Fixing It #5 – New Great Depression

  By Richard from Canada | August 12, 2012 - 05:29 | ,

 

This is an interesting video which I actually understood.

“In order to understand this crisis it is necessary to understand the role that credit has played in bringing it about, when we broke the link between money and gold 40 years ago, this removed all the constraints on credit creation and afterwards credit exploded,” Richard Duncan author of The New Depression: The Breakdown of the Paper Money Economy, told CNBC.”

http://video.cnbc.com/gallery/?video=3000103083

Hey there is also this interesting concept that we should not “Encourage The Bad Guys with so much easy money ?!” by Roger ?

Of course the big answer by Richard Duncan is that our governments should borrow and fiscally spend trillions to save the economy for another 10 years and hope we have our problems figured out by then !!

I guess eventually the payment becomes due !? It is just a matter of when, so there really is no fixing it !  Sorry a depression will fix it !

Here is his web site.

http://www.richardduncaneconomics.com/about-this-blog/

 

 

Written by: Richard from Canada on August 12, 2012.
Tagged . Bookmark the permalink.
  • CSArichardo

    Actually the Glenn Beck interview is pretty good.

    We live is creditism no longer capitalism !!

    http://www.youtube.com/watch?v=8iyCt0uwNWs

    Appears he is calling for government investment in new technology as opposed to war spending, etc. so that the creditism can continue.

  • windslice

    There was never really a true gold standard. The amount of money in the system was always more than the amount of physical gold available. Once the French cottoned on to this and started demanding gold, the gold standard had to fall.

    Forty years ago a commercial bank would not care whether the government had enough gold to back the loans it made.

    We have always lived with credit/debt based economies.

    The issue, as I see it, is that the amount of credit has been surging up an exponential curve. Everything has been based on percentage increase over the previous year. At first the curve is relatively flat and then it starts going up and up.

    Once you see house prices rising at 7% to 10% things are getting out of hand.

    The guy is suggesting that we could kick the can down the road for another ten years. He does not seem optimistic that the economy will fire up again.

    I am not optimistic that the cutting edge technology is going to help. It is moving too far away from the basic human needs and what, indeed, are they trying to develop?

    We, as humans, need food, shelter and clothing. They are the basics. Then we need some infrastructure to supply us the basics. I cannot see how clothing and food is going to become cheaper. Housing is, IMO,  still massively overpriced and reducing the cost of this could have big benefits. Far too money money has been squandered in this non-productive asset class.

    Yes, doubtless a few will become billionaires through the development of new technology to cure, I don’t know, cancer, solve infertility so that women of 60 can have brats, give us men our hair back again, HIV and prolong human lives until we can reach say 130. Or put footprints on Mars.

    Well, so what?

    The other few billions on the planet will remain exploited.

    And the number of poor in the west will increase.

    This will not solve the main issues of affordable food, clothing, housing, pensions and employment. Indeed, curing illness and increasing fertility makes the problem even bigger.

    The west is heading for a massive reset of their expectations.

    I do not know how much longer the central banks can kick the can down the road with zero interest rates. And I do not see any politicians around who have the will and personal necessity to force the people to realise what is happening and put in solutions to cure the inevitable social problems that are going to occur.

    It will be ad hoc can kicking for as long as the road exists.

    • CSArichardo

      I had to question this invest in technology thing alot too.  The US does that already and it’s called military technology or the military industrial complex !!  You know the internet, planes, satellites, etc.  Not sure he is suggesting anything different from what has been executing in the economy since the 1950s, except more credit money needs to be thrown at the problem !!

      • windslice

        Yep,

        A recovery needs decently remunerated employment for the masses.

        High technological development is not going to provide them. On the contrary, it has constantly reduced the number of “jobs for the masses” and shipped them abroad.

        The money available in the economy is being concentrated into fewer and fewer hands.

        The idea that through a highly skilled and well paid workforce producing ground breaking technological advances (that can be sold to, well, exactly who can they be sold to?) seems divorced from the needs of the general population.

        Add in the ominous fact that Asia is educating its bright, ambitious and determined young people to western standards and it is obvious that a very major problem is on the way for the west.

        Once again I will reiterate my forecast that the immense and largely untapped Asian market can and will support itself once the “credit” starts flowing here. Doubtless it will lead to tears in the future, but in the meantime it will be prosperity for Asia, as ideed the West has enjoyed for forty years.

        And then maybe the cycle starts again.

        There are still a lot of westerners who think that Asia is full of rice farmers, poor and uneducated people and beggars.

        Wrong, wrong, wrong.

  • Bigcollapso

    There are two main problems that got us here.
    1. Debt being created as a function of time without reference to wealth.
    2. Failure to discharge the bad debt when the system collapsed in 2008
    The future is now very set in stone as to what will happen. The only question is who the few people are that will have liquid wealth when the game of musical chairs stops, and how violent with the governments get as they collapse. It seems that our politicians are only capable of handing out increasing wealth, and have no ability to handle declining wealth.