Keeping it simple – so Americans understand! - International Social/Political

I am reminded of a psychopath who was absolutely terrified of pronouncing ‘swear’ words; however, this same conservative religionist was a predatory paedophile and thought nothing of (or justified) destroying the lives of innocent children – never say ‘FUCK’ but condone (or ignore) the mass murder of millions of innocent men, women and children. Such is the state of American society today! In the social psychoanalytic sense it is clearly a VERY SICK society!

But to today’s first installment of the new approach:

Reading Economic REALITY 101

Is it possible to extinguish a petrol fire by pouring more petrol on it? Is it possible to revive a debt-destroyed economy by creating evermore debt? If you answered NO to both questions some ‘hope’ remains.

Perhaps a brief history of paper currency may assist at this stage.

The Chinese are ‘credited’ with creating paper currency. Notes were exchanged in business transactions instead of bulky precious metals for convenience and security reasons. These notes were honoured as they were backed by the indicated amount of gold or silver but most importantly they were guaranteed by government. Traders embraced the use of these notes as they covered large distances and were often attacked by bandits who were unable to collect on the notes!

The astute mountain man would have noticed a number of crucial points; the notes represented universally agreed upon standards of VALUE, in the form of GOLD or SILVER and were issued and redeemed under the authority of GOVERNMENT! These are the two most important characteristics of ANY currency! Now compare to today’s greenback which is not pegged to any universal standard such as gold and is NOT PRODUCED by GOVERNMENT!

If you were unaware that the American Federal Reserve Bank, which prints US money, is a PRIVATE organisation, NOW YOU KNOW! [Knowledge is power everywhere else; let’s hope it catches on in America!]

If paper currency adheres to the FUNDAMENTAL PRINCIPLES that give it value, trading economies are never compromised by the life blood of trade, MONEY! However, if currency is detached from its traditional standards and backers, gold and government, then prepare for inevitable ABUSE caused by THEFT and FRAUD, that simple -- and there is nothing any lying Wall St Bankster or Chicago Economist can say to counter that hard economic reality. We offer a global financial meltdown as proof they are only able to offer more LIES and THEFT!

Old habits die hard, I would like to draw your attention to disciplines that reveal much. Semiotics and textual analysis; these disciplines reveal everything there is to know about any given culture, the degree of information gained is only limited by the level of expertise of the practitioner/analyst!

For example, non-Americans traditionally refer to their currencies as ‘notes,’ as their currency has traditionally adhered to the two most important principles of value; whereas in America, where private concerns manufacture money and lend it to government with interest, these notes are referred to as ‘bills’ because that is exactly what American currency is, a transferable medium of DEBT!

The internationally touted (but not internationally adopted) American economic model had nowhere to go but collapse; the sooner free market capitalism is abandoned the sooner the nation would be able to recover – ALL ATTEMPTS TO REVIVE A DEAD MODEL ARE FUTILE, as will soon become evident to ALL!

Everyone is encouraged to confirm for themselves the veracity of the above. I sincerely hope this attempt at mountain writing succeeded and was simple enough for all Americans to understand, keep your noses clean! As for me I’m off to shoot me a possum for tonight’s stew!

The shoes Iraqi journalist Muntader al-Zaidi threw at George W. Bush had more courage and truth in them than all of America's fawning media. Al-Zaidi reminded the world that Bush, Dick Cheney and their helpers have the blood of hundreds of thousands of Iraqis on their hands -- perhaps as many as one million.

In New York, fabled investment guru Bernie Madoff is accused of bilking clients of an astounding $50 billion while well-fed federal watchdogs snoozed.

Thanks to Madoff and Wall Street bandits, tens of millions of people have lost their life savings and retirement funds, and the world financial system is on the rocks.

Wall Street's big money con men, hedge fund Houdinis, and casino capitalists made a staggering $33.3 US billion in bonuses in 2007 alone by shady financial engineering and hawking fraudulent securities. Yet they have so far escaped prosecution. They get to keep their swag and $30-million South Hampton beach houses.

Worse is coming. Chrysler and Ford will shut plants in January. GM is next. In spite of the $13.4-billion auto industry bailout announced by President Bush last Friday, many plants may never reopen. As this column has long said, the U.S. auto industry closely resembles the old Soviet Union: Economically declining, bereft of new ideas, producing unwanted products, run by dimwitted careerist bureaucrats.

America produces the wrong cars, and far too many. The bloated auto industry must downsize. It has been selling cars only thanks to the steroid of cheap, easy credit -- in effect, almost giving them away. Now that the drug is largely cut off, sales have nosedived.

The U.S. economy has been running almost entirely on credit for a decade.

The U.S. national debt is twice America's net worth. Government and business encouraged a reckless credit binge to which the nation became addicted.

SAVINGS

Manufacturing fell to only 12% of GDP. Finance -- the shuffling of paper -- became America's leading industry. Americans saved nothing and had to borrow $1.2 trillion from China and Japan to keep the orgy of consumerism going.

Washington's response was panic, then flooding the economy with freshly printed money in hope something positive would happen. Japan made precisely the same gamble when its bubble economy collapsed in the early 1990s. Today, Japan has one of the world's highest deficits and its economy remains dead in the water.

The U.S. economy must be weaned off credit addiction. Pumping billions and billions of dollars into the economy is like mainlining more drugs to a sick junkie.

The economy needs a period of cold turkey in which remaining credit bubbles, bad debt and financial distortions are purged. This is called recession, and it's a vital part of the capitalist free market cycle.

Without a period of pain, we can't restore economic health or sanity.

But panicky American politicians plan to spend $8.5 trillion to stave off this necessary, beneficial recession. Their misguided efforts risk igniting a future firestorm of inflation that will be far more dangerous and painful than any recession.

HYPERINFLATION

That is why the European Central Bank, with vivid memories of the terrifying 1920s hyperinflation in Germany when a loaf of bread cost 80 million marks, has resisted deep interest rate cuts and printing money.

The Fed's recent slashing of U.S. interest rates to zero is a sign of utter desperation and an act of folly. Once investors realize that Europe, Canada and Asia are far safer investments than the U.S., watch for the U.S. dollar to nosedive -- as it should.

The remedy for America's economic ills is not more money but patience.

Americans must relearn the old verity that one must save for purchases and rainy days; that gambling with your home is idiotic; that there is no substitute for hard work or manufacturing; and that it's always very risky to trust politicians or financial "professionals" with your money.

© 2008 Toronto Sun

Capitalism is dead -- its fundamental premises were theft (profit) and lies (credit/debt has value!)

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