CRASH 2: Why there better had be an alternative to the current model…

….or everything will end up in the sewer.

globalunemploygraphpaintSorry that the above chart (for which I’m indebted to Irish Slogger Christo) requires a good deal of scrolling, but then the list of countries in trouble at the moment is very long indeed. The ones below the arrow at 7.5% unemployment (roughly the alleged US rate) marked with a red dot are those which have been following austerity policies recently, and/or work to a heavily Globalist Friedmanite economic model. The ones marked with a green dot I have set to one side, as I would say they have socio-economic and political problems that are not really part of the ‘mainstream’ crisis of neoliberal capitalism: Egypt, South Africa, Argentina and so forth.

As you can see, those economies heading south are somewhat replete with red dots. The entire collection of peripheral, central and southern States within the eurozone are represented: and the more ‘help’ they’re being given by Brussels-am-Berlin, the higher their employment rate is.

Only sixteen countries on the planet in 2013 have below 5% employment. Only one is in the EU. None of them are pursuing either austerity or Friedmanite neoliberal economic policies.

I venture to offer the opinion that what we have here is a failing model, and an urgent need for new ideas about how to stop a quickening spiral down the plughole.

Things don’t get any better when you look at the Sovereign debt situation. And remember: the current globalist model of mercantilism has at the centre of its philosophy growth by leveraging asset value through debt.

1. Greece   155%

2. Japan    134%

3. Cyprus   127 % (nb, 18 months ago it was only 81%)

4. Portugal 112%

5. USA        108%

6. Italy        105%

7. Ireland   102%

8. France      88% (nb the fastest growing debt during 2012)

9. Britain      86%

10. Spain       72%

Some key points are instructive. First, eight out of ten are in the European Union. Second, Every eurozone ClubMed member is in there – and ‘help’ given by the Troika has made the debt worse. Interestingly though, the lowest debt to gdp level in the EU is in Spain: the one ClubMed country that has flexed its muscles to resist Troika incursions into its domestic affairs.

Third, seven out of ten have a debt bigger than their gdp. Fourth, every one of these countries would find their debt unmanageable – and be forced to default – if interest rates rose to even 2.5%.

Fifth, three of those nations – Britain, the US and Japan – have engaged in massive QE and thus increased their debts. Japan at 134% is second only to Greece, but has just embarked on the most intensive QE + currency devaluation market interventions in history.

But fact number six is the real mind-concentrator: together this lot account for almost exactly one third of global gdp. The only zero debt-laden giant outside the list, China, is about to slow down towards a hard-landing. And Russia is hugely overdependent on energy exports to a global economy which needs less and less energy with every passing week. And, um, India just put up interest rates to protect the Rupee. Oh, and – er, five Wall Street banking firms account for 60% of all known derivatives exposure: Goldman Sachs is leveraged at nearly 100-1.

But the UK Coalition’s leader says recovery is just around the corner, and his Chancellor says “the strategy is working”. My advice at this point would be, unequivocally, “Vote Labour” – but for one fact: they clearly don’t have a clue what to do either. UKip? Don’t really see why we need them any more, as we’re obviously going to Brexit anyway. Well, I do see why the Newscories want UKip around – so they can do a deal, and replace Camerlot with themselves…the very people in the UK who most admire the economic model that got us into this less-than-sweet little jam. LibDems? Hahahahahaha.

To sum up: despite this appalling outlook, we need to have a dogfight followed by a referendum about whether to leave easily the most underachieving trade group in the world; the US Congress has a bunfight 24/7 about the deficit; the biggest bureaucracy in the world, the biggest lender in the world, and the biggest debt collectors in history have (together as the Troika) made every debt situation in which they’ve been involved worse; not one MSM medium anywhere of which I’m aware is questioning the failure of Globalist mercantilism; everything tried – QE, austerity, and Zirp – has failed…but been repeated/retained; and despite the fact that fully one third of the world economy producers are drowning in debt, debt forgiveness is not on the radar, not even being suggested for the radar, and vociferously resisted by Berlin, Frankfurt and Wall Street.

Now does everyone see why, without radical creativity, the game is over? Now does everyone grasp that, without a near 100% clearout of those at the top in global commerce, geopolitics, fiscal control, and energy, the game – once over – will simply turn into a frozen tableau….followed by massive social unrest around the world?

They are, all of these worthless egomaniacs, wrong, incompetent, denialist, and self-interested censors of what’s going wrong. And the MSM are implicated – in some cases, actively complicit – in the censorship. As for the politicians, they’re just low-grade hookers.

Forget Left and Right – as terms, they no longer matter – and they get in the way. Leave the comfort zone of your tribes. Accept that the coming battle is between big controlling and small vulnerable. Look around for those with whom you can form a Coalition for Decency.

Then forget politics, and start trying to use our fiscal and economic power to rid us of these rats. They are carriers of Black Death. United we stand a chance – but engaging in divisive rhetoric and continuing to vote for idiots will get us nowhere other than under the soil.

Connected at The Slog recently: Runners and Riders in the Apocalypse stakes.

41 thoughts on “CRASH 2: Why there better had be an alternative to the current model…

    • @zoompad. Modern theology has it that everything is God (includes you and me). In that spirit, may I offer you a quote from Nelson Mandela .. “Your playing small does not serve the world. Who are you not to be great?”
      And while I was searching for that Mandela quote, I found another one, especially for JW … “There can be no keener revelation of a society’s soul than the way in which it treats its children.”

      • Youth unemployment in South Africa is closer to 50%, so half of Mandela’s children are wishing and waiting. In terms of raw numbers, the horror story is even worse, unlike the west, the demographic bulge in Africa is below the age of 24.

    • That help will come, but only after things have gotten so bad that people will, in their desperation to believe in someone who really can fix things, throw their loyalty behind an individual yet to be seen, though I believe he’s around somewhere.
      Everyone should read ExoVaticana and then look around themselves at the state of the world.

      • Sounds to me like “deus ex machina” which is Latin for “i am too bloody lazy to do anything let’s just dream”

    • I’m afraid I agree with mark deacon here. We are merely at the early stages of the crash. Indeed, the words crash and collapse tend to invoke an immediacy of events. but in truth, a collapse can be in seconds or decades.
      There just is no alternative, (that I can see), that can be assembled to solve this. We are globally, in descent mode. The only unknown is time, in so much as how fast or slow that descent will be. My own interpretation, is that in 20 years we will look in the rear view mirror to see a downward ‘staircase’, of periodic mini crashes and collapses.
      Like the circus trick of keeping all those plates on sticks spinning in the air, they each wobble and eventually fall at different times and at different rates. But the core of your analysis is right, the circus clowns in charge will keep the plates spinning until they get tired, or until we get weary of their plate spinning act.
      The only alternative we have, I believe, is to firstly acknowledge that we are in a descent, and accommodate it into our lives personally, and try to point society into a low growth state for the future wellbeing of others. It will be a painful transition.

      • Agree with you entirely. I would add the possibility of a Black Swan event, such as Fukushima, where problems are escalating – steam rising from #3 reactor building. The official explanation so far is maybe rain got in…..though there have not been previous reports of new steam emmisions after rainfall.

    • I agree. There is time to prepare for a world in decline, but not much time. There are 4 major crises coming together – the crisis of water supply, of food production, and of energy supply – as well as financial. The adjustments required are FAR larger than a merely financial and economic analysis indicates. Nature now sets the terms of engagement, not humans.

  1. I imagine it to be rather like the appearance of Doodlebugs over head……..you can hear the drone and then the ‘phut phut’ as it starts to splutter, but no-one wants to be there when it goes silent, and starts to fall!

  2. To be honest, this looks like another of humanity’s Great Experiments. In the past we’ve had the Farming experiment (works, but you need lots of trade), the Living In Cities experiment (doesn’t work too well; we’re mentally villagers at best), the Unusual Political Systems experiment (Monarchies/Dictatorships don’t scale very well) and now the Great Money Experiment (fiat currencies are a dead end).

    This latter one basically comes down to how we partition scarce resources. In the past, barter and intrinsic-value coinage was where it was, and worked most of the time and when it failed, didn’t fail all that badly, but didn’t work very well for high finance. Then some genius invented fractional reserve banking and it was all downhill from there on in; fiat currencies are the next logical development from fractional reserve banking, and are basically a step too far.

    The problem with a fiat currency is that politicians control it. Politicians are people very skilled at getting elected and staying elected; they’re popularity whores at best. What they are absolutely rubbish at is self-restraint for the good of all, hence the recent quantitative easing. Give a politician control of a currency and the end state is the 100 trillion Zim-dollar notes in my wallet (a talking point only). While ever politicians have control of currencies, the irresistable temptation to generate more currency to get out of trouble will remain, and as politicians are only elected for a few years the concept of fixing a problem for a short while and then it’ll be someone else’s problem will always remain.

    The future is basically several different, competing asset-backed Bitcoin systems. What you get is an untraceable cryptographically secure pointer to a fixed asset, which backs the Bitcoin with cold hard cash and for which the Bitcoin can be exchanged. One such currency isn’t enough; you need several different, independent ones in competition with each other.

    If implemented, politicians will rant, rail and curse the existence of these financial systems because they would do what most other systems cannot: offer a non-inflating, easy-to-use alternative to politically controlled fiat currency. To compete with such secure, solid and non-inflationary currencies politicians would be forced into fiscal responsibility and actually standing up on their back legs and behaving sensibly and mostly honourably. They wouldn’t want to, of that I am certain, but faced with the alternative of watching their citizens defect to the Bitcoin-like currency instead of hyperinflating toilet roll they would have no alternative.

    This is the sort of idea that frightens politicians. This is even nastier than a tax haven; it breaks their control and threatens their ability to rob their citizens. It absolutely must be brought into being.

    • Yes,yes, but how does this bitcoin thing work? How do you pay? Do you down load them & print them out? What if you haven’t got a computer? How can you trust someone at the other end who you can’t see, & therefore can’t go & shout at? Please explain, I know I’m not clever, but I learned a long time ago that when something seems to good to be true…etc.

  3. “Forget Left and Right – as terms, they no longer matter “. A few politicians are ahead of you there.
    Ken Clarke has got into bed with Peter Mandelson and that ginger bloke in the LibDems to form a new institution called British Influence. The strapline on their website says “we are neither Europhiles nor Europhobes”. Their manifesto says “Making the case for Britain’s membership of the EU”, proving the outrageous lie of the strapline.
    It’s a cutting out operation to draw in anyone daft enough to think we have any influence in the EU, but since the strapline conflicts with the manifesto, and it’s headed by an old duffer, an old queen and someone whose name no-one can remember, I don’t see it lasting long.

  4. “Interestingly though, the lowest debt to gdp level in the EU is in Spain: the one ClubMed country that has flexed its muscles to resist Troika incursions into its domestic affairs.”

    Or might we re-phrase that to “The only country that has not let ANYONE anywhere near its bank or sovreign accounts books”.?

    Since the figure of 72% comes entirely from unsubstantiated figures supplied by the Spanish Government…….anyone who seriously believes that number probably also believes that Argentinian inflation is presently running at 10% this summer..

  5. Pingback: John Ward – Crash 2: Why There Better Had Be An Alternative To The Current Model…Or Everything Will End Up In The Sewer – 18 July 2013 | Lucas 2012 Infos

  6. Yesterday, Bernanke admitted openly that if the Fed were to stop QE, markets would crash. Put another way, the markets are an illusion created by unsustainable spending. Put yet another way, this will and must end.

    The notion that rates will rise is questionable. Remember, we made it up to 2.75% and we almost went over the cliff. That’s the hard-ceiling. A mere 2.75% (Low by historical standards!) and we’re cooked.

    So either we go over the cliff, or we grind-on agonizingly like Japan did for 30-40 years hoping in vain for another growth story. Or there’s always the third option that no one talks about: The powers that be invent a conflict and convince their respective peoples to start killing each other — as is the historic norm for global economic collapses such as this.

    • Must be why they are even thinking about going into Syria,arming the ‘rebels’, while retiring army chiefs say, ‘We must be clear as to our objectives’.

      • No, it won’t be nukes. The globalists will find some way to deal with the other enemy of their plan -Islam. They’ll manage to get us out there in uniforms but killing muslims in the great mercantile globalism race. They’ll figure a few atrocities will kick it off -like 9-11, Maybe even an Iranian nuke in a day sack. We won’t chuck the waste of money that is trident at them, so they’ll do it again to show how weak we are.They’ll claim it was the action of rogue elements…….and off it will go.

    • Roven,

      “we grind-on agonizingly like Japan”

      - which has one of the highest standards of living in the world. The whole “lost decade” story relates to ecomomic growth which is needed for the advance of the Fabian socialist project, not for the beenfit of the population.

  7. I still think things are going to get a lot lot worse before they get any better. And my money is on the long slow decline into the abyss as opposed to a ‘crash’.
    But, Who knows?

  8. A good description of the bizarre situation we are in with debt here!
    ‘…So when lots of people try to pay down their debts at the same time, the amount of money in the economy starts to shrink. When this happens, it’s like draining the oil from the engine of a car: pretty soon, everything stops working.
    This means that it’s almost impossible to reduce our debts at the same time without causing a recession.’
    http://www.positivemoney.org/issues/debt/

  9. starting to sound like an economist here john with too much pseudo scientific categorization – sounds like you are interpreting data to explain an outcome you have already concluded in your mind (apologies i only speak up to critizise, should give you more likes and lols with lots i find agreeable and informative!)

  10. @Mo,
    All you ever need to know about Bitcoin.

    http://evoorhees.blogspot.sg/2012/04/bitcoin-libertarian-introduction.html?inf_contact_key=9dc7786716d57b07de63dbab05b9d429fff97a5ed660173466c08dcd1b7664f3

    @Dr Dan.
    The Govt do not control the money system. Only 3% of the money in circulation is issued as cash by our Govt.
    The remaining 97% is created by the private banking system, digitally by a fraud called double entry bookkeeping ,when they issue a loan.
    That is why we have a financial crisis.
    Too much money has been created , with not suffcient assets to back this issuance. It is all fluff money.
    This is what the City of London specialises in, creating fluff money and not wealth.
    Wealth is something solid.Food.fish . minerals ,manufactured goods and resultant jobs. Fiat currency in excess is only good for hanging on a nail in the outside Karzi.

    • Correct.

      “Goldman Sachs is leveraged at nearly 100-1″
      The Wall St banks tried to buy themselves time with the bailouts, but their natural greed overcame them and now they have gone turbo-mode with the free money. Instead of them taking the warning and getting their houses in order, they have just taken us over the cliff.
      Bernanke has now basically admitted he won’t stop them, and until the day when one tiny person says they won’t honor their derivatives contracts * and the house of cards collapses, they will keep the show on the road by whatever illegal, immoral, and unlawful methods are available.
      * or Eric F’n Holder drags some of them into court outside of NYC.

  11. “….debt forgiveness is not on the radar, not even being suggested for the radar and vociferously resisted by Berlin, Frankfurt and Wall Street ”
    Our good friend Schauble speaking in Athens today told the Greeks
    ” Stop talking about a new haircut , is not to your benefit .If you accept our money and the same time your hope to have a haircut your are nothing else but liars “

  12. Pingback: THE PAEDOFILE: All mouth & Trousers from Plod. Situation normal. | The Slog. 3-D bollocks deconstruction

  13. Is there government debt? Government to government debt?
    It is plainly a simplification -because I’m simple- but is there any mileage in Britain saying to America for example, well we owe you 800 million and you owe us 750 million so we’ll call it 50 million owed to us and the rest just disappears…….

  14. Money is free to slosh around the world unhindered. Frau Merkel says that we are to move with this current of cash.

    At some point a Crash will also slosh around the world and when this happens any islands of stability will look more like a medieval fortress than a civilization that actually works.

    Supplying broken glass, guard dogs and guns will become a growth industry.

    Who will occupy the NSA spy facility under construction in Utah when the control of it is lost?…………interesting times!

  15. Brilliant summation John – Freidman’s so called economic miracle in Chile was only achieved under a dictatorship with the use of ( amongst other things ) unemployment by the ‘Chicago boys’ to drive down wages. At first glance it might be assumed that the same system which is trampling over the Club Med’s etc is operating well without a Pinochet, but when there is no true Democracy due to the majority of the parties & the MSM having their tongues down the back of the trousers of the financial shysters, it seems that old time tyrants are no longer needed, for the time being at least.

    I found a strange website that was the abode of an American guy named Steve Kangas who died in strange circumstance in 1999. He was a liberal & had faith in Clinton – I think if he had been aware of the none inhaling one’s dealings with Glass-Steagall etc he might well have altered his position. Steve’s website still exists today, kept afloat by an anonymous donor. He seems to have been way ahead of most in his writings & the linked article he wrote on the Chilean experiment scarily echoes today’s looting.

    Welcome to Freidman’s utopian dream :

    http://www.huppi.com/kangaroo/L-chichile.htm

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