Economic Devastation - page 54. | Bitcointalksearch.org

TPTB_need_war

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Stop reading Fekete. I debated him in email 6 or 7 years ago and blew apart all of this logic. I've debated in private many of the significant personalities on the net who are accessible, including Armstrong and Noam Chomsky.

None of these other chumps on the internet are any where near the league of Armstrong in their intellectual and extensive historical data understanding.

Gold backwardation is complete nonsense. ~~I will dig up Armstrong's explanation for you.~~Here they are:

http://www.armstrongeconomics.com/archives/9858
http://www.armstrongeconomics.com/archives/15131
http://www.armstrongeconomics.com/archives/18165

OROBTC, you are not focusing on the extenuating effects of stomping on the free market. It has nothing to do with whether higher or lower interest rates are preferable. It has everything to do with hijacking what would have been the optimum annealing (fitness) of the free market and then the after effects of "feeding drugs to toddlers" (as a dysphemism or cacophemism example of what happens when you distort what would have been natural). Time (entropy) is irreversible, i.e. people can't get back their innocence and recover the time they lost investing the wrong education which was stimulated by an extension of the Industrial Age past its useful life. Thus effects of Coasian barriers can be visualized as wind turbulence coming off a airfoil (wing) or the build up of effects of a water damn the turbulence of the damn failing (e.g. to an accumulation of silt or failure of the surrounding ecosystem, etc). So the after effects of QE will be increased turbulence.

See the free market is smarter (about fitness) than any one top-down decider, because it has more degrees-of-freedom (i.e. more opportunities to relieve pressure points and find synergies).

OROBTC

legendary

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Quote from: tabnloz on September 26, 2015, 10:58:28 PM

Doesn't QE just cause deflation?

Arguably, declining interest rates cause deflation and will raise all kinds of Hell. Dr. Antal Fekete is a controversial gold and economic analyst who has written on what happens with interest rates going down (briefly: OLD loans are harder to pay off if rates keep going down -- think about that statement (there always more OLD loans than new ones)) and the gold basis going negative ("backwardation").

Positive interest rates are a good thing. They are also normal (as TPTB has shown with Martin Armstrong's graphs).

Gold backwardation (sustained, not just a one day or one week expiration phenomenon) will lead to NO ONE selling their physical. Backwardation means that spot price is higher vs. nearby futures prices. With backwardation no one will lease their gold out for less than they could get just by sitting on it...

Fekete argues his cases better than I can, it has been a while since I read his work.

TPTB_need_war

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Quote from: tabnloz on September 26, 2015, 10:58:28 PM

Doesn't QE just cause deflation?

No. It caused misallocation and extension of corruption. That can lead to much worse outcomes than simply having productivity expand greater than the money supply. When you fuck up society and cause people to waste the precious years of their life and end up at a dead end. Then some example of outcomes that are likely are totalitarianism, war, and potential collapse of society into chaos.

tabnloz

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Doesn't QE just cause deflation?

TPTB_need_war

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It was a transfer effect, wherein the concomitant ZIRP sent capital fleeing to find yield in emerging markets. And the prevention of Western defaults providing the confidence to do so.

smooth

legendary

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A lot of the so called printed money was nothing of the sort. It was recapitalizing of banks. That meant there wasn't really any more money to circulate (banks just used it to meet the existing capital requirements that were being ignored, and earn risk-free interest), but it also means that massive cascading defaults and liquidations were avoided (or more likely just deferred, as you said).

But yes, some of it certainly swirled around making speculative investments all over the place.

TPTB_need_war

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The velocity of money rose in emerging markets because that is where the $9 trillion QE ended up. And interest rates dropped a lot over here significantly due to all that money swashing around (and the concomitant perceived reduction in risk as economies improved, which is congruent with Armstrong's point that interest rates are lowest where capital concentrates not only due to balance of supply and demand because also because of economies-of-scale in confidence).

But that has nothing to do with the long-term homeostasis of inexorably lower interest rates, as smooth points out.

sidhujag

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It would be ok if velocity of money rose to saturate all the printed money but it didnt. So most of it didnt do the trick but kicked the can thats it.

If velocity rises it would mean the market accepted the printed money and demand was high enough. We probably would be alot higher gdp if thats the case.

smooth

legendary

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@RealBitcoin I'm pretty sure I understand what you are getting at and I'll just say there are different perspectives on how an economy works. I happen to think that the defaults would be worse without easy money, but I'd also acknowledge that they probably would have happened a long time ago and the problem would be far smaller now. Then again counterfactuals are impossible to validate. Anyway, I don't think it is worthwhile to go back and forth on it, as we both certainly agree that the current situation is a mess.

RealBitcoin

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JAYCE DESIGNS - http://bit.ly/1tmgIwK

Quote from: smooth on September 26, 2015, 06:53:46 PM

Quote from: RealBitcoin on September 26, 2015, 12:47:48 PM

Quote from: TPTB_need_war on September 23, 2015, 02:08:46 PM

I still dont understand why you think interest rates are going down naturally.

Don't you realize that interest rates are going down because the printed money is causing the debt to be unsustainable. Of course interest rate will go to 0 or below if the debt payment is going to be a huge burden on the public tax system, or private income system.

Both government debts, as private debts are in unsustaninable levels, so the interest rate has to go down to not cause massive defaults.

That doesn't really make a lot of sense. Printed money would make the debt easier to repay. Something else is causing deflation that the printed money is unable to stop.

The money printing is causing the debt...

Each printed money is increasing the debt, so to avoid exponential debt increase, the interest rate must go to 0 (or even lower if the economy cant support it) to avoid default.

Plus the printed money ends up in the stock market and derivatives, its not paying back any of the debt, because it cant, it's paying only the interest on it. The total debt is always bigger than the total money supply, so by definition it's unpayable.

smooth

legendary

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Quote from: RealBitcoin on September 26, 2015, 12:47:48 PM

Quote from: TPTB_need_war on September 23, 2015, 02:08:46 PM

I still dont understand why you think interest rates are going down naturally.

Don't you realize that interest rates are going down because the printed money is causing the debt to be unsustainable. Of course interest rate will go to 0 or below if the debt payment is going to be a huge burden on the public tax system, or private income system.

Both government debts, as private debts are in unsustaninable levels, so the interest rate has to go down to not cause massive defaults.

That doesn't really make a lot of sense. Printed money would make the debt easier to repay. Something else is causing deflation that the printed money is unable to stop.

RealBitcoin

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JAYCE DESIGNS - http://bit.ly/1tmgIwK

Quote from: TPTB_need_war on September 23, 2015, 02:08:46 PM

I still dont understand why you think interest rates are going down naturally.

Don't you realize that interest rates are going down because the printed money is causing the debt to be unsustainable. Of course interest rate will go to 0 or below if the debt payment is going to be a huge burden on the public tax system, or private income system.

Both government debts, as private debts are in unsustaninable levels, so the interest rate has to go down to not cause massive defaults.

TPTB_need_war

sr. member

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Fascinating, clarifying chart from (or derived from) the Oxford study I had often cited up thread (which predicted 47% technological unemployment by 2020 - 2030[1]):

http://www3.weforum.org/docs/WEF_GAC15_Technological_Tipping_Points_report_2015.pdf#page=22

Thus we can see that Computers & Engineering are mostly immune to the coming technological unemployment. Although Healthcare, Legal, Education, Community Service, and Finance are mostly immune, they will be downsized with the peak in socialism and government upon us. At least those areas will have a future in Asia to some extent.

The general categories most susceptible to replacement by computerization and automation are:

Transport
Production (i.e. factories)
Office and Admin
Sales
Service
And some management (who managed the above)

[1]

http://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf#page=44

Quote

According to our estimates
around 47 percent of total US employment is in the high risk category. We
refer to these as jobs at risk – i.e. jobs we expect could be automated relatively
soon, perhaps over the next decade or two.

TPTB_need_war

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Others recognizing the Second Computer Revolution I had identified and the Knowledge Age I had identified.

http://www3.weforum.org/docs/WEF_GAC15_Technological_Tipping_Points_report_2015.pdf

Quote

We are entering a time of momentous societal shifts
brought on by advancements in software. According to Erik
Brynjolfsson, Council Vice-Chair; Director, MIT Initiative on
the Digital Economy, Massachusetts Institute of Technology,
USA, and a prolific author: “Now comes the second
machine age. Computers and other digital advances are
doing for mental power – the ability to use our brains to
understand and shape our environments – what the steam
engine and its descendants did for muscle power.”
These changes will impact people around the world.
Inventions previously seen only in science fiction, such as
artificial intelligence, connected devices and 3D printing,
will enable us to connect and invent in ways we never
have before. Businesses will automate complicated tasks,
reduce production costs and reach new markets. Continued
growth in internet access will further accelerate change.
In Sub-Saharan Africa and other underdeveloped regions,
connectivity has the potential to redefine global trade, lift
people out of poverty and topple political regimes. And
for many of us, seemingly simple software innovations will
transform our daily routines. These changes are not without
their challenges; as technology improves the lives of many,
we hope to help prepare people to understand and address
concerns on privacy, security and job disruption.

TPTB_need_war

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TPTB_need_war

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CoinCube

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Quote from: TPTB_need_war on September 12, 2015, 09:01:57 AM

CoinCube it is going to be interesting to see to what degree that ominous potential you describe plays out (you draw a lot from some themes I have popularized on these forums).

Absolutely, in addition to drawing a lot from your work especially your essays linked in the OP I have also benefited from pages and pages of sometimes bruising back and forth debates across numerous threads where I did not always emerge with the upper hand. Cheesy

That's why I put my predictions on page 98 of a thread dedicated to exploring your overall premise.

TPTB_need_war

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CoinCube it is going to be interesting to see to what degree that ominous potential you describe plays out (you draw a lot from some themes I have popularized on these forums).

I am still working hard and hoping for a more widely and rapidly adopted Knowledge Age. Thinking the Asians are poised to adopt my new software coming. I am over here in Asia and ready to market to them. Think new social networks accepting micropayments (remember I coded an entire such site in April and have it on standby, etc). I don't think they give a flying fuck about Bitcointalk.org.

CoinCube

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Quote from: ?? on ??

Then plan B is just to use tax havens for them.

They hardly pay any taxes, I watched a video lately talking about a clever scheme where businesses report 0 profits and turn all money into subsidiaries in other coutnries ,which then they pay back in royaltee fees, at an agreement of 0.5-1% tax with the local tax agencies.

It is a clever tax avoidance (not necesarly evasion) scheme. And while they pay 0.5%-1% ,we pay 50-75% taxes.

Fortunately this whole economy will collapse soon, and hopefully by then everybody will pay 0% taxes.

I agree wealth will increasingly seek to hide by moving into tax havens in other countries. It will also be increasingly hunted. Pressure applied in the name of shutting down tax havens will be one more tool to drive political consolidation and weaken the nation state. Those running from the tax man will increasingly be identified, caught and punished. Options for legal evasion like you mentioned above will be shut down or restricted to a even narrower elite.

Tax havens that survive will likely be rare and limited to select jurisdictions where citizenship is hard to obtain. These areas are likely to be funded by income taxes (there will likely be no escape for wage earners anywhere)
In these havens citizens will likely be exempt from inheritance, capital gains, and wealth taxes. This will allow the billionaire class to safely run their interests from afar.

The lesser wealthy will be increasingly consumed via taxation in their home nations. The coming wave of socialism and public anger will drive most of them back into the ranks of government dependents. This will serve the purpose of sating public rage, destroying potential local opposition, and further undermining the economics of nation states thus increasing the dependence on debt that will soon be issued by bodies and governed by laws under the jurisdiction of those same tax havens.

Rather then spontaneous collapse. I believe the proper model is that of controlled demolition.

TPTB_need_war

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Quote from: TPTB_need_war on September 09, 2015, 01:46:20 AM

I am still wishing many of you would raise this point with Armstrong. I am tired of emailing him.

Again to reiterate the emphatic point I made upthread, the elephant in the room that Martin Armstrong is apparently missing is that the 5000 year low interest rates and deflation is because we are shifting into a Knowledge Age wherein most of the old world capital is dying because knowledge creation can't be financed with usury. The bubble in government debt is because most people in the world haven't moved forward to the Knowledge Age and the boomers are still living in the 1950s:

http://www.armstrongeconomics.com/archives/36934

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