It is a travesty of justice what the technocrats, the nanny-zone supporters, and the politicians have done to Greece.
Mish
It is said that one cannot borrow one’s way out of debt, that more debt is not the solution to a debt crisis. These remarks are truisms, that is, they make sense at the surface and have the ring of truth but are completely false.
At a personal or even the enterprise level it is hard to make a living from continually taking on more debt but this is due to the finance rule which requires debt service at the smallest scale to be more costly than debt service at the largest. Even so, the debts of an individual are extinguished practically by the end of the debtor’s life. It is possible for creditors’ demands for repayment to outlive the debtor leaving no one and nothing from whom to collect.
For finance and sovereigns, there is no other way for the debts to be retired or serviced other than by the taking on of new debts. The idea is not to borrow oneself free of debt which is absurd but to maintain a level of perpetual indebtedness as a manageable state of affairs, to gain as necessary the monetary benefits of debt, to escape the pit that repayment represents. The understanding here is that finance entities such as governments outlive their creditors, that debts eventually fade into meaninglessness.
The suggestion of the Good German is that there is some sort of debt-free utopia where obligations are purged by dint of Teutonic hard work and suffering inflicted upon others, that the Good Germans have themselves endured these things many times, it is a bitter medicine but must be swallowed. This suggestion is also a lie: not the simple untruth of childhood corrected by the cane and some bawling, but materially destructive falsehood punishable by national ruin!
Such a debt-free state has never existed anywhere on Planet Earth, has certainly never included any industrial nation, has certainly never included Germany whose last encounter with austerity and Bruning deflation led to a particularly Pyrrhic brand of military Keynesianism which began and ended with massive debts that the same Germans took on then defaulted upon!
The Good Germans will find out on their own account soon enough when all of Europe’s debts come knocking first upon their doors then crashing down upon their heads: there is no practical difference between a Greece and a Germany that make use of the same debt-money system.
Any distinction is a matter of timing: the Good German gets to watch his fate spinning out in real time on television. The half-constructed Greek economy is identical to the German version but for the layer of smug certainty that ripens in the German. What is underway in Greece is inevitable in Germany. As with the rest of the EU, Germany has no organic credit but must borrow from its neighbors, right now its sales pitch is a bit better than the Greeks’. Germany is another ‘failed auction’ away from the sickening slide, the inability to beg some ‘confidence’ from gimlet-eyed bond speculators bent on gain.
Germany’s finance minister Wolfgang Schäuble wishes to expel Greece from the euro … “We can’t keep sinking billions into a bottomless pit,” he said on Friday.
Sinking billions is precisely what they must do! There is nothing else. The “billions” is simply a number so is trillions and more. There is no end to the numbers, there is nothing precious about them. Looking to give numbers meaning ends with ashes and dust, not billions not even thousands. Germany cannot support its own debts, only a fool believes in childrens’ fantasy, that a consumer economy like Greece’s — or Spain’s or Italy’s — can support its own finance debts by way of labor … ‘competitiveness’!
The more Germans hammer at the failure of the Greeks the more obvious this is the failure of the euro:
EU to punish Spain for deficits, inaction
Julien Toyer and Paul Day (Reuters)
The European Union is likely to take action against Spain’s newly installed government by May for delaying austerity measures ahead of a regional election next month, sources familiar with the situation have told Reuters.
Spanish and EU officials said in response to Reuters’ story that the government in Spain was working hard to reduce its deficit and that it was premature to say the country might be punished.
Three senior EU officials told Reuters that a final decision still has to be made, but the European Commission believes the new government overstated the deficit figures for 2011 so the current year’s data would look better. Spain is also not addressing quickly enough the deterioration in public finances expected in 2012, risking the country’s longer-term growth, the officials said.
Asked if the European commissioner for economic and monetary affairs, Olli Rehn, would take action and recommend that the bloc’s 27 finance ministers adopt sanctions against Madrid, one of the officials said: “It is very likely.”
Neither the Greeks nor the Spanish can pay finance debts by any means other than borrowing. Here is some bad news for Mr. Schäuble, the Germans cannot pay the Greek finance debts either! When it comes to it and it shall as inevitably as Monday, the Germans will borrow billions and throw them into the bottomless pit or become beggars living in the streets.
Schäuble does not understand the basics of economics:
The wealth is those who lend to German banks: the debtor Greeks are the counterparties on the banks balance sheets, the pitiful objects of Minister Schäuble’s pointless class war,
The twenty- or forty or so trillions in euro debts are equal to European wealth —
When the Greeks fail, this will not be success for the rest of the Eurozone. Europe is in a recession, this is not Greece’s fault but rather the failure of consumption waste-based economies that have no organic return.
Here is the precarious state of euro wealth, dependent upon the financial health of Europe’s least citizens:
– Europe is in the grip of an energy crisis that the same establishment refuses to acknowledge. Because Europe has some fragment of credit remaining to it, Europe pretends it has access to crude oil at any price.
– European policy-makers strangle access to credit for inexplicable reasons, fuel availability diminishes. What is underway in Greece and elsewhere is fuel conservation by other means.
– Credit bids the price of fuel on the asset markets: (TFC Charts, click on for big):
Figure 1: The outcome of high fuel price is demand destruction which has its own diminishing effect upon credit.
Dispense with the LTRO right away: it is the means by which non-cash assets are swapped for currency, it is a money laundry. As a by-product of the laundering process, there is a temporary bending of the EU’s self-destructive rules: “that Euroland is now strong enough to withstand contagion, and that the European Central Bank’s `Draghi bazooka’ for lenders has eliminated the risk of a financial collapse.” says Ambrose Evans-Pritchard in describing it. What frees the Germans to smash the Greeks in the face is the ‘success’ of the central bank’s criminal enterprise!
Euro debt is a system, claims against what appears to be a shrinking pool of funds within Europe. These funds are euros, it does not matter if the claims are against Greeks or French, the obligations in euros are fixed against those who have the euros, not those who have lost them. The claims are made by the banks. If the claims cannot be paid or financed then the banks who are due the money must be bailed out. The cost of their failure is too high. Claims are by one bank against another, they are direct in the form of debt by one bank to another or indirect by way of derivatives such as Credit Default Swaps.
The claims multiply against the largest pool of euros which is Germany. As with dollar claims in America, the individual euro issues are ‘sliced and diced’ into components and re-assembled into a rattatouille. Parts of each obligation are assigned to all debtors. The same way all dollar claims can be made against the US government because of its guarantees to depositors, so are euro claims made against the German government and German citizens. There is no ‘Greek debt’ that is not also German debt.
The German’s choices are stark: he can attempt to hold euros against multiplying claims and be ruined by them or he can not hold euros. This has nothing to do with the German’s character or morality but is a flaw of the euro-finance structure, with the euro itself. If the German holds the euro he will accept the euro-costs, he will be the fool in the market, the bag-holder in the euro scheme. If/when Greece fails, Germany will have to pay. Same with all the other countries in Eurozone. Germany pays because they are the only country that has any money.
Germany pays because they are so stoutly defending the euro. If they defend it they are immolated by it.
If the German decides he cannot bear the euro-debts he will change his euros for Deutschmarks. By doing so the euro claims are fixed. The German can also refuse to entertain any claim that is not German in origin. The German can protect his own economy as a natural right, he can do this or follow the Greeks and the others.
The Greeks will repudiate their euro debts and redenominate them in drachma. Greece lacks the euros to service and retire its debts and cannot borrow more from non-Greek lenders. The euro-using German will lack euros but will face massive euro-denominated obligations. All of its banks will require euro-bailouts, so will all the other banks that have ‘bought’ pieces of German guarantees. Germany will be in a recession, unemployment will be rising. There will be a failed German auction and the interest rates will increase. The Germans will be unable to borrow from lenders who are not German.
Those whose property is the debt are generally those whose property is the currency. Only debts that can be inflated away by inflation are those ‘fixed’ externally by way of foreign exchange.
Because the euro is non-native to any European country, nobody actually ‘owns’ the euro. All of Europes euro-debts are external, all can be fixed by way of foreign exchange. Trillions in wealth in the form of paper euros are now hostage to countries suffering under the same paper euros.
As long as the euro provided benefits in the form of cheap credit, it was made use of. The credit never produced goods of any value, nothing that would allow a user to weather a euro-generated storm. The euro is monetary crack, it never did any country any good, not even Germany.
The product of the euro are excess houses in Spain and Ireland, some consumer sales in Greece and elsewhere, some extra car sales for Germany. The benefit was an abstraction, an airy advertisement of ‘European unity’. What actually arrived was an inflexible bureaucracy in Brussels and a horror-show from Berlin. The crack high is now gone with the wind. EU policy has become a mixed bag of bullying, threats and rear-guard actions. Nobody speaks of a grand European future under the euro anymore. The talk is of how to escape the onrushing euro-amplified depression. The euro politicians are to be thrown under the wheels. The inept Merkel will go, so will mafia-man Schäuble. The new German government will throw money down the bottomless German pit … if the euro lasts long enough for the Germans to elect a new government.
The technocrats and euro-enablers have failed. Nobody in the European establishment appears to grasp the ongoing economic unraveling is permanent. There will not be any growth. The fuel constraints mean an ongoing recession. The old measures of prosperity — carefree waste behind the wheel of a new car — are now obsolete.
The euro was intended as a means to obtain fuel on the same seigniorage terms as the Americans. The euro is revealed to be an economic dictatorship. If fuel cannot be obtained anyway for unrelated reasons, if credit cannot be obtained for structural reasons there is little use for the euro.
As countries such as Greece exit the euro, euro-debts will be shifted to those still making use of it, those who still have the means to repay. As more countries abandon the euro the bailout obligations multiply against a shrinking pool of euro-users. These users will have to issue credit or exit. If credit is extended at the last minute, the Europeans will ask at once, “Why now? Why not when it could have done some good, when it could have saved Greece (and others)?” Otherwise, the towel is thrown in and there is no more euro.
If the euro dies the vast, paper fortunes that were once euros will become other things. Governments will be intent on inflating the external euro debts into nothingness: only debts that can be inflated away by inflation are those ‘fixed’ externally by way of foreign exchange.
Euros into drachmas, lira, francs: that is some foreign exchange. Most of those holding euros are the German banks, they would be ruined, the Greeks would relentlessly devalue the drachma if only to crush external holders of Greek debt. So would also be the holders of euro ‘wealth’: their euro position too large to readily convert, with D-marks out of reach. The end of the euro would mean the end of any euro-dollar swap. The Euro-plutocrat would become the ex-plutocrat with bags of petit currencies rapidly falling worthless.
What is more likely is that Euro-credit will be extended in dribs and drabs. Greece will fail and the exit will be messy. This will be the excuse to pitch dullards Merkel and Schäuble into the fire. Debt will be taken on to repay more debt, there will be no collapse in Europe. Instead, the slow unraveling over time, a Japan-style deflation taking place over decades.
Is the euro the means to a criminal end? Such a thing is hard to imagine if only for reason of ambition. The appearance of LTRO along with the absence of institutions that would permit a euro debt-money system to function properly suggests a criminal scheme. First comes the flood of artificial currency as a means to gain assets cheaply. The euro flood is then withdrawn which leaves deflation and the demand that collateral be turned over. Ownership is shifted by way of debts to finance elites. If the gigantic mortgage financing scam had not already taken place it would be incomprehensible for such an ambitious fraud to take root. To create a currency and then persuade actual countries to make use of it, to take on trillions of debt is something far beyond the reach of the average bank robber.
This chart proves debt most certainly does not equal wealth. If it did, this chart wouldn’t exist with it’s current data points. Notice the slope more than doubles each period while the time is cut by more than half with each new injection of hopium. What’s left is a 90 degree moon shot taking less than 2 years. You cannot outrun exponential math or maximum potential. Just ask all the other Empires that sit in the dust bin of history.
http://market-ticker.org/cgi-ticker/akcs-www?get_gallerynr=2772
The chart proves no such thing. What it shows is that wealth ain’t what it used to be. Our wealth used to consist primarily of present income and pawning a few heirlooms. The chart actually reflects the inability of income to keep pace with the rising value of natural resources. Combined with the certitude of a population raised on a false mythology that they deserve whatever they want, when they want it.
Wealth now consists primarily of liquidating existing assets + new debt + unfunded investments critical to future wellbeing diverted to current consumption. Existing assets are not unlimited and we can’t sell off 100% of them. You cannot unfund more than 100% of investments in the future. Debt picks up the slack.
You are absolutely correct that it can’t go on forever. Debt is what keeps the wheels from falling off. It is the forthcoming shortage of wheels (just a proxy here for all products and services) that will blow the whole shebang to smithereens. It can happen a little sooner or a little later, but happen it will. It’s all explained in considerable detail here.
http://www.wakeupamerika.com/PDFs/On-American-Sustainability.pdf
If you substitute Greece for America while reading Chapter 8, you might get the uneasy feeling that it is already in the process of happening there.
It truly is No Country for Constitutional Men. Sooner than we would like, there will be No Country for A Growing List of Men (and their sisters).
I would agree that credit used for productive purposes that creates real wealth is a good thing. The problem we face now is that we have multiple claims on the same asset in all classes because of derivatives. It’s this fact that is the fly in the ointment. The banks are having the same exponential problem with derivatives as the sovereigns with their debt in that the banking system needs ever more hopium injections while providing pleasure/liquidity for shorter and shorter periods.This problem grows bigger by the day because the banks are also back in the repo market with subprime paper which is what blew up both BS and Lehman. Just sayin’.
Problem is lack of productive purposes. We finance our stylish toys which cannot hope to pay for themselves. Debt financing flows from the less-stylish toward the more-stylish: to what it is we believe we want.
$800 million fighter jets, frigates, submarines, container ships, luxury automobiles, high-speed rail … whatever the little man on the television tells us to want.
Greece is stylish but not stylish enough: hotel holidays for Northern Europeans, tax evasion for Northern Europeans, tariff evasion for the rest of Europe: the punishment for not being stylish enough is for rollover financing to be withheld.
German auto industry is considered more stylish even as it bankrupts Europe, the industry has no hope of paying its own way, it needs hundreds of billion of euros every year in debt financing and has from the beginning of the auto age. More sensible to staunch the bleeding and jettison the car business and keep the Greek holidays. The car-makers’ hold on the public mind is too strong. The Greeks don’t advertise themselves endlessly everywhere as a ‘necessity’.
Advertising paid for by borrowing btw …
The debt financing of the US and the rest go to the industrialists who have first claims on all debt. The $15 trillion in public debt is private surplus, private wealth of the plutocrats. The public deficit is service on the entire private debt. If the US doesn’t run a deficit, the entire private enterprise will collapse like the Greek economy and for the same reason.
For there to be a private surplus in the first place some entity must carry a loss. Only governments — which do not die — can endlessly carry losses for private benefit.
People say, “what about all those entitlements! Outrageous paying negroes to watch television!” That money is spent by the so-called beneficiaries, it winds up in the accounts of industrialists, it doesn’t go to Mars. The beneficiaries are simply conduits from the lender(s) to industrial recipients in conduit schemes: banks, manufacturers, crime ‘lords’, cartels, other scum of the earth.
More on conduit schemes see; ‘Enter Mr. Conduit’.
*round of applause* from this reader.
Great piece – tempted to exchange more Euro abstractions for another Austrian Philharmonic abstraction after reading that piece.
But whats the point ?
They are pretty though.
When currency becomes unpredictable … ports and safe-havens are sought. There are sovereigns and Napoleons …
Yeah
Bought a French Rooster a couple of years back (from the Latin Monetory days) – not a pretty coin but interesting as it was a 1913 I think………………..
suissegold.ch/product.php?productid=16256&cat=258
The 20 swiss Franc is nicer really
suissegold.ch/product.php?productid=16255&cat=284.
FRNs or Gold FRNS or Gold FRNs or Gold………
In the end there can be only one.
http://www.youtube.com/watch?v=kq4SqgxIKM0
PS check out the depletion off the Scottish coast……….
UK Nuclear energy – primary production
(eurostat)
Y1999 : 24540 KTOE
Y2010 : 16029 KTOE
UK Primary production crude oil
Y1999 : 140721 KTOE
Y2010 : 63948 KTOE
UK Primary production NG
Y1999 : 89198 KTOE
Y2010 : 51464 KTOE
UK primary production coal
Y1999 : 21773 KTOE
Y2010 : 10402 KTOE……. a slight rise from the Y2007 low of 9808 KTOE.
The lack of a Nuclear programme in the UK when they built one fine PWR and then scrapped the programme is the greatest scandal in the History of the UK.
They claimed it was too expensive at the time………..
But when you build one of a kind they tend to be a bit on the expensive side.
Its a economic law somewhere or other.
30 years ago any Dork could have told them the North sea reserves were finite.
Can’t see how they & us are going to pull out of this disaster zone.
UK energy dependence %
Y1999 – 20.4%
Y2009 +26.6 %
Great piece.
Like the Von Trapp family in the finale of the Sound of Music, Germany is lustily singing the Song of Waste while surreptitiously slipping away from Econ 1.0 under a cloak of subsidised solar panels and weed-grown nuclear power stations.
Quite soon, Sister Merkel will pull the alternator rotors from the German toy car industry, leaving the remnant to feast contentedly in a lucrative niche producing carbon-fibre-bodied EVs for the urban 1%.
Clearly, this wilful contraction is at odds with Germany’s ability to participate fairly and effectively in debt-(waste)-o-nomics, hence the plight of Greece et al.
What can be done? Perhaps Germany should be annexed and forced to tear down its solar panels and windmills, under a policy of ‘energieverschwendungraum’ – energy-wasting space.
Just as no man can outrun death, Empires cannot outrun exponential math. Many Empires have tried, and all have failed, yet we keep repeating like the movie Groundhog Day.
First comes currency wars, then trade wars, and then the real shooting wars happen. Einstein really did say it best.
The Year of Living Dangerously – Brent priced in Euros reaches an all-time high:
http://sdw.ecb.europa.eu/quickview.do?SERIES_KEY=143.FM.Q.U2.EUR.4F.CY.OILBRNI.HSTA
what comes next?
That is a scary chart, just by oil prices alone does EU have a severe recession.
Add the blundering policy and the EU focked …
Here’s a closer look of Brent in Euros on a daily chart, mid 2006 to present:
http://www.acting-man.com/blog/media/2012/02/Brent-euro-terms.png
Car sales crater in Portugal, Italy, and France:
http://globaleconomicanalysis.blogspot.com/2012/02/european-car-sales-plunge-portugal-474.html
Right but how is any of this possible? Who is “accountable”? Does accountability even exist?
Why would anybody even conceive of the idea of enslaving whole populations with debt? It doesn’t make sense, it’s self destructive.
Or perhaps this is the point. Ultimately one has to take a step back from the finance world and look at the natural picture. If it’s true that humans are self destructive, it doesn’t bode well for the future of the world, and may mark the final endpoint of global civilization.
” Debt will be taken on to repay more debt, there will be no collapse in Europe. Instead, the slow unraveling over time, a Japan-style deflation taking place over decades.”-Steve
Really? You think these Clowns can extend and pretend out this game for DECADES like the Nips? They don’t have the homogenous population honor bound to stoically endure deprivation; they don’t have the access to cheap energy the Nips had for these last decades and they don’t have the trade surplus they had either. What they have are a bunch of squabbling elites and riots in the streets and things haven’t even really got that bad yet!
“Such a debt-free state has never existed anywhere on Planet Earth, has certainly never included any industrial nation, has certainly never included Germany whose last encounter with austerity and Bruning deflation led to a particularly Pyrrhic brand of military Keynesianism which began and ended with massive debts that the same Germans took on then defaulted upon!”-Steve
You are correct that nations don’t operate debt free, but that is because the process of issuing out debt was monopolized long ago by the Bankster class. Same bizness has been going on for millenia here, Cleopatran Egypt had the same debt problems with Roman Banksters that the Greeks have with Kraut Banksters.
Once the Banksters realized that instead of loaning money to Kings who could Die on them and leave them holding the bag and instead place the burden of debt on the ephemeral entity of the Nation State, they could be passed from one generation to the next virtually in perpetuity. Even Revolutions don’t usually extinguish the debt, because to get back on the bandwagon after the new Goobermint is established, the Nation State is forced into recognizing and paying off on at least some of the old debt. Unless you sell into the international Bond Market you can’t create currency that will trade as FOREX through the BIS. its essentially valueless outside your borders.
INSIDE your borders, going it completely alone is hard enough, but made even harder by the fact that the CIA, Mossad and MI5 will mess with your politics and Assassinate leaders as necessary until they get somebody in the top spot who will Play Ball.
” We finance our stylish toys which cannot hope to pay for themselves. Debt financing flows from the less-stylish toward the more-stylish: to what it is we believe we want.
$800 million fighter jets, frigates, submarines, container ships, luxury automobiles, high-speed rail … whatever the little man on the television tells us to want.”-Steve
It’s a canard to say that $800M Fighter Jets are just a “fashion statement”. The financial elite need the military to back up their ownership, and the bigger and better you can build out your military, the more of the world populations and resources you can control. War is VERY Productive Bizness for the Elite, it allows them to enslave ever more populations into debt servitude and extract ever more resources from the conquered territories. That isn’t a “fashion statement” Steve, its the exercise of raw power to gain control and wealth.
The system is collapsing now for the very same reason it collapsed in Rome, there simply are no further populations left to enslave here whose slave labor can net out any more than it costs to feed, house and clothe them. There isn’t any more cheap energy that can be used to further build out the military machine either. So they are trying to ringfence and shrink down in a controlled fashion to maintain Boutique economies, one by one hanging out to dry entire populations through MENA, and now progressing into Greece and then the rest of the PIIGS after that. Eventually of course to works its way right into the Belly of the Beast in a Theatre Near You.
Cascade Collapses are not controllable past a certain point. This one has been ongoing for decades now, but to do that they have had to exponentially increase the debt through the period. The problem comes when the marginal utility of increasing debt turns negative. Then you CAN’T infinitely expand debt into the Quadrillions, its NOT just numbers. Its not doing you any good, its making things WORSE, not JUST for J6P, but for the issuers of the debt themselves.
You are right that the attempt will be made to keep issuing debt in dribs and drabs, because the minute the merry go round STOPS, the whole house of cards comes a tumbling down all at once. However, every issuance of new debt brings with it more political consequences, more Blowback. At a certain point the system becomes so unstable it topples anyhow. For the Clowns in Brussels issuing Euro denominated debt, the Jig is just about UP here. Decades more of Euro Clownishness seems highly unlikely here. Leaving the Greeks to twist in the wind nets very little in terms of energy savings, their population is very small. Some really BIG populations have to be left twisting in the wind here to make Oil cheap again for some smaller Boutique Economies. Cutting off the Chinese or Indians would make a significant dent. Of course, they would be about as pleased with that outcome as the Greeks are, and will make a good deal more noise on the way down.
RE
I agree that anyone thinking we can go for decades like Japan doesn’t know their recent history. Almost ALL of Japan’s debt was bought by the country’s own citizens. Secondly, they have run trade surpluses almost every year for better than 2 decades. We have no such luxury in either of these cases, as we spend like drunken sailors with other people’s money, and we run trade deficits like we are setting our watches by it.
We do have reserve status with our currency, but I also see many bilateral agreements being done where the dollar is not needed to conduct business, and I believe we will see more of this and not less.
Very good comment RE, I agree.
The music does stop at some point.
Well, well, well…looky here:
Italy Police Say They Seized $6 Trillion of Fake U.S. Bonds in Switzerland – Bloomberg
February 17th, 2012
http://investmentwatchblog.com/italy-police-say-they-seized-6-trillion-of-fake-u-s-bonds-in-switzerland-bloomberg/
Now ZH has picked the story up:
$6 Trillion In US Bonds Seized In Zurich, Said To Pose “Severe Threats To International Financial Stability”
http://www.zerohedge.com/news/6-trillion-us-bonds-seized-zurich
On the surface the Irish car market appears to be recovering……….
2009 was characterized by a collapse of new car sales
Yearly new cars :Y2007 :181,571
Y2008 :146,637
Y2009 : 54,055
Y2010 : 85,264
Y2011 : 86,932.
But if you look a little deeper the buying pattern has changed drastically in favour of the most effiecent cars which are either very small petrol cars or the newer diseal engine cars in class A & B emission bracket.
January has always been the most popular month for new car sales since they changed the number plates to yearly figures , 2002K , 2003C , 2004 K , 2005 C etc.
So lets look at the Jan 2009 figures (the year of the collapse)
Y2009 Jan
Class A : 1,118 Class B : 5,339 Class C : 2,277 Class D :1,262 Class E : 578 Class F:140
Class G : 43 unspecified class :170 Total : 10,997 / Total classA & B : 6,457
Y2012 Jan
Class A : 7,482 Class B : 5,860 Class C : 538 Class D :295 Class E :167 Class F :141 Class G : 8 Unspecified class : 16 Total :14,507 / Total class A & B :13,342
Notice the dramatic fall of Class C & beyond.
And now this from the $6 Trillion in US Bonds story:
Why Were The Trillions In Fake Bonds Held In Chicago Fed Crates?
http://www.zerohedge.com
Irish private vehicle energy use : taken from offical Irish energy balance figures
Y1990 : 926KTOE
Y1991 : 981KTOE
Y1992 : 1012KTOE
Y1993 : 1054KTOE
Y1994 : 1114KTOE
Y1995 : 1176KTOE
Y1996 : 1259KTOE
Y1997 : 1348KTOE
Y1998 : 1421KTOE
Y1999 : 1504KTOE
Y2000 : 1562KTOE
Y2001 : 1642KTOE
Y2002 : 1697KTOE
Y2003 : 1746KTOE
Y2004 : 1817KTOE
Y2005 : 1891KTOE
Y2006 : 1977KTOE
Y2007 : 2070KTOE (PEAK OIL / CREDIT)
Y2008 : 2062KTOE
Y2009 : 1974KTOE
Y2010 : 1899KTOE
Residential oil use
Y1990 : 389 KTOE
Y2010 : 1288 (Peak ?) KTOE
Irish Class A vehicle sales (0 -120 g co2)
Y2009 : 13%
Y2010 : 34.7%
Y2011 : 42.5 %
The Jan 2012 figures indicate 50%+ or perhaps even 60% will be Class A vehicles for 2012.
Of the 14,507 new cars sold in January a whopping 10,599 were Diesel(5,890 Class A) , only 3,466(1,436 Class A) was petrol ! with the remaining Hybrid (178) Ethanol(297) & electric(7)
Must read blog post: http://oldprof.typepad.com/a_dash_of_insight/2010/08/book-review-the-big-short-by-michael-lewis.html
“Why did so many get this wrong?”
“Why did so many underestimate the effect of the subprime crisis? Why did they think it would be “contained?” Why did they think that various policy actions might deal with the problem? Why were recession forecasts by economists so far off?”
Sounds like the Eurozone crisis. All the mainstream prognosticators are calling the debt problem ‘contained’. There is something big they are all missing …
…something big they are all missing…are the bets made by spectators who have no skin in the game.
http://www.zerohedge.com/contributed/greece-not-lehman-20-ill-show-its-much-much-worse#comment-2167890
Who is the original issuer of credit in these scenarios you speak of, Mr. Ludlum?
Banks, finance. The governments are partners/are banks themselves.
Britain was the first country to industrialize, it did so because it had a robust banking/credit system and control over its own currency.
Lots is deep insights here. Steve, can you please define and perhaps provide a few examples of “productive purposes” that justify debt.
Here is an example I added to one of Mish’s articles (edited):
How to get rid of the carbon (excess carbon emissions from the atmosphere):
– First assume that the difference between having and not having carbon is a matter of choice- marginal utility if you will. The actual pros- and cons of carbon (in the atmosphere) are not part of this discussion.
– Eliminate all subsidies to airline business including credit. All of the airlines and airplane manufacturers will rapidly go out of business.
– Use the same subsidies to pay business enterprises to remove carbon — pay people not to drive/fly/etc. Let a few become billionaires by way of removing carbon. All carbon would be gone from the atmosphere in five years and there would be ‘carbon capitalists’. This would be the so-called ‘free market’ at work (actually subsidies at work).
– Most people would never notice the absence of airplanes or flight. (The simple fact is the vast majority of humans have never flown and never will fly in an airplane.) The same folks employed in airline business would be employed in the ‘getting rid of carbon’ business. The same banks would make billion$ by subsidizing these businesses..
If folks wanted to get somewhere they could walk, take a train, use a bicycle or sailing ship. ‘Entrepreneurs’ providing non-carbon transport would also become very rich.
Favoring the air business is simple prejudice and has no economic benefits.
What will take place instead of ‘entrepreneurship’ is that fuel costs will bankrupt all airlines and airplane manufacturers, a process that is already well underway. The carbon will go away by itself. Without the ‘carbon business’ people will become unemployed and then fall into poverty. None of these folks would ever get the chance to fly, without these potential customers the airlines are doomed.
One way or the other the carbon is going out of the atmosphere. It’s not my choice and I personally don’t care. I personally don’t care for flying (too many people have their hands inside my trousers) if all the airlines go out of business, good riddance.
Please disabuse yourselves of any notions that any industrial enterprise pays for itself. None do, they are all dependent upon credit subsidy. which is why the world is immersed in hundreds of trillions of debts. Our toys do not pay for themselves. (We just think we like them, they are substitute penises.)
Thanks and have a nice day.
Thank you for linking masculinity and the global patriarchy with the huge problems facing mankind! “Substitute penises” is a great term. the Fukushima Number One nuclear power plant was built by men, all the governments involved in the “growth” phase of the world economies are comprised of almost all men, men run almost all corporations….
Can you all see a day when men lose their appetite for ruinous suicidal competition? And a day when women become no longer beautiful symbols of male power, nicely dressed up, driving an expensive car…..That is the day that fossil fuels lose their grip on humanity. That is the day that men and women become really equal, when the global patriarchy dies (it is already dying) and perhaps a matriarchy, or many scattered matriarchies, takes its place. Women are much, much better as the bosses of men than the other way around. Men will cede power with relief as they see ruined civilizations and devastated nature wherever they look. Women can’t work miracles, we are not magicians, but without the “my penis is bigger than yours!” mentality of men, we will try to pick up the pieces. Women’s ways of thinking will be the new “normal”, not the horrid suicidal competitiveness that now still carries the day. Without those high heels, cars, money, all the trappings of status that kept women as toys and playthings (fun but not to be taken seriously) women will be freed from men’s drive to power.
Women are already in charge. As soon as more women prefer modest income organic farmers than high income wall street traders the world will change. Men compete for access to the best women. The best women define what status is.
Thanks Steve. Airlines are a good specific example. Perhaps the general rule is that debt is bad when used to accelerate consumption of any non-renewable resource or to generate waste faster than the environment can absorb. But I am not sure. If I were god I’m not sure what rules I should establish.
Stock Market Numerology 2012 – 0221
http://chartistfriendfrompittsburgh.blogspot.com/2012/02/stock-market-numerology-2012-0221.html