Tuesday, March 27, 2012

poor bankers

As I was reading The Druid Dude ( the arch druid report ) last Thursday, thoroughly enjoying his new thread on the collapse of the American Empire, a subject near and dear to my heart not because I’ll enjoy the crash but because I’ll enjoy the complete shock and utter disbelief from everyone else as their pampered spoiled lives are tossed upside down and I can gloat for the rest of my life, and his comments on the capitalist industrial system got me to thinking.  In short, and you really should just skip right over there and read the article yourself if you already haven’t done so, for the system to work capital must be concentrated for investment in factories and other infrastructure.  Workers are paid poorly, as is the owner of commodities, in order to get sufficient funds for the system to grow.  But, once you reach the point where your workers, getting paid less and less ( back in the day, achieved by immigrants forcing wages lower.  Oh, wait, that works today also.  Just Spanish instead of Italian is heard from the fresh meat arriving on death ships then, from a death march now ) can’t afford your factory products, either here or abroad, who keeps the system afloat?  That is pretty much the article the Druid Dude covered.  More will of course come in next weeks installment.   I of course have oodles and gobs to add to it, then I’ll get right into my sarcastic plea to save the bankers.  I’m sure this is also the direction the Druid is going and I won’t attempt to steal much of his thunder.  Not that I can.  He writes good enough for books other people pay to print.  But of course, writing slow enough for a book also means some uppity punk can post on his blog a lot quicker than you can.

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Henry Ford was of course known for his assembly line innovation, but he should be celebrated for his intelligence in raising his workers pay, hence allowing them to buy the product they were making.  At the time this was revolutionary.  I’m sure this caused quite a bit of surplus stomach acid to be produced amongst the rich and famous.  Others reluctantly followed.  No one, least of all Ford, did this out of love or compassion but out of self interest.  It took someone long enough, speaking of Robber Barons here, to pull their head out of their ass and figure it out.  Now, I don’t know if this is the straw that broke the camels back- perhaps it was impossible economically speaking to divert the investment money to the workers- or if it was other forces such as World War One when our central bank faced the danger of losing its loans to the Allies or even if it was just the creation itself of the central bank, but it pretty much all went to crap after that.  The farm commodities depression followed the war, the gambling on Wall Street with Monopoly money, then we got the Great Depression.  To get us out of a depression caused by interventionist policies from our central bank, we went socialist and then national socialist on a war footing.  From that point to the 70’s, almost all industrial demand was from one client, the central government.  The worker did in fact get more of the spoils, but not because of anyone’s generosity.  The surplus of oil we had allowed money creation and government growth.  When the oil supply stopped growing, so did the Industrial economy.  And so did workers wages.  But the Robber Barons didn’t have to go down with the ship.  Their wages weren’t going to go down.
Out of necessity, our economy turned to finances.  With our industrial plant aging, our ores depleting and our oil supply contracting, how else was the engine to keep working?  From the early seventies on, more and more economic activity took place in the magical Wonderland of finances.  This was the new wealth pump, to use the phrase of Druid Dude,  that replaced factories.  And for the longest time it worked wonderfully.  Until it didn’t, because it was all smoke and mirrors after all.  The global First World real estate bubble did not take place because suddenly every swinging dingus out there decided that rates were low enough to buy a house.  It was the last desperate attempt at our global financial albatross to keep the financial industry wealth pump working.  California/Japanese Real Estate Bubbles were replicated almost everywhere.  Remember, this happened prior to the global plateau of Peak Oil.  That was what popped the bubble.  But the real estate fiasco happened right after the Tech Wreck, itself a bubble.  The central banks were creating bubble after bubble to steal wealth.  Now that this is no longer possible, they are turning to the government to force people to send in their remaining Obammy Bucks.  At heart, this is what is driving the mandatory health care laws.  The bankers need more money.  Literally, they need more money or the whole rotted system collapses.  If/when it does, because of our total interdependency, the whole enchilada falls apart.  Systematic failure type falls apart.  Even if we don’t run out of oil first, how does one transport it here without a financial infrastructure to pay everyone along the way?
Before, I was viewing the greedy parasitical asswhore bankers as our masters.  The bastards that were squeezing us dry to live the high life.  But now, looking at it through the wealth pump prism, it makes a lot more sense to view the draining as a mandatory activity just to keep the system alive.  You can see how the gradual control over every aspect of our lives is assured, just to keep getting more and more money out of us.  Concentrating the wealth to the few that need that wealth just to keep that finance factory humming.  Why do you think it is getting harder and harder to live in an unconventional house?  If every homeowner could avoid a mortgage the bankers would be useless.  If every car owner who paid off his car could drop his insurance, how much money would that drain out of the financial system?  Our county here was just declared a natural disaster area.  Why?  Because of a few fires.  No economic activity was seriously threatened.  But by declaring this as such, suddenly all our ranchers and farmers are eligible for disaster loans.  Not grants, loans.  You get screwed in a natural disaster, the fedgov is now happy to get you further in debt.  Just like when the city you live in is about to declare bankruptcy.  The feds don’t send financial relief, they just offer lower interest loans.  How does that help anybody other than the bankers?
The system is dying, and it has been cannibalizing itself for some years now.  Don’t expect the financial system to remain in its present form.  Plan accordingly.
Gil, you beautiful bastard!  I got your topo map CD.  Many thanks!
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  1. Mar 27 2012
    Spud wrote
    I be taking out a little insurance, by having a few blacks in my little group. Been training a black friend of mine in the fine arts of bow hunting and wilderness survival.


    Do the blacks in your group have friends, acquaintances and extended family outside the group? Might the biggest baddest mother in the ghetto send word for particular fellow that next time on guard midnight to 0400, open the gate for the badass ? If he does not open the gate Badass and six of his ex-con followers, some with AIDS, will make a video with his favourite aunt. Will your new black friend and protege warn you? Or is he loyal to his family? He may decide to say nothing,and let badass get your honky ass.
    I warned you about the blacks. How well do you know the whites?

    1. At least we understand which side of the road you walk Vlad.

  2. I am impressed that in addition to reading JWR's blog and books, you also read JMG's blog and books, and for all your lowbrow yammering, you actually seem to know a lot about economics.

    Right now I am halfway through reading Sacred Economics by Charles Eisenstein - he almost has me convinced that negative interest rates would be the best way to move the economy out of zero-velocity - it would force the banks and the 1% to spend or invest their hoard. Anyhow, good job with the blog, JMD.


  3. Any party in my group is well liked and known. If you think just because of color one is qualified, or not. Then you yourself sir could not be included into our group. We think very much outside the box in all areas....