The economic BS we’re fed

st_dangerous_mushrooms_fIPJ sends this from ZeroHedge:

It was back in December 2012 when we summarized the biggest failing with the Eurozone: a continent in which due to the lack of a flexible currency (also known as a gift to Germany and what otherwise would be a very, very expensive Deutsche Mark) the member nations were unable to devalue their way out of depression. Namely, that absent the ability to engage in external devaluation, Europe’s troubled nations (i.e., most of them) had only one option: internal devalution, also known as plunging wages.

… which tries to argue that austerity is a good thing and wages must drop by 30-50%. Sorry but most people do not buy this need for austerity. Let me be more precise – in the economic terms we have imposed on us, from Keynesianism to monetarism, it’s all about models and when the model fails due to 1. coercion, manipulation and corruption by Them and 2. the fundamental flaw in economic models, then yes – austerity is necessary, wages must fall.

What I challenge is the model which would ever require such a thing in the first place and yes, that includes offering credit with high limits to those who cannot afford it – the sub primes. Everyone knows the old adage about earning 10 shillings and paying out 9, compared to earning 10 shillings and paying out 11. That’s the only real economics.

And all this talk of portfolio growth and the like. Seems to me that there are an awful lot of economists and advisers who are living this jargon version of the simple laws of economics with all their tranches and SDRs and OCDs etc. The very existence of the IMF, WB and the BIS is a perpetuated lie. Why on earth should any country be paying its taxpayer’s money to an external body, in order to have it lent back at crippling rates in perpetuity?

You might call that economics, I call it economic insanity. Even criminality.

5 comments for “The economic BS we’re fed

  1. Bunny
    January 26, 2014 at 10:43 am

    The big issue was that the politicians and their friends had thought they had found the magic money tree with mathematic modelling of the financial markets, that by using hedge fund techniques on an industrial scale, dividends and hence taxation would be paid for years on a risk free basis. Obviously they were wrong and the Brown boom was just an illusion of wealth.

  2. January 26, 2014 at 11:21 am

    Yes, agreed.

    My working theory is that the Euro was introduced at the instigation of Goldman Sachs* and the like because they knew it would never work properly and would require endless tweaks and tinkering and meddling to keep it alive, with Goldman Sachs etc charging handsome for doing it, and with former GS bankers being appointed as PM’s and heads of central banks just to keep tabs on things.

    * The ones who help Greece fudge their figures to be able to get in.

  3. Derek M
    January 26, 2014 at 3:50 pm

    What happens if France goes belly up. There are stories that some Chinese banks could be in trouble. The US keeps putting off the day of reckoning. There could be more excitement to come yet

  4. Dave_G
    January 26, 2014 at 7:47 pm

    The system was designed by ‘them’ to be paid for by ‘us’. Until we become a one of ‘them’ we’ll forever be in their debt……

    Of course we COULD just start our very own system and abandon theirs completely. It’s not as if they could stop us….. is it?

  5. Voice of Reason
    January 26, 2014 at 9:15 pm

    The problem with the system is that people confuse accumulation of electronic wealth as actually meaningfull.

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