Going forward~?

  By Mystic | August 4, 2012 - 11:58 | , ,

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Written by: Mystic on August 4, 2012.
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  • lgrinaker

    Cool.  That was a great presentation to make clear your point of the “cash” video from earlier, among other things that this video touched upon.  I do follow that very well (and it’s become quite interesting to me now); whereas I just wasn’t clear about what you were after in the earlier post and comment thread.  That even brings to mind what, for me, was simply an aside at some point.

    With the thought of Henry I’s tally sticks to keep account of things in his day, I thought of the contrast of the tremendous computing power we have available to us in our day, and the vast amount of record keeping, in particular, accounting that that computer power makes so simple (once it’s set up correctly).

    What do you think?  Do you think the computing capacity of our day, with our modern day computing system, has had any impact upon how vast our financial system has become?  (Clearly, if it is a factor, it wouldn’t be the only one, but is that a factor too, do you think?  or no?)

    How would King Henry I’s system of tally sticks have been able to keep up? ;-)

    Linda

  • CSArichardo

    It is all about a global government of the hyper rich !  A turf war of the US hyper rich against the Chinese hyper rich, Russian hyper rich, European hyper rich, etc.  driven by “relative deprivation”.  Rich people compare themselves to their rich peers and not their working class servants !!!  Remember after basic needs it is all a mind game about what you want/need !

    Having said that … there is therefore nothing patriotic about the hyper rich, although I did have some respect for Ross Perot who tried to defend  America against the unpatriotic rich !?  Some of the hyper rich might be nationalistic as opposed to patriodic but as George Orwell stated nationalism is inseparable from lust for power.

    So the world is everyday getting divided into a set of new global monopolistic companies and the US government supports this by seeking entry into the Chinese and all global markets to best assure that this power structure continues to flourish.  I mean we want more US companies and more US hyper rich to control the world … right ? 

    So I think real wages in the US will continue to drop to support the global market place and this will occur in two ways … by depreciation of the US dollar and a decline in nominal wages.  My guess is that  US dollar depreciation will be the primary future path as this will have the least riots in the streets.   It is also needed to inflate the debt away !?

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

        ………… and the US dollar is going to depreciate against what other currencies ………. No, no …. don’t tell me~! …………. All currencies are going to fall together, eh~!?  `Race to the bottom`, yeah~?!

      • CSArichardo

        The US dollar will continue it’s decline against the SDR basket in 5 year resets as it has since the 1970s maybe at just a faster pace.  You will not even know it hit you !?  In the real world the decline agaist it’s trade weighted basket should decline but if not it will be the nominal wages.  Have to love Rodd Perot

        http://www.youtube.com/watch?v=Rkgx1C_S6ls

        • windslice

          Yep,

          Perot understood what was happening.

          But there is no way of going against the force.

          It WILL balance out, in spite of all the government and central bank interventions.

          Welcome to the global economy. A rebalancing that WILL see similar workers across the globe having the same living standards, with a slant towards those countries with physical assets in the ground.

          Yep,

          the 7/11 shop assistant in the west will be able to afford the same living standard as one in the east. After rent, food and other costs paid for, there will be no money left over for long distance holidays.

          And so on up the scale.

      • http://www.alda-architects.co.uk/ Alan

         Why assume the race to gain advantage by depreciation, pegging etc. will continue universally? As currently stands the dollar will decline in use and in value against the currencies of emerging economies. What is currently saving it is lack of a credible alternative and money locked in (for now) as many do not want to collapse the value.

        It could also suit some to cause havoc with the value of the dollar and the considerations may not be entirely rational from our perspective. Possibly dangerous times. Often wonder if the weapons of mass destruction continually mentioned are financial!

  • http://www.alda-architects.co.uk/ Alan

    One consideration is what will be the reserve currency of the future. The dollar is in steady decline its percentage use is around 58%.   Many must be moving away from dollar use, we can see this in mechanisms being set up by China, and the noises coming out of Russia, Brazil etc. At what point does the dollar cease to be the reserve currency 49%, 45%. It is interesting to note that the next currency in global use is the Euro at about 23% (from memory) Worth considering the origin of much of the negative press related to the Euro. It is not that the points may not be valid, but that there could be other purpose.

    What will replace the dollar; SDRs, regional reserve currencies, gold or similar, another currency, chaos?

    Whatever the system, it is only good if not abused and if flexible.

    I think a better place to start would be to remove opportunities for abuse. That is unlikely, as those that benefit are in power or can influence those in power. The nub of the current problem is corruption, and fraudulent activity by a few at the expense of the majority, and it is not being tackled effectively. The economy of Empires and civilisations usually decline before their military. The reason for fall is that most people see no point in maintaining corruption or oppression. It is subconscious, apathy, loss of morale.

    • axionication1

      I always enjoy reading your comments.

      I am not sure what amazes me more: the enormity of fraudulent activity or that this activity has become our norm?

      • http://www.alda-architects.co.uk/ Alan

         What amazes me is that most of the corrupt seem to lack any long view, and this is true throughout history.  Over and over they kill the goose that lays the egg. Does corruption appeal to people who do not perceive the risk?

        The fraudsters and get rich quick merchants have always been with us, but the current lot seem so unimaginably arrogant. Perhaps it is all the food additives?

        The other amazing aspect is the docile nature of the general population.

  • axionication1

    Must be something in the meme air…
    Just put down the Gleeson-White book… It is a good read!

    I have a cost meeting in the morning. Rows & rows & rows of numbers. Black & red.
    The numbers will tell us what to do.

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

       Do us a post about it dooood~!
      (I mean, yer in the `great minds think alike club~!)

      • axionication1

        Me mind is a jumble. Some of my thoughts, at this time, a little too strange to put down in writing.

        :Consciousness changing tool.

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

           Blank piece of paper and a pen that swooshes along.
          Write first thing that comes to mind.
          Stop for ages.
          Write other things at various places on the page.
          Then have a beer and forget about it.

          • axionication1

            Will try.
            Bed time now though.

            Good video by the way! Deserves a hell of a lot more comment (I know, I know: pot, kettle, black).

  • windslice

    Aah, back to the old form. I have to admit that after the fives stuff I was considering deserting the ship. It was going nowhere.

    It has been my opinion, for whatever that is worth, that there has to be a global rebalancing of 

    - trade

    - power

    the rebalancing has to occur over

    - exchange rates

    - manufacturing costs

    But in order to agree this has to happen, there has to be an agreement as to where and how wealth is created.

    I have always maintained that real wealth is created through production and digging stuff out of the ground. The FIRE economy does not create wealth, it extracts a rent and concentrates the profits of production and mineral extraction into the hands of the guys who control the money.

    So, for the UK, that is under the impression they are moving to,or are already, a service based economy. They have to provide services to the rest of the world through tourism or the City of London. Bringing net income into the country.

    a. Tourism is a dead end unless you drop wages and prices to a level affordable to the wealth producers in Asia and countries like Australia. Maybe this can/will be done via currency devaluation. But outside of London and the reputation of the UK as a bad weather and bad food zone, I can’t see a great future.

    b. The financial service rent extractors have to continue to provide revenue from outside of the UK. Extracting a rent from the UK itself merely sends the country further into penury. The problem is that Singapore and Hong Kong are very keen to get into this market and will provide a fierce competition. And the banks are very good with (im)moral accounting practices, moving profits around the globe and avoiding tax.

    The UK has had a net current account deficit for years.

    So, to broaden this across Europe. The Southerners have little production and are essentially third world countries with German expectations. And yes, to move across the Atlantic, someone working a minimal wage job under the Golden Arches will be brought down to the level of their comrades in Asia.

    I do not believe the Great Wall of America can be built.

    Manufacturing takes place in Asia and the Asians will receive their wages.

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

       UK balance for services is about 15 billion positive …… and goods about 25 billion negative, with the oil running out.

      From Keynes to Stiglitz, the answer has been that a Superdooper-world-authority would regulate trade balances.
      S.Korea, China and Germany would be forced to use the surplus to, at least, invest in the importing countries.
      The trouble is, that the US doesn’t have the `importer problem`, as the exporters `invest` in their government bonds ………… so nothing will be done.
      As long as nothing is done, we move closer to more defaults.  The importers will not be able to pay.  (not in the US, because they can just `print’n'pay`).

      I think France is the place to look.  It sits at the fulcrum.  If its debt/gdp keeps increasing, the debtors further out will tip the whole thing over. 

  • John_by_the_creek

    Dear Mr. Mystic: 

    A very nice presentation!  I’m sure it will spur some brain cell activity amongst all the participants. 
     
    I believe you have injected a new (and much needed) dimension into the discussion, with your opening comments about “morality”.  When all is said and done, the system of “trade”, “money”, and “debt” that we have collectively created, and use, is about nothing more than human interaction.  The “numbers” are simply meant to keep track of it all.
     
    There are two kinds of people in the world; those that enjoy listening to fairytales, and those that enjoy telling them.  I suspect the former far outnumber the latter (for a host of reasons).  It’s a wonderful, symbiotic relationship though, and a good time is had by all whilst the tale is being told.  But when the tale comes to an end, we are once again left with nothing more, or nothing less, than stark reality.
     
    For many decades, we have allowed the fairytale tellers to “keep the books” (as the masses so enjoyed the enchanting stories of The Big Rock Candy Mountains: http://www.youtube.com/watch?v=JqowmHgxVJQ&playnext=1&list=PL872594E071C0176D&feature=results_main).  Is it then a question of deception…or willful (and blissful) ignorance?
     
    Either way, in the real world, frogs never, ever turn into princes.  Who then is more guilty; the teller of the tale, or the willing audience?  I might argue that both have suffered a serious lapse in moral judgment.

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

      Human Interaction Tracking System.  (HITS)™

      • John_by_the_creek

        This is all becoming very Orwellian.  Have you noticed? :)

  • Mystical

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