Thursday, August 6, 2009

One sign of lovable humans

At my work we have a sign above the urinals that reads: “Please refrain from throwing chewing gum in the urinal since this tend to block the piping”. And every time I go and use the facilities there are at least 3 or 4 discarded chewing gums in each urinal. To me this is a good sense of humour and a healthy sign that people won’t always comply within the “rules”. It might seem silly and juvenile, but I like it.

The violence is getting started

As I have written before there is a very strong movement of resentment growing in America. There are many different groups, everything from white supremacy clowns to black people marching to fascist tunes. Libertarians, tax protestors, and very conservative are complaining from the right while the government labels them as potential terrorists. Gun right people and NWO-freaks have started armed militia groups and so on and so on. All the while unemployment is growing, over 40% now in several towns in the US, the budget deficit is growing exponentially and people are loosing more and more trust in both the government and the Obamination. This will turn ugly sooner or later. If it’s going to manifest into in-house “terrorists”-attacks or demonstrations getting out of hand, it is hard to tell, but this cork is about to burst and I cannot wait for it. I really hope the American people take to arms and overthrow their government, and with “government” I mean the entire system, not just the racist president and his fascist policies, no, the republicans should also get their asses kicked. Back to basics and back to the constitution.

This link takes you to another form of violence, this time from the lefties fighting for the Obamination health-care stupidity. Please watch the movie and remember, these are the guys in power and we are just getting started…

Violence Erupts At Rep. Castor's Town Hall In TampaGo Here!

The evil that is Paul Krugman

to RTVE: "We have the money to invest in another bubble, and sincerely, a bubble right now would help us a lot even though we would have to pay the price later. This would be a good time to invest in another bubble, and I think we have the resources to do so, and because there is a massive unemployment right now."


This may very well be one of the most evil men alive. And he has won a nobel prize, like the complete fraud Al Gore and the terrorist Yasser Arafat. Time to end that nobel stupidity...

Another Paul

I think I like this guy more then his father...

Soup ‘em up

We humans do take things to the extreme. The U.S. army is apparently expanding their training operations at Ft. Irwin in the Mojave Desert and in doing so wants to “relocate” around 1,100 threatened California desert tortoises. The obvious question is: why? Firstly, the dessert is kind of a big place; can’t they find another area or part of it to play bang-u-r-dead? Don’t get me wrong, I’m no fan of any reptilia roaming around in slow speed just being in the way, but if it is not really necessary moving them and getting those pesky environmentalists and tree huggers after ya, why make all the trouble? And if this particular area of the dessert is sooooo damn important, fuck the bloody tortoises. Make soup of them, have the soldiers learn how to survive on slow moving stupid animals. Why spend all the time, money and effort moving them? Just kill 'em and be done with it.

Apparently they have moved these thingies before, with less flattering results. Moving desert tortoises is not always successful. The Army relocated more than 600 of the animals last year but suspended the $8.7-million program after the first phase when officials noted high mortality rates among the tortoises, chiefly because of coyotes. Reports LA Times today.

But one quote from LA times you really need to read because this says it all, it’s about tortoises attracting respiratory disease: “Everly said the Army is blood testing every tortoise and will quarantine any found to have the disease.”

Blood testing? Quarantine? $8,7 million? Wtf!? How about give me half that money and I fly over, kill all those buggers, open up a restaurant where I serve ‘em with cold beer. This is completely insane and so unnecessary. And aren’t the US military supposed to help out during this recession, saving some money? If they really need to stay in Afghanistan and waste tax money, can’t they at lest NOT move tortoises for a living? These guys are supposed to be killers! Not cuddling with stupid animals.

Economy for economists?

I was going to name this post ”economy for dummies” but that would be offensive towards dummies. Instead I choose to offer a bit of a guide to people that do not work at central banks, do not have an MBA in finance or has any kind of education in economy. This is mainly from a lecture I held a couple of years ago that I found on an old disc but it still holds its ground since nothing has changed. It is very basic in order for finance ministers and such to understand.

I do not mention M1, M2, M3 and I do not count or show mathematical conclusion, because it is not necessary. The basic rules are what they are and reality does not change. And please remember, almost all of this, except for some comments and the final part, was written and said about 6 years ago. No one predicted this crisis eh..?


There are really only 3 things you need to know about economy, the first two is very easy, the third one a bit trickier. These three things lead to a conclusion about a fourth one and that in turn leads to a 100% accurate prediction about the future.

First: Borrowing and interest rates
This has a very simple ground structure. Low interest rates equals more loans taken since it is cheaper to borrow. High interest rates mean less borrowing because it is more expensive to loan money. This also affects savings in the way that high interest rates mean you earn more money having money saved. Low interest rates mean you won’t save money because you do not earn anything from it. Also; higher rates and consequently savings mean that money is available for investments i.e. future gains. In turn; lower interest rates means more spending right now.

High interest rates = High savings, less borrowing = Higher investment rate

Low Interest rates = Low savings, much borrowing = Higher spending rate

Secondly: 1+1=2
Some economists say: “There is no such thing as a free lunch” or something like: “You cannot get something for nothing”. But even if most economists do agree on sentences like these, almost none of them truly understand the ramifications. Or to put it in other words; in the world of economists 1+1=4,9

Since 1+1=2 and $1=$1 it means that there is actually very little one can do outside the specific monetary circle you live in. Borrowing aside you can only spend the amount that you make. But most people and companies do not spend everything, they save some as a buffer. You know this yourself. If you only have $100 you will probably spend around $95 and save $5 to buy milk and bread later if necessary. If you have a bit more income or many hundreds, you might even put away some money so you can afford to buy a new TV or save to buy a new car in the future. Of course this behaviour partially change when we factor in borrowing, but the basic principle is clear, you cannot spend more than you have earned. This goes for you as an individual, it is true for every company and it is also true for the state.

Thirdly: Money
This is a long one, but size does matter so please read…

What is the difference between a $100 note and a piece of paper? The answer is; hardly anything. The piece of paper might be easier to write on and the dollar note might be shinier, otherwise, nothing. So why do we accept the dollar note as “value” hence can buy stuff for it? And why can’t we use any ordinary piece of paper? The answer is that the government put its muscles and its good word behind the dollar bill and back it up as “their” paper (at the same time outlawing any competitor). It does not matter what the notes are called or even what numbers and such there is on ‘em. What matters is how good the word of the particular government really is. The richer a country is and sounder the financial structure is, the more reliable a government is and the bigger and better a particular country is, the more power is backing a particular note.

Money is used as an exchange good so instead of us going around exchanging chairs for books or hand in our virgin daughter in exchange for a car, we use money. Money makes trade easier and it is easier to transport then people or construction material. This is the main reason for people to except money; we know it is necessary for any form of economy.

But since money doesn’t hold any real value it has to be correlated to something. As mentioned above, “the good word of the state” hangs on the wealth and soundness within the economy i.e. the amount of value being produced. The more value a certain economy produce, the more power you can put behind the money. However, if the number of notes in the economy shrinks in correlation to what we produced i.e. when there isn’t enough money in the system to buy “all” products; it leads to an overabundant of goods on the market and since we have produced more than the number of dollar notes each note grows in value and this means lower prices or/and deflation. Today’s economists claim this is the worst thing that can happen since, as they claim, the economy will dip down repeatedly until we either produce less or print more money.
The other thing that we can do with the money supply is that we print more money than the actual value. This means we get more money in correlation to what we produce and when this happens money looses in value and prices goes up. This is what is known as inflation. Most economist, again, agree upon that a little bit of inflation is better then deflation and consequently they mean that if the inflation rate is about between 1,5-4.5% it is a good thing. Hence they argue for, and the government agrees, that we should print more money than the actual value of what we produce just to keep the shopping spree going and keeping the economy from contracting.

Are u with me so far? Because now the first fun thing about this story comes:

The combination of the only 3 things you need to know about the economy
Government need to abide the same absolute laws as anyone else, hence cannot spend more then they have. BUT; politicians want to get re-elected and they want to behave like and be remembered by their constituencies as “heroes of the people” and as; “a good progressive champion for everyone’s equal rights” or their favourite one: “Saviour of the poor” and this they accomplished mainly by making everyone happy. And how do you make people happy? You give them stuff!

The government, however, is also limited by taxation and their income. They cannot tax us to much, even week feeble pussies like Britons or Swedes will rebel when pushed over the limit so there is a maximum income for the government. How can they fix that? By borrowing! The government goes to a neighbouring state, some companies or even their own people and says: “hey, here is some bonds, wanna buy?”. And normally this is not a problem; governments can sell many bonds since there is an abundant of tax-payer money backing it up. But what are they really selling? They are selling debt and in reality debt in money. The government promise to repay the lender with their money (not the value, please remember this). But also, even here there is a limit. Partly because there is just so much actual value that is shown by the amount of money and governments need to show - as any loan taker do - that they actually can, and will, pay the loans back. Partly they cannot borrow as much as they want because the repayments eventually get higher then the actual loans. So here we have dilemma, but as with any dilemma, the government has a solution: The printing machine!

In older times the printing machine was an actual physical printing machine with ink, paper and the whole enchilada. Today, they press some keys on a computer. In older times, they needed to transport the money and the whole process took time, today they press some keys on their computer and whoosh, the money magically appears in the system. A monkey can print money today; actually a monkey would probably do a much better job...

The three fun things about printing money:

First one: When the government cannot borrow anymore, they print more money. This devalues the debt because more money means that each note is worth less, but it also means higher tax revenues. Yes, that’s right, by some strokes of a keyboard they will increase your tax and you will never notice it. This is a super secret that they do not want anyone to know about. Think about it. Your money is worth less and the prices has gone up but the taxes stays the same or even go down a bit in percentage, but the actual tax is higher. When you understand this first fun thing about printing money you also understand why no government will ever give up this power.

Second one: More money in the system means (as you know from above) a higher level of spending - especially when the government combines printing with very low interest rates. People will go out and spend since they have more money (actual money “value” is, however, less) and people can borrow very cheaply. In effect this means that people indebt themselves in order to buy things they in reality cannot afford. This is what’s being done to us now from governments all over the world in a scheme to keep things rolling along, and it is partly “working”…

The Third one: All of these debts – the governments and the individual debts – in combination with more money in the system and the fact that this extra money reach different markets on different times, means that bubbles are created. Fictive values are created for certain companies, certain stocks or certain areas of the economy. The entire market gets distorted and the longer and the more money the worse it gets. In other words, the more trillions of dollars that is thrown into the system, the bigger the distortion and the bigger the bubbles get. And in our current situation they have thrown more money, in affect; done more harm then anyone ever have done in the entire history of mankind.

The conclusion – what you need to know

If you have read everything above and understand it, we can draw a fun little conclusion about GDP (gross domestic product (Swedish:BNP)). If we print money and borrow lots of money and throw those into the system it will increase GDP, just as economists and politicians are hoping for and as we can see today we can see “green shoots” and some “positive” things… Of course we do, especially within certain areas or, as we can see today, on the stock-markets.

But have we increased the value or the amount of what we produce? No! In fact, “forcing” us to spend more and indebt us more have, at least over time, decreased our ability to produce. Have we stopped the crisis? No! In fact we have seriously worsen it because now there is not only the initial problem, we have also a higher level of inflation, more debts and distortions on the market with one or several bubbles that will burst sooner or later.

To a certain extent, some economists know of some of these dangers so they know they need to - sooner or later - increase interest rates. The further down this path we go, the higher the interest rates will be. About now the actual interest rates are around 7-8% looking at Sweden and a couple of % higher when looking at US and UK. This will, of course, lead to more foreclosures and much less money available to the public since more of their income goes to pay back loans they have taken in order to spend spend and spend, and what will this do to the enemy class precious GDP? But the main problem is the bubbles that will burst one after the other, creating downturns or even trigger that depression that will hit us with full force at any moment. And since our situation is even worse, what will the economists and politicians do? They will do the same thing again! They will print more money, borrow more money and go even further down the road towards total and utter destruction. They will never admit defeat, say they were wrong or change curse. This is why I have predicted there are more stimuli’s to come, even with these “green shoots” because unemployment is so high and keeps rising. With the distortion more companies will fall, hence more bail-outs. And please remember, they have been doing this for a long while now. This is not the first couple of stupidities; it’s the biggest ones, but not the first ones.

So where do this leave us? Yes, you guessed; we are so fucked the word fucked does not measure up. We are fucked way beyond the “great depression” and way beyond anything anyone has ever seen. This is an epic failure of giant proportions that will change the world completely and I would even go so far to say that most of you will not survive. That’s how horrifying this is going to be and you, the mindless drones, you are really to blame. You voted for it, you wanted it, you live with it. Idiots.