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XCAnderson

Listed below are comments made by XCAnderson between Thursday, 30th July 2009 and Wednesday, 21st October 2009.

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A sombre warning 10:44am on 21 Oct 2009 Mervyn King's assessment is spot on. Alas he is too late. Due to his and the Government's myopic and naive idea that the banks were too big to fail and needed to be bailed up to stop the economy collapsing, their actions will actually facilitate the very thing they were trying to avoid, i.e. the collapse of the whole economic system. Of course it would be bad enough if this stupidity was confined the UK politicians, but Obama, following directly on from his predecessor, is simply pursuing the self-same policy across the pond.

To be fair though, whatever they do now is too late, what we are actually seeing is the end of the line for an economic-based system of which, up until today, capitalism was the best method available.

Alas, it was built on an illusion and required ever more phony money to keep the illusion going. This facilitated businesses, jobs and lifestyles, i.e. the way of life we have come to expect in the west, which our friends in the eastern bloc and developing world want to now experience for themselves. Unfortunately, for them - and for us - it cannot happen. We borrowed from the future to live for today and now the future has caught up with us. Capitalism ultimately met its match when it was confronted with a more sophisticated and technologically proficient world that demanded too much too soon.

However, there is a positive knock-on effect to all this. We might have just saved the planet. For it is impossible to solve the world's environmental crisis by being wedded to a production/consumption (economic) model as the bottom line will always be about maintaining businesses, jobs and lifestyles first and foremost, with the consequences coming a poor second. Hence, the focus on taxing the consumer for consuming, rather than simply stopping the producers from producing in the first place, e.g. they want you to buy the car - they just don't want you to drive it!

It will take the collapse of the way of life we have come to expect since the onset of the Industrial Revolution to confront the new challenges of today's world. As Einstein is attributed to have said "The significant problems we have cannot be solved at the same level of thinking with which we created them."
Another way to squeeze 4:58pm on 05 Oct 2009 What this shows is that Cameron and the Tories are perhaps even more stupid than Brown and the Labour Party, if that were possible. Can the Tories please explain where exactly all these new jobs are supposed to come from, especially when we are currently seeing the mirage of a world economy falling apart at the seams, and most of the businesses generated in the private sector were sustained simply on a credit binge, without which they are collapsing and with them the jobs. Furthermore, it was the public sector that kept the illusion ticking over with the creation of government and quasi-government jobs.

Basically, none of our politicians have a clue what they are talking about, because the whole economic system is on the verge of disintegration, propped up by temporary government intervention, and all they are doing is simply tinkering around the edges.

As Albert Einstein is attributed to have said 'The significant problems we have cannot be solved at the same level of thinking with which we created them.'
Microsoft: 'No bounce' 4:37pm on 05 Oct 2009 This is not a recovery, but another bubble caused yet again by government intervention and short-term speculators, but the stock market will collapse within weeks and with it the mirage of a recovery.

Worldwide quantative easing and other daft short-term strategies like the car scrappage scheme have merely postponed the inevitable, i.e. the collapse of the whole economy. The false assumption - given that the whole world economy was purely driven by consumption - is that these are merely temporary measures until the economy recovers of its own accord, but the economy cannot recover of its own accord because it was nothing but an illusion. Without borrowing from tomorrow we could never have created all the businesses, jobs, and lifestyles. Unfortunately, tomorrow has now arrived and our politicians are left desperately clutching at straws.

But look on the bright side, the consumption/production model, which was destroying the planet is dead and buried and this crisis will force us to move towards a new, more mature way of thinking, where we will look at how we all can contribute rather than how we can all take.
House prices: Too good to be true? 10:47am on 02 Oct 2009 Oh dear, oh dear. Another ridiculous prediction from our dear friends at the Nationwide. Then again, would we really expect anything different from an organisation that stands to go bankrupt as and when the market collapses?

The fact of the matter is that we are currently in a temporal stasis and the figures being banded about are based, as you rightly say, on a tiny amount of exchanges, since the vast majority of those wishing to buy are unable to get mortgages and won't be able to since the banks are effectively broke and need every penny they can get as they face more and more toxic debt fallout.

Indeed, what people seem incapable of understanding is that housing is 50-70% over inflated. Whereas in times long past lenders called the shots and lent no more than 2 or 3 times salaries, ensuring that prices would never go out of sync with the cost of living, for over a decade they broke all the rules, and in their wisdom decided to reverse the equation and instead perversely allowed sellers to create the prices, thus ensuring that the only way people could actually afford to pay their bills was on ever more elaborate credit mechanisms, e.g. interest only mortgages, multiple credit cards, equity release etc.

What utter folly!

However, without this asset bubble we would never have had the businesses, jobs and lifestyles we have become accustomed to.

Shame it was all an illusion.

What we are now seeing is a desperate attempt by all those in power to keep the illusion running for as long as possible, i.e. artificially low interest rates, quantative easing etc. Unfortunately, whether we see deflation or inflation, we will see the housing market inevitably collapse. In the former scenario, businesses will contract, jobs will be lost and people will be unable to maintain their mortgages, hence lose their homes. In the latter scenario, people will be unable to maintain their mortgage payments which will hike up above their capacity to pay, hence they will lose their homes.

The problem is that unlike the 1980s, where the amount of those affected was relatively contained, the amount of people affected this time will be in the millions and could thus lead to widescale social unrest.
The political detail 5:50pm on 15 Sep 2009 Frankly this debate is facile. The arguments between both parties are really ones of style not substance. All three parties are in complete denial over the state of the nation's finances, but then given the situation is replecated in the US should we be surprised?

Brown argues that we should spend now and cut later. The problem with this argument - worthy as it appears on the surface, aimed at maintaining jobs, keeping people in their homes etc. - is it is entirely bogus. The reason we are in this mess is because his inane policies - echoed throughout the western world - delegated power to the financiers who merely conjured up phoney wealth through all sorts of financial wizardry and as a result created bogus businesses, jobs, and lifestyles. His argument would be right if we had any money, which we would have done if he would held true to the Biblical imperative of building up reserves during the years of plenty in preparation of the inevitable years of famine.

What Brown is now trying to do is to belatedly compensate for his arrogance and complaceny by propping up this mickey mouse economy in the forlorn hope that things will soon pick up of their own accord. This is preposterous. The only reason the world economy hasn't as yet collapsed is because it is being propped up with even more phoney money from our dear governments. Unfortunately, when the QE stops - as it will have to - then everything will tank. It is not so much a matter of if, but when.

What will force his - and Cameron's hand for that matter, is the fact that the Government is effectively bankrupt. The QE trick can only last so long before everyone realises we have all been had. It would have hapened under the Tories and Lib Dems too because they would have followed the self-same policies, unwilling to deny the consumer his or her fix.

The unions can kick and scream as much as they like, but the fact remains that the Government will be forced to slash spending, including salaries, pensions and jobs. Unemployment will snowball and property prices will inevitably collapse, not least because their entire rise was attributed to the availability of credit, which facilitated the greed of Buy-to-Let and forced out first-time buyers. Also as unemployment climbs millions will default on their mortgages (especially those dreaded Buy-to-Lets) and in the process lose their properties, thereby flooding the market with them.

The fact of the matter is that the system will collapse and no amount of tinkering will make the slightest bit of difference. But then maybe this is a blessing in disguise, since it will take something significant to wake us up from our inertia and only then will we realise that a society built on greed, selfishness and arrogance can end in nothing but failure and ecological chaos.
PM: 'We'll cut with Germany, France and the US' 6:34pm on 14 Sep 2009 We are now very much in a surreal world. Each party is in complete denial over the, frankly, terminal mess that we are in. It is a 're-arranging the deck chairs on the Titanic' moment. Alas, circumstances will force all all their hands.

The unions are getting restless as well they might, but they are also in denial. The fact is that the only thing that will maintain the world economy in any way would be a continuation of the self-same phoney money mechanisms that got us here in the first place. Oh, and that also fails to account for the current debt crisis we all face, which, taking America alone, would take over 400 years to repay, but assumes that Americans will save 5% of their income and ALL their savings are used solely for this purpose! Not very likely.

QE and its many derivatives, such as 'cash for clunkers', is merely fueling the flames. Indeed, it is not so much a temporary quick fix, but is actually just accelerating the collapse.

It is all very well expecting governments to simply maintain spending UNTIL things recover, but that is assuming (falsely) that things will recover, but this is a myth, because there is nothing to maintain it.

The unions are right we face civil unrest, but that is the inevitable consequence of the folly of creating unsustainable lifestyles we cannot afford based on spending tomorrow's money today. Unfortunately, nothing can hold back the tides of time.
How Rover executives pocketed £42m 11:44pm on 10 Sep 2009 I have to laugh when you suggest that these former directors have been humiliated by this report. There is absoultely no evidence that this is so. Indeed, why on earth should they feel shame when, as you say, they did not break the law? No the real humiliation is the revelation as to how morally bankrupt our society has become whereby we faciliate pariahs such as these milking the system for their own personal benefit and then merely walking away scott free irrespective of the damage that they do.

The world economy is nothing more than a giant ponzi scheme, which has enabled those with power and control to take us all for a ride and then leave us all to carry the can, thinking, like Madoff that they can get away with it. Unfortunately they can't. It is rather like the man on the boat who drills a hole under his seat arguing that it is his seat and he can do what he wants! Because in spite of all this talk about the economic recovery, there is no such thing. It is all being artifically propped up and as soon as government cash runs out the whole system will collapse and all the money will become valueless.

So my advice to characters such as these is to enjoy your luxury lifestyles whilst it lasts because it won't be for long. See you at the soup kitchens!
Can governments squeeze bankers' pay? 11:08pm on 03 Sep 2009 The system 'works' by rewarding these reckless gamblers for dishing out IOUs with little thought as to the capacity of borrowers to pay back nor as to the consequences of their actions, either for the individuals, businesses or society at large. They are not generating real worth, but phoney money. As a result of their actions they have created a society of businesses, jobs and lifestyles that was artificially sustained and completely dependent on lending out ever greater sums of funny money. How no one could see where this leads suggests to me that they were all - the financial sector, the politicians, the economists and the consumers - in complete denial and happy to live with the fantasy for as long as it could be dragged out.

However, no amount of regulation - or taxation - can resolve the problem - all it is doing is tinkering with a flawed system and it is doomed to fail. The credit crunch was a wake up call, that has not been heeded. The economy is dead and is merely being propped up with, guess what, more IOUs that we have no way of repaying. As soon as this runs out, we will be back to where we were. Indeed, there is no credit being lent because the banks know they are sitting on toxic debt and need as much money as possible to cushion themselves from the fall out, but as consumers cut back, businesses will fail, jobs will be lost and people will default on their mortgages and other loans, property prices will collapse and many will go bankrupt. There is no way out.

And don't believe that the rest of the world is out of the woods since it was completely dependent on credit to facilitate it.

We will need a new paradigm - a society not focused around generating ever greater (and false) multiples of GDP, but on facilitating better communities, increased well-being for all, more compasssion, sensitivity and otther-centredness. When we finally realise that then we can begin to rebuild a new world order.
QE: More to do? 5:54pm on 06 Aug 2009 Funny that, and here I was thinking that the worst is over and the recovery is on its way, at least that's the myth the media has been spinning us.

The fact is that we are now on the verge of a total economic collapse due to years of abuse within the entire financial sector, encouraged by governments of all persuasions and a gullible public, creating phantom wealth, bogus prosperity and an unsustainable standard of living.

The only reason for the so-called good news of late is QE - both here and in America - has facilitated a temporal stasis, but rather like a brain-dead patient on life support displaying signs of life, as soon as the stimulus is turned off the economy will disintegrate.

Enjoy it whilst it lasts.
BT: A blacker pension hole 11:01pm on 30 Jul 2009 #43 Beatsy

"Which "localised community" would ever "need" atom-smashers, or giant telescopes, or space exploration, or gene tech, or global communications infrastructure, or steelworks or car plants, etc?"

The very nature of our current economic system is driven by profit maximisation and everything fits around that mechanism, irrespective of the damage that may be doing to individuals, society or nature. Thus we have steel factories, car plants etc. to keep industry going, because we have to keep people in jobs to earn money to keep spending etc. Worse, standards and safety are compromised because the priorities are the profit margin for the company and they will cut corners in order to do so.

However, if we move away from systems and refocus society around maximising the human experience, we would instead be asking how can this or that innovation support our objectives? E.g. creating a society that is safe and secure; where communities work together; where people work to support their local neighbourhoods; where we develop locally produced and supported goods and services; where we educate to the needs of the individual rather than forcing everyone to conform to the same subjectively determined standards etc.

Ultimately, the future is local not global.

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