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They Don’t Know What To Do Or They Don’t Know How To Do It.


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The problems I see are more in no.1 there, but I think an Alexandrian solution is needed.

In answer to your other question, no on a global level, savings and borrowings match, but we have an enormous crisis of confidence (far more extended than the pre-crisis over-confidence) in just about everything, which means that those with savigns aren't spednign them or lending them.

Isn't the problem that the value of loans and the value of the assets secured against them now don't match (not sure whether that's quite the same as savings and borrowings matching)?

In other words, Banks have lent trillions of dollars against assets that were 'worth' at least as much as they lent at the time the loans were originated. Now those trillions of dollars are backed by assets which are currently 'worth' massively less than the total value of the loans. The consequence of borrowers defaulting in this scenario is that the difference between the loan and the fire-sale value of the asset disappears resulting in massive reduction in the money suply.

Surely the solution to all this is:

a - all assets repriced until they are equal to the money left in the system.

b - governments 'print' money until the amount of money and assets balance (obviously a big chance of governments screwing this up)

c - a combination of a and b

It looks to me as though governments see option b as the quickest and easiest so this is what the will end up doing.

I also think this is why there is so much doubt about whether we will have deflation or hyperinflation. Option a is deflationary and option b is inflationary. I'm currently betting on hyperinflation purely because there is no way governments are going to print just enough money to restore balance. They're bound to completely overdo it and conveniently inflate away sovereign debt at the same time.

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Self made opportunity.

They've had a housing bubble so they can wipe out their debts.

Interesting.

Care to expand?

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HOLA447

http://injinsalternativeuniverse.blogspot....fit-taking.html

The story of the credit crunch is amazingly simple. It's as simple as the dotcom bubble and the great depression, as simple as the scam itself. It has a slight twist, however and more than a few wild cards.

What the bankers have done is bubble housing on purpose, so they can take control of a lot of assets through the magic of people defaulting on debts that aren't there. Why, do you think, have the bankers done this?

Well, to put it simply, the bankers are short on time. Two things are against them - the first being the rise of home computing/printing and the second being the massive debts they have run up via their proxy companies "the united states, the united kingdom" etc. They've promised pensions and universal healthcare and a playboy model for every 16 year old boy and a whole boatload of other stuff to keep the general citizenry passive which they haven't got a hope in hell of actually providing.

A nice economic crisis will solve that problem for them. No pension for you, grandad - "credit crunched", no medical care for you young 'un - "credit crunched" and no pay rises and lots more taxes and regulations for all the little folks who just go to work every day and are no harm to anyone. Or so the plan goes.......all hung on a simple slogan "credit crunch."

Fiat paper currency is pretty well crafted. It's so well crafted that a man in Glasgow managed to print a few hundred million "perfect" ten pound notes a year or so ago. It's so well crafted that a family in the south of england managed to print "enough money to destablise the bank of england." Counterfeit, of course. Not that you or me could tell them apart, but the man in the wig calling himself a judge said they were so they must be.

Here is the problem of paper fiat, going forward - home printing will eventually catch up to the top of the line printing of currency to a good enough standard to fool shopkeepers. Simple as that. It doesn't have to be perfect - just good enough to hand over to a corner store. At this point the empire of fiat is doomed. Given that PC's double in power every 15 minutes it seems and home printing also improves at a breakneck speed the day when it's uneconomical to keep up the paper part of the banking scam mustn't be all that far away.

The bankers must know this, and one would expect them to be preparing for it, one way or another. All those madcap cashless society and RFID tagging schemes that the internet has been chattering about for a while now suddenly start to make a bit more sense, don't they?

It's either start providing people with actual value (like gold or something) or get them into a database. As providing people with value for their labour isn't what banking is all about, a database is the preferred solution!

The other thing about the PC revolution is the internet. Right now you can go and watch umpteen videos about banking, get help with your debts, learn about fractional reserves, gold standards and all the lovely and obscure stuff that was up until a few years ago kept well out of the public arena. Now we have forums, blogs and lots and lots and lots of chatter. Word is spreading. Slowly, but surely, word is spreading.

Here is the plan -

1) Bubble housing by targetting that sector for cheap loans. (Remember, to the guy who owns the printing press paper money really IS worthless and even if it wasn't it doesn't matter he'll be getting it back soon enough!)

2) Do this in a few countries at the same time. Tv shows ramping property, magazine articles and all that jazz to accompany the cheap money.

3) Once the bubble is underway and in full swing, stop handing back out the money that is taken in and crash the whole system. This is a nice deflationary bit - when the market realises there is less money than has appeared because velocity has been so high and everything gets repriced.

4) Once everyone and their dog is flat broke and going bankrupt, print up a boatload of new cash to but their assets and technically pay all those outstanding state and private debts. You set aside a million for your pension? No problem, here have a million back - it will buy you a cup of coffee with no sugars.

5) Reboot the system with a new currency, preferably global or multi regional and probably claiming it is backed by gold to shut the goldbugs (and others who were paying attention pre bust) up. Actually it will be a database effort with ID cards and tagging if they can possibly get away with it. If not, they can always just go back to pretending they have more gold in a small household safe than exists in the whole world. And they will have almost all the gold, make no mistake.

6) Go back to business as usual and start again, only starting with owning most of the real estate on planet earth's western bit. (Lovely views, crazy skies.)

or so the plan goes, or so the plan goes. Chuck in a contrived war, Iron Man/Father of the people rescuer hero figure, persecution of a minority or two, strikes, riots, Tom Joad, gold confiscation, the discovery of a massive fraud or three that mysteriously don't get prosecuted and that's about it.

The paper is worthless if you own the press. It's the defaults that the bankers seek.

Bankrupcy for you and yours is profit taking for them and theirs.

:)

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Self made opportunity.

They've had a housing bubble so they can wipe out their debts.

I think you probably credit government with too much foresight. GB was happy to ride on the back of a credit bubble that briefly created an illusion of economic stability without thinking too much about the consequences. Now that it's all gone wrong he's found a short term fix in the form of QE. When the result of that is even more disastrous he'll be in opposition and past caring.

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I think you probably credit government with too much foresight. GB was happy to ride on the back of a credit bubble that briefly created an illusion of economic stability without thinking too much about the consequences. Now that it's all gone wrong he's found a short term fix in the form of QE. When the result of that is even more disastrous he'll be in opposition and past caring.

I think you misunderstand the purpose of government.

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Cheers.

I think you probably credit government with too much foresight. GB was happy to ride on the back of a credit bubble that briefly created an illusion of economic stability without thinking too much about the consequences. Now that it's all gone wrong he's found a short term fix in the form of QE. When the result of that is even more disastrous he'll be in opposition and past caring.

It would explain why they were so determined to continue on a path that so obviously ended in disaster.

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I think you misunderstand the purpose of government.

Injin - just look at our current crop of MPs. They're feckless ******wits to a man (and woman). If you seriously think anyone in government could dream up a plan of the sort outlined in the article you've just pasted you're even crazier than I thought you were.

Given the choice between ****-up and conspiracy theories I know which one I'd choose.

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Injin - just look at our current crop of MPs. They're feckless ******wits to a man (and woman). If you seriously think anyone in government could dream up a plan of the sort outlined in the article you've just pasted you're even crazier than I thought you were.

Given the choice between ****-up and conspiracy theories I know which one I'd choose.

How come everything I said is happening then?

It's not a conspiracy either - it's a collection of like minded people. And tha ssumption that the MP's mean anything is laughable. :)

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Surely the solution to all this is:

a - all assets repriced until they are equal to the money left in the system.

b - governments 'print' money until the amount of money and assets balance (obviously a big chance of governments screwing this up)

c - a combination of a and b

a ) I don't know how you could do this. You would need a government man to price everything according to a central plan. It would be soviet style price controls.

b ) In which case you devalue money until peak 2007 prices of houses were actually low. It would reward everyone who bought a house at a silly valuation, and punish the rest of us. Surely a HPC member is not calling for that.

Edited by KingBingo
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