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zogger (617870) writes | more than 4 years ago

The Almighty Buck 9

A rather vivid description of the standard operating procedure for modern high finance.

A rather vivid description of the standard operating procedure for modern high finance.

More or less what I have been saying, but I am not as afraid of any collapse as the "insider" giving the lecture in the article. Because I know the bulk of those electronic promises of future wealth called "pensions" and so on are *already gone*, already "collapsed", and there never was any intention of actually swapping them back for all the retirees so they could have living expenses.

  The whole article is about cons, so really..that was the ultimate magic beans for the milkcow con the grifters have been selling the public..and municipalities..and unions and organizations and other corporations.... "Gives us all your extra loot for decades, we'll "invest it", then we promise to pay you back later on even moar, forever and ever"! I mean, geez loweez,,, The numbers have never added up, it just cannot be done. That money/wealth is long gone. The rest is ..what to call it..chimeric wealth. Giant ponzi scheme. Sure it has paid off for some. that's how they work, they have to build the hype, so the earlier investors get back some big bucks and get all tuplip mania about it, they "sell" the con to their friends, and it snowballs from there.. only for awhile though, then they collapse once too many are "owed" more than what is coming in.

  So...there's no way it can pay off for the vast retiring boomer generation and beyond, because all ponzi schemes rely on new investors to pay the old investors, and the lie is that the money is "working for you" someplace in magical fairyland ville upstream. Once the pool of new suckers slows down, it gets harder and harder for ponzi schemes to operate, because they *don't make money* they just skim a lot and divvy some out to keep everyone faked out that it is a perpetual motion money machine.

    They'll try accounting tricks and come up with even more exotic forms of future credit, plus always the old faithful run the printing presses. Then tell people they should be robbed..err..taxed more.. all of that ...but the real wealth no longer exists, it has already been spent. It's gone.

You know the famous white van and speakers for sale con? It's famous, happened all over the country, I even saw it once in a parking lot in Stone Mountain Georgia when a friend was driving and I talked him out of it, told him straight up it was a con, freakin obvious. Oh man he had instant greed in his eyes and heart though, that blinded him to reality, so he couldn't see it. Anyway, that's the vast bulk of pensions and retirement accounts and so on today, a real impressive heavy even looks like a speaker inside, nice wood cabinet and get home, plug it in, nothing. Open it up...full of rocks. The sellers are long gone by then. Your thousand dollar speakers that you "invested" 200 in was a *box of rocks*. Because no one is going to give you real thousand buck speakers, except for a thousand bucks. There ain't no free lunch, there is no magical something for nothing, money doesn't work, money is imaginary property, people have to work, and perpetual motion-something for nothing- doesn't ever work at all.

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A Growing Economy (1)

spun (1352) | more than 4 years ago | (#32099276)

Just need to put it out there: gold supplies are finite. Gold is an important industrial metal. Economies grow, and sometimes shrink. With a relatively static money supply, the amount of money in circulation will not match the size of the economy. This is the reason behind having an elastic money supply. The idea that money, a symbol of value, must have value itself, is silly. If the symbol itself has value, it can not accurately represent abstract values of other things.

However, this is not to imply that the folks managing our elastic money supply are doing it right, or with the economies best interest at heart.

Next, a growing economy means that investments are not totally a Ponzi scheme. The growth of value is not completely dependent on new people buying into the scheme. More people being born and moving into the country creates a bigger economy. More efficient processes mean doing more with less, which creates a bigger economy.

I'm not trying to debate whether or not powerful forces conspire to take our wealth. They do. I'm saying, your analysis could be more nuanced. Some of the things you say will trip some people's bullshit detectors, and then they won't listen to the very valuable and true warnings you give.

And you miss some things. Our economy is growing. Our economic system is based on that fact. Our current system simply will not work right in a static economy. And we can not keep growing infinitely. The universe and especially our little planet are finite. Some day all the technological tricks will be known, and there will be no more growth of efficiency. Therefore, some day, we will need an economic system that works in completely sustainable fashion, without growth.

You are hung up on the fact that the economy is based on illusions. Sure it is. But so what? As Heinlein wrote, "Delusions are often functional. A mother's opinions about her children's beauty, intelligence, goodness, et cetera ad nauseam, keep her from drowning them at birth." Our delusions about our economy are similarly functional. It isn't the illusionary nature of our economy that is the problem: the problem is who is controlling the illusion.

The article was interesting, but simplistic. I don't buy for a minute that the conversation the author writes about actually took place. It's a rhetorical technique. Is fraud endemic in our system? Of course. But the simplistic theories presented do not begin to explain the complexities of the real world.

Still, the article is a good wake up call for people who've never pondered this stuff before. I guess wake up calls need to be loud and strident.

There's a way around the pension problem. (1)

tomhudson (43916) | more than 4 years ago | (#32107214)

States like California don't have the legal right to go bankrupt, but they CAN issue their own legal tender, such as 40-year non-interest-bearing notes, etc.

They will fix the city and state budget problems by issuing non-interest-bearing IOUs to people as a percentage of their retirement benefits. Think of it as a "claw-back" without actually having to claw it back.

They fix the city pension problems by selling the IOUs to cities for 25 cents on the dollar. The cities can then use this bogus $$$ to pay up to a state-mandated percentage of pension income. If they set the level at, say, 80%, it effectively means that the cities have just reduced their total pension cost by 40% ($20 in real money to the retiree, $40 in real money to the state for $80 of 40-year notes, which they give to the retiree).

It also generates revenue for the state, literally out of thin air, so "offsetting" pension liabilities becomes a big source of income instead of a liability. The more pensions there are, the bigger the income from the trade.

And lets face it, those 40-year IOUs will be worthless. When they mature, if inflation hasn't made them into pocket change, just pay them with MORE 40-year non-interest-bearing notes.

Remember, you saw it here first :-)

Re:There's a way around the pension problem. (1)

tomhudson (43916) | more than 4 years ago | (#32107252)

Oops - $20 in real money to the state ... reduces pension costs by 60%.

State pension costs are reduced by 80%, since they don't have to pay real money for the notes.

(and I know, the "real" money is also fiat currency ... which is why you can expect everyone to jump on the bandwagon - it's all unreal to begin with).

Retirement pension (1)

zogger (617870) | more than 4 years ago | (#32107872)

I am thinking what people need with a pension..roof over the head. Well, get some place and pay if off before you retire. Utilities,,get some solar panels, etc and pay them off. Put a wood stove in, and as long as you are working, superinsulate your home so you don't *need* as much heating and cooling anyway, most houses are beyond a joke when it comes to making them efficient. . We should have cheap LED lighting by then as well, add one more solar panel for those. OK, that's covered.

Solar is really underrate how well it works and how cheap it can be. I see guys get quotes that are out to lunch, they ain't looked hard enough. Last place we lived the main house was three stories, with an elevator, they had full appliances, all of it, a 300 foot deep well, and everything but the heatpump was solar powered. And they could have gotten by without it, they just didn't like burning wood and were Ac freaks..but if it was me..window fans and the woosdstove. We live in Georgia, it gets wicked hot here, and we do not have AC. It's doable, some cheap fans and a decent shade tree works. Anyway, that would have made that huge place 100% solar PV and stored solar wood fuel powered. Total cost for the installation was 29 grand. That's it, early 2000's money, on a close to 700 grand mansion (which gets you quite the dang nice place around here, big house and many acres). Not bad for having the bulk of your utilities covered for 30 years or more. 30 years should cover most folks "retirement" years.

    Food, grow a huge garden every year, can and freeze a lot, grow some poultry, contract for some beef, take up bee keeping, go hunting and fishing, whatever. You can get it down to producing 90% your own food real easy that way.

Transportation..paid off car, don't plan on buying new expensive ones, and buy a couple junkers just like it for spare parts. And then don't drive a lot. Go for walks, drive a bicycle, etc. Pickup a cheap moped or scooter, those are cheap now and work just fine. Alternate..within a few years now, electric vehicles will be out there, so add more solar panels to your house to keep your transportation running/charged up. Who cares if it takes a week to trickle charge the ride, just don't drive anyplace more than once a week then,combine trips. We do that now, once a week to town, that's it.

OK, that's covered. Clothes..people get to an adult size, buy loads extra while still working, clean them and pack them away good, vacuum sealing works OK for that. I just use old rubbermaid containers. I have enough good clothes to last for years and years now, all paid off. Electronic gadgets. Dang, skip the 90 inch 3-d TV and be happy with the one you bought 20 years ago that still works. Only change computers when they really are broken and ridiculous, same with the cellphone. No six month gadget cycles, make it six years instead.

That's my pension....low budget. I am working semi retired right now, that's it. Working on more solar, got some now, but still need more. All the other stuff, done already. And I can see it now, my alleged socialist security check, coming soon to a reality near me, will come in once a month, then go right back out again to fund some insurance company, that I will be forced to purchase, who will deny care anyway... Nope, no expensive trips to whocare' interest either. Buncha dang furriners all talkin funny and stuff..grumble. Hmm, shoot, been 24 hours since I mowed the lawn..hmmmm..gotta check for random neighborhood kids having too much fun as well..delinquents...prolly all hepped up on videogame brain implant dope...whatever that stuff is...

Anyway, there ya go, the cheap but good enough retirement, no huge dollar pension needed. (all these pensions are toast anyway..I thought about doing another JE but..meh..the info is out there. The pension guarantee dealie is busted, there is no mass retirement for the boomer generation, or any generation after that, can't be done. Your script thing would work, once the USA crumbles, and we go to state currencies. We *will* be defaulting on Federal debts,. or they will just run the printing presses, either way, toast, gone.

    We just cannot fund both a huge federal government, then a redundant huge state government, that basically just duplicates itself left and right. It's nuts. Our states are all large enough to be almost completely independent, we really just do not need a huge federal monster bureaucracy. It's crap. Expensive crap.

My thoughts on government workers and pensions..not needed, we need ten year maximum term limits for all government workers. No more government careers, of any kind, not paid anyway. You want to volunteer, real community service, swell, but ten years paid, then adios, see ya. Then back to the private sector. And once they know this, there will be huge incentive to make government *work* and be loads cheaper to run, because no free ride gravy train at the other end of that job. As it is now, there is no incentive for anything BUT always increasing governmental costs, because they "make more money" by growing government bigger and demanding more of the private sectors money, at gunpoint and threat of jail time, etc. It's a jobs and extortion racket.

Heck, my little teeny dipshit little town just did this last year. We never used to have cops, got by with the county sheriffs deputies. So, they hired a lot of cops, then they needed cop cars and I guess SWAT training and who knows what else. Whoops, now government "costs more", so they had to raise property taxes, and all the cops do now is write BS tickets. Crime, such as it is around here, not much really, is no less than before, just "government" costs more now, by a really large factor.

The federal government is just like that. Exactly, just macro scale. Say like..example..what the heck we need a department of education for, anyway? We got by fine without it. When I went to grade school it didn't exist! Can we truthfully say public education has gotten any better because of decades of this new agency and all those costs? We have a huge effort to keep the DEA running to bust pot??? What the heck? all the old reactionary farmers want to grow hemp, and everyone else wants medical and recreational, so why the hell do we have to pay money for this nonsense? Half the states and now DC itself wants to start legalization. Dump the war on some drugs, it just doesn't work and makes things worse.

Tons of examples. Don't invade foreign nations, we can get by with true state's militias and some air guard and a hundred nukes. No one would mess with us even at that level, we could obliterate them, and with a real states militia, swiss styled, every dude keeps his service rifle at home, and every little burg has a small armory with the heavier stuff, no invasions would ever work either. We don't need all that other expensive full time paid with pensions military.

I can go up and down the list and easily reduce the feds presence and economic expense to maybe 1/5th what it is now, just doing some semi common sense cost moves.

Transportation (1)

tomhudson (43916) | more than 4 years ago | (#32110446)

You don't like horses? They produce their own replacement parts, they'll start when it's too cold for your car to start, you can talk to them, they produce fertilizer, and pretty much everything is recyclable. The only problem is they take up too much space in the house, and when they do wander in, dumb people (my sister the "I know how to handle my own horse you dummy" expert) try to turn them around instead of leading them straight through and out the back door.

We have bike paths. Why not more bridle paths? I know, there's the "if we were still using horses, Manhattan would be 6 feet deep in horse shit." It is anyway, so what's their point :-)

hayburners (1)

zogger (617870) | more than 4 years ago | (#32110816)

-thought about it, haven't gotten one yet. We have a donkey but he is a nuts and I can't even get a bridle on him yet...

Re:hayburners (1)

tomhudson (43916) | more than 4 years ago | (#32112028)

You could always get a dog cart ...

Also there was a study done in Scotland a few decades ago that showed that a couple of ox worked out better for plowing in terms of energy consumption and TCO than a tractor did. I should immagine the balance is even more in favour of the ox now. All we need to do is come up with a way to handle 100 ox at a time - maybe some sort of computer-controled servo-mechanism, complete with Yosemite Sam shouting "When I says WHOA! I means WHOA!"

That and a few well-trained border collies could allow a couple of people to manage multiple teams. Plus, you don't end up with the formation of a layer of hardpan under the plow due to the mechanical action of the tractor. And the furrows get fertilized at the same time. A real green op.

Re:hayburners (1)

zogger (617870) | more than 4 years ago | (#32113988)

Thought about oxen as well, but we haven't had any twin bulls yet. I know from working with them and also holstein dairy cattle, ye gadz are they strong.

Dogcart could be doable, have three large dogs and three small ones.

Re:hayburners (1)

tomhudson (43916) | more than 4 years ago | (#32134696)

ye gadz are they strong.

"strong as an ox"

Good thing they're domesticated ...

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