I only ask, because there is an interesting thread over at Samizdata, and not all of you will have seen it.
I only ask, because there is an interesting thread over at Samizdata, and not all of you will have seen it.
WILL THERE BE A GLOBAL ECONOMIC COLLAPSE, OR RECOVERY?
Will there be a global economic collapse, or can the world’s economy be saved from a total
melt-down? Will the current stimulus packages work? Will there be an economic recovery?
These questions are now being asked by many business leaders, politicians and economists
around the world. There appears to be little agreement on what will happen as the unprecedented
economic crisis continues, in spite of optimistic forecasts from some world leaders. This article will
explain the causes of the current economic crisis, and what the outcome will be, in simple,
Firstly, let’s look at the causes of the current crisis. For over 30 years the Anglo-Saxon nations
(USA, Canada, Australia, UK, New Zealand) and a few other countries have been spending
considerably more money than they earned from exporting goods and services, accumulating large
current account deficits internally, and massive external debts internationally. To finance these
external debts they have borrowed money from creditor nations, in particular Japan and China. This
has allowed the Anglo-Saxon nation’s financial institutions to have the capital to continue growing
their economies, enabling them to finance costly wars and still import consumer goods to satisfy
their self-indulgent life-styles. They have continued to expand their currency supply in order to
maintain economic growth, but that caused an escalation of property prices, and growth in
borrowings to finance domestic consumption. Up to now they have been fortunate to avoid being
affected by the high inflation that normally follows an increase in the money supply, without a
corresponding increase in productivity. This was, in part, made possible by switching to the
purchase of imported goods and services produced by low-wage countries and paid for with the ever
increasing supply of US dollars.
The problem arises when Federal Reserve Notes (U.S. dollars) accumulate in foreign hands. A
Federal Reserve Note is an I.O.U. and rather unstable as it floats against the arbitrage basket of
international currencies. The only alternative for these nations to avoid being overexposed to
unbacked dollars which might tank at any moment, is to purchase United States Treasury
Certificates which are (so far) considered safer as they are rated (so far)”triple A.” Either way, other
nations are trusting that these I.O.U.’s will one day be useful for the purchase of goods, services or
other more stable currencies. The purchase of these Treasuries (loan certificates) by foreign nations
repatriates the dollars which are then spent domestically or overseas again.a vicious circle.
This inflow of money borrowed by the Anglo-Saxon nations has allowed them to maintain generous
state-funded welfare programs that have directly contributed towards undermining the role of the
family as the foundation of a successful society. This has encouraged people to look to the State
for their needs, rather than the extended family accepting responsibility for other family members,
sapping the drive and willingness of their people to compete in a competitive world. Socialism by
stealth in Western nations has done so much to destroy the family structure, the foundation from
which all successful societies are built. An increasing amount of Western Government revenues are
drained into providing expensive welfare programs such as health care, pensions, benefits for the
unemployed and inadvertently encouraging single parent families, but leaving little money for
investment into infrastructure and provide capital to develop their economies. Asians culture
encourages the extended family to accept responsibility of caring for other family members in times
of misfortune, paying for their education and health care, rather than the State. Most Asians accept
the premise that unless you work, you go hungry – sadly in the West it is expected by many that
the State will provide, regardless if one works or not.
One of the results of the current economic crisis is that the Anglo-Saxon Governments no longer
have revenue to support their expensive welfare programs; just at the time when there are the
greatest financial demands being placed on them. An aging population, escalating health-care
costs, growing unemployment is blowing out government budgets, causing unsustainable deficits.
Meanwhile the Asian countries, not burdened with such extravagant welfare programs, have been
able to use taxation revenue to invest into developing their domestic economies. As a result the
Anglo-Saxon nations have become less competitive in the global market-place than the Asian
economies. Added to this, the lack of domestic savings by the Anglo-Saxon nations has made
them dependent on borrowing from those countries that have large current account surpluses,
causing them to slip further behind in maintaining the standard of living that their people still expect
The end result has been a gradual break-down of the social fabric of western society till today they
are crime-ridden, diseased, over-indulgent, debt-ridden and self-destructive. The Anglo-Saxon
nations are now so heavily indebted to their overseas creditors, that even an increased amount of
export revenues would not enable them to service their external debts. However with falling exports
and large current deficits, it is only a matter of time before they slide into bankruptcy, unless they
are able to operate with a current account to service and repay their international debts. The flow of
US dollars into Asia has enabled their economies to obtain the capital to finance their domestic
growth and accumulate overseas reserves. In turn, lending their surplus capital back to the
Anglo-Saxon nations has allowed these countries to obtain the financing to purchase more imports
from Asia. This arrangement has worked well up to now for all concerned, but is not sustainable.
However, it is proving very difficult for the Anglo nations to expand exports to the rest of the world
during a global economic recession which is causing a lack of overseas export markets for their
goods and services.
Up to now the USA has been in the fortunate position of having the US dollar as the world’s reserve
currency, and being able to print dollars to finance its deficits, avoiding the need to borrow in other
currencies. As long as the global demand for dollars to finance world trade remains, it has been in
everyone’s interest to continue with this arrangement and retain the US dollar as the world’s reserve
currency. Over the last decade surplus dollars have been recycled back to the American banking
system, creating surplus liquidity in the Anglo-Saxon nations, and encouraging their banks to adopt
loose lending practices to generate paper profits from loans to domestic customers.
The current economic crisis was triggered when American and UK banks accumulated bad debts
from reckless lending, as their customers began defaulting on their loans. This quickly led to a
chain-reaction of banks defaulting and the need for government intervention to bail them out. This
has led to the current global economic crisis we now have.
In an attempt to avoid a total economic collapse, the governments of UK and USA have created
trillions of dollars of credit to inject into their banking system to save their banks from collapsing, as
well as guaranteeing deposits. This was intended to allow the banks to continue lending to prevent
their economies from going into free-fall, and government revenues collapsing. It appears this may
be working, although the banks have still not written off trillions of credit card debts and real estate
loans. The real question is, where has all the money gone that was lent though the bank’s bad
debts which have been written off? This money is still in circulation, but much of it is not
recoverable from those who have defaulted on their loans. What has happened to this money? It
has not just vaporised. Much of this money remains in circulation outside the USA and is now
controlled by foreigners.
Another difficulty faced by the Anglo-Saxon nations is that trillions of dollars have been written off of
their equity and property markets, wiping out much of the collateral from their banking system. Still
not accounted for are the trillions (possibly quadrillions) of dollars involved in the derivatives markets
– a sleeping time bomb ready to explode at any moment. In effect this has resulted in much of the
wealth of Anglo-Saxon nations disappearing, lowering the standard of living, slashing government
revenues, and will inevitably result in widespread poverty.
The Federal Reserve policy of creating new currency to replace toxic bank loans is like putting fuel
on the fire. In the short-term it may prevent the US economy from unravelling, but in the long term it
will be disastrous. It will result in run-away inflation as money looses value. Admittedly the US does
not have much choice – if they had not propped up their financial institutions, the economy would
have unravelled already, collapsing government revenues, and dragging the world into a depression.
They would not have had the revenue to service their national debt. Either way, the economy
collapses. The option of printing currency to inflate the money supply in an effort to stimulate
consumer demand and maintain economic activity is a very risky one, and will eventually lead to
erosion of the fiat value of the currency and uncontrollable inflation. Governments flooding markets
with currency to revive economic growth without increasing goods and services will only result in the
collapse of the currency.
So what happens next? The flood of money that has been injected into global markets may lead to
temporally restoring consumer confidence and spending for a short period. Sadly, the imbalances
that have led to the current crisis have not been addressed. Nothing has been done to correct the
imbalance of global trade between the Anglo-Saxon nations and Asia. The Asian nations continue
to accumulate more and more US dollars from exports and income from their investments. The flow
of capital from the West into Asia to finance imports continues. The outcome can only result in one
thing – a total collapse in the value of the currencies of the Anglo-Saxon nations.
The coming collapse of the US dollar will result in significant readjustment of global economic and
military power. It will result in the end of the Anglo-Saxon nations’ dominance of the global
economy. They will be replaced by two significant economic power blocks (Asia and the EU) filling
the vacuum created by their collapse. It will also be a time of further economic turmoil, followed by
political upheaval. It will lead to the end of many of the democratic freedoms which we have today,
replaced by authoritarian regimes regulating the global economy. Not only will there be a denial of
political, economic and social freedom, but also religious freedom. These institutions will be
replaced by authoritarian institutions regulating how people live their lives, denying much of the
individual freedom that we have come to accept today.
There is general agreement amongst many world leaders that the free-market unregulated
economic model advocated by the USA can no longer continue. In its place they are advocating
what UK Prime Minister Gordon Brown calls a “new world economic order”. What is planned is to
have much greater controls on the movement of money, where and how capital is used – controls on
speculation in futures, derivatives, commodity trading, etc. Technology available today will enable a
single world currency supported by one global central bank, to control both the supply and
movement of money around the world. This is being advocated by Germany and France under the
pretence of controlling tax avoidance and regulating markets, in reality it will go much further than
this – controlling the movement of money and all commercial transactions, with a cashless society
where governments can monitor all commercial and personal transactions.
The Euro is the only currency large and strong enough to replace the US dollar as a world reserve
currency, or a new world currency. Germany is the one country which has sufficient currency
reserves to underpin the confidence in the Euro allowing it to become the new global reserve
currency, having been for years the world’s largest exporter. Increasingly German dominance is now
dictating the direction of Europe – all that is lacking is the leadership.
The EU lacks a leader who can unite the various competing political and nationalistic factions to
enable decisions to be reached to bring about a cohesive economic policy and revive the European
economies. As the economic crisis spreads throughout Europe, unemployment continues to grow,
and political unrest becomes more severe, the need for the appearance of a strong leader will
create a power vacuum into which someone will surely step. Europe now desperately needs a
modern-day Napoleon, Hitler or a revived Holy Roman Emperor who can save the continent from
economic and political disintegration – a strong and commanding personality who can unite the EU
and lead it to economic recovery. Yet unity cannot happen unless the present disparate political
structures that currently exist are reformed, and the proposed new constitution adopted. The
materialization of a single leader that can unite the various European nations into a unified United
States of Europe, who has the ability to revive their economies, and provide the decisive leadership
required to lead them out of this crisis is the obvious necessity.
The fate of the Anglo-Saxon nations now looks extremely bleak. The collapse of their currencies will
be followed by total economic collapse. They will be unable to repay their international debts. They
will slide into bankruptcy. There will be wide-spread poverty, starvation, great suffering of their
people as their nations slide into insolvency. Disease will become wide-spread. Many
drug-dependant people will perish. Crime will spiral out of control, as a total break-down in law and
order develops. Most jobs will disappear. Governments will have no revenue to continue functioning
or pay for public servants or services. They will no longer have the income to maintain their defence
Throughout history empires rise, declined and collapse. The coming collapse of the Anglo-Saxon
Empire will happen quickly – this group of nations will disintegrate, which will result in the reshaping
of the political and economic landscape of the world. Without the stabilising influence these nations
have had on the world, many of the freedoms we take for granted today will disappear. The
Anglo-Saxon nations originally had a value system based on the Bible, but as they have rejected
the teachings of the Bible and the Law of God, so has their influence in the world declined. Now
these nations are facing total economic collapse, not economic recovery as many hope. They are
now being cursed for rejecting the teachings of the Bible and the Law of God.
1 May, 2009
Strange. On my desk, as we speak, is a little parcel. A special little parcel In this parcel are 3 little t-shirts. They belonged to 3 little people but as of yesterday, at 12.30pm the became the property of one Gordon Brown. So he shall recieve them. Along with little the t-shirts is a little note, which reads :-
we hope you like our little t-shirts. We liked them too but Mummy says they now belong to you as you need them more than we do. Mummy says she doesn’t need to send you her shirt as you already have it.
From Big Squid, Middle Squid and Ickle Squid
I state this is strange because as I look at this little parcel I see all my hopes and dreams for my Squids in there too, along with their little shirts.
10, Downing Street
Financial Fools Day.
Fools pretending to be protestors. Terrorists pretending to be protestors. Vandals pretending to be protestors. Greenies, Beardies, Trots, Commies, Scroungers, Losers and Wasters all pretending to be protestors. They are not protestors, they are f***wits.
What were they protesting for…………they weren’t. They were protesting against. Against everything that most people want in life.
These f***wits state that they speak for the population of Britain. No they don’t, they speak only for the idiots that support their cause. They are not interested in anyone else. They are happy to use violence and vandalism to get their message across. They are thugs, idiots and hypocrites.
Much beefing up of the Police in the blogosphere (I am guilty of this too). The only Coppers interested in starting a riot are the PoliticoPolice, those that stand to gain reward from Labour. The types that belong to Acpo. The ones at the very top. The ones have spent today, sat in ‘Head-Quarters’ , staring at CCTV monitors fed by 3000 cameras, watching the ‘real Coppers’ out on the street.
The Copper on the ground doesn’t want a riot. The regular Copper has been set up by his master (and he/she knows it). If they suppress trouble, those as the top will take all the glory. If they are seen to be inflaming it, they will be hung out to dry. Like the rest of us, the average Copper can’t win. He is just a pawn in the big Political Game.
I have watched the footage this afternoon, and I don’t care what anyone says, the Coppers on the ground have conducted themselves with great skill. And they should be applauded. It is very easy to see them as a group that ply the wares of this Labour Government and it is easy to forget that all those Coppers are just people like you and me. I myself, in the last couple of weeks have been swept up by the whole ‘Plod is out to get us’ way of thinking.
It is easy to forget that whilst I, as a member of the public, hate the restrictions this Government sees fit to put upon me. What I can drink, what I can eat, where I can smoke, what I can think etc… the average Copper also has to put up with this, and then when he/she goes to work there are more restrictions, targets, rules etc to follow. The average Copper isn’t the stooge of this Government, it is the fall guy. And I have only just realised this (another Mummy learning curve).
All those Coppers, on the ground, in London today, are real, down to earth people. They are members of the Public. They have families, mortgages, bills and commitments. Just like the rest of us. They are involved in the protests today. But not by choice. They have to be there. The thugs, idiots and terrorists (check your dictionary) get to cover their faces whilst they vandalise property and assault the Coppers. The Coppers don’t get this privilage. They are there for all to see. If they have to use a sheild, a baton, a taser, CS Gas or just their hands to protect THEMSELVES, they will be scrutinised. They could be punished. They could lose everything. They are the fall guys. Just like our Soldiers in Iraq and Afghanistan. These Coppers can’t say no. They have to attend these protests.
But in the real world, they are just like you and me.
A member of the public.
Members of the public.
A member of the public.
I am going to post this at my place aswell. I have learnt something today. Something important.
UPDATE1:-And some very bad news from the Gilts Markets. If the Government can’t sell on its debts, we are all f****d.
UPDATE2:- And this just in from Alex Singleton, about how Gordon Brown’s Attack-Apparatchik-GramscoNazis, such as Harriet Harman, whipped up the mob to attack Sir Fred Goodwin’s house, is even worse. That a person’s private property can be asaulted and trashed, by mobNazis, under the auspices and authorisation of other GoverNazis because they found the soundbytes convenient, is unacceptable, in a civilisation. Therefore, the Nazis will have to go, all of them, including Polly Toynbee, for ever, and ever, and ever, for we can’t afford to have any of these droids encumbering humanity and our destiny in the Universe.***
It will be too expensive to keep Nazis on this earth in the meantime, and the Universe is a dangerous and morally-neutral place. Full of flying rocks, ice, supernovae and other fell objects, none of which have our interests at heart neutrally or otherwise, and we have about 50 million years, only, to find out how to comprehend The Face Of God, and see It, and Understand His Mind. And get off, to somewhere else (global warming, but not yet as we think we know it.)
(That is part of The Test. To see if we can do it in time. University challenge was only the beginning. Eat your heart out Man U.)
If Daniel Hannan disappears, I will put him up here.
And I see The Devil got it down too. But I think we beat him by some minutes….p’raps we get pu earlier in the North.
Sorry, I did mean, really, to type “up”. Perhaps we poo earlier too: I do not know.
Here’s James Burdett on Daniel.
*** Perhaps that’s how Evil works: life arises, gets going for a bit, gets “highly organised and highly-evolved”, then – socialism steps in, and it all coems to a sad, planetary-death-type end, before anyone can get off to The Stars.
This is the Second Chris R. Tame Memorial Lecture. It was given at the National Liberal Club in London on the 17th March 2009, and sets out a libertarian response to the financial crises of the past year. A full text of the speech will be published in the next week or so. In the meantime, here is the video. A better quality video file on DVD is available on request from Sean Gabb <firstname.lastname@example.org>for £5.
UPDATE:- this is what we said almost a year ago.
It says over at Guido Fawkes’s place that Gordon Brown is in a state of delusional denial about the economic shambles he has created for us. I don’t agree, although of course I don’t know the fellow and haven’t ever met him.
The only occamist conclusion to be drawn is that he deliberately spent the thick end of £5 trillion on a clientariat state, to ensure the right number of ZanuLieBorg terms so he could finally get into No-10. This was all while knowing it to be unsustainable for more than a few years (or until the Markets noticed.)
No skin off his nose or even many of the Blair Babes and their mates: their pensions would be safe (they ensured that by force of law) while he had confiscatorily-taxed and spent ours and we have to slave till we die. They know they’re going down: it’s only the naïve, younger ones who think they ought to care about seats and careers.