2010 Review and 2011 Forecast - Part I: Down the rabbit hole we go - Eric Janszen

[Alvaro Spain]

Re: 2010 Review and 2011 Forecast - Part I: Down the rabbit hole we go - Eric Janszen

No! Richard Koo was not "Right". But no one else was either. Let me try and explain.

The real problem is that everyone seems to be fixed upon the idea that the only mechanisms available to unpick the Gordian Knot are to be, in one form or another; government inspired. Seignorage, Quantitive Easing, Money printing, selling Treasuries .......

With the very greatest of respects, I have been watching these ideas float around for as long as I can remember, but at each and every turn of the economic screw; the whole edifice falls over, flat on its proverbial face.

The simple fact is, (and I am pleased to be able to say that the good old Bank of England have been kind enough to agree), we have an ongoing problem with a grossly under-capitalised private sector. Not at the banking level, but at the grass roots of society. We are desperately short of equity capital and grossly over supplied with credit.

Everyone keeps talking about banks. Aaaaargh!!!! We need to forget all about the banks. What is missing are savings institutions dedicated to the provision of that missing equity capital that needs to be re-injected back into the grass roots. THAT is our problem and until that message sinks in, nothing will happen other than, once again, the whole edifice will fall flat on it's face, again and again and again... ad infinitum. Our children's children will be discussing the same thing in the following centuries if we do not get that message across.

In my opinion, you are both right and wrong. Right in theory, but you are not taking into account that society is made for the enjoyment of the powerful, not of "we the people". And you can do nothing, because to change things you would need to become powerful, and if you do you will find that you like the society as it is now.

[Chris Coles]

Re: 2010 Review and 2011 Forecast - Part I: Down the rabbit hole we go - Eric Janszen

In my opinion, you are both right and wrong. Right in theory, but you are not taking into account that society is made for the enjoyment of the powerful, not of "we the people". And you can do nothing, because to change things you would need to become powerful, and if you do you will find that you like the society as it is now.

All I can say is, let future history be the judge of my future actions.

[Alvaro Spain]

Re: 2010 Review and 2011 Forecast - Part I: Down the rabbit hole we go - Eric Janszen

All I can say is, let future history be the judge of my future actions.

I like your answer. You are obviously an intelligent and good humoured man. Thanks.

[Chris Coles]

Re: 2010 Review and 2011 Forecast - Part I: Down the rabbit hole we go - Eric Janszen

You cannot tell the quality of the individual from the size of their bank balance. In past times I have met with, and in some cases came to know well, people that were, are, very wealthy. Many are fine people; some are what one can only describes as first class Sh..s. It is not what they own, but how they treat with you that, in time, either leaves you holding them in high respect, or with a deep dislike of them both as individuals and businesspeople.

Time heals many wounds, but not those that come from discreditable actions by devious character.

[LazyBoy]

Re: 2010 Review and 2011 Forecast - Part I: Down the rabbit hole we go - Eric Janszen

couldnt agree more!

i ROTFLMAO every time i read/hear about some small-to-bigger biz going tits up due to "not being able to borrow enuf working capital" not to expand, but just to keep the doors open?!!

when, back in the good ole daze, "working capital" was what one had _saved_ during good years, so had the money to expand when opportunity presented itself or could simply survive the biz cycle without having to go to the bank to borrow

...

now it seems that most of the MBA whizkids (or other wannabe biz operators) have no idea how to run a biz when they dont have somebody elses money to blow...

Agreed! And this lack of savings/responsibility became the Standard Operating Procedure at the personal, business and governmental levels.

My blue-collar, lower-middle class parents built their house with sweat equity and the money they saved for it. They never had a mortgage, let alone a car loan or credit card debt. Since then, a house you couldn't afford became a way to get the Hummer you couldn't afford – a new one every two years – and people pay interest on their groceries.

And when was the last time you heard of a municipality/school-board/state say we're going to need a new school/courthouse/whatever in a few years, so let's start saving up for it? It's easier to float a bond and let the future pay for it.

And these are the SOPs in good times! Every level of society was holding their max debt load (more than they should have been allowed) and imagining there would never be a rainy day.