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AGelbert

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Re: Money
« Reply #30 on: July 06, 2015, 07:11:54 pm »
Hat tip to Surly for this great find!

Here is another view from Thomas Piketty that seems obvious, but I have heard no one mention it:

Germany hasn't paid ANYBODY.

German copyright law is arcane with limited provisions for public reuse, so this is a Google , DIE ZEIT. The original German interview with Thomas Piketty can be found here.

"Germany has never paid"
The star economist Thomas Piketty calls for a large debt conference. Especially Germany must help the Greeks refuse INTERVIEW: Georg Blume

TIME (DIE ZEIT)
June 27, 2015 20:09 c



Since his book Success "Capital in the 21st Century" is one of Frenchman Thomas Piketty of the most influential economists in the world. His theories on the distribution of income and wealth triggered last year of a global debate. In time conversation he now mixes also decided in the European debt debate.

DIE ZEIT: Can we Germans are pleased that even the French Government currently pays tribute to the dogmas of the Berlin austerity?

Thomas Piketty: Not at all. That's a reason to celebrate neither France nor Germany, and certainly not for Europe. Rather, I am afraid that the Conservatives, in particular in Germany, are on the verge, Europe and the European idea to destroy - and because of their appalling lack of historical memory.

DIE ZEIT:: We Germans have yet worked up the story.

Piketty: But not when it comes to German debt! The memory of it just for today's Germany would have to be of importance. Look at the history of public debt to: Great Britain, Germany and France have all been in the situation of Greece today, even suffered even higher debts. The first lesson that can therefore be drawn from the history of sovereign debt, is that we do not face new problems. There was always plenty of opportunities to pay off the debt. And never want only one, as Berlin and Paris looking to make the Greeks.

DIE ZEIT:: But they should repay the debt after all?

Piketty: My book tells of the history of income and assets, including the public. What struck me in writing: Germany really is the prime example of a country that has never repaid its government debt in history. Neither after the First nor the Second World War. There was another pay about after the Franco-German War of 1870, when it called for a high payment of France and they got it. For the French state was suffering then for decades under the debt. In fact, the history of public debt irony. They rarely follow our ideas of order and justice.

DIE ZEIT:: But it can not but draw the conclusion that we can do no better today?

Piketty: When I hear the Germans now say that they maintain a very moral dealing with debt and firmly believe that debts must be repaid, then I think: That's a big joke! Germany is the country that has never paid his debts. It can be obtained in other countries no lessons.

DIE ZEIT:: Do you want to try the story in order to portray States who do not repay their debts as a winner?

Piketty: Just such a state is Germany. But slowly: The story teaches us two options for a highly indebted country to settle its arrears. One has fooled the British Empire in the 19th century after the Napoleonic Wars expensive: It's slow method, which today also recommends Greece. The UK division at that DIE ZEIT: the debt through rigorous financial management from - although it worked, but took extremely long. Over 100 years the British relatives two to three percent of its economic output on the debt, spending more than they for schools and education. That must not be and should not be today. For the second method is much faster. Germany has it tried in the 20th century. Essentially, it consists of three components: inflation, a special tax on private assets and liabilities sections.

DIE ZEIT:: And now you want to tell us that our economic miracle was based on debt cuts that we deny the Greeks today?

Piketty: Exactly. The German government was in debt after the war ended in 1945 with more than 200 percent of its gross national product. Ten years later it had little choice but the national debt was less than 20 percent of the national product. France succeeded in that DIE ZEIT: a similar feat. This tremendously rapid debt reduction but we would never have reached with the budgetary resources that we recommend Greece today. Instead, our two countries turned to the second method, the three mentioned components, including debt restructuring. Think. To the London Debt Conference in 1953, canceled on the 60 percent of Germany's foreign debt and also the domestic debt of the young Federal Republic were restructured

DIE ZEIT:: This was from the realization that the high repayment demands on Germany after the First World War were among the reasons the Second World War. They wanted this DIE ZEIT: forgive the Germans for their sins!

Piketty: Nonsense! This had nothing to do with moral insights, but was a rational economic decision. It was recognized at the DIE ZEIT: correctly: According to major crises which have a high debt burden result, there comes a DIE ZEIT: when you have to turn to the future. We can not expect to pay for decades for their parents' mistakes of new generations. Now the Greeks have undoubtedly made great mistakes. By 2009, the government in Athens have forged their budgets. Why not the younger generation of Greeks now bears more responsibility for the mistakes of their parents as the young generation of Germans in the 1950s and 1960s. We must now look forward. Europe was founded on forgetting the debt and investing in the future. And it is not on the idea of eternal penance. We need to remember.

DIE ZEIT:: The end of World War II was a break with civilization. Europe was like a battlefield. That's different today.

Piketty: reject the historical comparison with the post-war period would be wrong. Take the financial crisis of 2008/2009: That was not any crisis! It was the biggest financial crisis since 1929. So we have to do these historical comparisons. This also applies to the Greek national product: Between 2009 and 2015 it fell by 25 percent. This is comparable to the recessions in Germany and France 1929-1935.

DIE ZEIT:: Many German believe that the Greeks have their faults not seen until now and want to just go ahead with its high government spending.

Piketty: If we had told you Germans in the 1950s, that you present your errors have not sufficiently acknowledged, you were still trying to repay your debts. Fortunately, we were smart.

DIE ZEIT:: German Finance other hand, seems to believe that a Greek exit from the euro zone could Europe weld together even faster.

Piketty: If we start to launch a country, the serious crisis of confidence in the euro zone is now, only larger. Financial markets would turn to the next country immediately. That would be the beginning of a long agony, in the course of which we risk Europe's social model, its democracy, to sacrifice even his civilization on the altar of a conservative, irrational debt policy.

DIE ZEIT:: Do you think that we are not Germans generous enough?

Piketty: What are you talking about? Generous? Germany earned so far to Greece by comparatively high interest grants loans to the country.

DIE ZEIT:: What is your proposed solution to the crisis?

Piketty: We need a conference on the total debt as Europe after the Second World War. A debt restructuring is unavoidable not only in Greece but in many European countries. We just lost the completely opaque negotiations with Athens six months. The idea of the Euro Group that Greece in the future generated a budget surplus of four percent, in the next 30 to 40 years to repay its debt is still not off the table. It is said that in 2015 will one percent surplus generated in 2016 then two per cent, in 2017 three and a half percent. Totally crazy! It will never run so. We move the necessary debt debate on the cows come home day.

DIE ZEIT:: And what would after the great haircut?

Piketty: It would require a new democratic European institution, which decides on the permitted level of debt in order to avoid a resurgence of debt. This could for example be a European Parliament chamber, which results from the national parliaments. Financial decisions can not escape the parliaments. To undermine democracy in Europe, as Germany does today, by insisting on the durchgepowerten especially from Berlin Regelautomatismen in debt of states, is a big mistake.

DIE ZEIT:: Your President Francois Hollande has just failed only with his criticism of the fiscal pact.

Piketty: That does not help matters. If in recent years, the decisions in Europe would have fallen in a democratic way, there would be today Europe a less strict austerity.

DIE ZEIT:: As it is doing in France with no party. National sovereignty is considered sacred.

Piketty: In Germany more people do, in fact thoughts that go in the direction of a democratic new foundation of Europe, as in France, with its numerous Sovereignty believers. In addition, our president still makes a prisoner of the failed EU Constitution referendum in France in 2005. François Hollande does not understand that a lot has changed by the financial crisis. National self-interest, we need to overcome.

DIE ZEIT:: What national egoism shows in Germany is at work?

Piketty: I think Germany today is very marked by the reunification. They had a long DIE ZEIT: afraid of being left behind by economic them. But then the union succeeded very well, thanks to a functioning social model intact and industrial structures. Meanwhile, however, the country is so proud of this achievement that it granted all the other countries lessons. This is a bit infantile. Of course I understand the importance of the successful reunification was about the personal history of Chancellor Angela Merkel. But now Germany has to rethink. Otherwise, his attitude towards the debt about a great danger for Europe.

DIE ZEIT:: What do you advise the Chancellor?

Piketty: Those who want to expel Greece from the Euro-Zone today will end up in the dustbin of history. If the Chancellor wants to secure its place in history, like succeeded Kohl with the unification, it must be now successfully used for an agreement in the Greece issue - including a debt conference, which we then start over at zero. But then with a new, much stricter budgetary discipline than before.

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AGelbert

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Re: Money
« Reply #31 on: July 06, 2015, 08:30:33 pm »
Thanks, AG. I get an increasingly bewildering number of things that hit my inbox every day.
Some of them bear fruit.
Right now this is the only place i know of you can read it in English.
Doubtless not for long, though.

Surly,
You are quite welcome. It would be interesting to see how the NAZI sympathizers at places like Rense.com, who are continually trying to blame the Allies for creating the conditions that created Hitler ("onerous" reparations after WWI), would react to the hard truths your posted article points out.  They wouldn't like it.  ;D  The continual efforts to make a saint out of Hitler and the German people of that time disgusts me. They are no better than the racist  defenders of the stars and bars. In the USA, it is no coincidence that the same people are often both Holocaust deniers and confederate Flag defenders.

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AGelbert

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Re: Money
« Reply #32 on: August 09, 2015, 06:01:30 pm »
Quote
Quote from: agelbert on August 08, 2015, 01:24:02 PM

    DEFLATION is a misnomer in a fiat currency environment. What part of that do you not understand?

 Catching up on my reading this morning AG, and just had to compliment you on your excellent financial postings of late.

 The capital gains insight was top notch material as well that did not go unnoticed.

 While I realize your favored focus is on other matters, your insights on financial matters, appearing more often, would be most appreciated as well. 

GO,
Thank you.

As to the comments from Palloy on PV and RE on the "population" problem or the "low energy " of Renewable energy systems allegedly making it "IMPOSSIBLE" to transition to 100% Renewable Energy without killing the economy, their arguments are more ideological than logical. It's a waste of time to argue with them.  8)

For your info, the EROI fixation Palloy and others have in regard to doing the math on Energy is flawed. LCOE is what I referred to that really describes energy efficiencies from cradle to grave.

Since you are up on financial and accounting terms, here's a very brief summary of what is involved in formulating LCOE from an excellent article.


SNIPPET 1:


Levelized Cost of Energy (LCOE) Defined


LCOE is used to compare the relative cost of energy produced by different energy-generating sources, regardless of the project’s scale or operating time frame. As Thomas Holt and his co-authors define it in A Manual for the Economic Evaluation of Energy Efficiency and Renewable Energy Technologies (see Resources), LCOE is determined by dividing the project’s total cost of operation by the energy generated. The total cost of operation should include all costs that the project incurs—including construction and operation— and may incorporate any salvage or residual value at the end of the project’s lifetime. Incentives for project construction and energy generation can also be incorporated.

LCOE = Total Life Cycle Cost / Total Lifetime Energy Production 
    (1)

As presented in Equation 1, LCOE is a metric that describes the cost of every unit of energy generated by a project in $/kWh (or ¢/kWh or $/MWh).

As will be shown directly, this basic definition of the LCOE can be expressed mathematically in more complex ways to account for all of the variables that impact the life cycle cost and total energy production for a PV system.


SNIPPET 2:

LCOE Uses

LCOE is most commonly used for evaluating the cost of energy delivered by projects utilizing different generating technologies. Specifically, it is used to rank options and determine the most cost-effective energy source. LCOE may also be used to compare the cost of energy from new sources to the cost of energy from existing sources. In this context, it is useful to policy makers deciding how future energy needs will be met and which technologies to support, and to utilities and project developers selecting technologies. It should be noted that energy-efficiency projects may also be evaluated using the metric.

Because it captures total operating costs, LCOE enables comparisons between significantly different technologies, but it may also be used to compare the cost of energy from variations of the same technology.



SNIPPET 3:

Key Financial Concepts

While it is beyond the scope of this article to thoroughly explain the financial theory behind the LCOE equation, there are two key concepts that you need to understand.

Cash flow. For the purposes of the LCOE calculation, the cash flow is a table showing the amount of money either spent or received each year over the life of the project. The values included in the cash flow vary depending on how the project is financed and whether you are considering tax credits or incentives.

In a simple example, the Year 0 value for a PV project cash flow would include the capital cost of installing the system and any up-front investment or capacity-based incentives. All tax credits, tax savings and performance-based incentives would begin to be recognized in Year 1. For most subsequent years, the only costs in the cash flow would be relatively small O&M expenditures. The likely exception to this would be the year when the inverter needs to be repaired or replaced. In some scenarios, the value of the equipment or material is included in the cash flow at the end of the project lifetime.

If the value of money was static over time, then the total life cycle cost of the project would be determined by simply summing each value in the cash flow. However, a dollar today is worth more than a dollar tomorrow, which leads us to the concept of present value.

Present value. In the context of this discussion, we want to determine how much each annual value in our project cash flow is worth in today’s dollars. To figure this out, we need to multiply each value by some factor less than 1. This factor is called the discount factor and can be represented by the following equation:

Discount Factor = 1 / (1+d)


where d is the rate of return that could be expected from equivalent investment alternatives. The discount factor can be difficult to define and varies from project to project and over time.

A present value calculation allows you to account for the timing of expenditures or revenue and puts a higher value on costs and income that occur near the beginning of a project.
This is important when comparing technologies because they often have different long-term cost profiles. Renewable technologies often require a large up-front investment and incur little cost over the project lifetime, whereas traditional sources of energy often have a lower up-front cost but require continuing significant investment in fuel costs.


http://solarprofessional.com/articles/finance-economics/levelized-cost-of-energy?v=disable_pagination



I have been unable to get these CFS OBVIOUS advantages of Renewable Energy past the ideological lense that Palloy AND RE refuse to stop seeing through. So, I don't bother to try any more.

ALL the arguments presented in this forum against the feasibility of a rapid 100% (or more) transition to Renewable Energy do not hold water. Even the IMF, no friend of Renewable Energy, AGREES with me.  :icon_mrgreen:

The IMF just destroyed the main argument against clean energy May 25, 2015

http://www.energypost.eu/imf-just-destroyed-main-argument-clean-energy/


But they aren't the only ones.


Quote
his new book “Clean Disruption of Energy and Transportation”, famous author, lecturer and Silicon Valley entrepreneur Tony Seba predicts that by 2030 all power generation will be solar and wind and all cars will be self-driving electric vehicles. The existing energy industry will be “obliterated”.  ;D In a review of the book, José Cordeiro, founding energy advisor at Singularity University and Visiting Research Fellow at the Institute of Developing Economies ( IDE-JETRO) in Japan, concedes that this sounds unlikely, but calculates that it is very well possible.

http://www.energypost.eu/clean-disruption-silicon-valley-will-make-oil-nuclear-gas-coal-obsolete-book-review/


But don't try to convince RE or Monsta or Nicole or Ilargi or Palloy et al. They are not listening. Soon they will be forced to face reality. But until then, they will continue to claim I am the one not facing it.  ;D

At any rate, if you want to have some fun with Nicole Foss or Ilargi, ask them what the present value of a deflating currency is...  ;D

http://www.doomsteaddiner...pic=559.msg82616#msg82616
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AGelbert

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Re: Money
« Reply #33 on: August 13, 2015, 08:37:08 pm »
Let me take this opportunity to congratulate you both. You're very dedicated, each of you, and worthy of a great deal of praise. I mean that sincerely. Please don't think that, because I'm a curmudgeon, that I don't appreciate all you do for this site and for the concerned people in the world.



Thank you. It's the passion thing.  8)  I am frequently so fed up and frustrated about the way things are that I try to quit. Surly usually gives me a lesson in reality and kicks my ass around so I get back in the saddle, but I must admit it gets really old seeing so much POLLUTING POISON coming down on us and so few people willing to realize that we are NOT going to change anything for the better if we get all maudlin about defending/justifying all the wrong moves made by Homo Saps to get to where we are.

If I could synthesize the main argument I have with the Predators 'R' US  crowd, it's that the homeostatic range of ALL life forms, even if many have radically different ranges than ours, DICTATES that there IS such a thing as TOO MUCH of a substance that we need to LIVE. This is LIFE REALITY. But the Wall Streeters do not understand that concept. MKing does not understand that concept either. Most Libertarians do not understand that concept either.

TOO MUCH PECUNIARY PROFIT is deadly for human society. Never mind that it leads to tyranny and oligarchy. That's the LEAST of our concerns. 

The problem is that it is incredibly difficult to maintain our level of civilization and not degrade the biosphere. When addressed as a social challenge, one that everyone must pay for equally, it makes it into that 'homeostatic' area as a metaphor to life processes. In that case, everybody tries to keep their polluting down to a dull (i.e. sustainable) roar, so to speak.

But when a few ass holes running a multibillion dollar fossil fuel industry get MORE MONEY if they POLLUTE MORE through wars, extraction, processing and sale of fossil fuels, they leave behind the 'homeostatic' zone and charge into the extinction trajectory. They become a metaphor for a cancerous tumor. The more billionaires out there DOING what they DO, the more tumors.

It's easy to convince people that having too little money is bad. It's damned near impossible to convince them that having too much money is bad. But it is. That is the lesson and the warning that homeostasis SCREAMS at us from nature.

Most people don't get it. For example, they look at a graph with the X axis equal to time and the Y axis equal to income. They do not understand that, in living beings, that graph has a HOMEOSTATIC ZONE. If you depart from that zone below OR ABOVE, you will harm yourself and those around you (humans AND the rest of the biosphere).

INCOME, when you do the biosphere math, is a certain RANGE of nutrients along with shelter, security, etc. (see Maslow).

Everybody looks at that graph and says there is no such thing as too much "money". Well, your body NEVER gets ANY money; It gets NUTRIENTS. What happens when you eat 72 ounce steaks, drink 10 milk shakes and other sugar "goodies" every day? Well, THAT is what is happening to our society!

Yeah, I know. Good luck trying to convince anybody of that.  :(
 
Nevertheless, at least for now, I will continue, as Knarf, RE and Surly (and others from time to time) do to, not just document our misery, but propose ways to avoid extinction.  ;)


http://www.doomsteaddiner...dex.php?topic=559.new#new
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AGelbert

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What to Expect From the Fed's Jackson Hole Meeting

Mohamed A. El-Erian Aug 24, 2015 2:00 AM EDT

SNIPPET 1:


Quote

Although the official focus this year will be "Inflation Dynamics and Monetary Policy,"   the event organized by the Federal Reserve Bank of Kansas City also should be an opportunity to discuss the challenges facing the global economy, including the slowdown in the emerging world and the threat it presents to social well-being and financial stability.   ;D


Agelbert NOTE: We KNOW who's social well-being and financial stability the Fed lackeys for Oligarchy are concerned with, don't we?       

IOW, if your net worth is not well over a one million dollars, your "social well-being and financial stability" does not merit disussion among attending luminaries of world finance. 


 
SNIPPET 2:


Quote
As things stand, the next scheduled assembly of global economic officials won’t take place until the annual meetings of the International Monetary Fund and the World Bank in the first half of October in Peru.

By then, one of two outcomes will have been established:
Either loosely coordinated national policy responses will have succeeded in restoring calm to markets and in buying more time for the global economy to get back on a growth path, or more intense market volatility will have fueled greater concern about adverse consequences around the world, accentuating the dangers of a vicious cycle of economic contraction and financial instability. 

Investors  may hope for the first outcome. But, absent any changes in policy actions and prospects, they would be well advised to plan for the second

http://www.bloombergview....ackson-hole-china-markets
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AGelbert

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Re: Money
« Reply #35 on: August 25, 2015, 10:16:20 pm »
The Crash of 2016 may have started.  :o

https://youtu.be/039Zh9KBCqY

Published on Dec 5, 2013

Looking at American history, Hartmann, host of The Big Picture, sees that roughly every four generations, catastrophe strikes. To avert the next economic and social disaster, he urges us to reject the destabilizing profit motives of corporations, and embrace the ideals of democratic civil values that once defined the nation.

Founded by Carla Cohen and Barbara Meade in 1984, Politics & Prose Bookstore is Washington, D.C.'s premier independent bookstore and cultural hub, a gathering place for people interested in reading and discussing books. Politics & Prose offers superior service, unusual book choices, and a haven for book lovers in the store and online. Visit them on the web at http://www.politics-prose.com/

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AGelbert

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Re: Money
« Reply #36 on: August 29, 2015, 07:22:28 pm »
Quote
Sure. Also applies if you go back since BEFORE we went off gold.

No it doesn't MKing, you are unaware of monetary history.

Why would they go off it and disparage it if it wasn't in their way?

Your idea that the dim always use that the inflation is all relative and can be kept up with is fallacious and fools talk as well.

Your one of  those people that applies your experience and ability to cope to everyone else.

Go to a seniors center in your area and instead of ****ing about your gout and bragging about your wonderful genes talk to some folks petrified of how to get through the month on and 800 dollar Social Security check and their 10,000 in savings with no interest on it. Good folks that worked all their life and trusted their government and it's currency.

You are clueless about the misery inflation inflicts upon millions of our citizens; that goes for you to Eddie with your callous insensitive remark about the price of hamburg. Be thankful you can dick some poor bastard out of a couple of hundred bucks because of a toothache; you may not always be that fortunate. Inflation is government stealing from the poor and the elderly as well as the trusting citizens of our country. Praise the heavens you have the ability to manage it.





We’re proud to collaborate with The Nation in sharing insightful journalism related to income inequality in America. The following is an excerpt from Nation contributor Greg Kaufmann’s “This Week in Poverty” column.

     http://billmoyers.com/2013/06/22/the-older-americans-act-and-u-s-seniors/ 
     

 

Apparently MKing, who accurately states that causality is important to scientists  ;), neglects to recognize the effects of inflation, DELIBERATELY ENGINEERED EFFECTS for BANKER SWAG, that CAUSE people on fixed incomes, like the older segment of the population, to lose buying power to the point of having to make choices between food and medications.

And that is just one of "coping strategies" that we-the-people at the wrong end of the economic inflation mechanism have to deal with.  :( 

Inflation is analogous to a less sophisticated form of HFT (high frequency trading). Like the HFT, market gaming, parasitical mechanism designed to continuously take (steal) a tiny percentage off the top, the ONLY reason fiat currencies are created is for the express purpose of extracting a "first in line" percentage of buying power off the top BEFORE the masses have, NOT DRIVEN PRICES UP, but been FORCED to pay higher prices because the value of an item reflects the increased fiat money supply.

MKing sees everything in terms of supply and demand. That's incorrect in regard to fiat currencies. There is no "increase" in demand to raise the price of goods and services. There is simply a leveling effect from the increased money supply. It's an insidious effect, tantamount to wealth transfer (theft) form the masses to the elite pigs.

So, the banker elites make a PROFIT off the inflation engineered LOSS/MISERY of the rest of the populace.

This BLATENT cause and effect relationship of inflation seems to go right over MKing's "causality is important to us scientists" head.

I really wonder what part of INFLATION IS A WEALTH TRANSFER MECHANISM FROM THE MASSES TO THE BANKER ELITE  that MKing does not understand.        

Anyone that claims this is about supply and demand, see below:

« Last Edit: August 30, 2015, 06:02:29 pm by AGelbert »
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AGelbert

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Re: Money
« Reply #37 on: August 30, 2015, 05:59:44 pm »
Apparently MKing, who accurately states that causality is important to scientists  ;), neglects to recognize the effects of inflation, DELIBERATELY ENGINEERED EFFECTS for BANKER SWAG, that CAUSE people on fixed incomes, like the older segment of the population, to lose buying power to the point of having to make choices between food and medications.

There is a difference between inflation, and poverty. If the fixed income was high enough, there would be no problem. Therefore, what you are describing isn't a inflation problem. It is an income problem. To solve it is easy, double social security payments. Nothing to do with banksters.b  ;D

Quote from: agelbert
And that is just one of "coping strategies" that we-the-people at the wrong end of the economic inflation mechanism have to deal with.  :( 

You talk as though you have never seen the consequences of poverty before?  In the world I grew up in there was no income, let alone someone guaranteeing a fixed one. God that would have been great. As it was, medicine was home recipes and food was something you better go shoot or grow, if you wanted to eat. This fixed income gig sounds pretty good, I think everyone should get one!

Quote from: agelbert
So, the banker elites make a PROFIT off the inflation engineered LOSS/MISERY of the rest of the populace.

This BLATENT cause and effect relationship of inflation seems to go right over MKing's "causality is important to us scientists" head.

Because you saying it doesn't make it so. Causality does matter. There are all SORTS of reasons that inflation happens, and all SORTS of effects. And sure, banksters have been trying to engineer a cut since banks and sters were invented. But inflation isn't the only thing they want a cut of, they want a cut of everything. You should see their percentage for setting up M&A financing. And there is no loss/misery except….in YOUR example…WHEN POVERTY GETS INVOLVED. And when I say POVERTY, I only mean "not enough money for folks to buy whatever they want or need" and this…THIS covers a lot more than what the government might consider POVERTY.

All it takes is a new drug and $100G month to get it and presto…Anthony is enraged that inflation did it!

Please.


MKing, you are using your scattergun approach again. Of course there is a world of a difference between abject poverty and coping strategy choices from geezers on pensions like yours truly. That goes without saying.

Social Security being doubled would just barely bring up the buying power of a pensioner on Social Security to the level they had 40 years ago. My point is that inflation EMBEZZLED/STOLE that buying power from them.

Of course there are a lot of scams going on out there to fleece we-the-people beyond inflation by the elite, be they bankers, stock brokers, fossil fuel industry price shock fun and games, Health Insurance Horsesh it and medical professional price gouging, etc.

But inflation is the big enchilada. It takes a bite out of EVERYTHING. It's the CAUSALITY of causalities, as far as buying power erosion.

I hear ya on poverty. I never directly experienced it but I saw pictures of how people lived in Puerto Rico in the 1930's in the countryside.

In the cities, it was nice houses, cars, running water and electricity. In the countryside, none of the above. The wooden (not concrete like they have now) houses had thatched roofs (i.e STRAW). The people mostly walked barefoot. Only city folk had shoes. Bilharzia disease was rampant. TB too.

Only socialist government policies changed all that. The elite, of which many fu cks in my family belong to, just did not give a sh it. The elite never give a sh it, no matter where they live and what their color is. But that is another sore subject.  ;)

A cousin of mine is an Industrial Engineer (Georgia Tech graduate). He worked for a pharmaceutical corporation. He told me all about how much it costs to do what in those factories. MKing, regardless of the fact that the money spent on research is often lost (and needs to be recovered through successful drug sales) because many research projects are a dead end, the pharmaceutical corporations are involved in world class price gouging, FAR and above covering the research costs base. 

There is NO EXCUSE for the ROUTINE 2,000 to up to 40,000% mark up on cost on pharmaceutical drugs, PERIOD! 


« Last Edit: August 30, 2015, 07:34:44 pm by AGelbert »
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Re: Money
« Reply #38 on: August 30, 2015, 06:08:49 pm »
Agelbert NOTE: Eddie is a Dentist from Texas.

that goes for you too Eddie with your callous insensitive remark about the price of hamburg. Be thankful you can dick some poor bastard out of a couple of hundred bucks because of a toothache; you may not always be that fortunate. Inflation is government stealing from the poor and the elderly as well as the trusting citizens of our country. Praise the heavens you have the ability to manage it.

As usual, you miss my point. I mentioned food because we all know food costs are rising quickly . I wasn't being callous, I was trying to understand what's happening with the money.

Considering inflation vs. deflation in assets, ask yourself what happens when food costs eat up a bigger and bigger piece of John Q. Public's income?

 Answer: He spends less and less on anything else, including asset purchases of any kind. So when it comes to assets, higher food prices would seem to me be to actually be deflationary, and not inflationary.

This is not something that is generally understood, but it makes sense to me when I look at what's going on.
Rising prices are only half the equation for inflation. Without more money in the form of wages to spend into the economy, food prices can go to the moon, and we'll still be in a depression.

This is the same fallacious and absurd point that another brought up in the first Foss interview of late. The idea that rising prices and taxes are deflationary, not inflationary.

I would like to know of one instance when the price of something rising does not as an absolute fact mean less money is available for something else. It is self evident, but to call rising prices deflationary is the mark of someone so inept and incapable of sound thinking and comprehension that they cannot be reasoned with.

You and another here live in a world where rising prices are deflationary and therefore by the same twisted, contorted, imbecilic logic, falling prices are inflationary since they give us more money to spend on other items. It's really amazing that you would voice such buffoonery in public and be serious on top of it.

Your thinking is backwards Eddie much as the backward reverse thinking Diner mentor you no doubt pick up this insanity from. As soon, and not until, you find the time to think clearly and learn the difference between inflation and deflation; Alasdair would be an excellent teacher, if you can find the time to listen, I will be happy to continue the conversation with you in financial matters.                                                                                                               Regards, GO

 

   
« Last Edit: August 30, 2015, 07:27:33 pm by AGelbert »
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Re: Money
« Reply #39 on: August 30, 2015, 07:08:36 pm »

(From the inflation article you referenced.)


This seems to me to be the salient sentence in the Mises Institute article:


When the Federal Reserve Banks bought the government's 2½% bonds, say, at par, they held down the basic long-term interest rate to 2 percent. And they paid for these bonds, in effect, by printing more money. This is what is known as "monetizing" the public debt. Inflation goes on as long as this goes on.

If almost all the money the Fed created went into the the current equity market bubble, which is badly leaking now and apt to burst, taking the major stock indexes back to some point as far below the mean as they are above it now, then all the phony money the Fed created goes up in smoke. That, my expert friend, is most assuredly NOT inflation.

I think right there is where the traditional understanding of inflation fails to explain our current circumstances.


I am listening to Alisdair now. I hear him talking about the Fed having to helicopter money, which is something I mentioned earlier in this thread last week, and which you stated unequivocally would not occur.

Your suggestion that my fallacious thinking is the result of someone or another's mentoring here or elsewhere is wrong. Fallacious or not, it's based on my own critical thinking skills, and it's an attempt to put the big picture together by engaging in an open discussion of what we see happening in the real world.

I notice that any time I might say something that questions your world view, you react in a personal way, impugning my mental faculties, which I don't appreciate. You're much better at that than you are at making real arguments, which is what I'd much rather engage in, in a thread like this one.

I don't argue that the ultimate end game of currency debasement is a recipe for a fast economic collapse and a hyperinflation. But as Alisdair himself says in this interview you posted, we are not nearly there yet. Selfishly, what I want to understand is a roadmap for how to negotiate the near term future.

The currency wars are rewarding savers of USD cash money at the moment, in a very big way, for those with the means to exploit the arbitrage opportunities to exchange some of their fiat for real goods and for gold, too.

We are also experiencing real and easily measurable deflation at the moment, by nearly any reasonable metric. Commodities say we have had steady deflation for five years. The velocity of money is dropping faster than it did between 1929 and 1932. Welcome to Reality Check 101.

Eddie,
So how come the average Joe used to be able to take a two week to one month vacation each year and own a car and house too, but NOW they can't while YOU still can?     

Maybe you want to attribute it to your education and business smarts. I am not trying to impugn your intelligence or ability, but I am, right there with GO, claiming you are engaging in self serving rationalizing.  ;)

When I was a kid, doctors and dentists MOSTLY lived a middle class existence. Something has gone very wrong since then. That "something" involves, to a high degree, inflation caused buying power erosion of people on wages or pensions. 

But there is more to that society destroying inequality calculation. That is the FACT that professionals who own their businesses are exceeding in their buying power, not just published inflation, but actual inflation. They became much wealthier, as a group, than professionals with the SAME level of education and intelligence as peers on wages in a hospital or prison or military service setting.

Health care has become more of a business than a vocation. That is wrong, Eddie. There is no socially valid reason for a doctor or a dentist be remunerated any better than they were when most of them were middle class in the 1950's.
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Re: Money
« Reply #40 on: August 31, 2015, 07:58:50 pm »
The Deliberate Erosion of Fixed Income Purchasing Power Engineered by Fed goosed INFLATION in the USA is NON-Democratic THEFT for the Elite.

Agelbert NOTE: The Federal Reserve is NOT a democratic organization. The very clever rationale for

Fed "Independence" (from we-the-people, but NOT from elite bias) was based on the alleged "Inflation Bias" of an elected Congress on monetary policy. 



An "Independent" (as in YOUR VOTES DO NOT APPLY) Fed would allegedly avoid panic and control Inflation better... 


Question 41 of a quiz on what the Fed does, why it can do it, what it isn't authorized to do but does anyway, and what the Congress can do about it (but since 1913, never does;) ).

Quote

The case for Federal Reserve independence does not include the idea that

A) political pressure would impart an inflationary bias to monetary policy.
 
B) the principal-agent problem is perhaps worse for the Fed than for congressmen since the former does not answer to the voters on election day.

C) a politically insulated Fed would be more concerned with long-run objectives and  thus be a defender of a sound dollar and a stable price level.
 
D) a Federal Reserve under the control of Congress or the president might make the so-called political business cycle more pronounced.

The correct answer is B).  :(

See below for OBJECTVE criticism of Fed independence (the correct answer is in bold):

Quote
45) Critics of the current system of Fed independence contend that

A) the current system is undemocratic.

 
B) voters have too much say about monetary policy.

C) the president has too much control over monetary policy on a day-to-day basis.

D) all of the above are true.


46) Critics of Fed independence argue

A) that it is undemocratic to have monetary policy controlled by an elite group responsible to no one.

 B) that an independent Fed conducts monetary policy with a consistent inflationary bias.
 
C) that the Fed, since it does not face a binding budget constraint, spends too much of its earnings.

 D) only A and B of the above.   


47) Critics of Fed independence argue

 A) that it is undemocratic to have monetary policy controlled by an elite group responsible to no one.

 B) that independence seemingly does little to guarantee good monetary policy.

 C) that its independence may encourage the Fed to pursue a course of narrow self-interest rather than the public interest.

D) all of the above.   
   

Banking: The fed and monetary policy
Study by dwkremer   

https://quizlet.com/75164...etary-policy-flash-cards/

The surreptitious theft/erosion of purchasing power from the wages of Americans is the MAIN cause of the inequality increase in the USA. The Fed did ALL of that. MKing might whine that we-the-people "voted" the Fed into existence in 1913  ::), but that would be a lie as well. Even a cursory examination of how that Christmas eve "vote" for the Fed came about would reveal that democracy and voting did not apply.

The Fed (see Alan Greenspan), in it's "Principal Agent" role (for you know who  ), also was instrumental in getting the BLS (Bureau of Labor Statistics) to modify the cost of living calculation formula in order to low ball "unnecessary items" like housing costs, food and energy  ::). I admit some voting was involved in that shaft job. But really, the COLA gaming was just the icing on the elite 'wealth transfer from the masses to the rich' welfare queen cake! 

WHY? Because, while Inflation SUBTRACTS from the average Joe or Jane's purchasing power, the Fed is GOOSING the purchasing power of the elite by setting margin rates UNDEMOCRATICALLY.

Those margin rates that allow for generous borrowing for speculation by the brokerage firms and big banks do NOTHING for the main street American economy.

But for Wall Street, it gooses speculation in stock market securities, while it wrecks normal price discovery mechanisms. That is, they iNFLATE the paper wealth of a tiny elite sliver of the US.

Then they claim "inflation is under control" because the COLA fun and games make SURE the masses have their purchasing power eroded at the same time.   

Do you understand what loose margin requirements really means? Loose margin requirements is like giving ALL potential borrowers an A+ top tier credit rating. Do you think everybody on wall street merits that? Of course not! But they get it. At the same time, we-the-people get less purchasing power.

The Fed works for the Elite. Voting isn't going to change that any time soon.  :( 

Surly, I agree that union contracts, environmental laws and many other socially positive bits of legislation are the result of elected officials with a conscience. Yes, we need to vote, OKAY?

But the Fed has been an elite tool since it was founded in 1913. After we got off the gold standard, they got worse! And the royalist conspiracy that Thom Hartmann mentions often has taken apart much of the social progress made in this country.

When some duplicitous double talker like MKing brings voting into a discussion of Inflation cause and effect, he does so with exactly the same "we are all to blame" dissembling agenda BALONEY the mainstream media tried to sell us in 2008. I'm surprised you didn't see through that.  :(

Not only are we NOT all to blame, but 90% of us (at least!) are NOT to blame!

We-the-people DID vote Nixon in to become President. He pushed some great environmental legislation.   

But THIS action by him was totally undemocratic. THAT action should have required a referendum, but it did not. I suspect the Fed dictated that action to President Nixon.
Quote
The Nixon Shock was a series of economic measures undertaken by United States President Richard Nixon in 1971, the most significant of which was the unilateral cancellation of the direct convertibility of the United States dollar to gold.

https://en.wikipedia.org/wiki/Nixon_Shock

Surly, Today I have once again confirmed what I told you some time ago in a pm about talking to walls at the Doomstead Diner. The flexibility I observe here is like that of one year old cured concrete.     

« Last Edit: August 31, 2015, 09:20:19 pm by AGelbert »
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Re: Money
« Reply #41 on: September 01, 2015, 01:38:48 am »



Honest Economist Hudson tells it like it is!

SNIPPET:
Quote
Killing the Host discloses complaints leaked by angry IMF officials who became whistleblowers and published their complaints at Canada’s prestigious Center for International Governance Innovation (CIGI). These same quotes were just cited breathlessly by Reuters. What the wire service did not report was the point that the IMF’s former economists made.

Lagarde continues to insist that Greek debts can be paid by “extend and pretend,” lowering the interest rate and stretching out the maturities. This is her definition of “writing down Greek debts.” Most peoples’ definition would mean writing down the debt principal. Reading Reuters’ selective quotes, it is almost as if the seemingly detailed report was written to counter the political points Varoufakis, I and others have been making.

What Reuters excluded from its report that provides the key to unlock what is most politically embarrassing: The behavior of Obama and Geithner in protecting Wall Street’s ca sino bets that Greece could be arm-twisted to pay. Dominique Strauss-Kahn had two conflicts of interest: He wanted to run for the presidency of France, gaining favor by protecting French banks; and he wanted to get the IMF back into the austerity advice business, by joining the Eurozone troika. When Christine Lagarde started to repeat his refusal to back the recent IMF staff report endorsing write-down of Greek debt, the staff leaked it this spring, much to her embarrassment when the IMF signed onto a troika program with no real debt relief.[4]

The Reuters report throws up a cloud of disinformation saying that she backs debt relief, as if this means backing a writedown of unpayably high Greek debt. Quite the contrary, Lagarde has said again and again that her idea of debt relief is simply to extend and pretend – to stretch out the maturity of Greece’s debt, to lower the interest rate charged.

Full article:

http://michael-hudson.com...-public-relations-missif/
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Re: Money
« Reply #42 on: September 04, 2015, 12:12:47 am »
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Re: Money
« Reply #43 on: September 06, 2015, 03:43:07 pm »
What Currency Is Most Often Used in China?

As of 2014, China has the largest economy in the world. Its currency however, is not as valuable as one would expect. In 2014, 1 USD was equivalent to about 6.1 Chinese yuan. As of 2015, only 20% of Chinese trade is conducted with Chinese currency. Foreign currency is most often used in China for trade.

Use of the yuan for trade in China is actually on the rise. In 2009, the Chinese yuan was not used for even 1% of total trade in the country. There is an effort by the Chinese government to increase the value of China's currency in the hopes that it will become a global trading currency in the future.

More about Chinese economy:

•As of 2014, the Chinese economy is worth 17.6 trillion USD.

•The Chinese economy grew at a rate of about 10% for three decades  :o
until 2008.

•As of 2013, US owes China 1.28 trillion USD. 

http://www.wisegeek.com/w...t-often-used-in-china.htm
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Re: Money
« Reply #44 on: September 13, 2015, 08:32:37 pm »
Surly, you crack me up  :emthup:

The system we live "under" was not designed for us to prosper.
This system is like a noose. Not so bad at 1st, until it's tightened !
We are living in the last days & the air ain't so good and easy to breathe now.

There is little doubt that the parasites are killing the host.

As luck would have it, I read Pam Marten's (Wall Street on Parade) review of Michael Hudson's eponymous book. It is reproduced below.
I may just get it, expect we probably all know the ending.

Michael Hudson’s New Book: Wall Street Parasites Have Devoured Their Hosts — Your Retirement Plan and the U.S. Economy

By Pam Martens: August 31, 2015

Author and Economist, Michael Hudson

Michael Hudson

The riveting writer, Michael Hudson, has read our collective minds and the simmering anger in our hearts. Millions of American have long suspected that their inability to get financially ahead is an intentional construct of Wall Street’s central planners. Now Hudson, in an elegant but lethal indictment of the system, confirms that your ongoing struggle to make ends meet is not a reflection of your lack of talent or drive but the only possible outcome of having a blood-sucking financial leech affixed to your body, your retirement plan, and your economic future.

In his new book, “Killing the Host,” Hudson hones an exquisitely gripping journey from Wall Street’s original role as capital allocator to its present-day parasitism that has replaced U.S. capitalism as an entrenched, politically-enforced economic model across America.

This book is a must-read for anyone hoping to escape the most corrupt era in American history with a shirt still on his parasite-riddled back.

Hudson writes from his most powerful perch in chapters describing how these financial parasites have tricked our society into accepting them as a normal, productive part of our economy. (Since we write about these thousands of diabolical tricks four days a week atWall Street On Parade, poignant examples came springing to mind with every turn of the page in “Killing the Host.” From the well-placed articles in the Wall Street Journal toa front group’s pleas for more Wall Street handouts in a New York Times OpEd, to thedirty backroom manner in which corporate speech was placed on a par with human speech in the Supreme Court’s Citizens United decision, to Wall Street’s private justice system and the Koch brothers’ multi-million dollar machinations to instill Ayn Rand’s brand of “greed is good” in university economic departments across America — America has become a finely tuned kleptocracy with a sprawling, sophisticated public relations base.)

How else to explain, other than kleptocracy, the fact that Wall Street’s richest mega banks collect the life insurance proceeds and tax benefits on the untimely deaths of their workers – all codified into law by the U.S. Congress – making death a profit center on Wall Street. Or, ****/transcript-43/">as Frontline revealed, that two-thirds of your 401(k) plan over a working lifetime is likely to be lost to financial fees.

Hudson writes: “A parasite’s toolkit includes behavior-modifying enzymes to make the host protect and nurture it. Financial intruders into a host economy use Junk Economics to rationalize rentier parasitism as if it makes a productive contribution, as if the tumor they create is part of the host’s own body, not an overgrowth living off the economy. A harmony of interests is depicted between finance and industry, Wall Street and Main Street, and even between creditors and debtors, monopolists and their customers.”

What has evolved, says Hudson, is that Wall Street banks have “become the economy’s central planners, and their plan is for industry and labor to serve finance, not the other way around.”

To gloss over the collapse of this depraved economic model in 2008, Hudson says these Wall Street central planners simply depict “any adverse ‘disturbance’ as being self-correcting, not a structural defect leading economies to fall further out of balance. Any given development crisis is said to be a natural product of market forces, so that there is no need to regulate and tax the rentiers.”

Similarly, when citizens rise up en masse to demand a realignment of their economy, as happened with the Occupy Wall Street movement, first the public relations masterminds dismiss them as an unhinged gathering of smelly hippies, followed by their violent eviction in the middle of the night, with military precision, by the Praetorian Guard of the kleptocracy. In Manhattan, the Praetorian Guard (NYPD) has a high-tech surveillance center mutually staffed by cops and Wall Street personnel – and mainstream media find nothing unusual about this.

Hudson correctly calls 2008 a “dress rehearsal,” writing that “Wall Street convinced Congress that the economy could not survive without bailing out bankers and bondholders, whose solvency was deemed a precondition for the ‘real’ economy to function. The banks were saved, not the economy.” Hudson adds that the “debt tumor” was left in place. (This is the nightmare we are presently watching unfold.)

The result of the systemic disabling of regulations on Wall Street has resulted in the following, says Hudson: “…the wealthiest One Percent have captured nearly all the growth in income since the 2008 crash. Holding the rest of society in debt to themselves, they have used their wealth and creditor claims to gain control of the election process and governments by supporting lawmakers who un-tax them, and judges or court systems that refrain from prosecuting them. Obliterating the logic that led society to regulate and tax rentiers in the first place, think tanks and business schools favor economists who portray rentier takings as a contribution to the economy rather than as a subtrahend from it.” (But, of course, those business schools are financially incentivized to think that way.)

The outgrowth of these tricks to make parasites appear to be a natural appendage to a well-functioning economy results in a “veritable Stockholm Syndrome.” Hudson explains:

“Popular morality blames victims for going into debt – not only individuals, but also national governments. The trick in this ideological war is to convince debtors to imagine that general prosperity depends on paying bankers and making bondholders rich – a veritable Stockholm Syndrome in which debtors identify with their financial captors.”

Hudson has much to say on the perversity of corporations buying back their own stock. In one chapter, Hudson writes:

“In nature, parasites tend to kill hosts that are dying, using their substance as food for the intruder’s own progeny. The economic analogy takes hold when financial managers use depreciation allowances for stock buybacks or to pay out as dividends instead of replenishing and updating their plant and equipment. Tangible capital investment, research and development and employment are cut back to provide purely financial returns.”

On the timely debate over wealth and income inequality, Hudson writes that “Asset-price inflation is the primary dynamic explaining today’s polarization of wealth and income. Yet most newscasts applaud daily rises in the stock averages as if the wealth of the One Percent, who own the great bulk of stocks and other financial assets, is a proxy for how well the economy is doing. What actually occurs is that financing corporate buyouts on credit factors interest payments and fees into the prices that companies must charge for their products.”

Where this leads, says Hudson, is that “Paying these financial charges leaves less available to invest or hire more labor. Likewise for the overall economy, the effect of a debt-leveraged real estate bubble and asset-price inflation is that interest payments and fees to bankers and bondholders leave less available to spend on goods and services. The financial overhead rises, squeezing the ‘real’ economy and slowing new investment and hiring.”

Hudson is clearly on to something. The U.S. seems to be crashing like clockwork every 8 years with the crashes gaining in intensity. The 2000 dot.com crash wiped $4 trillion out of investment accounts while, 8 years later, the 2008 crash brought down the whole financial system, the U.S. and global economy, and it’s still producing a dead weight on economic growth. Next year will mark the eighth year since the 2008 crash and if last week’s market convulsions were any indication, we’re in for some very rough sledding.

Chapter 8 of “Killing the Host” begins with this quotation from John Maynard Keynes: “When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done.” Hudson expands further:

“Instead of warning against turning the stock market into a predatory financial system that is de-industrializing the economy, [business schools] have jumped on the bandwagon of debt leveraging and stock buybacks. Financial wealth is the aim, not industrial wealth creation or overall prosperity. The result is that while raiders and activist shareholders have debt- leveraged companies from the outside, their internal management has followed the post-modern business school philosophy viewing ‘wealth creation’ narrowly in terms of a company’s share price. The result is financial engineering that links the remuneration of managers to how much they can increase the stock price, and by rewarding them with stock options. This gives managers an incentive to buy up company shares and even to borrow to finance such buybacks instead of to invest in expanding production and markets.”

The net result of this, says Hudson, is an effective “debt-financed takeover from within.”

Hudson writes about the revealing September 2014 Harvard Business Review article by William Lazonick, who noted:

“Consider the 449 companies in the S&P 500 index that were publicly listed from 2003 through 2012. During that period those companies used 54% of their earnings—a total of $2.4 trillion—to buy back their own stock, almost all through purchases on the open market. Dividends absorbed an additional 37% of their earnings.”

“This management strategy created financial wealth by elevating the stock price,” writes Hudson, “not by producing more goods. Earnings per share rose not because companies actually earned more, but because there were fewer shares outstanding among which to spread the earnings. Many of the companies downsized and outsourced their employment and production. The immediate beneficiaries were corporate officers exercising their stock options.”

Hudson quotes another prolific writer on the subject of our bankster-controlled society, Paul Craig Roberts, who has noted the following about corporations buying back their own stock: “The debt incurred will have to be serviced by future earnings. This is not a picture of capitalism that is driving the economy by investment.”

Hudson says that what is happening today in corporate America is very different from the corporate raiders of the 1980s who used leveraged buyouts to gobble up companies. Today, says Hudson, “corporate executives raid their own company’s revenue stream. They are backed by self-proclaimed shareholder activists. The result is financial short-termism by managers who take the money and run. The management philosophy is extractive, not productive in the sense of adding to society’s means of production or living standards.”

Make no mistake about it: this is a dangerous book to the status quo. It is truth-telling at its finest in America’s darkest age of entrenched lies. Michael Hudson has clanged the alarm bells over more continuity government from the likes of Hillary Clinton and her fellow Wall Street Democrats. He’s also scuttled the chances that Donald Trump will be able to reengineer America from “Give me your tired, your poor, your huddled masses yearning to breathe free” to the evil fortress that kicks out infants by directing hatred and blame for America’s woes to impoverished immigrants running from their own leeches.

Hudson’s masterful book comes at the perfect juncture of stock market convulsions and an early election season when Americans are turning out by the tens of thousands to hear what the candidates for the Oval Office plan to do to return the wealth and the soul of America to the people.

“Killing the Host” is available as an e-book at CounterPunch and in print atAmazon.com.


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