Are The Bankers Now Aligned Against Progress Itself?

[wonderpup]

Deflation seems to be the Voldemort of the banking muggles- they fear it more than anything else- thus they instruct their Central Bank Puppets to fight against it at all costs.

The reason is simple- deflation and debt are not happy bedfellows- if you are a purveyor of debt then you want inflation to rule the economic sky.

Not rampant, out of control inflation- just a gentle but inexorable rise in inflation so that your marks customers will be able to service their ongoing debts with their (hopefully) inflation driven wage increases- and maybe be able to take on even more debt- because if you are a banker debt=wealth, your wealth in particular.

BUT- and it's a biggie- progress, specifically technological progress, tends to be deflationary. As productivity increases prices tend to fall- and this is supposed to be good thing- right? We all get to buy more stuff at cheaper prices- is this not the dream?

And yet we are assured by our bankster friends that we are wrong- we are deluded in our foolish belief that prices going down is good- it's not its BAD- oh yes, very bad- because this is (he who most not be named) deflation (The horror)

So I suggest that the interests of the financial system and the interests of the rest of us are intrinsically misaligned- they want inflation, we want cheaper stuff- and to the degree they seek to manipulate the system in order to prevent the deflationary benefits of progress they are our ENEMY- we should burn them! (Just kidding- )

So it seems that we have a financial system that increasingly acts not in support of the living standards of the people but against them- and as the deflationary impact of technology accelerates so does the desperation of the money elites to inject inflation into the the system- they want us POOR- they want us INDEBTED- they want to own our f*cking asses! They do not want us to have cheaper stuff and more freedom.

So a war is now being waged by the debt owners against the wage earners- their weapons are Interest Rates, QE and the whole panoply of 'Independent' central bank 'operations' all designed to stoke inflation.

The financial system has gone rogue my friends- it is no longer the source of prosperity for the common man (if it ever really was) it is now entirely a tool of the elites for whom debt is the very quintessence of wealth- their wealth IS our debt.

So don't be fooled when that nice looking Bank of England governor assures you that deflation is the threat- it is not- the threat is his institution that no longer serves the people but the interests of the debt mongers.

And take no notice of that bullshite crap about how deflation will mean that no one will buy stuff- think about it- if the certainty of lower future prices were a guarantee that people would stop buying things the entire PC/Laptop/tablet industry would be gone- just blown away as tight lipped consumers waited, and waited and waited for those prices to fall. Does anyone see that happening?- no they don't- so the man in the sharp suit is lying to you boys and girls- he is talking his book- so not trust the man from Goldman Sachs- he does not work for you.

Debt based money and technological progress are like matter/antimatter- they cannot coexist in the same space and sooner or later we will be forced to choose between the bankers and progress itself.

I thank you.

[oracle]

Deflation seems to be the Voldemort of the banking muggles- they fear it more than anything else- thus they instruct their Central Bank Puppets to fight against it at all costs.

The reason is simple- deflation and debt are not happy bedfellows- if you are a purveyor of debt then you want inflation to rule the economic sky.

Not rampant, out of control inflation- just a gentle but inexorable rise in inflation so that your marks customers will be able to service their ongoing debts with their (hopefully) inflation driven wage increases- and maybe be able to take on even more debt- because if you are a banker debt=wealth, your wealth in particular.

BUT- and it's a biggie- progress, specifically technological progress, tends to be deflationary. As productivity increases prices tend to fall- and this is supposed to be good thing- right? We all get to buy more stuff at cheaper prices- is this not the dream?

And yet we are assured by our bankster friends that we are wrong- we are deluded in our foolish belief that prices going down is good- it's not its BAD- oh yes, very bad- because this is (he who most not be named) deflation (The horror)

So I suggest that the interests of the financial system and the interests of the rest of us are intrinsically misaligned- they want inflation, we want cheaper stuff- and to the degree they seek to manipulate the system in order to prevent the deflationary benefits of progress they are our ENEMY- we should burn them! (Just kidding- )

So it seems that we have a financial system that increasingly acts not in support of the living standards of the people but against them- and as the deflationary impact of technology accelerates so does the desperation of the money elites to inject inflation into the the system- they want us POOR- they want us INDEBTED- they want to own our f*cking asses! They do not want us to have cheaper stuff and more freedom.

So a war is now being waged by the debt owners against the wage earners- their weapons are Interest Rates, QE and the whole panoply of 'Independent' central bank 'operations' all designed to stoke inflation.

The financial system has gone rogue my friends- it is no longer the source of prosperity for the common man (if it ever really was) it is now entirely a tool of the elites for whom debt is the very quintessence of wealth- their wealth IS our debt.

So don't be fooled when that nice looking Bank of England governor assures you that deflation is the threat- it is not- the threat is his institution that no longer serves the people but the interests of the debt mongers.

And take no notice of that bullshite crap about how deflation will mean that no one will buy stuff- think about it- if the certainty of lower future prices were a guarantee that people would stop buying things the entire PC/Laptop/tablet industry would be gone- just blown away as tight lipped consumers waited, and waited and waited for those prices to fall. Does anyone see that happening?- no they don't- so the man in the sharp suit is lying to you boys and girls- he is talking his book- so not trust the man from Goldman Sachs- he does not work for you.

Debt based money and technological progress are like matter/antimatter- they cannot coexist in the same space and sooner or later we will be forced to choose between the bankers and progress itself.

I thank you.

BLAH,BLAH,BLAH,BLAH,BLAH,BLAH.

You should know how this is supposed to work.

all of the sages and those following geomancers etc say now the flow turns west to east/north to south.

and men become women

those following the prognosticators will be sorely miffed when it be proved that all the esoteric mumbo-jumbo(yes I know howmyou think it works) does not work the way that it should.

Kevin 39:67

you be mighty miffed and say to the high priest, "but you told us the sky would fall, and the world would be upside down, and the sun would rise in the west, and set in the east"...and yea, it did not come to pass.

and lo...you were left desolate and few in number,because you did not harken to the word of the lord and the bloke on the number 74 bus who you thought was crackers, but spake in parable beyond your understanding,"

it's all supposedly in the blood.(sort of)

big daddy upstairs says it doesn't work that way, even despite all the conjourers tricks.

Edited January 31, 2014 by oracle

[chronyx]

BLAH,BLAH,BLAH,BLAH,BLAH,BLAH.

You should know how this is supposed to work.

all of the sages and those following geomancers etc say now the flow turns west to east/north to south.

and men become women

those following the prognosticators will be sorely miffed when it be proved that all the esoteric mumbo-jumbo(yes I know howmyou think it works) does not work the way that it should.

Kevin 39:67

you be mighty miffed and say to the high priest, "but you told us the sky would fall, and the world would be upside down, and the sun would rise in the west, and set in the east"...and yea, it did not come to pass.

and lo...you were left desolate and few in number,because you did not harken to the word of the lord and the bloke on the number 74 bus who you thought was crackers, but he spake in parable beyond your understanding,

it's all supposedly in the blood.(sort of)

big daddy upstairs says it doesn't work that way, even despite all the conjourers tricks.

[oracle]

Deflation seems to be the Voldemort of the banking muggles- they fear it more than anything else- thus they instruct their Central Bank Puppets to fight against it at all costs.

The reason is simple- deflation and debt are not happy bedfellows- if you are a purveyor of debt then you want inflation to rule the economic sky.

Not rampant, out of control inflation- just a gentle but inexorable rise in inflation so that your marks customers will be able to service their ongoing debts with their (hopefully) inflation driven wage increases- and maybe be able to take on even more debt- because if you are a banker debt=wealth, your wealth in particular.

BUT- and it's a biggie- progress, specifically technological progress, tends to be deflationary. As productivity increases prices tend to fall- and this is supposed to be good thing- right? We all get to buy more stuff at cheaper prices- is this not the dream?

And yet we are assured by our bankster friends that we are wrong- we are deluded in our foolish belief that prices going down is good- it's not its BAD- oh yes, very bad- because this is (he who most not be named) deflation (The horror)

So I suggest that the interests of the financial system and the interests of the rest of us are intrinsically misaligned- they want inflation, we want cheaper stuff- and to the degree they seek to manipulate the system in order to prevent the deflationary benefits of progress they are our ENEMY- we should burn them! (Just kidding- )

So it seems that we have a financial system that increasingly acts not in support of the living standards of the people but against them- and as the deflationary impact of technology accelerates so does the desperation of the money elites to inject inflation into the the system- they want us POOR- they want us INDEBTED- they want to own our f*cking asses! They do not want us to have cheaper stuff and more freedom.

So a war is now being waged by the debt owners against the wage earners- their weapons are Interest Rates, QE and the whole panoply of 'Independent' central bank 'operations' all designed to stoke inflation.

The financial system has gone rogue my friends- it is no longer the source of prosperity for the common man (if it ever really was) it is now entirely a tool of the elites for whom debt is the very quintessence of wealth- their wealth IS our debt.

So don't be fooled when that nice looking Bank of England governor assures you that deflation is the threat- it is not- the threat is his institution that no longer serves the people but the interests of the debt mongers.

And take no notice of that bullshite crap about how deflation will mean that no one will buy stuff- think about it- if the certainty of lower future prices were a guarantee that people would stop buying things the entire PC/Laptop/tablet industry would be gone- just blown away as tight lipped consumers waited, and waited and waited for those prices to fall. Does anyone see that happening?- no they don't- so the man in the sharp suit is lying to you boys and girls- he is talking his book- so not trust the man from Goldman Sachs- he does not work for you.

Debt based money and technological progress are like matter/antimatter- they cannot coexist in the same space and sooner or later we will be forced to choose between the bankers and progress itself.

I thank you.

ever wondered why we're supposed to haev deflation this time???

it's astrology folks!

....we are now at 180 degree phase from"(inflationary 70's)...or put more bluntly the @rse end of the uranus cycle of 84 years.

...or at least it would work that way if astrology was the only science in play(but it's not)

i'd like to enlighten you about some of the the geomancy stuff( if you like subliminal messaging..then watch "hancock")

doesn't have to work this way if you are made aware of it.

Edited January 31, 2014 by oracle

[oracle]

I'm ok with the fact the authorities will treat me like I'm certified!

once you wake up,do you think you will face it woth such dignity? or are you going to feel a bit hard done by?

[John The Pessimist]

If this thread doesn't draw Erranta back out of the undergrowth, nothing will......

BTW, the value of money has been deflating relative to houses and the shiny shiny for decades. Calling it inflation is merely a conjuring trick, sleight of hand if you will. As most of us are paid in money, the value of our labour as measured in pounds is worth less. This is why we're all working harder to stand still. Deflation is the rentiers enemy, as their assets' value degrades relative to units of labour, which is all that most of us have to trade.

[okaycuckoo]

If this thread doesn't draw Erranta back out of the undergrowth, nothing will......

BTW, the value of money has been deflating relative to houses and the shiny shiny for decades. Calling it inflation is merely a conjuring trick, sleight of hand if you will. As most of us are paid in money, the value of our labour as measured in pounds is worth less. This is why we're all working harder to stand still. Deflation is the rentiers enemy, as their assets' value degrades relative to units of labour, which is all that most of us have to trade.

http://illusionofprosperity.blogspot.co.uk/2014/01/real-annual-disposable-personal-income.html

But deflation is happening anyway. The jiggery pokery with central banks and interest rates is a political movement for determining relative wealth.

If QE had been aimed at individuals instead of the owners and creditors of financial corporations, we'd still have deflation.

[FallingAwake]

Great post, wonderpup. I don't think it's as bad as all that, but I think you make some great points, especially about people not buying stuff waiting for the price to go down.

[billybong]

.

Edited February 1, 2014 by billybong

[Ah-so]

Deflation is a symptom not the disease. There is no problem with falling prices related to improved productivity and the deferred expenditure argument is incorrect.

Deflation in a troubled economy is a symptom of a vicious circle, connected with falling wages, lower earnings and investment. Once a vicious circle starts it can needlessly destroy economic activity so is worth stopping.

[Bloo Loo]

Deflation is a symptom not the disease. There is no problem with falling prices related to improved productivity and the deferred expenditure argument is incorrect.

Deflation in a troubled economy is a symptom of a vicious circle, connected with falling wages, lower earnings and investment. Once a vicious circle starts it can needlessly destroy economic activity so is worth stopping.

It will only destroy economic activity that is not needed...however, during the process, the high money priests will deliberately halt the natural progress to preserve their own beleivers ( central banks are only there for one reason...to save banks) and they will do this by adding price control, destroying real assets and printing.

As I pointed out in another post, you could launch the entire banking system into space, and it could be self sustaining forever....course, they would starve in a year as there would be no-one there actually producing anything at all, but the balance sheet would look great.

[rollover]

Don't worry, all the banking talents that left after 2009 bust is heading back from Asia, to sort it out here.

[@contradevian]

Great post, wonderpup. I don't think it's as bad as all that, but I think you make some great points, especially about people not buying stuff waiting for the price to go down.

..or the other myth that people won't supply unless the price continuously goes up, which is what the likes of Carswell etc say they believe. But I see the effects of inflation every day. Bars of soap getting smaller, only 74 tea bags in a pack rather than 80 and so on.

[Qetesuesi]

If this thread doesn't draw Erranta back out of the undergrowth, nothing will......

BTW, the value of money has been deflating relative to houses and the shiny shiny for decades. Calling it inflation is merely a conjuring trick, sleight of hand if you will. As most of us are paid in money, the value of our labour as measured in pounds is worth less. This is why we're all working harder to stand still. Deflation is the rentiers enemy, as their assets' value degrades relative to units of labour, which is all that most of us have to trade.

But for how much longer? Wonderpup managed to mention technology cutting prices of goods without mentioning that this occurs principally by automation cutting out labour costs of production.

[Bloo Loo]

Surely in many cases (most cases? ) deflation caused by improvements in efficiency means less employment? Overheads walk on two legs and all that.

who needs employment when the necessities are supplied from productivity gains?

[Ah-so]

who needs employment when the necessities are supplied from productivity gains?

I still think the introduction of weaving machines, putting thousands of skilled weavers out of work in the 18th c. is something we never recovered from. Productivity and innovation are our enemies!

[Bloo Loo]

I still think the introduction of weaving machines, putting thousands of skilled weavers out of work in the 18th c. is something we never recovered from. Productivity and innovation are our enemies!

I blame the wheel...hundreds of box carriers instantly redundant.

[winkie]

They would prefer us to:

“buy things we don't need with money we don't have to impress people we don't like.”

The higher the prices rise, the more innovative ways people will find to do things themselves, and/or cut out the middle that can cause unnecessary costly luxury.....when there are fewer living wage jobs about, people will create their own income in other labour saving ways....technology, education, information and having the world at your fingertips can only help people do this.

This is a very typical example.....needs must.

Edited February 1, 2014 by winkie

[jonpo]

and how do you propose bringing about this deflationary paradise ?

[Bloo Loo]

and how do you propose bringing about this deflationary paradise ?

Step 1...No central Banks.

Step 2...no need for a step 2.

[R K]

You also (presumably) would like a job. i.e. exchange your labour for some tokens to buy stuff.

If businesses can only produce stuff to sell at increasingly lower future prices, they're probably not going to bother, you won't have a job, and ultimately you won't eat.

18th and 19th century was littered with deflations and they weren't very pleasant for most people.

(This deflationary/debt deleveraing period isn't very pleasant for most people. Neither was the 1930s or what flowed from it)

Edited February 1, 2014 by R K

[Bloo Loo]

You also (presumably) would like a job. i.e. exchange your labour for some tokens to buy stuff.

If businesses can only produce stuff to sell at increasingly lower future prices, they're probably not going to bother, you won't have a job, and ultimately you won't eat.

18th and 19th century was littered with deflations and they weren't very pleasant for most people.

the blind man describes the view.....you are confusing the numbers in money with the value in money numbers.

of course I would produce my widget next year for sale for less if the less in money numbers bought the same....or more...the difficulty is convincing the blind that less in their pay packet is actually more.

[Ah-so]

the blind man describes the view.....you are confusing the numbers in money with the value in money numbers.

of course I would produce my widget next year for sale for less if the less in money numbers bought the same....or more...the difficulty is convincing the blind that less in their pay packet is actually more.

At least among the naive Austrian-isms is something meaningful. You cannot convince them and this is why it is wrong to reject the entire work of Keynes. Controlling the money supply is all a psychological trick, but it works effectively. The naive Austrian view is that somehow people's behaviour is not altered by the amount of money in circulation. Stopping a deflationary spiral is something that a government can do.

[wonderpup]

But for how much longer? Wonderpup managed to mention technology cutting prices of goods without mentioning that this occurs principally by automation cutting out labour costs of production.

I think technological unemployment and under employment is feeding the deflationary trends by putting downward pressure on wages. But people have put the argument to me that lower wages are less of an issue if prices are falling also- which is true, at least for those who still have an income.

But more fundamentally; is the truth here that we have a financial system geared to scarcity and a productive capability that is now threatening abundance?- at least in some things- and as a result the interests of the financial sector and the productive sector are now beginning to diverge?

If we accept for a moment the bankers claim that deflation is a very bad thing then an increasingly productive technology must represent a threat to our well being because it will lead to lower prices for goods and services, which is deflation.

But wait a moment- are we not also told that lower prices, higher productivity and more efficiency are good things? How do we square this circle?

It seems to me that the current banking model is based on the notion that productivity is like a saturn five rocket, a thing of vast intertia that requires a huge amount of borowed captial to launch and keep in the air. As a result the 'payload' of that rocket is small, it produces realtively little and prices are high. In this model the bankers do well as they supply the fuel in terms of debt.

But what happens when a better rocket is invented- a more efficient and prodcutive rocket- here the payload is greater and the need for debt lower- and resulting prices are lower. In this scenario the bankers do less well as less debt is incurred.

Ok- I'm not sure this rocket thing is working what I think I'm trying to get at here is the notion that the current system is based on the idea that production is hard, expensive and as a result prices are high- essentially a scarcity model.

What improving technology does is the opposite, here production is less hard, less expensive and as a result prices are lower- more of an abundance model.

So one way to view the opposition of the banks to deflation-and by logical extension- improved productivity itself- is to understand that they seek to maintain scarcity in the face of increasing abundance- because they are essentially creatures of scarcity, to the degree that in an environment of scarcity their role as providers of capital in the form of borrowed money is more important and secure.

So in a very real sense the well being of the bankers is not really aligned with the well being of society as a whole. Most of us would choose abundance over scarcity, low prices over high prices- but this is not the kind of environment in which a money lender can thrive. In a world of cheaply available abundant goods and services the need for debt is reduced- and if you are a monger of debt this can not be a good thing.

[Bloo Loo]

At least among the naive Austrian-isms is something meaningful. You cannot convince them and this is why it is wrong to reject the entire work of Keynes. Controlling the money supply is all a psychological trick, but it works effectively. The naive Austrian view is that somehow people's behaviour is not altered by the amount of money in circulation. Stopping a deflationary spiral is something that a government can do.

100% wrong...Austrian view is all about people and the way they react.

People have however been trained by the Semi Keynesian policies the Government and Posh talking heads. I say semi keynesian, because Keyenes isnt that far from Austrian at the end of the day...at least in the idea of saving in the boom and spending in the bust..

If people had been living the real value world for the past 100 years with deflation, then they wouldnt think twice about it...they have been living in the other world of free added value for the last 4 generations....

Odd then that there is such an interest in BTC.....or is that interest generated by the same free lunch that inflation offers....instant profit?