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Granddad, Tell How Capitalism Committed Suicide:

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http://www.bloomberg.com/apps/news?pid=206...id=a11PeBn6TV8A

July 10 (Bloomberg) -- ``Granddad Benny, is it true that capitalism committed suicide?''

Granddad looked up from the fire he was stoking with bundles of 2006 and 2007 vintage mortgage-backed bonds. ``In a way, Joel, yes. In developed countries, people got too greedy, especially bankers, and everyone borrowed too much. In less developed countries, people racing to improve their living standards reawakened the slumbering inflation monster.''

Joel put down the stick he was using to scratch the dirt. ``Why did the Gigantic Global Bubble Burst of 2008 catch people unawares? Weren't there any warning signs, Granddad?''

``With hindsight, Joel, water should have set alarm bells ringing. Before the Giglobubu, wealthy people paid $15 per liter for Cape Grim bottled water from Tasmania, at a time when the Asian Development Bank estimated that 700 million people in Asia lacked access to clean water. Investment banks even started to invent securities betting that water shortages would arise. Even so, when the Water Wars started, the world wasn't prepared.

``Cyprus started buying water from its neighbor, Greece, because its dams were down to 7.5 percent of capacity and its desalination plants couldn't meet demand. Spain drew up plans to build a pipeline to funnel water from the Ebro River to Barcelona, the nation's second-largest city, amid the worst drought in half a century.''

Smell the Cappuccino

``Did people collect rainwater for drinking, like we do, Granddad?'' Joel asked. ``I've noticed how grumpy you get if there's not enough for you to make coffee in the morning.''

``Some did, Joel. Rich people, though, bought their coffee from shops, paying stupid money for buckets of flavored water with a dash of milk. It took Starbucks Corp. just four years to double in size, so when the company said in 2008 it planned to shut 600 U.S. cafes and chop 12,000 jobs, 7 percent of its global workforce, some clever people started to worry.

``Speaking of milk, that was another clue. All across China, millions of people earned enough to buy refrigerators for the first time. Then they rushed to the shops, buying pints of milk to put in their shiny new fridges. So energy prices surged to keep the fridges humming, and milk prices went through the roof along with other foodstuffs. Inflation climbed out of its coffin and started to terrorize the bond market all over again.''

Independent, Unelected

``What did the central banks do, Granddad? Weren't they the ones in charge of the economy?''

``Well, the most important parts of the global economy were certainly ruled by independent, inflation-targeting central banks. While their system worked fine in good times, it turned out to be a disaster when the going got tough. Governments were quick to grab back the reins of monetary policy from their unelected proxies, but with inflation spiraling higher and growth slumping, they only made things worse.''

``Did inflation kill capitalism, Granddad?''

``Capitalism sowed the seeds of its own demise because the benefits of a decade-long boom accrued to capital, with nothing flowing to labor. Telling workers who hadn't had a decent pay raise for years to tighten their belts once the good times ended proved disastrous.

``People started to realize that just because communism had lost, that didn't mean capitalism had won. Cracks started to appear. In New Zealand, the government nationalized the country's rail and ferry services, deciding it could do a better job of running the transport network than private industry.

Unraveling the Euro

``Then the euro, one of capitalism's crowning achievements, began to unravel. After Ireland rejected the Lisbon treaty in three consecutive referendums, its fellow single-currency members decided to kick the country out of the project. Once Germany and France realized how easy it was to thin the ranks back to the core gang of euro countries that they'd wanted in the first place, they started finding excuses to bar more nations, starting with Italy.

``With banks and mortgage lenders going bust faster than the government could arrange bailouts, every nut job with an Internet connection started demanding a return to something called the gold standard. When a bunch of academics joined in by denouncing fiat currencies, the general public lost all trust in money.''

Continues at the link, good article.

I can see the lost trust in paper money coming, the sheeple will get educated about this at some point and then the questions will start coming.

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That article is a TOTAL embarassment to humanity.

Socialist claptrap from beginning to end.

The Euro, one of capitalisms finest achievements? Give me a break, nothing could be more ante capitalist. Fiat money and central banks are straight out of the communist manifesto.

"Capitalism sowed the seeds of its own demise because the benefits of a decade-long boom accrued to capital, with nothing flowing to labor" - JESUS, this guy is so brain washed.

And then finally (rather clumsily) he makes his strike...

"...every nut job with an Internet connection started demanding a return to something called the gold standard."

How desperate are they!

Edited by Far Out Bear

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So all is well with the capitalist model then?

We have nothing to worry about?

Banks not about to implode then?

If you think what is going on now is capitalism, then you are mistaken. Capitalism was over turned ages ago. Undermined by government and paper money. The crises occuring now are the consequences of socialism, not of capitalism.

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it just occured to me, perhaps the guy is taking the p1ss. he has presented it as a fairy story - which is one way of describing that article. blatant communist propaganda is another.

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So it's socialists running the banks chasing profit?

It's socialists who've took control of privatised industry and are now making huge profits in the energy companies at our expense?

It's socialists in charge of private equity who've took out huge loans sometimes as high as 9 or 10 times earnings to buy companies and then sell them back to the market for a profits.

It was the socialist that sold the idea to govt that we should all have private pensions as the free market can deliver better returns for your pension than the govt.

Is it the socialist who bought into buy to let to make a quick profit and push house price inflation up?

And it's the socialist who's turned capitalism on it's head to purely focus on the pursuit of profit above all considerations?

:lol::lol::lol:

I think your right it's all socialisms fault. If only they let the capitalist chase profit all would be well.

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... Capitalism was over turned ages ago. Undermined by government and paper money.

What alternative would you suggest?

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Guest Steve Cook
If you think what is going on now is capitalism, then you are mistaken. Capitalism was over turned ages ago. Undermined by government and paper money. The crises occuring now are the consequences of socialism, not of capitalism.

"Captialism" is just the new flavour of bullsh*t spewed out by the current elite. At other times, it is other flavours.

However, your "faith" in "true" capitalism is touching....

Because, of course, you're not brainwashed yourself, at all, are you?..... ;)

Edited by Steve Cook

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The only nation to be nearly truly laissez faire was the UK. It ended in disaster and was found not to work.

I would suggest reading some Dickens.

Read about the great stink and cholera in London. Laissez faire didn't want to pay for the solution.

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Guest Steve Cook
The only nation to be nearly truly laissez faire was the UK. It ended in disaster and was found not to work.

I would suggest reading some Dickens.

Read about the great stink and cholera in London. Laissez faire didn't want to pay for the solution.

yep

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Guest Steve Cook

Capitalism aint the problem. Nor is socialism. Or any other "ism" for that matter.

We are are the problem. Humans, that is...

Edited by Steve Cook

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You all appear to be of the opinion that goods and services grow on trees. Without private property and private profit, no work ever gets done, there is no incentive. That is why not much work gets done in our country, because the government appropriates almost everything we make - all in a good cause, naturally.

Capitalism didn't fail. Capitalism was rejected. You have your way, so you should be happy...

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Guest Steve Cook
You all appear to be of the opinion that goods and services grow on trees. Without private property and private profit, no work ever gets done, there is no incentive. That is why not much work gets done in our country, because the government appropriates almost everything we make - all in a good cause, naturally.

Capitalism didn't fail. Capitalism was rejected. You have your way, so you should be happy...

Its nice to have it all sown up and certain in your head isn't it....

That's the nice thing about ideologies

I can certainly see the attraction

Edited by Steve Cook

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Capitalism aint the problem. Nor is socialism. Or any other "ism" for that matter.

We are are the problem. Humans, that is...

That kinda goes without saying. That is rather like saying the outcome of a game of chess is white wins, black wins or the game is drawn. It is the details we are here to talk about.

So, with that in mind, let us ask which system enables humans to live the most prosperously. If you look at the achievements of the west, it is pretty obvious that competitive capitalism is best. why did we reject it, after all it did for us?

Edited by Far Out Bear

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Guest Steve Cook
So it's those pesky humans fault of not reading the manual correctly. Perhaps we should get rid of them that would probably solve most of the worlds problems at stroke :)

Well, yes.....

But, then, there would be no-one there to appreciate it, would there......

Bit of a paradox really

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Guest Steve Cook
That kinda goes without saying. That is rather like saying the outcome of a game of chess is white wins, black wins or the game is drawn. It is the details we are here to talk about.

So, with that in mind, let us ask which system enables humans to live the most prosperously. If you look at the achievements of the west, it is pretty obvious that competitive capitalism is best. why did we reject it, after all it did for us?

Why is it pretty obvious?

I would suggest that energy is what did it all for us....by the way

Edited by Steve Cook

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Guest Steve Cook
Well, try scratching a living from the dirt once you remove the last few centuries of accumulated captial, then perhaps you will see the difference.

Nice rhetoric. Perhaps you might like to expand a little?

Edited by Steve Cook

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Nice rhetoric. Perhaps you might like to expand a little?:

To understand capitalism, you need to understand a few terms.

Capital (goods) high order goods and services, factors of production.

Savings The difference between what is produced and what is consumed.

Competitve Captialism is the process whereby savings are created and invested to increase the total stock of captial goods and thus increase the quantity and quality of goods and services produced.

Socialism renders this process impossible because investment is impossible without free capital markets and profit motive. The result is economic stagnation first, recession second and later collapse (soviet union, and next america if she doesn't mend her ways)

Edited by Far Out Bear

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Nice rhetoric. Perhaps you might like to expand a little?:

Dirt scratching is a pretty good metaphor. Capitalism is, etymologically, rule by money. Everything is done for money. However, 'money' is an intangible concept. The amount of 'money' it takes to buy a burger in, say, Bombay, is vastly different to what it takes to buy one in Tokyo. So what we're really looking at is levels relative to individual societies - enough capital (which is the labour of others bartered into paper or metal) in order to consume goods and services pertaining to a comfortable and enriching life. Unfortunately, this is a tautology, and shifts Capital from the end-ruler position to a means to an end. No-one wants to hoard paper and metal for its own ends (except the violently ill and possibly Scrooge McDuck)

What we are actually pursuing is Eleutherism - the pursuit of happiness and contentment. Many individuals equate that with the stability and opportunities that securing "The labour of others" brings. However, that "labour of others" can only be elevated above their own "labour to others" by controlling supply. Essentially, one person's labour is considered to be worth more than another's through relatively arbitrary methods, and only those who are convincing or even deceptive will be able to persuade another of thus.

So I posit that Capitalism is not rule by money, and as it has as it's raison d'etre the aggrandisement of the individual and distortion of the importance of one person's skills over another at the expense of others it is instead rule by Coercion, Extortion, Blackmail and - in the worst cases Deception.

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Oh dear, that is as scary as ******.

People are going to blame capitalism for the failures of socialism. :angry:

Here is capitalism in a nutshell -

You trade with others peacefully, voluntarily and with no coercion involved. You save a portion of today's product to invest in new equipment so that tomorrow you can make even more goods or make the same amount of goods using less resources, energy or time. You are free to accept or reject any offer that is made to you and other people are also able to reject any offer that you make to them in turn. No one owes anyone else anything unless they specifically agree and contract for it. This occurs in all markets.

Socialiam is -

Thinking that empathy with the plight of less fortunate humans entitles you to use violence to acquire resources to give to them in order to save them from their circumstances.

Thinking that a few elite people with specialist knowledge can make better decisions for others than those others can themselves.

Thinking that laws, rules and regulations can take the place of self interest in motivating an economy.

Thinking that people who have never even met owe each other time, energy, money, respect and even in some mad cases love.

Thinking that mythical enitities such as the state can solve problems by waving guns around and stealing from the productive.

----------------------------------------------

Socialism kills capitalism. Notice that these are basics of human action and there are only humans acting. There is no way to operate a socialist model that will not utterly ruin production. None. This is simply because the rules of capitalism are inbuilt to the structure of reality and have to be obeyed in order to get improvements in production. Anything which deters people from working, from saving ther capital no matter what reason is counterproductive to it's own goal. People who call themselves government might get a get out of jail free card, but there is no get out of reality free card.

Capital in capitalism is real world goods saved from last times production- it is NOT money, by the by.

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Dirt scratching is a pretty good metaphor. Capitalism is, etymologically, rule by money. Everything is done for money. However, 'money' is an intangible concept. The amount of 'money' it takes to buy a burger in, say, Bombay, is vastly different to what it takes to buy one in Tokyo. So what we're really looking at is levels relative to individual societies - enough capital (which is the labour of others bartered into paper or metal) in order to consume goods and services pertaining to a comfortable and enriching life. Unfortunately, this is a tautology, and shifts Capital from the end-ruler position to a means to an end. No-one wants to hoard paper and metal for its own ends (except the violently ill and possibly Scrooge McDuck)

What we are actually pursuing is Eleutherism - the pursuit of happiness and contentment. Many individuals equate that with the stability and opportunities that securing "The labour of others" brings. However, that "labour of others" can only be elevated above their own "labour to others" by controlling supply. Essentially, one person's labour is considered to be worth more than another's through relatively arbitrary methods, and only those who are convincing or even deceptive will be able to persuade another of thus.

So I posit that Capitalism is not rule by money, and as it has as it's raison d'etre the aggrandisement of the individual and distortion of the importance of one person's skills over another at the expense of others it is instead rule by Coercion, Extortion, Blackmail and - in the worst cases Deception.

Don't go all philosophic on me.

Money is simply a tool, to concentrate on money is missing the point.

It is all about capital goods, savings and investment. This is what competitive capitalism is all about. People doing things for each other, because there is obvious gain in doing so. What can be wrong with that?

Edited by Far Out Bear

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Guest Steve Cook
Dirt scratching is a pretty good metaphor. Capitalism is, etymologically, rule by money. Everything is done for money. However, 'money' is an intangible concept. The amount of 'money' it takes to buy a burger in, say, Bombay, is vastly different to what it takes to buy one in Tokyo. So what we're really looking at is levels relative to individual societies - enough capital (which is the labour of others bartered into paper or metal) in order to consume goods and services pertaining to a comfortable and enriching life. Unfortunately, this is a tautology, and shifts Capital from the end-ruler position to a means to an end. No-one wants to hoard paper and metal for its own ends (except the violently ill and possibly Scrooge McDuck)

What we are actually pursuing is Eleutherism - the pursuit of happiness and contentment. Many individuals equate that with the stability and opportunities that securing "The labour of others" brings. However, that "labour of others" can only be elevated above their own "labour to others" by controlling supply. Essentially, one person's labour is considered to be worth more than another's through relatively arbitrary methods, and only those who are convincing or even deceptive will be able to persuade another of thus.

So I posit that Capitalism is not rule by money, and as it has as it's raison d'etre the aggrandisement of the individual and distortion of the importance of one person's skills over another at the expense of others it is instead rule by Coercion, Extortion, Blackmail and - in the worst cases Deception.

True. But I see these qualites as being indicative of humans per se, more than they are indicatative of any particular ideology.

As soon as any community reaches a size where there is no longer a direct and transparent economic relationship between the participants in that community, deception and all of the other ultimately destructive social traits, become pretty much inevitable.

In other words, human civilisation has, contained within it, the seeds of its own destruction

Edited by Steve Cook

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  • 396 Brexit, House prices and Summer 2020

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      • down 5% +
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      • up 5%



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