. Part II

Keep walking please.


While the Greatest Depression continues to gain momentum most people seem utterly clueless as to why, and what is possibly worse is that no one seem to understand the scope of it.

So what do I see that others don´t? And are there actual evidence to my claims? I´ve compiled a wee tiny thingy (in two parts, you can find the first one here ) to point to reality.

Remember this is not the ramblings of a madman, it’s not made-up stories to frighten you, and am not a tin-foil hat seeing reptiles taking over the world through Illuminati.

These are facts. Hard, straightforward, irrefutable, undeniable and absolute facts.

Fact 4 – the Scam of GDP (BNP for Swedes)
I have talked about this before, and I will many times more. The reason for this could be that I want you to know how idiotic this measurement is, but actually I only find it hilarious that so many, pundits and the general public alike, seem to have taken this swindle to heart.

Before I get into the explanation you need to know that:

IF GDP IS GOING DOWN IT CAN MEAN THAT WE´RE ACTUALLY GETTING RICHER!

HIGHER GDP CAN MEAN (AND OFTEN DO MEAN) THAT WE´RE ACTUALLY GETTING POORER AND THAT OUR WEALTH IS DETERIOATING!!

They are lying to you, and if you take everything they say about GDP at face value there’s no hope for humanity. Really. It isn’t. This scam has gone on for long enough.

GDP normally is calculated as follows:

GDP = private consumption + gross investment + government spending + (exports − imports), or,
GDP = C + I + G + (X − M)

Let´s see if you understand math at the same level as 13y olds.

What the equation tell us, among other things, is that if Government spend more, GDP goes up. However, government need to take money in order to spend money. This means that every time government do something (at its core) it’s a zero-sum game. A politician can consequently not promise to give you something without first taking something from you, but no matter what it has no effect on GDP.

There is however one exception from this mathematical fact; borrowing.

A government have the ability to borrow on the future. In the simplest of terms they take money from your future, from your kids and your grandkids and put it to use today. They take that money from future obligations such as Medicare, your pension funds, your savings and our potential future productivity. This way they can bring GDP up and hand over “free stuff” to you in present time. Of course in the long run this means lower GDP, but let´s not dwell...

In addition to direct borrowing from your future (or: STEALING!) they can also borrow money from other countries or larger financial institutes (big banks). Banks and other countries see no problem in lending out cash to a government since they always have you, the people, as collateral. A government can mortgage you, your labour and the country´s natural resources in order to get loans.

In other words to please you today and get your vote they sell you and pieces of your country like a commodity. Or; the more benefits you get - this way - the more enslaved to foreign interest you´ll be.

Never heard that one mentioned from a crack-pot leftie have you?

These first two options do have limits. Either the repayments on such loans get too high for comfort or we reach a situation whereas big banks (or other countries) start to question if the loans will be repaid. Also, sooner or later, peoples mortgaged future will be here to bit back. People want their pensions, people want their savings and people need Medicare and so that money needs to be conjured up again when the future as arrived.

This limit has today, in most countries across the globe, been reached. Borrowing more in either of these first two ways cannot be done anymore, or at least not enough to satisfy those in charge. Coincidently pundits, “economists” and politicians are today talking about a “liquidity crisis” – there´s not enough money in the system...

However there´s a third way those deemed better can borrow and make you happy today. They can go to the central bank and get unlimited cash through a magnificent invention: the Printing Machine!

Since printing shitloads of phantom money out of thin air coincidently (the word of the day...) brings with higher inflation (did you read my first post?) it’s a highly temporary fix. But thanks to Guttenberg’s invention our elected frauds can, for some odd years, play Santa’s in order to buy your vote.

All this to keep GDP growing and keep you voting for the same criminals you always vote for.

I will almost stop here. There are of course more interesting things to mention about GDP, but you can play around with the equation above and figure it for yourself or go to this post by the Market Ticker and get some more background about other malicious dealings that comes with GDP. There´s also a huge difference between the short term and the long term effects depending on action taken, but you should have figured that out by now.

There is however one more thing that should be mentioned. Because what you need to know is that it doesn’t matter (again in the short run) what our masters spend the money on. Whether they borrow/print and spend or if they keep to basics without bringing in cash from the outside to the equation, what they spend money on does not matter comes to GDP – it has the same effect.

In essence government can buy flowers for all your money, they can buy guns, wage war or dig ditches across the countryside and GDP stays the same (or increase if they´ve borrowed/printed) no matter what.

Productivity be damned! Creating value? Pfff... such secondary crap is ignored, GDP is what matters.

This is what I referred to above when I mentioned that GDP can be growing while we´re actually getting poorer. As example almost 80% of GDP in the U.S. is consumer spending and about half of that is borrowed money and the only thing keeping U.S. GDP numbers up is unprecedented military costs (also on borrowed money). Mathematically speaking this is impossible to sustain, which of course mean the entire economy will, sooner or later, retract (or Crash!).

In real figures the U.S. economy haven´t grown at all in many years, no matter what any spokesperson of GDP say.

Again this is basic very simple math.

And here you as consumer also enter the picture because it doesn’t matter what you do with your money either. If you save money you contribute to GDP, if you lend money to government you contribute to GDP, if you spend all your money on porn you contribute to GDP. In the short run it has no meaning what you do – your money will always contribute. With one exception; if you pull out your cash from the system, hide them under your bed and try to never use it the contribution will, to a degree, go down. But even then you need food and electricity and you still pay taxes and so forth.

Just as with government, productivity and savings (the backbone of the economy) is not important, what is important is that you spend money - preferably borrowed money so you can temporarily increase GDP. This is why cornflake-economists and those ruling us keep telling you to spend, spend and spend. Buy more stuff! Please! It doesn’t matter if you actually need another TV, another phone or 57 new pair of shoes – just spend it all!

And this leads us to our next piece of reality...


Fact 5 – a totally fictitious real-estate market
Almost in every country (especially in the western world and in China) three factors have kept real-estate prices up at a totally false height.

First up is you – the true idiot of the story. Partly because government, big business and big banks keep telling you to spend it all and partly because interest rates been kept ridiculously low you went out and bought houses, apartments and real-estate with (mostly) borrowed money. Sure they did fool you with imaginary rates and a constant bombardment of advertising, but you made a conscious decision to spend a big portion of your savings or borrowed more than you should in order to buy something that was already overvalued.

Even worse is that many of you borrowed on top of on your mortgage or used a piece of that loan to buy more stuff you don´t need.

Secondly we have banks – spiteful and scheming banks. Many of which were already in a zombie-state and should have been sized (or burned to the ground) long before we ended up in today´s mad world. What banks do comes to mortgages and loans I have already covered in my first post, but here´s an addendum: they also buy houses, loans and mortgages from themselves or from each other!

There are several variants of this but usually It goes something like this: a ´Parent´ bank buys a (often defaulting) competitor – recently they bought these competitors with freshly printed cash curtsey of government - that becomes a ´Child´ underneath the owner (or they simply start a subsidiary). On the books of this ´child´-bank there are loans and mortgages so the `parent´ bank buys them (at a higher price than the market is willing to pay) and in doing so increase the average “value” of their books. If you remember from my other post this means the bank can lend out more money i.e. get higher revenue.

If they keep doing this; buying and selling within their own walls or (sometimes) between “competing” banks, they can fictitiously create higher prices of housing and real-estate. And since they also get more “value” on their books they can lend out more to stupid morons (you) that in turn buy those homes at inflated prices and so the carousel continues...

The thing I´ve described here isn´t always possible in all countries because, strangely enough, a few countries have outlaw such shadowy dealings... but as said this is only one of many ways banks can artificially help out creating a bubble.

The third entity after you and big banks doing their very best to create a bubble is also, coincidently, the entity responsible for all things wrong in this world:

Government.

In addition to force-feeding you lies and propaganda to convince you to buy stuff that you don´t need and stuff you actually cannot afford, and in addition to having a responsibility comes to law and order, government also embark on their own fantastic tale of carelessness.

You see government usually have access to their own huge bank (ex: SBAB in Sweden - Fanny and Freddie in the US) through which they do their very best to keep interest rates low, house prices high and try to act as a vacuum cleaner on the market – picking up enormous piles of toxic assets and bad loans. This they do in order to circumvent the market and instead of letting the economy cleans itself and let the automatic functions of capitalism punish irresponsible loan-takers and bankrupt fraudulent loan-givers, government steps in.

Whether they have access to such a bank or not, government still have other certifiably insane schemes to pull out of their filthy hat.

Examples of these are; subsidies for building companies, vouchers handed out for “free” to people looking to buy their first home, bank guarantees so no big bank need not to worry about bankruptcy, bail-outs, government loans, stimulus packages and the list goes on and on.

If you remember from above a government can never, ever, never, ever, never do anything without first take your money through taxes or through borrow/printing money. So every time government steps in on the real-estate market they do so by taking money from another sector of the economy. This relocates capital from one area that may be just as vital or even more productive to the area government, in its eternal wisdom, feel is more important. This is the very definition of a bottle-neck economy and it always, without exception, create bubbles.

As two final notes on this subject you should firstly know that renting should always be more expensive than buying (and owning) a home. If it’s not, you can automatically assume that something is seriously wrong.

Secondly the cost for a normal home for a normal income have always, throughout history, been about 3 times that the normal annual salary. If the cost of a normal home costs 9 times or even 10 times a normal income (which is the case today) you can automatically assume that we´re living with a bubble economy.

Of course all of these facts are ignored by The Powers so when our debt-mountains (the largest pile of crap in history) come crashing down so will all inflated sectors come down with - which in particular is the case with real-estate.


Fact 6 – lies, lies and forced sex in hotel rooms

If you´re managed to read through my ramblings in these two posts and also decently understood these hard, straightforward, irrefutable, undeniable and absolute facts - Then you will by now also understand that you´ve been lied to. And this is not one single tiny white one, this is lying way beyond any cartoonish double-dealing two-faced supervillain.

If you´re not grasping a pitchfork at this very moment and/or looking for a grassy knoll with a nice view over your parliament, you have simply not understood what I´ve just told you. Repeat and read through these two posts again without passing go.

But you see, our magnificent story isn´t quite finished.

Normally this is probably the only topic I don´t really need to cover. Most of you actually know or suspect you´re being lied to on a daily basis, but what you don´t understand is that the lying doesn’t stop with “I didn´t have sex with that woman Monica Lewinsky” or funnies like “I smoked, but I didn´t inhale”. Such expressions of elitists lying are only a very, very small portion of it. And that a rich, fatty man with Napoleonic complex get caught having sex (or: rape) a maid in a New York hotel room and then lies about, and then get a horde of lawyers to discredit the woman in question and then is let lose to cuddly with his wife whom he days earlier cheated on is hardly even news anymore.

However our Great Leaders and their entourage of cornflake-economists, journalists, banksters and customer service agents working for social services, are today really out in force. Many of these criminals are of course only idiots, just as you are, but many of them are also fully aware where things are heading and what´s wrong with the world.

This make them lie - well, lying more than usual. And believe me, we´ve seen nothing yet.

Since they are fully responsible for our economic mess (and many of them know it) they are today trying to cover it up. Even if they aren´t fully aware of their part in destroying our way of life, they still have an inkling that people will blame them. This is, coincidently, the REAL REASON for bringing about the nightmare of extreme surveillance and the fascist monitoring systems they are putting into place.

So far they have blamed the market, they have blamed banks, Wall Street, PIIGS and of course; manmade global warming! A few shadowy organisations have also started to blame immigrants, refugees and gypsies. This “blame-game” will only increase. It was never our elected frauds fault – it was the boogeyman (blacks, Muslims, Jews, the rich, the poor, Alky Aida, *whoever*). And the sheople (you) will of course follow suit.

Just look at what they try to feed you about the crisis.

They say it started with Leman Brothers going down. No it didn´t! Not even fuckin close. And then they argue we have too few regulations on a already overregulated market. Then they claimed that we need to save the “too big to fail”.

And then we need to borrow and print trillions se ´we´ could pay off debt! Yeah, that’s logical...

Now they are trying to tell you that all is well. Never mind Greece, Belgium, Portugal, Spain, Italy etc in Europe, never mind that China is building giant cities no-one is living in, never mind that Japan is into her 34532532th stimulus, never mind that U.S. is crashing before our very eyes, never mind rampaging inflation and the biggest debt-mountain in history, never mind tens of millions starving in Africa. And you should never pay any attention to the thieves behind the curtain.

Sure there are problems, but they have fixed it or know how to repair it. No worries. You just keep buying stuff and they will fix all problems...