Why most of the political/economic threads here are a waste of time

Pecker · 18-11-2008, 1:30 PM

Read. Enjoy.

BBC NEWS | Magazine | The myth of record debt

Steve W

loz · 18-11-2008, 1:43 PM

party pooper.

One thing is for sure though, there has been a ~~record~~ high number of posts of late discussing this issue.

Note: the count of the number of posts on this topic has been adjusted for inflation, currency, seasonal differences, and the increase in the average inside leg measurement of forum members.

BandWidthJunkie · 18-11-2008, 2:23 PM

I must admit I read that story this morning and thought of starting a thread on it, but I just didn't have the heart to read through another 100 posts of rhetoric and dogma about it again

**IronGiant** · 18-11-2008, 2:27 PM

Why most of the political/economic threads here are a waste of time

Can we make that official?

Dave

Stephen Wilde · 18-11-2008, 2:33 PM

Plenty of off balance sheet government obligations ignored there.

Try including the ballooning cost of public sector pensions and run that forward for a bit.

Anyway the problem is not just the level of government debt. It is the level of government, individual and commercial debt COMBINED.

The real problem is that the growth of the money supply which funded all that credit (via excess printing worldwide and an artificial speeding up of circulation by fanciful investment vehicles) has come to a grinding halt, as it always had to eventually.

Thus there is suddenly less money in circulation and insufficient to continue to fund the ongoing myriad of personal and commercial schemes and transactions worldwide.

It is that sudden decimation of the supply of money that has caused the crisis. Only the most secure borrowers will be able to get access to credit at ANY rate.

That is not the end of the story because all those for whom there is not enough credit will default and further reduce the money supply.

It is a downward spiral involving a continuing reduction of money in circulation with no obvious minimum.

That is why it has been proposed that it might be safe to keep printing and borrowing at national levels as a temporary measure to try and stabilise the runaway contraction of the money supply. In such a situation inflation is no longer the main problem as it normally would be if the problem were just an increase in the money supply.

The trouble is that such a solution can only work if every nation joins in, in proportion to it's share of global money supply. In practice that cannot be done because of inadequate data and those who are least affected have no incentive to co operate. They will just smile at Gordon, agree with him and then laugh and proceed to do whatever benefits them most.

I fear his latest efforts may just be making him and us into an international laughing stock.

The whole western world assumed that because it was possible to increase money supply so much with relatively little inflation then it followed that there was a new never ending financial paradigm.

Trouble was still building up in the increasing differential between global money supply and the total value of goods and services available globally but they assumed it was not happening because the normal warning indicator of increasing inflation was absent.

The truth is that the inflation which should have occurred was being masked by a corresponding temporary deflation caused by the flood of new production of both goods and services from fast developing nations like China and India.

Notwithstanding the absence of inflation the supply of money was getting wildly out of kilter with reality and the inevitable adjustment is now in progress.

It is not a failure of capitalism. It is in fact the essence of what makes capitalism work in the medium to long term.

The fault lies with governmental abuse of capitalism and is not a party political issue. So many governments thought they could monopolise the economic system and expand their spending and influence indefinitely.

And a whole lot of very silly voters just keep voting for bigger and bigger government at the expense of real wealth production.

Pecker · 18-11-2008, 2:45 PM

Stephen, I think maybe...

...oh, it doesn't matter.

Steve W

deanym · 18-11-2008, 3:17 PM

Can we add religion to the title?

Pecker · 18-11-2008, 3:25 PM

Quote:

Originally Posted by deanym

Can we add religion to the title?

I'll wait until the BBC post an article on it.

Steve W

Zeromajor · 18-11-2008, 3:38 PM

make this a sticky

Stephen Wilde · 18-11-2008, 3:43 PM

Quote:

Originally Posted by Pecker

Stephen, I think maybe...

...oh, it doesn't matter.

Steve W

Whoops, perhaps I missed the point of a tongue in cheek title.

Fred Quimby · 18-11-2008, 3:50 PM

Cant we just ban anything to do with politics/God and stick to aliens and Home Cinema.

Zeromajor · 18-11-2008, 3:59 PM

Quote:

Originally Posted by nikonkid

Cant we just ban anything to do with politics/God and stick to aliens and Home Cinema.

How about a nostromo themed home cinema? Complete with animatronic alien breathing down your neck behind the seats, sort of like that alien encounter ride at disney - I'm sure there's someone around here who's got one of those

Fred Quimby · 18-11-2008, 4:35 PM

Quote:

Originally Posted by MajorZero

How about a nostromo themed home cinema? Complete with animatronic alien breathing down your neck behind the seats, sort of like that alien encounter ride at disney - I'm sure there's someone around here who's got one of those

Im so excited at that I nearly fainted with pleasure. We should keep things serious on these forums.