No comment

Well, only two brief comments really….

Scaremongering

NHS suffering devastating cuts to jobs and services

http://www.telegraph.co.uk/health/healthnews/7858068/NHS-suffering-devastating-cuts-to-jobs-and-services-warns-BMA.html

Millions face incapacity benefit cuts

http://www.telegraph.co.uk/news/newstopics/politics/7858141/Millions-face-incapacity-benefit-cuts-as-welfare-reforms-speed-up.html

Reality

The great inertia sector (hat tip Michael Shedlock “Mish”)

http://www.dailymail.co.uk/news/article-1289702/Public-sector-inertia-council-office-employees-month-sickies.html#ixzz0s51Nv1j7

More scaremongering

http://www.telegraph.co.uk/news/worldnews/middleeast/iran/7857627/Iran-could-have-nuclear-weapons-by-2012-CIA-chief-warns.html

Reality

Psssst!!!… hey mister… Israel already has nuclear weapons and they are not signatories to the non proliferation treaty

More bailouts ergo more gravy for the political train

Obumma and Cameron agree BP must not collapse

http://www.telegraph.co.uk/finance/newsbysector/energy/7857981/Obama-and-Cameron-agree-BP-must-not-collapse.html

I stand by my prediction: global war by 2013 / 2015 latest

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7 Responses to “No comment”

  1. Debt and demobilization… (Adrian Ash) « Guido's temple of the absurd Says:

    […] In one of my previous posts, someone asked how I think a war could be financed at this point in time. Obviously, when you observe the graph at the link above, it is clear that financing isn’t the problem. If the people go along with the scam, a government can create the financing; and wars against foreign evils have a way of rallying people around the flag… regardless of the overwhelming evidence that a country’s own politicians have plundered and pillaged society to the tune of billions of Dollars. […]

  2. James Says:

    Here’s another fun one for you –

    http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/7857595/RBS-tells-clients-to-prepare-for-monster-money-printing-by-the-Federal-Reserve.html

  3. D Bell Says:

    Thank you for that thought provoking (and rather depressing) response.
    If i may, i have a couple of further questions (the last i promise, i’ll not take any more of your time)

    So you believe that we are now in or facing a deflationary phase similar to the 1930’s with the price of goods and assets falling?

    If western nations are bankrupt, how will they finance war, by printing money? And if so, would this not lead to high inflation ?

    You wrote- “it matters not where the war will start and why. What matters is where the war must be taken to and what it has to accomplish” Could you elaborate?

    How would a conflict escalate to a global war?
    I think i can understand how, for example, the US might create a ‘diversion’ with a country like Iran but how would other larger countries like China and Russia allow themselves to get dragged in to create a global conflict. And if one reason for war is to reduce excess industrial capacity, then, as i understand, China is a large source of excess global capacity and would need to be included in such war plans, no?

    Thank you

    • guidoamm Says:

      Very similar to the 30s… absolutely… and very similar to the late 60s too… people tend to forget what brought about the abrogation of Bretton Woods.

      The military industrial complex is being financed as we speak. GE is the most glaring example. Quantitative Easing can take many forms so in theory a government could just do more of the same to build tanks, missiles and ordinance. Also, society can be called upon to buy war bonds. By the time war rolls around, few will be asking how it will be financed.

      Right now, we have no shortage of triggers to start a war. Take your pick. Israel, Iran, Korea, Venezuela, Yemen, Egypt or Sudan, any of the Russian Stans plus the other two Pakistan and Afghanistan… starting a war is fairly easy.

      What needs to be accomplished is at once keep Western society busy (either at the front or employed by the war industry and, anyway, food and energy rationing will keep even the idle busy) and the obliteration of industrial capacity that today is located in a band of land that, in rough terms, snakes from India, through China to South Korea.

      I cannot say how the conflict can escalate.

      Bingo

      Of course, I could be waaaaay off base on this one. But frankly, when the BIS estimate of credit market notional value is US$600Trillion (that’s trillion) and the world economy is barely US$50Trillion and dropping fast, that notional value can turn into real value in a snap… Lehman proved that. For as long as the credit market can be expanded, nobody cares about notional value. Once credit expansion stall or, Ye Gods! Should decline…. notional value is not your friend…

      If I’m off base and by 2015 nothing has happened, you can always rub my nose in it. This is the blog. You can always refer to my writings here.

      There are only two ways to deal with debt. It can be paid off or it can be written off.

      In order to believe that debt can be inflated away, one must believe that inflation can be infinite. If that were so, it would be tantamount to having discovered perpetual motion. But since that is clearly not the case, once the underlying economy no longer allows you to service the interest on the debt, then the debt must be paid off or written off.

      I think that proof that debt can no longer be serviced has been glaringly proven. Bankruptcy has clearly spread from the private sector to sovereigns: Greece, Dubai, Spain, Iceland, California, Latvia… and coming soon to a town, state or country near you too…

      Till that trend does not stall or reverse, I think we’ll be in deflation…

      Got gold?

      http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3585763

    • guidoamm Says:

      This is one way a war could escalate

      http://www.businessweek.com/news/2010-06-29/-deep-cover-russian-spy-ring-worked-since-1990s-u-s-says.html

  4. guidoamm Says:

    My contention is that the monetary authorities have lost the ability to inject inflation into the system.

    Today we are all on a US$ fiat monetary system based on floating exchange rates. So, for all intents and purposes all global currencies must contend with US$ inflation that dates back to 1913. That’s a lot of inflation.

    Inflation is a dynamic that is exponential in character thus it is limited mathematically.

    For as long as the authorities can inject inflation into the system, the tax base can be expanded as can deficit spending. These two dynamics taken together make it possible to at once postpone the effects of bankruptcy AND give the impression of a healthy economy.

    Inflation brings forward the demand and production cycles thus accelerating the credit cycle thus feeding overcapacity thus employing people. But as the “beneficial” effects of inflation wane, the authorities must resort to progressively more extreme strategies to keep inflation on a positive slope. Thus as inflation loses traction government has a vested interest in at first tolerating practices that are border line legal, but then progressively encouraging and finally colluding in practices that do not conform to the parameters of fiduciary duty if they are not down right criminal (Enron, Fannie Mae, Madoff, GM). Thus as the inflationary dynamic progresses and matures, government also gradually becomes the largest actor in the economy.

    However, once tax revenue begins to decline and all monetary strategies fail to expand the credit markets thus fail to reflate tax revenue, government must perforce cut back on spending. The first thing to go is going to be social expenditure.

    As recession bites, the tax revenue dwindles, unemployment rises (thus further impinging on tax revenue) at the same time that social costs are skyrocketing due to all social promises made over the decades, sovereign bankruptcy becomes a very high probability.

    However, admitting to bankruptcy in the West is something that cannot be countenanced. Western nations do not go bankrupt. Western nations and Western politicians are the ones that go around the world telling everyone else they will go bankrupt but industrialized nations cannot and will not go bankrupt.

    As social unrest raises its ugly head, the probability of revolution increases exponentially.

    Before we allow a revolution in the West, our “leaders” will create a diversion.

    It matters not where the war will start and why. What matters is where the war must be taken to and what it has to accomplish.

    War will at once galvanized the unemployed and the destitute and rally them around the flag against some foreign evil. We’ll be able to pack swathes of them off to the front. At the same time we’re going to obliterate all the excess industrial capacity so that at the end of the war we can restart the credit cycle.

    You can do a search on “curtailing public spending” or “curtailing social expenditure” on my blog.

  5. D Bell Says:

    How do you come to your prediction of a global war by 2013/2015?

    I would be very interested to understand why you think this and what steps you see playing out that might lead to such an event.

    Great blog btw!

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