I am so sick and tired of the rubbish and scaremongering from people who (on paper) should know better.
It is a breath of fresh air to read something which actually nails the real cause of the problem and
what the problem is (solvency vs liquidity)
http://online.wsj.com/article/SB122428279231046053.html
It is like people complaining about shares going down and their super (like 401k) being down 40% this year after 4 years of more of 20% gains!
Year 1: $100,000
Year 4: $207,000
Year 5 $124,000
Monday, October 20, 2008
Thursday, October 16, 2008
Zero interest rates?!?
Ahh the Global Financial Crisis otherwise known as Global Fried Capitalism or GFC.
Blame it on capitalism and use it as an opportunity for another experiment with socialism.
Doesn't Russia's 75 year bloody detour into hell tell you something, what about North Korea....
No the enlightened, elected few and their many unelected advisors believe they can do better to "manage" the economy.
With a fundamentally socialist organization at the core of each "free market" economy, I am talking a reserve bank, it is not capitalism, never was. It is what is called a mixed economy.
What the reserve bank does is set its target rate, which is normally what banks can borrow money from it.
It defends this rate by either buy or selling bonds. It is based on the idea of a natural rate of interest.
Here is the BS that is peddled by reserve banks and economists the world over. They set their interest rates in line with the natural rate of interest, which is in fact indeterminable (unknownable) at the time they set their rate.
Set it too low and the reserve bank is said to be running an "easy" money policy...
Set it too high and the reserve bank is said to be running a tight money policy.
So reserve banks the world over have been running a easy money policy, pretty much from 9/11/2001. Eventually the easy money, at one time confused as excess savings finds it way to the most profitable game in town and then beyond, causing inflation to rise.
The reserve banks begin to raise interest rates, the media reports, "Reserve banks has a tightening bias" and suddenly things which only work when money is close to free (to banks) are no longer profitable, whoops we need to blame, executive greed, extreme capitalism, mean street, the masters of the universe.
I actually want those idiots to go to the wall and go bankrupt. That is the best thing which could happen to them and their unproductive use of money. Shuffling/merging/bundling crap loans with good and calling them Triple A assets, is like wrapping a dogshit in a bun and calling it a hotdog. Both are going to cause violence reactions.
We have a solvency crisis (not a liquidity crisis), the only way banks are going to lend to each other, rather settle accounts with each other (noone trusts the solvency of the other bank) is when the Government owns 51% of the bank and forces the banks to lend and settle.
Simple as that.
The bankers are doing, at the moment, what makes good bankers, that is, being cautious and prudent.
The Governments of the world want them to go back to be incautious and reckless.
No doubt the music will begin again when reserves banks reach that magical point again where it is easy, close to free money and all the unproductive businesses (and profits) can start again.
Then we have this bloke saying zero rate interest is going to happen.
http://business.smh.com.au/business/zero-interest-rate-a-possibility-20081016-524u.html
Noone asks the Japanese how their little experience with zero interest rate went... whoops a 15 year period in the doldrums. No thanks I would rather have money mean something.
Here is the point.
The reserve banks are to blame, they are the root cause, and provided the incentives for all the unproductive use of capital. Trying to control/manage and thereby corrupting the price signal that money provides through time (I am talking the interest rate) they have corrupted the whole structure of the economy.
That people who are fundamentally opposed to free markets are using Wall Street and Capitalism as the scapegoat is nothing new.
Mostly they are control-freaks who hate the idea that things just work out without requiring government policy or intervention. Otherwise they are peddling a social agenda which takes from the productive and gives to the people who will vote them back into office.
If the local Australian government really wanted to fix things and use their surplus properly, they should give everyone back their money their paid in taxes rather than a select group.
http://www.theaustralian.news.com.au/story/0,25197,24494843-5013946,00.html
The worse advice I have even seen was from Wayne Swan and Lindsay Tanner (who should know better).
Go and spend the payment!!! don't save it, spend it! FFS why not helicopter everyone $1000 dollars so we can all spend it! It will make us all richer won't it.... but wait, don't stop with $1000, what about $10,000 or even $100,000. How about everyone wins lotto courtesy of the government. That seems to be working in Zimbabwe and worked in the Wiemar Republic, and John Law's Mississippi Bubble as well didn't it?
They should bring it forward to have the payments arrive on the first Monday in November (before the first Tuesday ala Melbourne Cup) it will have the same effect.
The words of the late Kerry Packer come to mind...
"if anybody in this country doesn't minimise their tax, they want their heads read".
"the Government wasn't spending it so well that we should be donating extra".
Nice to see my tax dollars at work allowing people to blow it on the pokies, drink and piss it against the wall or spend it on retail goods.... I can do that as well, without having to support the ATO and government bureaucracy along the way. But wait, the politicians don't give a toss either, they are living off the tax money as well.
Have Fun (on my hard earned tax dollars)
Blame it on capitalism and use it as an opportunity for another experiment with socialism.
Doesn't Russia's 75 year bloody detour into hell tell you something, what about North Korea....
No the enlightened, elected few and their many unelected advisors believe they can do better to "manage" the economy.
With a fundamentally socialist organization at the core of each "free market" economy, I am talking a reserve bank, it is not capitalism, never was. It is what is called a mixed economy.
What the reserve bank does is set its target rate, which is normally what banks can borrow money from it.
It defends this rate by either buy or selling bonds. It is based on the idea of a natural rate of interest.
Here is the BS that is peddled by reserve banks and economists the world over. They set their interest rates in line with the natural rate of interest, which is in fact indeterminable (unknownable) at the time they set their rate.
Set it too low and the reserve bank is said to be running an "easy" money policy...
Set it too high and the reserve bank is said to be running a tight money policy.
So reserve banks the world over have been running a easy money policy, pretty much from 9/11/2001. Eventually the easy money, at one time confused as excess savings finds it way to the most profitable game in town and then beyond, causing inflation to rise.
The reserve banks begin to raise interest rates, the media reports, "Reserve banks has a tightening bias" and suddenly things which only work when money is close to free (to banks) are no longer profitable, whoops we need to blame, executive greed, extreme capitalism, mean street, the masters of the universe.
I actually want those idiots to go to the wall and go bankrupt. That is the best thing which could happen to them and their unproductive use of money. Shuffling/merging/bundling crap loans with good and calling them Triple A assets, is like wrapping a dogshit in a bun and calling it a hotdog. Both are going to cause violence reactions.
We have a solvency crisis (not a liquidity crisis), the only way banks are going to lend to each other, rather settle accounts with each other (noone trusts the solvency of the other bank) is when the Government owns 51% of the bank and forces the banks to lend and settle.
Simple as that.
The bankers are doing, at the moment, what makes good bankers, that is, being cautious and prudent.
The Governments of the world want them to go back to be incautious and reckless.
No doubt the music will begin again when reserves banks reach that magical point again where it is easy, close to free money and all the unproductive businesses (and profits) can start again.
Then we have this bloke saying zero rate interest is going to happen.
http://business.smh.com.au/business/zero-interest-rate-a-possibility-20081016-524u.html
Noone asks the Japanese how their little experience with zero interest rate went... whoops a 15 year period in the doldrums. No thanks I would rather have money mean something.
Here is the point.
The reserve banks are to blame, they are the root cause, and provided the incentives for all the unproductive use of capital. Trying to control/manage and thereby corrupting the price signal that money provides through time (I am talking the interest rate) they have corrupted the whole structure of the economy.
That people who are fundamentally opposed to free markets are using Wall Street and Capitalism as the scapegoat is nothing new.
Mostly they are control-freaks who hate the idea that things just work out without requiring government policy or intervention. Otherwise they are peddling a social agenda which takes from the productive and gives to the people who will vote them back into office.
If the local Australian government really wanted to fix things and use their surplus properly, they should give everyone back their money their paid in taxes rather than a select group.
http://www.theaustralian.news.com.au/story/0,25197,24494843-5013946,00.html
The worse advice I have even seen was from Wayne Swan and Lindsay Tanner (who should know better).
Go and spend the payment!!! don't save it, spend it! FFS why not helicopter everyone $1000 dollars so we can all spend it! It will make us all richer won't it.... but wait, don't stop with $1000, what about $10,000 or even $100,000. How about everyone wins lotto courtesy of the government. That seems to be working in Zimbabwe and worked in the Wiemar Republic, and John Law's Mississippi Bubble as well didn't it?
They should bring it forward to have the payments arrive on the first Monday in November (before the first Tuesday ala Melbourne Cup) it will have the same effect.
The words of the late Kerry Packer come to mind...
"if anybody in this country doesn't minimise their tax, they want their heads read".
"the Government wasn't spending it so well that we should be donating extra".
Nice to see my tax dollars at work allowing people to blow it on the pokies, drink and piss it against the wall or spend it on retail goods.... I can do that as well, without having to support the ATO and government bureaucracy along the way. But wait, the politicians don't give a toss either, they are living off the tax money as well.
Have Fun (on my hard earned tax dollars)
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