Tuesday, May 31, 2011

Recycling Surplus

True, part of the issue though is the nature of the debt backed monetary system. Germany being a net saver, must lend tremendous amounts of money to other nations. Because all savings are also debt in our monetary system. So Germany ends up lending money all over the place, including areas where German bankers don't really understand the situation.

Japan was in a similiar situation in the 80's and lost tremendous amounts on bad investments. Now it mainly just backs up savings with the national debt, which is now at 200% of GDP. Germany hasn't been willing to take that path so far.

[quote name='Traktion' timestamp='1306836519' post='3004952']
They also loaned a lot of money to Greece - oops!

Recycling surplus cash into countries running deficits, just so that you can accumulate a [i]greater[/i] surplus is a fools game. China is discovering this, as is Germany.

Yep China figured it out... China is a lot smarter than Japan and Germany.  China took the exporting as far as it could go, and got the technology they wanted, and when it couldn't be pushed farther.. they made the switch to demand led growth.  First by government stimulus, then the second phase that will play out over several decades is consumer led growth.

My feeling is Japan and Germany understand what is happening but the governments are seized by the huge industrial corporations.  Which benefit so much from this arrangement.  Whereas in China the Communist Party is still calling the shots, and only views the profits of the industrial corporations in the big picture.

A similiar comparison is between China and the US-UK.  In the US-UK without doubt the banks have seized control of the political system.  And are doing things good for the banks regardless of whether it harms the populace.  While in China the big 4 banks are owned by the state, which is ran by the Communist party.

Saturday, May 21, 2011

The start of the European Spring

This does look like the beginning of the 'European Spring', the moment I've been waiting years for and arguing is neccessary.

The Arab Spring started in Tunisia, when Mohamed Bouazizi was trying to make a living as a street vendor.  But the Tunisian authorities made it a requirement to be licensed to be a street fruit vendor.  And they limited the number o licenses available.  In the bidding for the licenses Mohamed Bouazizi could not afford it.

With his livelihood taken from him, he immolated himself in an act of protest.  That started the mass protests against tyranny in the Arab world.

Now Spanish youth are starting to rise up.  And they are exactly right to, if they don't do something now in a collective movement, most will spend their whole life either outright unemployed or just barely surviving.  This in a first world European nation.

The Spanish youth movement has made an incredible breakthrough of thought.  Instead of being for the right wing party or for the leftwing party they are against both of them.  Which is a much more powerful line of attack.  As this left/right divide has been diffusing legitimate resistance for decades.  Sadly though, they want 'more democracy'.  Which I don't see solving the problems.

The final step is when they are ready to empower one man to solve the problems the nation faces.  Like Putin has done in Russia.  Once the problems are solved and there is opportunity they will be out there making money and having families.  And the money will be there to cover the older people too.