Posted by: graemebird | January 28, 2009

Bank Bailouts Are Irrational

BROUGHT TO THE FRONT BECAUSE OF THAT COMPLETE CUNT CAMBRIA’S FAILURE TO RETRACT HIS LIES.

“It could work, CL…..” This is so annoying. This idiot Cambria after all this time. Asserting something that CANNOT work can work. And then talking gibber.

In terms of helping the real economy, bank bailouts which replace cash for ponzi-money at a high enough price NOT to be a transfer of wealth to the banks CAN “WORK”. 

But any bank bailout that doesn’t reduce debt and replace ponzi-money with cash CANNOT work. And any bank bailout that takes real wealth from main street and gives it to the financial sector CANNOT work. 

And this is because it is main street that is in trouble. And the banks that were bloated. The Americans particularly had maybe 20% of people involved in the finance industry when under sound monetary conditions they ought to have had 2 or 3%.

Milton Friedmans work on  the so-called “optimal supply of money” and general observations prior to that, established the idea that we need more bank services when there is higher monetary inflation. And that if we had stable growth deflation we would barely fucking need these assclowns at all. So the financial system was bloated, main street was arm-twisted into debt. And stealing off indebted mainstreat to re-bloat the financial sector therefore can NEVER work.

What can work is a program to reduce debt, replace ponzi-money with cash, and charge the banks like buggery for any emergency cash they need.

 

So it cannot “work” what this idiot Cambria is advocating. By its nature it can never work. Since it wasn’t the financial system that was ever starved of resources. Rather its the newly indebted main street that is.

There is a few things one has to get ones head around. 

1. The importance of maintaining SPENDING not LENDING. There is simply no compulsion for us to get into more debt if there are other ways for spending to be maintained.

2. The only spending that it is important to maintain is BUSINESS-TO-BUSINESS spending.  Its not the least bit important to maintain government spending, bank lending, consumer spending, or anything but business to business spending. This ought to be stabilised at whatever the previous high was.  Or thereabouts. 

3. The banks can all fall over and we just throw a party, so long as business-to-business spending is maintained.

4. But it is not possible to release enough cash to maintain business-to-business spending (with all the banks keeling over, or at least under stress) unless you as well institute a reserve asset ratio, to stop these guys pyramiding on the new cash.

5. Its not plausible that we could have a competitive banking system without a reserve asset ratio of at least 40%.  A recession is a good time to move in this direction. This implies a lot more cash. But very little more money-supply.

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Responses

  1. Why don’t people just want to LEARN stuff. You know. Just find stuff out and learn it. Because if you keep learning stuff eventually you know more than most people about a lot of gear. And that way you don’t need to fake it like that bootnigger Cambria.

  2. “http://larvatusprodeo.net/2009/01/27/corporatism-redux/#more-783

    There’s a bit of chat around the shop today that one of the mooted new stimulus measures the Rudd government might undertake – bringing forward tax cuts and LITO changes for low income earners – could be a way of counterbalancing an anticipated small increase in the minimum wage from the Fair Pay Commission. The suggestion seems to have arisen from the eminently well-connected Heather Ridout of the Australian Industry Group.”

    This is one of the first things proposed that is even in the right direction. Its in the right direction but look how pissweak it is. What is someone on minimum wage doing having to pay income tax? I mean who do these fucking monstrous leftists think they are kidding with that irrational combo.

    No more tax for anyone on minimum wage. The threshold must be higher than the minimum wage obviously. And the proposal is pissweak. Bring the minimum wage down and the take-home pay up. Close down a dozen departments to pay for it and close down a dozen more gratuitously.

  3. what’s this constant use of the n word?
    you hate blacks now?

  4. There aint no black niggers. And there hasn’t been for a very long time. You know that. I wouldn’t use the word against anyone who even had a good tan. One doesn’t want to be misunderstood. I probably wouldn’t use it to describe Cambria if he were Olive-skinned eye-tie.

  5. THE CAUSE OF THE FINANCIAL CRISIS WAS THE SAME CAUSE AS ITS ALWAYS BEEN IN EVERY SUCH CRISIS WITHOUT EXCEPTION FOR 1000 YEARS.

    THE CAUSE IS FRACTIONAL RESERVE BANKING. OR BANK-CASH-PYRAMIDING. OR THE CREATION OF BANK PONZI-MONEY. THIS IS ALWAYS AND EVERYWHERE THE CONTEXT IN WHICH THESE BANKING CRISES OCCUR.

    THE SHEER MAGNITUDE OF THE RATIO OF MONEY-SUPPLY OVER CASH, INSURES THAT THE SITUATION IS UNSTABLE AND IS ONLY BEING KEPT AFLOAT BY GOVERNMENT BACKING AND SUBSIDY.

    THE SUB-PRIME REGULATIONS WERE NOT HELPFUL BUT ULTIMATELY IRRELEVANT TO THE PROBLEM SINCE THOSE LOANS WOULD NOT HAVE HAPPENED WITH 100% BACKING NO MATTER WHAT.

  6. THERE ARE SOME GOOD SPECULATIONS HERE ABOUT PRODUCTIVITY, THE COST OF WAR AND SO FORTH. THE TIMING OF THE RECESSION IS INDEED AFFECTED BY SUCH PROBLEMS SINCE THEY REFLECT WHEN IT IS THAT MAIN STREET STARTS FINDING IT HARD TO PAY ITS DEBTS. WHEN PRODUCTIVITY FALLS THEN THE CENTRAL BANK, STUPIDLY FOCUSING ON CONSUMER PRICES, HAS TO RESTRAIN MONETARY GROWTH SINCE CONSUMER PRICE RISES START SHOWING UP…. AND IT IS THIS SLOWING OF MONETARY GROWTH MORE THAN ANYTHING THAT WILL SET THE TIMING OF THE CRASH.

    I CANNOT KEEP YOUR COMMENT THERE SINCE IT CONTAINS THE LYING PRESUMPTION THAT THE ADVENT OF RECESSIONS ISN’T ALL TO DO WITH FRACTIONAL RESERVE. THE TIMING OF RECESSIONS MAY INVOLVE OTHER THINGS. BUT ULTIMATELY THESE THINGS ARE NOT IMPORTANT INDEPENDENT OF FRACTIONAL RESERVE.


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