Posted by: graemebird | January 29, 2009

45 Per Cent Collapse Rate/Time To Wake Up To Gross Domestic Revenue.

“WORLD trade collapsed by nearly 45 per cent in annual terms in the final three months of last year, according to new International Monetary Fund figures that expose the staggering depth of the global financial crisis.”

Contrast this to comparisons of  GDP, both nominal and real. What countries do you know had their nominal GDP fall in that last quarter? Or fall at anything close to that rate? So what is the deal? (you should be thinking). How can nominal GDP still be growing and world trade falling off a cliff?

And in fact most countries will be showing that their REAL GDP has barely fallen AT ALL!! during that time. One or two per cent in many cases I would suspect. What does it all mean? Do we need to be getting powerfully more productive every quarter to stop international trade imploding? Surely not!!!  Why would not international trade fall and rise in line with internal trade?

Well it does. It must do. So what is the answer?

The answer is that our economists are irresponsible triangulaters, beholden to blood-sucker-central, and thats the better ones. The less good ones are lunatics.

But thats the sociological answer. The technical-economics answer is the following…. International trade is calculated by measuring SPENDING ON PRODUCER GOODS as well as spending on consumer goods.  That is to say international trade doesn’t net out business-to-business spending. (The netting out, when it comes to calculating GDP, is done when imports are minused from exports). Whereas the rest of the calculation of Gross Domestic Product  DOES!!!  net out business-to-business spending.  What I’m informally calling business-to-business spending is something close to what George Reisman calls “PRODUCTIVE EXPENDITURE” and is close to what elsewhere is described as “GROSS INVESTMENT”.

The free-fall of the global international trade in the final quarter of last year means that productive expenditure worldwide collapsed during that time. Productive expenditure ON AVERAGE was collapsing in the final quarter of last year. Taking the world economy as a single economy that is to say, the last quarter of last year was when the global economy truly fell into depression. Whereas estimates of GDP will give us a different date. I can quite confidently infer this. Since there was no fully developed move towards protectionism this is the only thing that can explain what the IMF is telling us.  Global trade not being credibly disaggregated from internal trade during that time. 

In the case of Australia taken alone: Our own economy surely started falling to pieces in the first quarter of last year. When our money supply started tanking. Thats when productive-expenditure will have tanked. But I don’t know for sure. Because I cannot get hold of the Reisman Gross-Domestic-Revenue and Productive-Expenditure FIGURES. Why can I not get hold of these figures? Because no-one compiles them. Why does no-one compile them?

There is one reason and one reason only for this. And its because our economists are a bunch of piss-weak, triangulating, snobbish, mean-spirited, nihilistic jerks. And thats the good ones. The others are lunatics. 

Now why don’t you all do the right thing, just admit that George Reisman is right, get it together to promote this sort of analysis, take the inevitable attempted abuse and persecution from the left on the chin, prepare to fight back in advance, give all the credit to Reisman that he is due, and do the right thing for your country, adopted or otherwise.

You see its PRODUCER GOODS SPENDING that fractional reserve fiat causes to  bounce all over the place. Not GDP. Its business conditions that fractional fiat wrecks, not consumer goods spending……..

((((((( 1. which only tanks after the damage is done 2.   Actually it is falling consumer spending that is part of the healing process.  But in their dumbass way our economists have taught everyone to think that the tanking consumer spending is the bad thing and the cause of the problem. 3. Since I’m always criticising Kirchner, I must point out that he kind of halfway recognised this point on a TV interview not long ago. He was saying that savings are good in this recession. His justification wasn’t all there though. But he said that savings meant that the banks could lend more to business. Not strong enough though. Not sure enough of his footing to cut the opposition side to pieces. It comes across as one mans dubious opionion whereas it ought to be a  total attack on Keynesian lunacy.)))))

……Part of the reason why our more nihilistic and piss-weak economists don’t feel the need to get it together about how to deal with recessions,  is that they don’t feel the pain. So many of them are on the stolen-money-dime and its not a visceral thing with them when they are hurting AND THE KEYNESIANS AND TAXEATERS RESPOND BY CRANKING UP THE PARASITISM!!!!!!!

Sinclair. Being mildly on the right side of things is not good enough. Its not good enough to look down on the Keynesians in a fit of pride at being better then them. A cockroach is better than them.  Its no great acheivement.  Great radio performances, but its time to get this issue right in your own mind and then go to war against the orthodoxy.  Sutchbury has been right earlier and more often then anybody else in the mainstream newspapers,  but its never good enough.Because you are never attacking Keynesian root-and-branch. Just the excessive manifestations of same. You have to learn the new stuff.  You too Henry. Being the best columnist outside of Brookesnews is not good enough. You have to go that extra mile and turn this thing around.

Because a recession requires the cutting of all expenditures that aren’t business-to-business, the replacing of ponzi-money with cash-money, the maintenance of spending-not-lending, (and STRICTLY ONLY BUSINESS-TO-BUSINESS SPENDING AT THAT).

And so there is no room NO ROOM!!!!!!!!! for resources to be drained off into more of the same parastism that caused the problem in the first place. Or for some feeble mock-recovery to be manipulated by the creation of  a yet even greater volumes of the same ponzi-lending that destabilzed business conditions in the first place.



  1. “Boris, the problem is that, deep down, even the Arab “accommodationists”, who are probably a minority, wish to wipe Israel off the map. I have literally never met a single Muslim or Arab who did not want to see Israel destroyed, through violence or coercive “diplomacy” a la South Africa. There might be one or two around the place, but it’s too rare to qualify as a phenomenon. So yes, negotiations are a waste of time.”

    Fisk I know one and I ran into him the other day. I cannot tell you how I got to know this fellow and thats part of the problem. He is an older fellow and has some real wisdom. But he would talk to me differently then he would talk to people in Auburn or Lakemba.

    Anyhow for just about the first time I remember he was criticising Israel. But it wasn’t mean-spirited in the slightest. It was well-meaning criticism in that he reckons he understood that they had to invade but that they buggered it up anyway. It was like my own attitude…. I wish you well but you screwed it up sort of thing.

    He doesn’t know nothing about me as a blogger. More as a fellow to drop by over at such and such suburb to catch up with people and have a couple of beers. Astonishingly he took almost the self-same attitude that I had been writing about except this was after rather than before the main action in Gaza was finally called off.

    Anyhow he friendly-sadly said that he thinks they messed up. Because they wreck everything and then they don’t kill hardly any of the Hamas leadership. I was totally dumbfounded. Since I insisted to Jason Soon that since they had (inadvertently…. ((((((but callously or not??? I reserve judgement without knowledge of military specifics)))))))) ….. since they had inadvertently killed all these kids and civilians with this latest military action, that those kids will have died in vain if they don’t go in their and slaughter at least half of the top leadership.

    Anyway what happened???? They call it off without doing so!!!!! Oh the (in)humanity!! Why? Well I’ll hazard a guess in a moment, but in the old days it would always come down to pressure from Washington, and in the older days it would come down to pressure from Washington on account of nuclear blackmail from Moscow.

    The peace which this action will lead to will be a thing with very short legs, and worse still, even shorter legs as a proportion of the pain they have inflicted.

    I feel for these people and I am on their side. But the fact is that the Israeli Government is still a government and we must recognise that they will often fuck up when they take action, no matter how overdue or valid that action is.

    Why didn’t they kill the leadership? Or half of the top 500 (lets say)?

    Well it was a daydream from the start I suppose. It was out of the question. And isn’t it the case that government bludgers worldwide have the zeitgeist to always look out for eachother in preference to the people they ought be acting as agent too?

    But even adrift from such broad Hoppean thinking………..

    ….I don’t think your average Israeli conscript is the legendary commando that he used to appear to be. This is just a suspicion. I don’t think they have what it takes anymore speaking on average. Are they all Mookie Betsers and younger Bibi Netenyahu’s? I don’t know? I don’t think they have kept up. Have they got the best gear?

    I reckon our guys are still the tops. They drop our guys into East Timor when they are hacking people to pieces in a frenzy of violence, and any failure on our part could lead the most populous Muslim nation in the world into a frenzy of violence an overconfidence.

    And two of our guys are ambushed, one is shot a grazing wound in the side of the head. he feels his ear, realises he is going to live, and kills the two militia goons outright with two bullets only.

    Years later they drop our blokes into the Western desert, and the aim is to spot and disable, not to kill. Our blokes run into 7 hostile forces incidentally in a single night, kill everyone, are completely unharmed, and the report is sent to Rumsfeld and he reads it and he says “Amazing” and thats all he says.

    But these Israeli conscripts may not be what they used to be. When they finally sent them in the last time there was that fighting in Lebanon, they were getting killed at an astonishing rate. And then there is a black mark to that action at about that point, Since there appeared to be the distribution of an enourmous amount of little cluster plastic explosives, which may have been purely an act of bitterness with all their kids being killed.

    One of the strongest moral messages for me in the movie Magnum Force is where Harry shows up at the pistol-range at 3.00 am to be surprised that there are all these rookie cops practicing at a time when he usually has the range to himself. The moral message doesn’t come from the fact that the rookie cops surprise him by their presence. But from the fact that he shows up there to have the range to himself. The script was written by two writers who both have a sort of rightest philosophical bent and who were both extraordinarily young at the time (Milius and Cimino. One of the coolest scripts ever written and Cimino would be lucky to be 23 at the time.)

    The morality comes in the preparation. I wonder if our blokes haven’t been diminished by their overuse and the lack of time for training. But I suspect that in 2001, with American technological and aircover, we could have sent our blokes into some toilet-twon to rip the tongue out of the head of a Hamas spokesman and hang five of the top leadership and get out killing only militants all the way.

    I am not confident about Israeli conscript fighters any more. But I’d want to know if it was all merely a suspicion.

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