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Evil Incarnate
Old 11-09-2008, 04:34 AM   #1
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Evil Incarnate

Central banks are betting that negative real interest rates will induce people to spend rather than save money that is declining in value, economists said. The strategy also aims to jolt investors and banks into seeking higher yields by making riskier long-term loans.
``It's clear you need to have interest rates that are lower than inflation going forward,'' said Jan Amrit Poser, chief economist at Bank Sarasin in Zurich. ``Central banks are rushing to get interest rates down.''

This is far more wicked than a malfeasance any imaginary "Devil" of religious imagination could manifest.

The governments of the world want to force people to consume, the very opposite of prudent behavior. Driving the defenseless into what will represent absolute penury for some and will result in significant misery for many others shows us the true evil in the world.

The politicians and bureaucrats who espouse this garbage belong in a cell, not in an office. What sort of human vermin are running the show in current times? What Herr Poser is doing should be a capital crime rather than economic policy and he should pay the requisite penalty.
Has the entire globe fallen for such a massive swindle?

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Old 11-09-2008, 05:08 AM   #2
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So everyone goes out and spends every penny they can find, on depreciating and "throw away" assets (I hesitate to call them "assets" more apt would be junk). Then after that is all done what happens? Breadlines, CCC Camps to "rebuild" the infrastructure of the country, which, probably would not be needed, at that point? I guess this is what happens when you mix politics with economics. With this kind of asinine thinking the "revolution" cannot be far off.
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Old 11-09-2008, 05:49 AM   #3
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When was economics ever not mixed with politics, or vice versa?

What does politics effectively do other than determine how resources (including not just natural resources but also labor, and all capital/assets which are born of labor and resources) are owned, shared, managed/mis-managed under every system under the sun: monarchy, theocracy, republic, democracy, communism, socialism, what-have-you...??
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Old 11-09-2008, 05:58 AM   #4
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When was economics ever not mixed with politics, or vice versa?

What does politics effectively do other than determine how resources (including not just natural resources but also labor, and all capital/assets which are born of labor and resources) are owned, shared, managed/mis-managed under every system under the sun: monarchy, theocracy, republic, democracy, communism, socialism, what-have-you...??
I said politics with economics. I understand politics "drives the train" but sometimes it is based on sound economics whereby the facts (economics) determines what is possible. When we get total disregard of the economics of the situation, which IMHO, we have now, it can, and, in this case, will get asinine. Just semantics.
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Old 11-09-2008, 06:37 AM   #5
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sometimes it is based on sound economics
Oh.. that sounds so idyllic (not being sarcastic!). The whole world has gone crazy simultaneously! I don't know whether I am contradicting what I wrote above but it seems to go beyond any politics we can imagine at this point. People/governments everywhere all decided to spend more than they make whether they are socialist, capitalist or whatever.

Stimulating more spending is "evil incarnate", but how do we deal with a necessary massive reduction in spending? It is going to have to change things enormously.

just found this comment over at Mish's Global Economic whatever:

Quote:
Our society/economies/civilization, like the Blob, are based on companies continuously growing bigger and consumer spending always increasing. Companies growing and consumers spending more increases tax revenues which lets politicians spend more which makes voters happy.

Reducing real spending would require a radical shift in attitude and would certainly come up against a slew of vested interests that would fight tooth and nail against any such idea.

Tax attorney's/CPA's don't really want to see the income tax simplified, lawyers don't want simpler laws, teachers/administrators don't want less education budgets, lobbyists don't want their influence lessened, bureaucrats don't want less government, politicians certainly don't want to spend less, etc., etc. Nobody will do anything against their own self-interest or stand by idly and watch their sacred cow get gored.
It's sort of the tragedy of the commons written on a universal scale. The commons being the financial system as we have known it. Many people have played their large or small part in the debacle. I wonder whether it could have been otherwise.
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Old 11-09-2008, 03:20 PM   #6
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everyone wants everything simplified until something happens them and they think there should be an exception for them
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Old 11-09-2008, 03:37 PM   #7
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Hmm. inflation rates not matched by savings account interest coupled with easier lending standards lead me to want to invest in stuff rather than cash hoarding. No big surprise. in our case the stuff is income real estate - others might feel the need to invest in the stock market or candy bars and makeup, but that's their prerogative. One might argue that the lower net worth folks are hit harder, but if they are already spending all they have on food and gas and such it really shouldn't have much affect on them. 'Specially if the taxes are raised for higher income folks to finance a healthier social security system.
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Old 11-10-2008, 10:54 PM   #8
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It's interesting to recall that the original term for what we now call 'economics" was "political economy".

This fact should disabuse anyone of the fallacy that the two are not incestuously coupled.


By the way, in spite of all the happy-talk, positive-thinking and new hope,
global political economy is going to get much worse for most of us in the coming years.

Ladelfina, I too find Mish a useful read, but I like the "Bit Bucket" section of The Housing Bubble Blog dot com even more for enlightenment.
Anytime I want to feel really stupid, I read the analyses the brighter lights post there and both learn and gain an appropriate dose of humility.
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Old 11-11-2008, 06:49 AM   #9
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So if I have an interest-only mortgage and rates go down to zero, I guess I can just keep their money and not have to pay anything for a while? Not too shabby. I like this new economic theory!
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Old 11-11-2008, 06:56 AM   #10
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So if I have an interest-only mortgage and rates go down to zero, I guess I can just keep their money and not have to pay anything for a while? Not too shabby. I like this new economic theory!
Hopefully, they will go BELOW ZERO then they would send you money for borrowing their money. Wow, the new financial system is coming.
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Old 11-11-2008, 07:09 AM   #11
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Hopefully, they will go BELOW ZERO then they would send you money for borrowing their money. Wow, the new financial system is coming.
That's a tough concept for me to grasp! I suppose it would result in much higher home prices, with homes essentially available for less to the few who still qualify for a mortgage these days.

I don't see this happening but it is certainly an interesting thought.
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