Saturday, January 24, 2009

Matthew Parris says: we were living beyond our means and must now reduce our expectations.

There's no new motor to drive the economy

The coming nonsense is that when this recession is over, countries such as Britain should seek and find our salvation in (in what will become a buzz phrase of 2009-10) a “new economic model”. Wrong. Actually we're just stuffed. We hit a tree. There is no replacement economic model for us to drive off in. We must bash out the dents, clear the broken glass, remove the bumper from the front wheel, and limp on as best we can. We should accommodate ourselves to that prospect.

Posted by wanderinman @ 12:17 PM (872 views)
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One thought on “Matthew Parris says: we were living beyond our means and must now reduce our expectations.

  • The objection to government-issued money has always been that it would be inflationary, but today some “reflating” of the economy could be a good thing. Just in the last year, more than $7 trillion in purchasing power has disappeared from the money supply, including wealth destruction in real estate, stocks, mutual fund shares, life insurance and pension fund reserves.6 Money is evaporating because old loans are defaulting and new loans are not being made to replace them.

    Fortunately, as Martin Wolf noted in the December 16 Financial Times, “Curing deflation is child’s play in a ‘fiat money’ – a man-made money – system.” The central banks just need to get money flowing into the economy again. Among other ways they could do this, says Wolf, is that “they might finance the government on any scale they think necessary.”7

    BORROWING FROM PETER TO PAY PAUL:
    THE WALL STREET PONZI SCHEME CALLED FRACTIONAL RESERVE BANKING
    Ellen Brown, December 29th, 2008
    http://www.webofdebt.com/articles/ponzi.php

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