Go up and give ‘em a hand down

  By Mystic | December 30, 2011 - 05:30 |

Hopefully this all speaks for itself.
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Written by: Mystic on December 30, 2011.
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  • Windcutter

    Best wishes for the season to one and all.

    That blasted Claus didn’t come again, I’m utterly disappointed as I fully hoped that the stockings I hung up would be filled with something pleasant.

    And if suspenders and high heels were involved as well, hmmm……

    But no,

    • snedmeister1

      Best wishes to you too Windy…

      You popped into my mind while thinking about these discussions of late….

      I can remember replying to a comment you made, specifying not to over simplify things, and that some things can not
      be broken down into simplistic terms and then compared to other simplistic terms…
      That real life has grey areas, that do not fit into absolute quantifiable terms, and there is a limit to simplification etc….

      (It’s this pattern, that got my goat about the exponential function comments etc….)

      It was an off the cuff comment by me, prompted by housing if I remember rightly, but while talking with Z, I had the thought
      that maybe I was over simplifying the way the monetary system works in certain countries…??
      Maybe, I was doing the same thing with this topic, and comparing Apples and Pears…??

      If it wasn’t for the discussion we had coming from memory out of the blue, I wonder if I wouldn’t have just put up the brick wall, ignoring Z’s view…??
      ( At least now, even if I disagree with him, or don’t understand, I know I tried to get it… ).

      Funny how the brain works isn’t it…???

      Enjoy the new year…..

       

  • Agodina6

    1 question.  Yes the U.S. peaked in oil production in the 70s , but we had the world to fall back on for oil  When the world hits peak oil, would we hit what albert bartlet has quoted as ,1 minite before midnite.  Jimmy Carter has said that we have used all the oil that has been produced in preceding history and it seems to me that we do this whenever we hit the peak of something like coal or oil.  I am just worried about how steep the other side will be. Not necessarly when we will hit peak be it now or 20 years from now when some people think it will be.  Expontial function …haha

    • http://overthepeak.com/wordpress/ Mystic

      There is a good chance we are over the oil peak (2005/9) and we are on our way down.
      (Note* That is bubbling crude, black gold, Texas tea, real oil)
      Since Carter there has been North Sea, Alaska and GoMexico and It is possible that a new mega find will be made, but it is getting increasingly unlikely.

      As I recall, most charts of peak oil seem to be basically symmetrical.  As she goes up, so she comes down, but maybe that is only for onshore sites (offshore come down very quickly).

      What was the question again…..Ah yes, well…….the problem comes with the money stuff.
      Money has been leant out extrapolating from the past (If they gave it any thought~?) and the future with less oil is going to be `less bang for the bucky` than it was in the past.

      We are going to find out if `work` is really the basis for money or not~!?

    • Bigcollapso

      It doesn’t matter if we have peaked or not. We are past what money men call “cheap oil”. While the concept of cheap oil reveals a lack of understanding about how the world works, it is still somewhat relevant. What matters is surplus energy after the energy to produce energy is subtracted. This number has been on the decline for years,  meaning that banks, governments, etc must cut their complexity to prevent collapse.
      Since we are not doing it, we will see a financial collapse that will seem to have “caused” peak oil. The reality that that missing energy makes the money go bad right on the hard drive that it spins on, but few will understand that.

  • http://www.richnewbold.co.uk/ Richard

    Regarding the first chart: (using rough calculations) if somebody’s income is 40k that works out at an income of approximately 3.3k per month, much higher than the amount of savings indicated by the red line. Therefore, my question is this: is that red line really savings or just the amount of cash these people happen to have available in their accounts at any moment in time? Half a monthly paycheque doesn’t strike me as any kind of “savings”.

    From Common Errors in English: (of which I make many)
    http://public.wsu.edu/~brians/errors/principal.html

    • http://overthepeak.com/wordpress/ Mystic

      Savings is always a bugger, because it means different things to different people (sometimes paying off debt, goes as savings).
      The way I thought about this, was that it could be from a poll that simply asked people how much they saved each year / month.

      But, this is the last para in the article (if it helps) -
      “What has mattered for the average American is simply
      that a specific amount is saved, which has been around $100-$200 a
      month in real (after-inflation) terms, irrespective of the amount they
      have actually earned. So while real disposable income and consumption
      have roughly tripled over the past 50 years on a per capita basis, savings is up a less-than-whopping 13% (0.25% annualized growth)”.

      Thanks for the principal link~!

    • Lyle

      Then ‘there’ is ‘their’ ‘to’ ‘too’ if ‘you’re’ up to ‘your’ ears in errors.  :)

  • badartdude

    One or the other. . . it seems.

  • CSArichardo

    Nice comments by Roger and Phyllis but ….. it is talking apples and oranges.  What should be said is that the 50 US states have the same funding/debt issues using the US dollar as the 23 European states that use the Euro.   

  • Stevo

    Do these statements by economists convince people that central banks will print to excess…or are people still in wait and see mode?

    • http://overthepeak.com/wordpress/ Mystic

      I think most economists (hah, maybe) know that `printing` is a bit complicated.
      There are so many `shades` of it.
      E.G.- Most all the ECB buying of Italian bonds is being `sterilized` (the amount of money that went out, comes back in again).
      It is all slightly different in Switzerland, Japan, UK and US.

      The `Big One` will be when a big CB says it is going to directly `monetize` government deficits with no counter-thinging `sterilization`.

      • Bigcollapso

        Although it is true that directly monetizing deficits will light a fire to inflation, it is important to remember that even swapping “assets” for money is highly inflationary. I think that some are having a hard time getting their mind around that, especially economists. The reason is thermodynamics. The assets have no value in the context of what they are trying to do. Let me use an example that I have used before.
        Imagine two houses, both are in bad condition. Each house is currently worth 50,000 and would be worth 100,000 if it was fixed up. A banker/financial guy would say that you can sell one house and use the money to fix the other. In the real world, no machine can be build that will burn/crunch/take the remaining “value” from the one house and use it to fix the other. Both houses need huge new wealth put at them to be “worth” something. That is, the real world wealth value of them is zero. Banks/Governments are creating new money that is sent after the “fixup” type problems, which it is incapable of. Inflationary.

        • http://overthepeak.com/wordpress/ Mystic

          I can only imagine that your ongoing confusion with all things to do with money, is that you have over-laid some sort of `scientific definition` of what money is…….and that `scientific definition` just happens to be completely wrong.
          Otherwise, I am at a total loss as to how a bright bunny such as yourself, can go on spouting such nonsense.

          But, even that can’t be right~!
          After all, if you were being `scientific` you would be going back and checking what you were saying was not bollocks……but you don’t do that.

          So…..a new idea.
          You think `money` is not scientific, but in some way `magic`…….But then no, you are not a nincompoop.

          I give up……….
          (and very strongly suggest that you give up any further talk on anything to do with money.  In fact, stick to science, energy things you know about and if there is anything to be said on money, put Mrs. Collapso on (and we may get some sense)). 

          • Bigcollapso

            Our freedom will be lost when the money men lose control of the physical world. While I may give up on you, I will not give up on everyone.

            • http://overthepeak.com/wordpress/ Mystic

              Is there a park near you, where you can stand on a box, and shout at the people~?
              Go there, oh poet…..the people doth need thou.  Thine hour hath most truly comethetheth~!

              • Bigcollapso

                I will handle my own affairs.You handle yours.
                If you want me to leave your domain here, just say the world. I will be gone. I am easy to get rid of. Otherwise I will be here as long as I can stand it to shine light into the things you say. I have come to expect your nastiness, in fact the more light I shine on your fantasy of government creating wealth without theft, the nastier you get. It is just all in a days work for me anymore.

                • http://overthepeak.com/wordpress/ Mystic

                  Luke 10:7

                  Stay in that house, eating and drinking whatever they give you, for the
                  worker deserves his wages. Do not move around from house to house.

                  Proverbs 12:11

                  He who works his land will have abundant food, but he who chases fantasies lacks judgement.

                  Proverbs 14:23

                  All hard work brings a profit, but mere talk leads only to poverty.

                  Proverbs 22:26-27, 29

                  Do not be a man who strikes hands in pledge or puts up security for
                  debts; if you lack the means to pay, your very bed will be snatched from
                  under you…. Do you see a man skilled in his work? He will serve
                  before kings; he will not serve before obscure men.

                  Ecclesiastes 5:10

                  Whoever loves money never has money enough; whoever loves wealth is never satisfied with his income. This too is meaningless.

                  Matthew 6:24

                  “No one can serve two masters. For you will hate one and love the other;
                  you will be devoted to one and despise the other. You cannot serve both
                  God and money.

                • http://www.richnewbold.co.uk/ Richard

                  We Brits, and by that I’m also including Mystic even though he left the UK decades ago, often have a uniquely different sense of humour (spelt correctly you will observe) to much of the English speaking world. If we were being nasty we’d just tell you to f**k off, but the things we say when mocking could almost be described as terms of endearment. Basically, if you say silly sh*t we’re going to reply in kind and mock you mercilessly – the idea being you buck your ideas up and get with the program (ie. stop repeating all that nonsense you were brainwashed with over at YouTube and start thinking with your own brain). Happy New Year, dude! May 2012 bring you some enlightenment :-D

        • http://www.richnewbold.co.uk/ Richard

          People use analogies to simplify something they are explaining – usually by using a subject people are familiar with. It’s the familiarity that helps to people to understand what you’re explaining. Your analogies are just bizarre and more complicated than the information you want people to understand.

          • Bigcollapso

            This is not an analogy. It is the description of a fundamental flaw of economics and the understanding of money.

            • http://www.richnewbold.co.uk/ Richard

              Sorry – you are correct – this wasn’t an analogy so much as it was an example. As I wrote my comment I had in my head that daft Obama birth certificate video you made and the analogy you gave regarding the plane that crashed.

              • Bigcollapso

                Why is it daft. If it is too hard to understand I will make another one. What did you not understand about the .pdf file that was made by an very ignorant person with a Macintosh?

                • http://www.richnewbold.co.uk/ Richard

                  I realise I’m digging a hole here, but what does owning a Mac have to do with anything?

        • Stevo

          Didn’t really get the inflationary bit, but I would say that about 25% of the motivation behind house price increases in the UK were due to actual improvements in the buildings themselves i.e. additional rooms, bathrooms, driveways, kitchens, double glazing etc.  About 25% due to population stresses in certain areas, and the other 50% because little else appeared attractive to speculate in over the last decade with all the new credit. 

          • Bigcollapso

            My comment was ONLY about fake government money causing inflation. The house thing was not an analogy or side story, but was a description about how the actual physical world works, and how the bankers are causing nasty inflation with their asset swaps rather than debt liquidation.
            The houses were used in the story to show how the physical and thermodynamic world works in a way that should be understandable to anyone that has ever lived in a house, or watched one deteriorate.. Please read the comment again in the context of how the actual world works aside from the games that the bankers are playing to cover up the fact that they stole more than exists, are trying to cover for it, and have no idea how to fix it

            • Stevo

              Hi collapso, had another go but still didn’t see how the inflation worked in it.  Surely adding value to an inanimate object such as a house is not inflationary?  Similarly, the inflation rates calculated by governments take into account added value to consumer items. i.e. more features added to a cellphone is calculated as being deflationary.  Though the money supply has been increased to provide the extra features, the extra features themselves sterilise the inflation.

        • Jetser

          Bigcollapso, are you suggesting that nobody on the planet is willing or capable of doing up a house? If someone offered me a run down house on the agreement that I do some re-pointing, plastering, plumbing, decorating or whatever else was required to make another house good then I’d accept the deal whether money existed or not, even if the only money was “fake” government money. That is, I’d do it if the value of the work required on that house was less to me than the value of the house I’d be receiving. Given that people do fix houses up, your contention that it can’t happen requires clarification.

          I think you’re ignoring the rest of the economy. It may be true that you can’t use one house to fix up another, but if you can trade the house with someone who can access the labour and materials required to do it up, then it can be done up. Using money means that you don’t need to trade directly with that person – you can sell one house and pay them to fix up the other. As you refer to thermodynamics I’ll use an analogy from the world of creation/evolution debates: Creationists use the 2nd law of thermodynamics to show that evolution cannot happen; scientists point out that the Sun exists.

      • Stevo

        So people still largely in wait and see mode.

        • http://overthepeak.com/wordpress/ Mystic

          If by people you mean `the people`.  As far as I can see, most don’t give it a thought and some (like Collapso) think about it, but don’t realize that they don’t know how to think about it.
          So, I would say that of the people 80% don’t care to think about it……and of the other 20% most think (for the wrong reasons) that there will be inflation and a few (probably for the wrong reasons) think there will be deflation.

          I think most learned people are in wait and see mode (because it obviously depends on what the government/treasury/CB’s do. 
          (although I here must admit I have forgotten what they are waiting to see (in the question)).

  • therealrealist

    MMT is becoming more and more clear to me now with articles such as the last one in this presentation. The socialist in me is crying out for the “injustice” in the world. America is a country that happened upon some very freak circumstances at just the right time (two world wars where it experienced virtually no domestic damage giving it a head start, cheap oil production, an investment in military and imperialist doctrine, and an abundance of productivity from said energy resource) to allow it to hoard the most resources on Earth, but that doesn’t necessarily reflect how “hard” the citizens worked. Like that article you had in last weeks presentation, we are simply creatures of circumstance. Americans dont get an abudance of wealth because they have a hard working citizenry (for the most part anyway), they get the biggest share of the pie because their military has forced the rest of the world to allow them to be the consumerist nation of which all economies buy into.

    But it is not the deficit spending that will break the camels back, it is the decline in cheap energy and its effect on globalized shipment and production that will fundamentally change the way buisness works in the future. From this a new economic model must emerge, because the class divisions (especially the decline of the middle class) will fundamentally change the average American consumer, thus destroying buisness as usual.   

    I’m going to vomit the next time a Libertarian tells me that an individual with money in America necessarily “earned” his or her wealth.

    Quite fascinating once you collect the dots. Its been exactly a year since I’ve started watching your videos Nick and I think I’m starting to make progress on this stuff. Thanks and have a great New Year!

    • http://overthepeak.com/wordpress/ Mystic

      It’s fun this learning lark, in’it~!?
      We just have to never think we know anything and the fun should be able to last forever.

      Hello.

  • safeinsuburbia

    Hey, at least I’ll have plenty of nice green toilet paper when I retire.

    • http://overthepeak.com/wordpress/ Mystic

      Any more of this stupidity and I will block you.

  • James

    i wonder how this pink bump, can come around this time.

    new year is due. let’s unify.

    • http://overthepeak.com/wordpress/ Mystic

      I think it has to be global and big.
      How about a big realization (all of a sudden) that they must do something about global weather……and all decide to……let’s say……print up 5% of gdp every year to go on `green` projects.

      • James

        is this what is tried to be enforced already, kyoto protocol(05′) and ‘green projects’ ? something does not like the ‘enforced idea’, yet.

        • http://overthepeak.com/wordpress/ Mystic

          No, that is yer normal, run of the mill, politico-bollocks.

          What I am talking about is a Mega Deal~!
          5% of the world gdp every year to `do things green` (but really an excuse to get more money into the world economy). 

          • James

            they are trying(Solyndra)….subsidies and all sorts, protectionism, but (still) the dough decides where it wants to go or not.
            I see the big Green thingy also, but to go huge, a lot more catalysts may be needed and reforms ( ? )…there are competing forces-interests, as always.

            • http://overthepeak.com/wordpress/ Mystic

              No.  Sorry.  You are not getting my dribble~!

              The world is soon going to need a lot more money.
              The world leaders will have to get a scam together to provide it.
              The `green thingy` is just an example idea of mine.
              The Big Point is that when united world leaders decide on something like this, `competing forces` will not be tolerated.

              • James

                yes , yes,  I get you…sometimes competing forces cannot be tolerated but one can’t exist without the other.
                good points.

  • Anonymous

    On the last article – I understand a sovereign monetary system can never default or go bankrupt. But I really doubt printing money is the cure-all that many seem to believe it is, because money printing doesn’t create wealth, it only redistributes it. That’s not a problem by itself, the problem I see is that it redistributes wealth away from people who could spend it “smartly”, and towards bureaucrats and bankers who can’t spend it “smartly”. By smartly, I mean investing in things that people actually want and need. It seems to me that the collective purchases and investments by individuals would allocate wealth better than centralized purchases by bureaucrats and bankers, simply because people spending their own money think a lot harder about where to spend it than a banker or bureaucrat spending someone else’s money. So it’s not that money printing is going to make the economy go bankrupt, it’s that it takes wealth away from the people who know how to spend it wisely and gives it to people who don’t.

  • Anonymous

    Chart number two just didn’t match the picture in my head so I did a bit of research. The GDP is currently estimated to be a bit under $15.1 trillion and the total national debt is closer to $15.2 trillion. That puts national debt well above 100% of GDP. Perhaps the people who made this graph are excusing Intergovernmental Holdings AND debt held by the Federal Reserve Banking System? Debt held by the public is a bit over $10.1 trillion which would be 67% of GDP. Perhaps this graph is a year old AND using public debt?

    I attached a current chart from http://www.usgovernmentdebt.us/spending_chart_1900_2016USp_H0sH0lH0f.

    No, I am NOT taking the bait! Roger and Phyllis Mitchell are half right and I’ll try to be happy with that. As long as the US is a sovereign nation with the power to repay its debts, there is no danger of anything going bankrupt.

    One of the problems that we are having at the state and local level is that the austerity measures being taken by the federal government are putting us in the same pinch that the PIGS are in. Our local and state government don’t have the option of printing money and so they must borrow and tax. I think the state would be smart to institute a state bank so that it can take advantage of the power banks have to create money on the cheap against reserves made up of money held by the state and loan it to the local units of government at administrative cost.

    This would just be a kick-the-can down the road thing, but it beats the alternative which may well be bankruptcy.