The Assumptions on which our System Rests

Here’s something to try get your head over. There’s three assumptions that the best part of the developed world depends on for its current progression.

First of all, cheap energy. I heard Max Keiser argue this week that capitalism depends on cheap energy (Keiser Report, E490). That is almost a profound statement, and is certainly true. In replacing human labour with machinery held in the hands of the rich few, those machines are useless without energy to power them. Cheap energy is the only viable alternative to skilled man power.

Next up: constant inflation. Today’s society is fiscally powered by a giant borrowing machine. It has no way of paying itself back, other than to devalue the debt through low interest rates and printing money (quantitative easing), which produces inflation. As long as investors are profiting out of this, it could go on forever, but part of that profit depends on the given countries’ currency’s ability to deliver goods, wherein constant inflation becomes linked to cheap energy. If a country and its currency cannot produce goods, then no level of inflation can sustain a nations needs. Your currency becomes worthless, and you end up with no buying power and potentially a hyper-inflationary crisis.

The final assumption is a common enemy. We’ve always had one. Everybody’s always had one. It seems that our current military hobby (the middle east) is about to expire, and the UN are gunning to take on Assad for the next decade. We’ve made ourselves some enemies closer to home as well. Part of society is carefully considering where to place their votes during the next election with regards to Eastern European open-door immigration. Having these enemies causes us to put great trust in our bourgeoisie government, which they love because it keeps them safe and minted for years to come.

They tell us we’re in the worst recession since the great depression of the 1930’s. Yet it’s all statistical. I don’t see people starving, cars still ride the roads, and there’s even positive newsflashes here and there about growth. So why aren’t all the doomsday theories coming to pass?

Earthquakes caused by fracking? Photo credit: martinluff via flickr

It’s because these three assumptions are still being met. World governments are desperately sucking out what energy they can get, hence the stir over fracking. Interest rates are at all time lows, and many financial experts warn that inflation is far higher than government figures (I mean, look at the price of potato’s!) And yeah, Syria.

But the cost’s of fracking now show in Texas, and the energy won’t last forever anyway. As capitalism dies under its own weight, clever inflationary tricks will become nothing. And notably, this week in Britain, the motion to begin air strikes on Syria were defeated in the house of commons, signalling that we’re no longer convinced by any passing tale as justification for a war.

The concept of capitalism is fundamentally flawed, and its dependencies cannot last.

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The Deal with Wonga

This is the deal with Wonga. They are a pay day lender. That makes PAY DAY a key word. They are a service to get you through a few days of desperation, at a premium price.

I just heard on the news of a lady who borrowed £275 to buy a new cooker, and ended with £10,000 of debt. Clearly she didn’t understand how Wonga works.

It won't sting if used properly

It won’t sting if used properly

These are the figures: Borrowing £275 + Interest & fees £44.77  = Total to repay £319.77
(see picture for more details)

If you treat Wonga like an ordinary loan then yes, you will get into trouble.

I recently read Planet Ponzi, a fantastic book by Mitch Feierstein about how the financial markets got as they are. His top advice for anyone buying into financial markets is only to invest in things that you fully understand the mechanics of. When you are buying a cooker on a loan, it’s easy to think that that might not apply to you as a consumer. But it does in every way. The cooker is what you invest in. The dividends of the investment are being able to feed your family in the latent time before your next pay check. If you don’t understand that this is an extremely short term loan, then you are foolish to invest in it.

Now to the Church of England. If the social problem at hand is down to borrowing, why is the church teaching people that the solution is borrowing at a more affordable rate, and then providing the service? Loans are meant to be for absolutely desperate situations. If you cant afford items you desperately need, get a sensible long term loan with low interest rates. If you only need to wait till next Friday, live with it.

The solution is education. Teach people how financial systems work. Teach people to be self reliant. Teach them to save for a rainy day. Teach them to constantly strive to improve and earn more. Teach them that credit is for exceptional circumstances, like a house or education.

How I Think Economics is Being Used as an Acceptable Dictatorship

This post is written in response to ‘Unlimited Freedom: A Falsehood’, by Joel Sparks.

Here is a principle that will split people down the middle. I recently read the article by Mr Sparks that argues the hypocrisy of the american people, fighting for their freedom to bear arms, even though the freedom of life should supersede the impacts usually blamed on the second amendment. However, freedom is an emotionally charged and frequently misused construct. In fact, in the United States’ declaration of independence, the right referred to is not that of freedom, but of life, liberty and the pursuit of happiness. I maintain, that the second amendment is more important today than it ever was. The second amendment was not put in place so everybody could carry a weapon down town. It was contained in the constitution as a protection from tyranny.

A tyrant is a political leader who cruel and oppressive, and who has usurped constitution and gained undemocratic control of a sovereignty. Can you see any ways that is happening today?

What about the politicians using money manipulations to rob from the people to sustain their borrowing, which despite all the terrible consequences looming down the line, keeps them in power? That could be done Cyprus style (simple theft), or it could be done the British way (zero percent interest rates, quantitative easing, inflation, value of money falls).

What about the anti competitive acts, now sponsored by the US government in the on line and social media industries. The back door government pass that Facebook, Twitter, Google, Apple and others have allowed, as well as the surveillance of other countries’ phone’s and internet use. These supposed anti-terror measures, becoming enshrined in law could also be easily abused to steal ideas and control peoples’ day to day lives.

Such tyranny showed itself unquestionably in the 1950’s, with the McCarthy communist trials. People were pressured to confess acts never committed, and denial’s were manipulated to convince the prosecution of completely fictional communist involvement. Or there was the ‘executive order 6102’ of the 1930’s, in which the US government criminalised the hoarding of gold bullion, a time tested means to protect legitimate investors from economic woes.

What do you think, when you see banks bailed out with our money, not so economic activity can resume, but so balance sheets can be cushioned out a bit, while their own investment schemes can go on unharmed. All the money stays at the top while so called surf’s earn less money in real terms than they ever have. Or when you see intellectual property owners charging $20-50+ for a single journal article. With their wealth, lobbying and government involvement, we become increasingly powerless to stop it.

What about the manipulations on the world gold price today? That is, the strategic selling of paper gold (ie. gold that doesn’t actually exist), which hides wide distrust in the world currencies. Currency, a measure of wealth with (ironically) no gold standard is constructed by the government. As governments fight against gold, silver and bitcoin, by trying to force all activity to be mediated in fiat currency, what limit will they stop at to hold control of your liberties?

And what is the effect of it all? It means we live in a world where we think only graduate jobs have worth, and where the people who create wealth get increasingly less of it. This restricts opportunity for self actualisation through the ability to provide a balanced life for oneself and family. Recreation is increasingly restricted. How many leisure activities, particularly those that pump adrenaline or stretch you, now have so many strings attached to them that it is hard for people to pursue them at a fair price. You simply can’t go road tripping, boating, mountaineering or caving, unless you have real money. A nation of vegetables now exists, glued to Facebook and sky TV. Is that tyranny enough for you? Do you call that life, liberty and the pursuit of happiness?

Photo Credit: tvtropes.org

Photo Credit: tvtropes.org

The case for the right to life has made a lot of people a lot of money. John Lennon even sings “Imagine there’s … Nothing to kill or die for’. Well actually, with the decreased liberty through financial and legislative control (tyranny), we’re approaching that world now. And it’s boring. Risk’s and experiences that make us feel alive are being taken away. The second amendment is a right that protects people from this theft of people’s liberty, with intrinsic worth. A genuinely upset american population, all armed, would not be one that I would fancy taking on. Europe on the other hand now sits helpless.

The declaration of dependence fights not for freedom, but for ‘life, liberty and the pursuit of happiness’. Unless accompanied by the other two, life is pretty purposeless.

The Problem with Pensions

I got a letter from one of my employers last week letting my know that in September, should my wage cross a certain boundary, I would be automatically enrolled in their pension scheme. What a fantastic idea. In case you hadn’t heard, the government has run out of money, and since it can’t afford any more to maintain our ageing population, due to the stupid expenditures it has committed itself to, we have to cover ourselves.

Okay, nice idea. What’s wrong with that? It’s fair enough isn’t it? I know all the socialists will be up in arms just on the principle of it. But yeah, we earn our money, we invest it prudently in a pension scheme so we have something to live off once we retire.

So we’re now legally obliged to invest more money in the banks, which if I remember, are the same banks that have all just spent the last five years bordering insolvency due to frivolous investment. Right… So as the world treads into an ever deeper banking crisis, who is forced to deposit their money into insolvent banks? Us. You and me.

I always had a better idea to prepare for my retirement, and thanks to this new legislation, that now has a fresh hurdle. Rather than giving my money to some fat cat banker to invest, why can’t invest it myself? Why can’t I take the money I would have put into my pension my whole life long, and build up businesses, wisely chosen commodities or property, and live from the dividends that would produce. That would not only be industrious, a strength to the economy, and a very satisfying occupation for my final years, but it would support me better than any pension would.

But most people don’t want that. They don’t want to do the leg work to become self reliant. They want someone to make them a job, and give them a pension. Now that they’ve drawn so much from the government, they have to draw from their employers instead, but it’s just passing the bomb onto someone else. Ultimately all this money has to somehow come from the only part of the economy that produces wealth: the private sector. So unless some more people start making an effort again soon to produce real wealth, this system is going to collapse and fall.

Glass Half Full?

Image Credit: Mike Smith, Las Vegas Sun for USA Today

Image Credit: Mike Smith, Las Vegas Sun for USA Today

Why do I feel bad for what I believe?
I find that what seems instinctive others don’t conceive.
When I look around and see that people are oblivious,
To an oncoming catastrophe that’s going to be hideous!

They say my glass is only half full,
And that living my ideals makes life so dull.
Yet a part inside of me is shouting the line,
That if we carry on as we are, things are far from fine.

It’s nice going after the individual to be caring,
But saying the individual needs to care for themselves is so daring.
It plucks the emotions and makes you feel warm,
But destroys their independence in every form!

But just a little is okay, I hear them say,
That would be nice, to our fellow human beings?
Well the road to hell was always paved with good intentions, and in every previous generation of society if you didn’t work you didn’t eat. Nature took care of that.

But in today’s world we think we can beat natural laws,
With political union, written scrip and clause.
And no matter how we hide it, living on borrowed time cannot last,
Soon we’re going to find ourselves living back in our past.

by Christopher Barker

Cous Cous, Petrol And The Economy

Ainsley Harriot

Something that I’ve noticed recently, is that an astronomical amount of people are buying Ainsley Harriot branded products. Various soups, and Cous Cous, all with a contemprorary mug shot of the man himself which will make middle class women go weak at the knees. What bothers me is that everybody jumps up for it because looks to be something different, and therefore must be worth more money, and be very classy. After all, Ainsley Harriot is a tv chef, which means he must cook far better than we: the people, right?  And it’s the same with so called “Al fresco” dining. I’m sure somebody in favour of it will tell you that it’s been the standard term for years and years, but I, so far in my life have always known eating outside as exactly that: eating outside. But stick a fancy Italian name on it, and out come the wallets, everybody buys some new fancy wooden patio furnature to be rained on all summer. Boom! Like that…

Despite these reportedly difficult economic times, where money is in short supply, it still doesn’t seem too difficult to seperate people from their money. Which brings me on to petrol. As I see it, what’s been happerning for years now is that the public, (and the government for that matter) have gradually been lead to spend more and more money. Back when I was 8, we replaced our TV, which had been handed down through the family over 20 years. Since it, we’ve had four different televisions. Then there’s all the equipment that breaks after 13 months, and subscriptions to come on top of that. A trip to the cinema costs you a tenner, a satisfactory lengthed Subway sandwitch costs a fiver, and if you’re going to travel anywhere, weather it by in your own car, or by bus, you will also be paying several pounds for the combustion of some type of fuel.

There’s uproar that energy is going up in price by about 20%, and every few weeks, another penny appears on the prices at the petrol station, yet what are people really loosing out on? Seriously, if you stop buying Ainsley Harriot Cous Cous, you can still afford 175 litres of petrol, should the price go up by one penny a litre. The oil companies are trying to squeeze us just like Ainsley is.

So what’s my gripe here? Simple: I don’t buy Ainsley Harriot’s Cous Cous, I have other goals in life, than to live, fooled into thinking that I eat the diet of a celebrity chef. I’m trying to save money for University, and other events in the future, and every penny Mr Shell adds to the price of his wares is a penny less that I can use for the road ahead. They say that price is determined by what people are prepared to pay, which is absolutely true, and unfortunately right now people are prepared to take the easy road.

If I’m not careful this could turn in to a sensational rant about lazyness, greed and socialism, and for that reason I’m going to stop there. But next time you’re in the Supermarket, and Mr Harriots smile tries to tempt you, just think: thats a quid worth being in your life savings, and not his Range Rover.