Where's the Money come from? - Formosahut forum

The world is about to embark on an unprecedented cash-splash in order to kick-start economies. Australia is spending about a trillion dollars while the US is talking several trillion. Most countries are doing the same.

Firstly, i was surprised there even was that much money to spend - when you see how stingy certain governments can be on funding various essential services and now there is a bottomless well suddenly.

Secondly, i'm curious as to where that money comes from? My understanding is that some of it is from Central Banks buying 100-year government bonds - which may or may not be ever paid back. How does that work? Other money comes from loans - though i'm not sure who's loaning the money.

I do wonder what happens if we have another rainy day - say next year? A real rainy day - for example a permanent border shutdown with China due to escalating tensions or even a war? Or another over-reaction to another corona virus?

And how does all this money get paid back? Again, i don't understand it all properly but on the face of it I'd hate to be a young person coz it looks like they'll be getting saddled with higher taxes and less government services for the terms of their natural lives. At least they can be satisfied in the knowledge that through their sacrifice the lives of some sick elderly people were prolonged for an extra few months or even years.

Then there's Modern Monetary Theory. According to an article in The Chronicle:

"The sneaky third way to pay back debt is just printing money and giving it to your lenders. Governments can do that, but historically they have chosen not to, because it tends to cause hyperinflation. However, a variation of this idea is coming back into fashion, with a new name - Modern Monetary Theory."

All of the above feeds back into the basic question: Are government's weighing up these repercussions as they chart radical policy courses that will reverberate long into the future? Coz now is the time to weigh them. Before would have been better. Later, will be too late.

This was my first thought when Trump announced the initial 2 TRILLION dollar infusion of cash -- where does it come from and why couldn't they do that to solve the decades old health care crisis in the US?

Clearly they could do that for any reason they want, but they choose not to. This money is going to keep their rich friends afloat, not poor Joe and Joanne who are going to lose their business and end up on the street.

My world view is this -- these governments are just legalized gangs. They're the scum that have tricked, swindled, cheated, and if that doesn't work, killed all the competition. The US govt. is simply the most powerful gang. Sure, we vote, to elect a temporary gang leader.

So they can create as much money as they want. Yes, they just print it. They just create it out of thin air, and it will result in inflation. My parents bought the house I grew up in for 30K, and that was a shitload of money then. It's now worth nearly 500K. That's inflation and it's a stupid amount of money for a very normal house in a normal neighborhood.

Just a few decades ago, 100K would have been more than enough for a couple to retire on, now they need 1 million, minimum.

And how about the newest fad, negative interest rates. Banks lend money out, and accept less in return because at the rate that the value of the currency is going down, the bank does better to get that percentage back. So, for example, they lend out $10, and will accept as payment $9 in a certain period, because if they don't do that, that $10 will only be worth $8 by that date.

I think what we're going to see at some point is the end of cash, and covid is moving that forward: https://www.bbc.com/news/business-52455706 . I've been studying money for a while now, and digital currencies, and cryptocurrencies, and there's a lot happening. I think in the not to distant future, governments will be rolling out their own digital currencies, and among other things, this will increase their surveillance capabilities by degrees I don't want to imagine.

In the meantime, whatever money we have is worth less and less and less.

This guy is good if you want to learn more about the history of money and cryptocurrencies and surveillance potentials of central bank digital currencies:

https://www.youtube.com/user/aantonop
https://aantonop.com/

EDIT: Here's a random video from one of those pages: https://www.youtube.com/watch?v=LgI0liAee4s. I haven't listened to it all yet.

I think what we're going to see at some point is the end of cash, and covid is moving that forward: https://www.bbc.com/news/business-52455706 . I've been studying money for a while now, and digital currencies, and cryptocurrencies, and there's a lot happening. I think in the not to distant future, governments will be rolling out their own digital currencies, and among other things, this will increase their surveillance capabilities by degrees I don't want to imagine.

In the meantime, whatever money we have is worth less and less and less.

Read a few days ago that China has started a trial roll-out of state run digital currency. Interesting coincidence that it comes on the back of the virus roll-out

Very interesting. And of course once they do it, everybody else will. It gives governments enormous power and control over those people required to use the currency. They will know exactly what digital units of currency were spent on, when, and where it was spent. They'll be able to trace a unit of currency indefinitely. And since they pay people in this currency, they'll know exactly who is spending what, when, and where. And those people accepting it will, of course, also be identifiable; they'll have to be in order to use the currency.

It also means they'll be able to disable units of currency if, for example, someone's 'social score' gets too low or they say the wrong thing on a blog posting.

The difference with bitcoin is that nobody can control it and that it's decentralized. That's why governments hate it so much. They've been trying to kill it since it started, and it just goes up in value. Sure, it's down from it's peak of 20k, but it will pass that over the next year or two, maybe much sooner.

Money has changed dramatically, from sea shells to metals and now to bits of data and nothing more, nothing more at all.

There is some dissent about these things - but not a lot. Do you see any hope for a mass rebellion against this big-brother state that we're getting herded into?

Nope, not until enough people are literally hungry enough to raise hell.

Warren Buffett explains the simple reason why the US will never default on its debt

In short, the US is accumulating debt in its own currency, and it can print as much currency as it likes, so it will never default on the debt. But, the currency will lose value and we'll have inflation.

https://finance.yahoo.com/news/warren-buffett-explains-the-simple-reason-why-the-us-wil...

Great article. So if you've borrowed in your own money then it is just a matter of printing money. You almost wonder why bother going through the pretense of borrowing it - why not just print it straight off?

Have often wondered at what point printing money causes inflation. If i print $10 it won't make a difference - or a $1000 or a million. At what point does it make a difference? Anyway, a few trillion should test it out

Here's the Australian treasurer's take on the subject:

"More than $30 billion in aid is expected to flow next month, Mr Frydenberg told Parliament on Tuesday, the "largest and fastest injection of economic support Australia has ever seen". It's part of a $320 billion package - equivalent to 16.4 per cent of gross domestic product ... However the "unprecedented scale and speed" of the government's economic response had driven a rapid increase in borrowing, Mr Frydenberg said."

Ok - so how to pay that back?

Mr Frydenberg said the "proven path" for paying back debt was not higher taxes, but rather "growing the economy through productivity-enhancing reforms". The "values and the principles that have guided Coalition reforms in the past must guide us again in the future", Mr Frydenberg said.
"Unleashing the power of dynamic, innovative and open markets must be central to the recovery with the private sector leading job creation, not government."

So if it's the same values and principles then i'd wonder why productivity didn't dramatically increase last year?

Secondly, is the idea of growth as a solution flawed? You could argue that it's human growth/consumption that got us into this predicament in the first place.

"Labor's Treasury spokesman Jim Chalmers said the government seemed to have no plan to reboot the economy.
"If only the Treasurer had been able to cough up some detail," Mr Chalmers said, referring to a lengthy coughing fit Mr Frydenberg had during his speech."

He is currently being tested for the virus. I'll be surprised if he's got it coz it's down to zero cases for most states now - more likely he knew his words tickled his throat coming out.

Anyway, the guy is in a tough tough spot as treasurer. I don't envy him that job.

"So if it's the same values and principles then i'd wonder why productivity didn't dramatically increase last year? "

Exactly, and that's the question they never want to answer. I think it was Reagan who invented the whole 'trickled down' concept, meaning if the rich get rich enough, their excess cash will somehow find it's way to those they don't give a shit about. Unsurprisingly, that has never happened even though the rich are richer now than ever.

And while the rich and powerful in the west demonize socialism in the best of times, in periods of crisis like this, they accept bailouts because they're "too big to fail". So it's socialism for the rich, and rugged individualism for everyone else.

It's a pathetic situation which can only lead to social, economic, and environmental collapse, if not outright war, which in a nuclear age won't be pretty. Regardless, I have little doubt we are witnessing the beginning of the end of an era.

I'd like to be more positive. But if we, as a species, can't even get our shit together to make a unified stand against a virus, how are we going to address global warming?

In fact, I suspect those in power don't really care about these crises because, either consciously or not, not only do they not give a shit about 30% of the world's population dying, it's actually a good thing. They're mostly poor, needy people anyway, so who gives a shit. Famine, war, chaos, these have all, historically, served to increase the wealth and power of the wealthy and powerful.

This article helps to explain where the money comes from - it's pretty much as we supposed - it's printing money, pure and simple.

https://www.nytimes.com/2020/04/15/business/coronavirus-stimulus-money.html

Until recently, Modern Monetary Theory (printing money) was considered a radical fringe-lunatic theory - it's now mainstream. Guess we'll see how it works out.

Yep, they print money, then pay for it by printing more money. It can't end well.

In the short term, what we'll see is asset prices rising. Real estate and the stock market will go up because they'll be flooded with money, and that money has to go somewhere. So now, we are seeing high unemployment or underemployment with record highs on the stock market. How does that make sense? The official employment rates in the US might sometimes look OK, but it's all BS. Many of those people are working two, three jobs and still can't pay rent or are living in poverty.

Housing prices in the US now are going up, all due to cheap mortgages, and that is due to the printing of money. Meanwhile, personal debt is also rising. This is a replay of what led to 2008, by a multiple of 10.

I think the printing of money and increasing the debt could benefit the economy if that money were used for social programs that actually strengthened society, but they're just throwing the money into cheap credit and one off cash payouts. It doesn't do a thing to address those with no healthcare, student debt, homelessness, or any number of serious social problems we're facing.

In short, they're printing money to keep the large corporate players afloat. That's who it's benefiting.

In the short term, what we'll see is asset prices rising. Real estate and the stock market will go up because they'll be flooded with money, and that money has to go somewhere. So now, we are seeing high unemployment or underemployment with record highs on the stock market. How does that make sense? The official employment rates in the US might sometimes look OK, but it's all BS. Many of those people are working two, three jobs and still can't pay rent or are living in poverty.

In short, they're printing money to keep the large corporate players afloat. That's who it's benefiting.

You were right about the stock market and house prices. It seems to be defying gravity. We've broken all kinds of records in the past few months - highest ever, fastest ever rise, shortest ever bear market (set in the middle of Covid!)... And all this through record infection levels in Europe and America and electoral chaos in the US for good measure.

I wonder what happens with the money printing economics - does it get put back in the box at some stage or do we just print money forever now?

Why don't we print money to address climate change? Can we just buy everyone a new electric car? Buy land back for reforestation?

As you mentioned, why not print money to fix the health system, homelessness etc?

It looks like they are going to keep those presses running, at least in the US. One philosophy making the rounds is that there is indeed infinite money, and infinite debt. The US govt pays its debt by printing more money.

All of this is resulting in, among other things, real estate becoming increasingly out of the reach of many people, and so they end up renting. But this, of course, is pushing up rental prices. And those middle class people who can get their hands on a house are increasingly doing so by taking on massive debt.

One of the most cruel realities of the 2008 meltdown was not only that so many people lost their homes and were forced into renting, but that because of that, rental prices skyrocketed. Talk about rubbing salt into the wound! That trend has continued as the rich get richer, buy more properties, and the poor get poorer.

Now, with COVID, we have an added troubling situation. So many people have lost their jobs, and many if not most of them have fallen behind on their rent or mortgage. The US govt passed a law that forbids evictions until March, at which point, presumably, landlords can evict away. All of these people who haven't been able to pay rent are accumulating massive debts that they'll never be able to pay off. If they're making $10/hour when they work, and they can't afford their rent now, what makes anyone thing they will be able to pay all that back rent due?

And so in a very short time the US is going to see literally millions of households being thrown out onto the street. I'm guessing the presses will be working over time for years to come. It's almost as if the economy is so sick that there really isn't any choice. But what will it all lead to?

The thing that gets me is how radical it is. Economists are not known for their radical ideas but we've now got widespread implementation of an economic policy that was roundly considered fringe lunacy just 12 months ago.

It's kind of like rushing in a vaccine without doing all the safety trials.

And so in a very short time the US is going to see literally millions of households being thrown out onto the street. I'm guessing the presses will be working over time for years to come. It's almost as if the economy is so sick that there really isn't any choice. But what will it all lead to?

If your goal is social upheaval, then that would be the best way to go about it. If a riot explodes, it's not a big step to join in if you're living on the street. We saw that already last year.

If your goal is social upheaval, then that would be the best way to go about it. If a riot explodes, it's not a big step to join in if you're living on the street. We saw that already last year.

And I think that's largely the reason why (more) free money will soon be falling from the sky. It's easier than actually dealing with the fundamentals that are the source of all the economic problems. I think those fundamentals are far more complex than politicians or social activists often portray. They're usually dumbed down to soundbites like redistribution of wealth or trickle down economics or income disparity, but it goes far deeper than any of those I'm afraid.

On some level, the gorilla in the china shop breaking everything is our culture, economy, even identity (in the US anyway) all being based on consumerism. Nobody addresses that, regardless of where they stand on the political spectrum. In the US, there are no democrats or republicans saying, "You know, maybe we should just all buy less shit." Of course, this is oversimplifying as well, but our economy is entirely based on consumption.

Looked at another way, maybe we need to actually evolve in some way.

On some level, the gorilla in the china shop breaking everything is our culture, economy, even identity (in the US anyway) all being based on consumerism.

That's the key right there - consumption. All the problems in the world can be traced back to that. It's what we do as living creatures - consume and reproduce. As humans we got too proficient at it.

We went beyond 'consuming to keep ourselves alive' to 'consumption as a status symbol' - the best car - the best house - the best holiday at the best hotel. It became a consumption competition - a feeding frenzy.

With chickens i noticed a kind of thoughtless greediness. Give them a patch of grass and some time - they will eat that down to bare earth. They're not thinking 'maybe we should conserve some of that for later'. The impulse to consume is overpowering - even when it will result in their own doom.

Luckily for the chickens i am around to ration out supplementary food, but i don't know who's around to rein in human consumption.

With chickens i noticed a kind of thoughtless greediness. Give them a patch of grass and some time - they will eat that down to bare earth. They're not thinking 'maybe we should conserve some of that for later'. The impulse to consume is overpowering - even when it will result in their own doom.

I've noticed that whenever there's a threatening natural event like a major earthquake that knocks out electricity, a serious typhoon, etc., I want to eat. It's a weird sensation and even though I'm acutely aware of why I feel it, it doesn't matter. The awareness of wanting to eat as a natural response to the situation is not enough to quell the urge entirely.

But we've gone way beyond that, as you point out. Our very economy depends on consuming more than we need, or even want. Advertising exists to make us want products and services that we didn't want before being exposed to the advertisement. And they're very good at it.

The US reports nearly 5.7 million people will likely lose their homes in the next two months.
https://www.visualcapitalist.com/mapped-the-risk-of-eviction-and-foreclosure-in-u-s-sta...

"It goes without saying that with nearly 17 million Americans behind on mortgage and rent payments, there could be significant consequences down the road."

Seems like it is 'going without saying' - don't hear much in the media about it despite the consequences. Just for your self-interest as a power class you'd think you wouldn't want homelessness going off the charts.

This media report encapsulates the situation:

"Wall Street notched more milestones Friday as the market largely shrugged off another discouraging jobs report amid expectations that the incoming Biden administration will pump more aid into the pandemic-ravaged economy.

The Standard & Poor’s 500 index rose 0.5%, its second straight record high. The Dow Jones industrial average and Nasdaq composite closed at new highs."

Here's an interesting 'kicking against the pricks' story. A group of Reddit users figured out a way to mess with big hedge funds - specifically short sellers.

The user credited with inventing the scheme, Deep Fucking Value, turned a 50k investment in Game Stop into 47 mil.

The technique appears to bet against the short sellers.

"Shorting, or short-selling, is when an investor borrows shares and immediately sells them, hoping he or she can scoop them up later at a lower price, return them to the lender and pocket the difference."

That's fine if the price goes down, but if it goes up, the shorter loses. In that case the shorter is in a mad scramble to buy the stocks he/she's borrowed to pay them back and limit losses - which in turn adds to the upward price pressure.

The Reddit users strategy appears to apply upward pressure on a stock that has been shorted, which is then exacerbated by the shorter trying to get out of the position, driving it up even more.

Whereas in normal stock buying, the worst case scenario is you lose 100% of your investment if a company goes bankrupt, in shorting, however, the skies the limit for losses. If the stock goes up 1000% then you lose 1000%.

Not surprisingly, despite hedge funds manipulating share prices as a matter of course, they are now crying foul.

Thanks for that explanation. I've seen the headlines but haven't had time to read up on what's going on. That's a nice, concise explanation. Shorting is in itself a form of stock manipulation, so it's laughable that the big funds should now cry foul. They've simply been beaten at their own game.

Of course, the exchanges, regulators, various gatekeepers, and other big players who chat over brandy and private numbers will side with the funds.

"Republican lawmaker Michael Burgess of Texas argued that Congress had yet to spend all $4tn of the previous pandemic relief, noting $1tn had yet to go out the door.

"Why is it suddenly so urgent that we pass another $2tn bill?" he asked."

Larry Summers, economic adviser to President Barack Obama warned of "inflationary pressures of a kind we have not seen in a generation, with consequences for the value of the dollar and financial stability".

"Stimulus measures of the magnitude contemplated are steps into the unknown."

Got that right. This whole printing money thing is so radical. You wouldn't think so coz it attracts almost no scrutiny - but is. Never been done before on this gigantic scale. Was considered lunacy just a year ago.

My guess is will work fine for a year or so - the stock market will keep booming coz the money has gotta go somewhere.

But beyond that?

Who knows ... maybe Funny Money Theory really is the way to go - onward and 'up through the atmosphere...'

"Wall Street hit fresh records on Friday amid speculation that a disappointing US non-farm payrolls report would dial up the pressure on Congress to approve President Biden’s $US1.9 trillion ($2.47 trillion) fiscal stimulus plan." (paywall)

So bad news increases the chance of printing more money - which is great for the stock market!

Yep, that's how it works. Market views are show shortsighted that that's how it works. Although they know in the long run it might hurt the market, in the short term it will keep it afloat, so prices rise. Most of my holdings are at or near all time highs. How is that possible? The world economy is a mess and asset values are at all time highs? So there's massive money printing going on.

At some point the shit is going to hit the fan and this is going to blow back on us in the form of inflation. That is a mathematical inevitability. It's already happening in the form of inflated real estate and stock prices. I mean, c'mon, no mediocre house in a mediocre neighborhood is worth half a million dollars. That's crazy, but that's what's going on.

Here's a very mediocre house in a very mediocre neighborhood that serves as an example. I know this because I grew up a few blocks from this house: https://www.zillow.com/homedetails/410-Riley-Ave-Worthington-OH-43085/34020615_zpid/. $434,900

Now, note, this isn't a suburb in New York or Chicago, it's in Columbus, Ohio. To be fare, Columbus is a cool town and under appreciated. It has a lot going for it. But for that price, one could buy, what.... shit... I guess prices are going up everywhere.

So inflation is already happening even though the "official inflation rates" don't reflect that. With this ridiculous amount of money printing, the above house will soon hit 600K and my stock/crypto portfolio will add yet another 30%.

Ok, that's an extrapolation, but there is where i'm living. The guy said it was worldwide demand thing that was also pumping up the prices - especially steel.

If it's a worldwide thing - let's search it - this article says it is - then that flows through to a whole lot of industries - with the public bearing the brunt.

This could be the first bite of inflation from the Funny Monetry Theory. Things get suddenly more expensive - thereby decreasing the value of your money.

You could have almost copied and pasted this article from any number of articles in the US. The exact same thing is happening there.

"So we've seen a mini housing boom emerge over the last six months, and that's very much thanks to government stimulus," Mr Pollock said.

The price of steel has also been rising, making it difficult for builders like Luke Eiszele to quote and plan ahead.

I've read quotes in the US press identical to this, and it's directly related to the printing of money. They even sent me thousands of dollars even though I'm living overseas and don't need the cash. But, hey, thanks! I'll sink it into bitcoin. It, ast least, has a capped limit on quantity.

But shortages are also largely due to supply chains getting thrown out of sync by COVID. Shipping got disrupted due to lockdowns and slowdowns, resulting in bottlenecks of shipping containers.

As I now live right on the Tokyo Bay, close to the narrow mouth, I have a front row seat to watch all the ships coming and going. My new hobby is identifying ships by name, type, journey, etc. It's pretty interesting. So when I see this quote:

Turning the reefer containers off allows dry goods such as shoes, electronics, or textiles to be sent to reefer demand locations. Once there, they can be emptied and switched back on to continue their journey.

-- it has much more meaning for me. The main types of ships coming and going are containers, reefers, general cargo, automobile vessels, chemical, and, a biggie, LNG.

Did you know there are ships just for carrying wood chips? Holy shit! I just looked up one of the first ships I catalogued, the Hydrangea. It's now in Hualien!

HYDRANGEA
Wood Chips CarrierWood Chips CarrierIMO: 9888900

This link might work: http://url.cailab.net/c7

Or you can look it up on https://www.marinetraffic.com/

We've both marveled at how the world's leading economists suddenly embraced the previously fringe theory of money printing - and wondered when the chickens are coming home to roost. Could be that this week was the start of that.

Significant falls on the stock markets this week - and i can't see anything in the near-medium term future to arrest that.

We've got:

massive debt
soaring house/commodity prices
many businesses crushed
failing vaccines

Time to bunker down and get that off-grid existence running?

Business idea: This is not original, people are already doing it, but have thought it would make for a good shop. Initially had it as a Climate Combat shop, selling all kinds of stuff to deal with Global Warming, including my patented 'Chill Hat' - a normal hat with a sleeve inside to hold a flexible ice-pack. Now i'm thinking it could extend to selling anything related to surviving the collapse of civilization - from brewing kits to chicken coops...

massive debt

soaring house/commodity prices

many businesses crushed

failing vaccines

Unfortunately, history teaches us that this situation usually leads to war of some sort -- the debt that is. And it's the debt that's going to cause whatever happens. Wars are good for business.

Time to bunker down and get that off-grid existence running?

Business idea: This is not original, people are already doing it, but have thought it would make for a good shop. Initially had it as a Climate Combat shop, selling all kinds of stuff to deal with Global Warming, including my patented 'Chill Hat' - a normal hat with a sleeve inside to hold a flexible ice-pack. Now i'm thinking it could extend to selling anything related to surviving the collapse of civilization - from brewing kits to chicken coops...

It's a good idea. I'm not in the position to do that, being in the Tokyo area, a foreigner with few rights. I figure Australia is one of the best places to be when the shit hits the fan. You have plenty of agriculture and natural resources, loads of space...

I'd start selling that stuff online while you still have Internet.

Reuters: Fuelled (sic) by federal stimulus checks, the BNPL business model has been hugely successful during the pandemic, especially in western countries. These firms make money by charging merchants a fee to offer small point-of-sale loans which shoppers repay in interest-free instalments, bypassing credit checks.

Just what we need. The article is about PayPal's buy-into the BNPL race in Japan.

I don't know how they work out the inflation figure but i think it's far worse than the official rate.

The local building supplier told me yesterday that the price of decking has almost doubled in a year. Doubled.

That means the cost of renovations/building has sky-rocketed (all building materials have shot up due to over-demand).

House prices have gone up significantly - maybe 20-30%.

Car prices have gone way up.

Petrol is way up.

These are key expenses in a normal person's life that are up, let's be conservative, by 20-30%.

We hear stories about inflation being up but the official report in Aus is 2.5%. That simply doesn't match with the real world.

Those official government inflation reports are all bullshit and they know it. They even start believing their own bullshit. Years ago I saw an interview with a well known, establish economist (can't remember which talking head he was), and when questioned on people complaining about inflation and pointing out how much prices had gone up, he said they were wrong based on the government figures. "I know you think your dollar isn't going as far, but trust me, it is!" "But my dollar buys less food." "That's just an illusion!"

For one thing, at least in the US, all sorts of budgets are based somewhat on the inflation rate, including things like social security which is adjusted yearly for inflation. Unfortunately for those who depend on their social security, that adjustment is based on an artificially low rate.

Those official government inflation reports are all bullshit and they know it.

It's another one for the 'we can't tell you the real truth' file - 'but here's the messaging'.

ISTANBUL, Dec 27 (Reuters) - The lira tumbled almost 8% against the dollar on Monday amid persisting investor concern over Turkey's monetary policy,

At current levels the currency is still 35% weaker than at the end of last year (while) inflation that has risen to more than 21%. Price rises are set to exceed 30% next year in part due to the lira depreciation, economists predict.

I wonder if Turkey is the canary in the coalmine here ...

Dan mentioned this in another thread that it's the draconian bio-state causing stress on the hospital system - more than Covid. The same is true in all industries currently in Australia.
It was one of those things that was never going to work - quarantining close contacts when you've got 10k cases a day and spiking (it's now over 100k per day). That's up to a million close contacts.

Sure some can work from home - but you can't work from home if you're a truck driver delivering groceries to supermarkets. Or fuel to petrol stations.

The level where Covid (a covered-up lab-exit!) could get truly scary is when there's not enough food on the shelves.

Scott Morrison: The more you try to protect your hospital system, the more people you are taking out of work, which disrupts supply chains.

Well you're the one who introduced the rules buddy. He's furiously back-pedalling now that over 10% of the workforce are off on any given day.

This is a constant daily process of balancing the need to keep people at work and to protect our hospitals. And that is why it changes almost daily.

Guess that's the alternative system of government to thinking things through first.

If there's a crash it will probably be this year some time. Likely a perfect storm event with a range of things compounding the situation. Labor shortage could easily be one of them. When demand is greater than supply, prices go up - whether its goods or labor.

BBC: The pandemic has made the world's wealthiest far richer but has led to more people living in poverty, according to the charity Oxfam.

Lower incomes for the world's poorest contributed to the death of 21,000 people each day, its report claims.

But the world's 10 richest men have more than doubled their collective fortunes since March 2020.

As my father used to say: money doesn't disappear - it goes somewhere.

In this case the funny monetary policy - that will be paid off through increased taxes/inflation for generations - has gone where it usually goes - into the pockets of the super-rich.

Oxfam: This year, what's happening is off the scale. There's been a new billionaire created almost every day during this pandemic, meanwhile 99% of the world's population are worse off because of lockdowns, lower international trade, less international tourism, and as a result of that, 160 million more people have been pushed into poverty. Something is deeply flawed with our economic system.

Something is deeply flawed in our system, period.

According to Forbes figures cited by the charity, the world's 10 richest men are: Elon Musk, Jeff Bezos, Bernard Arnault (fashion industry) and family, Bill Gates, Larry Ellison (Oracle), Larry Page, Sergey Brin, Mark Zuckerberg, Steve Ballmer (ex-Microsoft) and Warren Buffet.

Of those, the ones in bold were directly involved in censoring investigation into the origin of Covid and the subsequent cover-up. Who says crime doesn't pay?

Sri Lanka, & other countries, are looking like the canaries in the coalmine.

Prime Minister Ranil Wickremesinghe: Sri Lanka is facing a far more serious situation beyond the mere shortages of fuel, gas, electricity and food. Our economy has completely collapsed.

That's not good news coming from the Captain of the Ship.

Currently, the Ceylon Petroleum Corporation is $US700 million ($1.02 billion) in debt. As a result, no country or organization in the world is willing to provide fuel to us. They are even reluctant to provide fuel for cash.

If steps had at least been taken to slow down the collapse of the economy at the beginning, we would not be facing this difficult situation today. But we lost out on this opportunity. We are now seeing signs of a possible fall to rock bottom.

I wonder if that last sentence could be extrapolated to the world economy ...

9 News: In Sri Lanka, people queue for kilometres to fill a tank of fuel. In Bangladesh, shops shut at 8pm to conserve energy. In India and Pakistan, power outages force schools to shut, businesses to close and residents to swelter without air conditioning through deadly heat waves in which temperatures top 37 degrees Celsius.

These are just some of the more eye-catching scenes playing out in the Asia Pacific region, where various countries are facing their worst energy crisis in years - and grappling with the growing discontent and instability caused by knock-on increases in the cost of living.

When people get hangry on a large scale - that's how revolutions happen.

If steps had at least been taken to slow down the collapse of the economy at the beginning, we would not be facing this difficult situation today. But we lost out on this opportunity. We are now seeing signs of a possible fall to rock bottom.

They didn't lose an opportunity. Any opportunity they're referring to is more debt. This is another case of a collapsing currency. The whole world is in this debt cycle, like a dog chasing its tail. The US is the reserve currency which is laughable as it has no real value considering the US is currently 30 TRILLION in debt. And this is the economy that is the reserve currency? So, again, the world economy is a house of cards. Sri Lanka is low hanging fruit. They don't have a whole lot of guanxi in the world of finance.

From the same article:

Sri Lanka has been muddling through mainly supported by $5.81 billion in credit lines from neighbouring India. But Wickremesinghe said India would not be able to keep Sri Lanka afloat for too long.

It also has received pledges of $433 million-$865 million from the World Bank to buy medicine and other essential items.

Sri Lanka has already announced that it is suspending repayment of $10.16 billion in foreign debt due for repayment this year, pending the outcome of negotiations with the International Monetary Fund on a rescue package.

It must pay $7.26 billion on average annually until 2026.

That explains it all. Every country is in debt. How can this possibly work? It can't. There will be international upheaval of some sort. It might be war. It might be civil unrest. But it's an absurd situation that government are refusing to acknowledge.

9 News: In Sri Lanka, people queue for kilometres to fill a tank of fuel. In Bangladesh, shops shut at 8pm to conserve energy. In India and Pakistan, power outages force schools to shut, businesses to close and residents to swelter without air conditioning through deadly heat waves in which temperatures top 37 degrees Celsius.

These are just some of the more eye-catching scenes playing out in the Asia Pacific region, where various countries are facing their worst energy crisis in years - and grappling with the growing discontent and instability caused by knock-on increases in the cost of living.

When people get hangry on a large scale - that's how revolutions happen.

Fuel and water lines, they're already happening all over the world. This from Mexico.

I'm making more money now than I ever have in my life, but with inflation as it is I realize it's hardly worth it to work. If I work another year, which I plan to, I'm just earning enough money to pay for a year where I plan to live, given inflation. What's the point? Why work?

Think about it. In the 1970's, what do you think middle class people felt they needed to retire comfortably? I'm talking about their total wealth. I'm guessing 30-50K. In the 80's that went to 50-80. In the 90's, middle class folk probably felt insecure without a cool 100-150K in the bank, right?

Now it's fucking 1.5-2 million, and by 2030 it will be 5 million. My money is a joke.

Our currency is losing value. The USD is not crashing yet because it's the reserve, but others are. Sri Lanka, Turkey, Venezuela, the currency markets are in turmoil due to none of them having any real value. The US keeps printing, as do all the others, which is just now resulting in inflation, but they have no choice but to keep printing. We're in a death spiral of fiat.

They have no choice to keep printing because the system is broken. The next couple of years are going to be really ugly.

My money is a joke.

Our currency is losing value. The USD is not crashing yet because it's the reserve, but others are. Sri Lanka, Turkey, Venezuela, the currency markets are in turmoil due to none of them having any real value. The US keeps printing, as do all the others, which is just now resulting in inflation, but they have no choice but to keep printing. We're in a death spiral of fiat.

This came into the mix today:

9 News: Russia has just defaulted on its foreign debt for the first time since the 1917 Bolshevik Revolution.

The country missed a Sunday night deadline to meet a 30-day grace period on interest payments originally due May 27.

In response, the Russian Finance Ministry said it would pay dollar-denominated debts in rubles and offer “the opportunity for subsequent conversion into the original currency".

Luckily Russia prints rubles so problem solved!

(Russia has US$ in overseas accounts - but they've been frozen.)

Luckily Russia prints rubles so problem solved!

(Russia has US$ in overseas accounts - but they've been frozen.)

That's right. Their other option is to offer increased interest on bonds in an attempt to borrow money, and that will put further pressure on the currency. In other words, if Russia wants to borrow money and nobody wants to lend it to them, their only option is to offer a high interest rate, but to meet that rate, they have to print more money. Again, it's a death spiral for a currency.

The catch here is that those interest rates on currency bonds (or the bonds) are almost always in USD. So Russia is screwed. Countries that issue bonds in USD can easily crash if their currency collapses. This is why the US is in this position of being able to borrow as much is it likes, because it's the reserve currency.

South American countries aren't borrowing in their own currencies. They're borrowing in USD. If their currencies collapse, their debt is non payable and they default. This is what's happening all over the world.

Again, the whole system is based on a hollow currency, the USD. There is no value backing all this up. It's all make believe. How can a house that was worth 50K 20 years ago now be worth 2 million?

Then there's this from the article:

Investment analysts are cautiously reckoning that a Russia default would not have the kind of impact on global financial markets and institutions that came from an earlier default in 1998.

Back then, Russia’s default on domestic ruble bonds led the US government to step in and get banks to bail out Long-Term Capital Management, a large US hedge fund whose collapse, it was feared, could have shaken the wider financial and banking system.

Once again:

Russia’s default on domestic ruble bonds led the US government to step in and get banks to bail out Long-Term Capital Management, a large US hedge fund whose collapse, it was feared, could have shaken the wider financial and banking system.

... could have shaken the wider financial and banking system.

And that's it in a nutshell. The rich bailing out the rich. Never mind all those thrown into homelessness in 2008. They're certainly not too big to fail. In fact, we don't give a shit about them. But one of our pals in the banking industry facing a slow year? Oh my. Yes, we'll use taxpayer money for that.

AHow can a house that was worth 50K 20 years ago now be worth 2 million?

This can only happen because the currency is losing value. The house isn't worth more; the currency is worth less.

Somewhere you've mentioned that the only option for governments is to keep printing money. That seems to be the inescapable conclusion of all this. For example, Australia has decided to turn the tap back on to keep funding Covid-payments after a short, failed attempt to ween itself off the cash splash. Why not? Just print it!

I remember a time long ago (2019) when politico-economics was all about belt-tightening. Voters were exhorted to demand fiscal responsibility 'in these uncertain times'. The goal was always balancing the budget. Politicians would earnestly explain that the national budget is the same as your household one - you can't be continuously spending more than you make. Which is basically the same message i've heard all my life. Printing money was considered madness.

In fact, it probably started in 2008 with the World Economic Crisis - that was the first time i heard of stimulus payments in Aus, though my understanding then was it meant going into temporary debt, then paying it off. Which the govt had announced it would do in the budget speech a month or so before Covid.

But now it's looking like a giant bonfire of money. I don't see any way back.

Money has become this 'fake' meaningless thing.

This is interesting. From that article:

His federal government has been under pressure to reverse a decision to scrap emergency payments for people who have to isolate but do not have sick leave.

Mr Albanese tweeted on Friday evening: "We will discuss proposals to ensure the vulnerable are protected over coming weeks."

Whereas just today Japan announced a record number of cases, and yet no new restrictions.

This new wave is going to break all records, and it's going to be very interesting. Japan is now experiencing the most covid cases ever. That's astonishing. And yet it has decided, so far, not to reverse the easing of restrictions it has started. Good for them. Smart move. The new strain is causing nothing more than a cold, and people are sick of restrictions and want to get back to living.

Meanwhile, countries that are maintaining some top down, draconian set of control methods are caught in a tough spot. What is the situation is Australia now if you test positive? To the extent that countries demand some stupid quarantine and mandatory testing, they have to somehow compensate the victims, unless of course you're in China.

China is maintaining this farce of a zero policy and it's killing its economy, but I think that's by design in hindsight. They don't give a shit about covid. They probably wanted to cool the economy anyway, and this gives them a good reason to do so while avoiding any blame for the hardship it causes the masses.

In the west, central banks are having to raise interest rates to cool inflation. They have to purposely torpedo the economy after printing so much money during covid that it started causing runaway inflation. China doesn't have that problem. It can blame economic hardship on covid while at the same time use it as an opportunity to expand surveillance.

All in all, I'd say China is winning in this game so far.

Here's the disconnect in what's going on in the economy: we have rampant inflation, real wages are falling, we keep hearing how the economy is in tough times due to Covid, stock-prices are in one long free-fall - and yet - corporate Australia has just recorded record profits!

How does that work? At least if there were record profits, wouldn't the stock market go up?

ABC: Half-yearly profits for all companies together had almost doubled to $US55.2 billion ($79.6 billion), up from $US28.7 billion for the same period last year
"These energy giants are posting staggering profits while fuelling our cost-of-living crisis", ACTU president Michele O'Neil says.

This must be part of The Great Reset. Normal people see their money shrink away before their eyes while the corporates bank record profits.

The energy companies' situation is particularly galling. Energy prices have gone up about 30% in Australia - i got a letter with my last bill explaining that it was due to Covid, the Ukraine War etc, etc - next thing i know i'm reading they made record profits! WTF?

Meanwhile, i have some energy company shares, but they've all fallen, quite dramatically in some cases.

This feels like one giant con-job.

This feels like one giant con-job.

That's exactly what it is, and the con is that people actually believe that government has their best interests at heart, and when it doesn't, it's because of a bad apple or the 'wrong party' being in power.

It doesn't matter what party is in power. It simply doesn't. Wealth will continue to flow from the poor to the rich. The con, at least in western democracies, is that people bought into this idea that their vote matters. It doesn't. Sure, it matters on little things, and some big things. In the US, abortion is a big thing that voting can actually impact. So are issues like weed legalization and... well I can't think of much else at the moment.

But the really, really big shit, the shit that affects us all, MONEY, that is 100% unaffected by who is in office because the politicians were bought and paid for before they ever took the oath. And if they do try to affect real change, they're silenced in one way or another.

I'm not buying any more stock at my age. I'm waiting for it to go back up and then I'll start selling a percentage every year, and it will go back up. That's how the rich get richer. These fluctuations always make them more money. It doesn't matter if it goes up or down, they win. They can accumulate while it's down, they can write losses off on their taxes, they can squeeze little players out of the market, it's a power play.

During the crash of 2008, corporate America went in and bought as much foreclosed property as they could, sending rental prices skyrocketing, and that trend continues. They want these crashes. It's mop up time for them. And people lose their homes, so they must rent! And because more people must rent, the assholes can jack up rental prices. It's evil. So people end up spending 50, 60, 70% of their income on rent. It's the big squeeze.

Meanwhile, cash is worth less and less. Our buying power is diminishing, and it will continue to do so.

Yep, it's a con job, and we're the suckers.

It doesn't matter what party is in power. It simply doesn't. Wealth will continue to flow from the poor to the rich. The con, at least in western democracies, is that people bought into this idea that their vote matters. It doesn't.

I keep feeling that the political landscape is wide-open for someone who can rise above the party system. There's an enormous level of discontent they could tap into. Come in and speak truthfully - even just inquire about the truth.

Trouble is it's more than the party machine system you have to overcome. The media, big corporates, national security orgs, the whole establishment is gonna suppress you - that's why they call it the establishment. The last thing they need is someone coming in and blowing the lid on their organized racket.

I don't understand how this works but it seems to be one of those openly corrupt things. Australia has massive supplies of gas - more than we can use - but we're told prices are going up to due to a supply crisis ...

The problem appears to be, yet again, due to globalist cartels running the world. Australia exports 80% of its gas so Australians, despite a huge surplus, are forced to pay prices dictated to it by some unaccountable, inaccessible global body, including the increased costs of exporting that gas.

This is the most insidious aspect to globalism - everything is pushed conveniently out of reach of normal people - oh we can't control that coz it's due to international pressures! Meanwhile, those elites who do control it - many of them from Australia, are making a killing.

It's a double whammy - we get fleeced of our money whilst being rendered impotent in terms of being able to do anything about it.

There have been a lot of winners due to Covid, which helps explain the reluctance to investigate its origin. There have also been a lot of losers - it's divided society socially, but as well as economically.

Winners

1. Pharma/THE Science - massive injection of money for drugs/research/general funding - their power has become god-like, unquestionable - last thing they want is an investigation that shows that their industry caused/covered-up Covid

2. Bureaucracy - apart from no-one losing a cent in income due to the all the restrictions, their power has swelled tremendously as bureaucrats take control of all facets of our lives as they administer/enforce decrees from the experts

3. Corporates - record profits, increased powers of surveillance

Losers:

1. Small business people, especially in tourism/food/entertainment - smashed by the lockdowns/border closures

2. Retirees - have seen their live savings dramatically dwindle since Covid

3. Normal people - huge hike in inflation has resulted in money going directly from normal person's pocket into corporate person's pocket

Here's another source of money -- us.

Retirement Plan Changes As 401k Contribution Limits Increase

These funds are invested in stocks, bonds, or both, mostly in equities. This is an infusion of cash into the stock market, and it's being contributed willingly by those who pounce on this 'opportunity' to hand over more of their earnings to Wall Street.

It works if you retire and cash out when the market is up. It doesn't work out so well otherwise.

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