Sunday, March 01, 2009

Counterfeiters about to go public

For over three centuries the Bank of England has been counterfeiting surreptitiously under the counter via the smoke-screen of the hilariously named open market operations.

This week, this counterfeiting is about to go public.

Welcome to Gordon Brown's brave new world order and his attempt to prove that the Keynesianism which didn't work in Japan isn't going to work here either.

Rather strangely, of course, if I were to buy a superb colour photocopier and to start printing up copies of ten pound notes in my basement, to then "stimulate" my local economy, I would be quite rightly arrested and thrown in the public stocks for being a fraudulent criminal stealing the wealth from everyone around me. Everyone understands this. But when this private crime is done publicly, it somehow becomes good. If anyone would like to write in and tell me how my personal bid to "stimulate" the economy would be different in principle from how the government is about to start "stimulating" the economy, I shall be pleased to read it.

In the meantime, for more on Japan, and in fact the entire economic outlook for the entire world, you might want to check out a recent 41 minute Jim Rogers interview on Bloomberg. Necessarily centred on the US, it's easy enough to allude his thoughts directly across to the UK, where we have a mini-me economy without the benefit of having the world's reserve currency. Click through the picture or the direct HTML link to get to the interview:

If you have 40 minutes spare, then the whole thing is worth watching. But here are the highlights:

4:18 Comparing this situation to Japan

4:48 Why this is worse than Japan

5:54 Why recessions are necessary cleansing agents

7:04 Einstein's definition of insanity

9:18 Why we need to take the hit now

14:50 Tripling of the Federal Reserve's balance sheet

15:40 Tough love and saying NO

17:10 Two or three years of pain is better than 18 years of Japan

19:10 How the US Army prevents US bond sales

27:00 Problems with central European banking loans

28:30 Greenspan's avoidance of blame

29:20 Bernanke does not understand economics

29:34 Bernanke will keep printing until we run out of trees

31:00 The Emperor's Ponzi scheme

31:30 China is the most capitalist nation

32:10 People can fail in China

32:20 Fannie Mae is a complete failure and fraud

32:30 Obama's biggest contributor was Fannie Mae

33:50 Why G20 will fail

34:00 G20 should go to the bar and leave us alone

34:30 The present approach did not work in Japan

35:00 Gigantic short positions in the Dollar

35:30 Why I am getting out of the Dollar

35:50 Why the Dollar will fail as the world reserve standard

36:00 Why the Dollar will debase

37:30 Current Dollar rally is artificial

38:10 Buying the Yen

38:20 Swiss Franc no good

38:40 Buying commodities

39:50 Asia is the future

40:00 Everything in Singapore works

40:45 The turkeys in Washington


Anonymous said...

You would be arrested for your stimulation plan because you wouldn't pass the inflated notes firstly to your political cronies - allowing them to be on the 'good side' of the inflationary wave.

Only through the judicious use of political will can they ensure that the poor suffer the effects of inflation the most. Meanwhile, your plan would put your local shop-keeper on the good side of the inflationary wave - and as such, must be avoided at all cost.

Don't worry - here in the USA - we are probably only 6 months away from 'monetizing the debt' as they call it.

The world we are passing on to our children will be in shambles. The mentality has already been sown into place and the vast majority think these 'bailouts' are some sort of good thing.

I can only hope revolution comes to both our shores to cleanse this sick debt-ridden obsession.

Jack Maturin said...

Crikey! I would get free chocolate bars and the shopkeeper would be able to pay his taxes in worthless paper photocopies, thus denying government staffers the business class air fares they all like to take to G20 conferences.

I hadn't thought of it like that!

Thanks Anonymous :-)