zaph

Slash and burn

21 posts in this topic

TBH does he really have a (political) choice?

The Libs will be wailing tax tax tax, carbon tax, rah rah, debt debt debt, rah rah before the next election. If they are able to wail deficit deficit deficit, rah rah as well then it will be three strikes and out for the Goose.

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TBH does he really have a (political) choice?

The Libs will be wailing tax tax tax, carbon tax, rah rah, debt debt debt, rah rah before the next election. If they are able to wail deficit deficit deficit, rah rah as well then it will be three strikes and out for the Goose.

Yep. No choice politically. They've painted themselves into a corner and Abbott will hammer them if they don't do it. Apparently the promise breaking limit has been reached.

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does anyone else think goose is looking thinner (both face and hair) and aged?

when the floods hit, the question was asked of gillard - can you still run a surplus? yes of course she answered. it would have been the perfect opportunity to say 'we will do everything we can but recovery comes first etc'. blame it on the floods!

goose must be hoping that Europe explodes so he has an out.

it may be in this article but i was reading on the way home that goose will just run big deficits either side of the surplus, shifting payments around by a few months. effectively changing nothing but he can claim the surplus scalp.

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does anyone else think goose is looking thinner (both face and hair) and aged?

when the floods hit, the question was asked of gillard - can you still run a surplus? yes of course she answered. it would have been the perfect opportunity to say 'we will do everything we can but recovery comes first etc'. blame it on the floods!

goose must be hoping that Europe explodes so he has an out.

it may be in this article but i was reading on the way home that goose will just run big deficits either side of the surplus, shifting payments around by a few months. effectively changing nothing but he can claim the surplus scalp.

Well I read wong warning that there would be deep spending cuts and some hard decisions so this is usually the precursor for doing sod all in reality. So that's about what I'm expecting. They might go for cuts in private health/education. NG stays.

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If he is serious about returning the budget to surplus or balancing it then I'm all for it.

We've seen what persistent deficits do - they catch up to you in the long run, even if it is a looooong run.

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There is some suggestion from certain economists that the spending cuts should be postponed and that they should balance over the cycle. It would probably be true if this cycle were to replicate the last one but alas governments of both persuasions tend to not pay down debt during the boom times but rather squander the savings and project the boom times to go for ever when it all goes sour. The forward estimates are based on the past. The ruse is discovered at every change of government. Start cutting now to avoid the rush I say. We could stand to lose a few pounds and may need to shed a few more before long.

Edit: form instead of from - it's like a disease

Edited by staringclown

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The theory of governments saving in the good times so that they can spend more than they earn in the bad times is great, except that they never do it.

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The theory of governments saving in the good times so that they can spend more than they earn in the bad times is great, except that they never do it.

That was Keynes idea. Withdraw money supply in the bubble economy and expand it in the bust. Unfortunately government cannot bring itself to withdraw money supply ever!

But Keynesian economics was out of fashion by 1980 and Friedman economics was adopted. Friedman recommended constant money printing each year a low rate, 4 to 6% p.a.

Unfortunately Friedman economics crashed in 2007!

We need a new brand of Voodoo economics.

The Keynesian concept was nothing new, it was something that "naturally" occurred with precious metal currencies.

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That was Keynes idea. Withdraw money supply in the bubble economy and expand it in the bust. Unfortunately government cannot bring itself to withdraw money supply ever!

But Keynesian economics was out of fashion by 1980 and Friedman economics was adopted. Friedman recommended constant money printing each year a low rate, 4 to 6% p.a.

Unfortunately Friedman economics crashed in 2007!

We need a new brand of Voodoo economics.

The Keynesian concept was nothing new, it was something that "naturally" occurred with precious metal currencies.

As long as "naturally" includes bankers colluding to restrict access to precious metals to cause crashes that they could take advantage of.

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As long as "naturally" includes bankers colluding to restrict access to precious metals to cause crashes that they could take advantage of.

The population used to control how precious metal currency there was. If money was too cheap then the public turned coin into jewelry, if money was too expensive then jewelry was turned into coin.

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The population used to control how precious metal currency there was. If money was too cheap then the public turned coin into jewelry, if money was too expensive then jewelry was turned into coin.

The bankers used to control supply of PM's - PM's are much easier for a limited group of people to control and manipulate. There were far more frequent depressions under a gold standard.

There is lots of evidence of banker collusion to create depressions. Some quotes:

James Buel, American Bankers Association meeting, 1877 - in a letter to ABA members to do everything to prevent the U.S. returning to Greenbacks

It is advisable to do all in your power to sustain such prominent daily and weekly newspapers, especially the Agricultural and Religious Press, as will oppose the greenback issue of paper money and that you will also withhold patronage from all applicants who are not willing to oppose the government issue of money.

... To repeal the Act creating bank notes, or to restore to circulation the government issue of money will be to provide the people with money and will therefore seriously affect our individual profits as bankers and lenders.

See your Congressman at once and engage him to support our interests that we may control legislation.

American Bankers Association, 1891, as printed in the Congressional Record of April 29, 1913

On September 1st, 1894, we will not renew our loans under any consideration. On September 1st wee will demand our money.

We will foreclose and become mortgagees in possession. We can take two-thirds of the farms west of the Mississippi, and thousands of them east of the Mississippi as well, at out own price... Then the farmers will become tenants as in England.

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There were far more frequent depressions under a gold standard.

Prior to the Great Depression a recession was called a depression. Because the GD was so bad and people were so emotionally scarred they stopped using the term depression and started using recession.

Edited by Mr Medved

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There are 2 possibilities under a gold standard:

1. You allow leverage i.e. the banks can keep a fraction of the gold that they lend out into the market.

This solves nothing and is no different to what has happened in the world recently and what has happened during countless bank runs during gold money days. People lose faith in a bank's ability to produce the physical gold on demand and a rush results.

It doesn't matter what backs the money issued, whether it is gold, salt, peas or little statues of Shane Warne, as soon as you allow leverage the same problems as we are facing today will result.

2. You don't allow leverage. With the very restricted supply of gold this is a total disaster waiting to happen. As soon as supply of anything is hugely restricted, much bigger booms and busts will follow. This applies to anything e.g. Californian real estate and artwork.

Organisations or countries that manage to hoard enough gold will be able to create booms/depressions at their whim - again there is historical precedent for this.

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Prior to the Great Depression a recession was called a depression. Because the GD was so bad and people were so emotionally scarred they stopped using the term depression and started using recession.

and now a lot of the world uses the term 'the great recession'. not long till the d word gains traction.

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There are 2 possibilities under a gold standard:

I hear a lot of problems but no solutions!

It's almost like you think that the people with the money will connive to keep it and get more and the ones without it will connive to get it :)

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I hear a lot of problems but no solutions!

It's almost like you think that the people with the money will connive to keep it and get more and the ones without it will connive to get it :)

Ha, something like that. I think a lot of the problem is human nature. Perhaps when humans are no longer greedy and immoral there will no longer be depressions.

There seems to be a cycle of a total stuff up, followed by various fixes, to good times, to boom, to people forgetting the stuff-ups and removing the fixes, sprinkle in lots of fraud and back to stuff-up.

If I had to pick a solution, the most logical one I have heard so far is:

If you have not seen it or don't have 1h56 to spare, the summary is:

1. Instead of borrowing money (from banks) into existence, governments create the money by issuing it themselves.

2. This means that they get to spend money without having an associated debt like they currently do.

3. This takes all the power away from bankers - they are no longer in charge of the money supply.

It's not perfect but I like it compared to the alternatives I have seen so far. The example Still provides is that a government could print too much in times of war and cause runaway inflation (but at least there is no associated debt).

For an approach that has a lot of runs on the board (hundreds of years in ancient Rome, England and many years in the US), it gets surprisingly little coverage ... unless "people with the money will connive to keep it" has something to do with it!

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I’m far from qualified to speak on the subject but having been active on the internet since the late 90’s (9600 baud) I’ve noted that being qualified is not a requisite to putting in your two cents on an argument so here goes

* Keynes theory was for a closed economy.

* We all saw what happens during the “good” times. People get all antsy about the government over taxing us. Howard had so much money rolling in he didn’t know what to do with it. Keynes would have had Howard raise taxes to mute the boom. However everyone was crying that the surplus showed that we were all paying to much tax. So what’s a government to do?

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I’m far from qualified to speak on the subject but having been active on the internet since the late 90’s (9600 baud) I’ve noted that being qualified is not a requisite to putting in your two cents on an argument so here goes

* Keynes theory was for a closed economy.

* We all saw what happens during the “good” times. People get all antsy about the government over taxing us. Howard had so much money rolling in he didn’t know what to do with it. Keynes would have had Howard raise taxes to mute the boom. However everyone was crying that the surplus showed that we were all paying to much tax. So what’s a government to do?

I don't have any qualifications either ET.

Good post!!

That is the crux of the problem of human (something or other).

In the good times, we want to have a good time - not thinking there will ever be a bad time.

In the bad times we still want to have a good time - thinking there will never be a good time.

Now how do we fix it? :crybaby::shocking:

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1. Instead of borrowing money (from banks) into existence, governments create the money by issuing it themselves.

2. This means that they get to spend money without having an associated debt like they currently do.

3. This takes all the power away from bankers - they are no longer in charge of the money supply.

Whether it is bankers or government a better system IMO is where there is no central control of the money supply. Two possibilities (though there are probably many others) are:

- Private currencies

- Bitcoin, or something like it

I guess bitcoin is a bit like a private currency. Let people decide what they want. The only problem with this is with international trade - for example, Martin Armstrong argues the world needs a global reserve currency for multi-national trade. I'd say this is what the powers are looking to implement within the next decade to get rid of the USD as the world reserve currency.

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