Where or where has our Mystic gone ?! Let’s go somewhere else !
I never thought about asking the very basic question of what is a Euro ? There are many comments that say countries who use the Euro are effectively using a foreign currency and hence cannot print/inflate their way out of a debt problem. The US is a sovereign issuer of it’s own currency and hence can print/inflate itself out of a debt problem.
The SDR is of course like the Euro in that it is a foreign currency to all who use it. We also realize that the SDR has a more Publicly controlled allocation process (hand out new money to governments based upon GDP by the IMF) as opposed to the $US that has a more Privately controlled swap process (private debt exchanged for money by the FED).
So let’s use the Steve Keen approach to the debt problem. He says “QE to the people” as opposed to “QE to the banks”, but what about “QE to Governments” !!! That is what a SDR allocation is and it forces governments, with debts, to pay down their debts first with their allocated SDRs.
So if the Euro is closer to a SDR than a $US here remains the future plan. Allocate Euro to governments and force them first to pay down their debts ! If you have no debts you can keep it on reserve for the time you need it !!!
Here is a chart which captures what I think are some of the FED’s rational behaviour behind their interest rate policies. Rational of course from their perspective … not yours ! You are probably thinking the FED is alittle irrational ?!
I have no real wealth … whatever that means … because I have sex, food and politics (family) !!
However I understand that there are highly motivated people who need to rule the world…ok they need an outlet or a measurement that they are better … or is it that they are winning the game !?
We are moving not into a world war but a war among billionaires and we are their captured wage slaves … war slaves.
Globalization has created super corporations, the very thing which monolpoly laws tried to prevent in our individual countries like the USA. So the big guys said if we cannot have 100% of the US market then to grow that big we need to get 70% of the global market. The way to do that is free trade and a globalization movement to support it. Appears that politicians were too happy to along for the ride.
My bottom line is that we would all be served very much better by an economic system that encourages more millionaries not billionaries. That is the basis of the free market. Small guys having a chance to make it big. Not big guys having the monopoly power (political, legal, banking connections) to make themselves trillionaires!
Some might say that billionaires flow down their wealth to their connected business partners and make plenty of new millionaires. Those who trickle it down attempt to monopolize wealth. People who build bottom up create wealth. When did we forget that ?
So is it power to the people or power to the 1% !?
Imagine you could create a fake world that’s close to the real world but not identical. The only difference is that Social Security and Medicare don’t exist in your fake world. The Social Security Act wasn’t passed in 1935, nor could it be expanded in 1965 to include Medicare. But all other historical events are the same, including wars, election results, recessions and financial crises.
The goal is to demonstrate one of the problems with the debt debate, which I’ll call the Net Debt Paradox. The paradox is this: If we only rely on the most commonly reported figures, government debt would be higher in your fake world than in the real world.
But hold on, you say: How could debt be higher without entitlement programs? Isn’t the debt crisis mostly about the costs of these programs? The social spending that’s projected to grow faster than the rest of the budget? If you remove the social spending, wouldn’t debt be lower, not higher?
No, the paradox is that it wouldn’t, because of the way the government presents its finances. Nine times out of 10, debt is defined as the amount that the government borrows from “the public” – also known as net debt.
So how much does the government reduce its reported debt by deducting Trust Fund borrowing?
As of December 2012, the answer is $4.4 trillion (including borrowing from all trust funds, with Social Security and Medicare providing nearly two thirds of the total). That’s 28% of the nation’s annual economic output and about two and half times federal tax revenues. It allows the government to report a debt-to-GDP ratio of 74% instead of the more accurate figure of 102%.
As you can see, this is a meaningful difference. And everyone should be aware that the government’s debt projections – from both the White House (through the OMB) and Congress (through the CBO) – begin with the lower, bogus number. Which then gets repeated countless times in the media and creates the impression that our debt trajectory is much better than it actually is.
According to the new study, student debt almost tripled between 2004 and 2012, and is approaching $1 trillion, while the percentage of borrowers who were more than 90 days delinquent had risen to 17 percent, from 10 percent in 2004. In addition, student loan debt was the only kind of household debt that continued to rise through the Great Recession, and it is now the second largest after mortgage debt.
Higher education has been a great money maker for the banks as they have turned universities and colleges into profit making machines.
How you make a profit from students who have no jobs and cannot pay back debts is hard to figure out until you realize that student loans are backed by the US government and relatively new laws prevent students from defaulting on their student loans, even if they declare bankruptcy.
How is this capitalism ? The end result is going to be billions in non-performing loans and those students who make an effort to pay back loans will not be spending on other stuff ! Do you smell more deflation in the air ?