Economy moves in cycles

Martin Blank

Sun Dec 09 07:02:23 -0800 2007

manage

This goes along with what I've been telling people.  The economy moves in cycles.  Some of them are rapid, and some are slow.  China has started outsourcing low-skill jobs to other countries because workers there are getting too expensive for certain jobs.  This is a very slow cycle, taking decades to reach, but was inevitable as its economy improved.  The countries to which it outsources will likewise eventually find some of their jobs moving to other countries.  Japan's current 15-year economic woes were brought about by a cycle of uncontrolled economic prosperity, which caused the commercial real estate market to get so expensive that no one could afford it anymore, and then people just stopped buying even as construction continued unabated, stopping only when the market collapsed (sound familiar?).  Because real estate investment was so wide-spread, virtually everyone was hit when that happened.  This is a smaller cycle, but still one that isn't always easy to see coming.

The weakening of the dollar had to have a positive effect at some point.  The euro's strength had to have a downside eventually.  Manufacturing in the US is going to have an upswing, and the Boeing/Airbus competition is going to be a very visible part of it, as the 787 -- already thought by many in the aerospace industry to be the better plane overall -- is going to be that much less expensive per-passenger-mile compared to the A380.  The Big Three also have the possibility of improving their numbers if they can get some decent models out, as even the export costs will be less than the difference based on the currency.  Many smaller manufacturers will also benefit, and maybe we'll see some solid changes in things.

The other side to this, of course, is the strong probability of a stronger dollar, which pretty much everyone agrees is in the world's best interest.  Getting it back under a 1.3 ratio to the euro will make a lot of people happier and get some strength back into the economy.  I don't see this happening until sometime in 2009 (which will allow the next president to take credit for it completely undeservedly, as it will be existing cycles causing it to happen), but I'm fairly certain that it will come to pass.

strong, weak or just plain fair?

zogger

Sun Dec 09 09:02:24 -0800 2007

manage

I don't like either a "strong" or "weak" dollar because that is just going to perpetuate the "trickle down" theory of money creation and the establishment of "credit" (better called enforced debt) based on what is in essence a hereditary and feudalistic wealth model which is codified into "law".

I see zero "fairness" or benefit in letting one small group of already wealthy people control this "credit" where everyone else is born into being in debt to them.

The dollar as we have it now is an outright creation of a private business concern, who then loan it at interest into circulation. Real sweet deal for those at the top of this pyramid scheme, and it is no wonder this type of economic structure is maintained all over in various nations and is rigidly protected-it's a *huge* con that works, and also has an interesting side benefit of allowing the consters to rig the market sub rosa for special added double plus good profits..

If we had a dollar supply that was strictly based on proven and transparent and openly auditable wealth creation numbers, we would eliminate a lot of these artificially created boom and bust cycles and this harmful economic yo-yo we keep being forced through. In short, a "fair" dollar (and fair euro and yen and so on) would be, IMO, a preferable method of new money supply creation, which in turn would lead to much sounder private investing and government running.

Anyway, at the end of the day, count me out on being a Keynesian or proponent or rigging the usury rates to attempt social engineering, not much of a fan of the boom and bust and "trickle down"economics model, I prefer steady solid growth and the concept of near inflation or deflation proof currencies, and for the bulk of the wealth to go to the actual wealth producers, not the wealth riggers and rearrangers.

strong, weak or just plain fair?

Martin Blank

Sun Dec 09 11:37:50 -0800 2007

manage

Even with commodity-based currencies, you're still going to have currencies that are weaker or stronger against each other based on swings in production.  Two countries that start equally are going to have differing production numbers each year as weather affects the production of raw materials, distance affects the cost of transporting said raw materials, and differing tastes affect the sales of raw, intermediary, and finished products.  Travelers between the two countries will swap currencies, and find that certain things are cheaper in the new nation than in their own even on a one-for-one currency swap, and some will seek to import those goods.  This will slow production in the home nation, lowering the value of the currency, and boost production in the other, strengthening the currency.  This is not something that will simply tilt a little here and there around a happy medium point -- investments will have to returned, so things will skip around some, much like they do today.  Expand the mix into several or dozens of countries, and it gets even more complex unless everyone settles on one currency.

This doesn't even get into tech advantages, such as the development of industrial-scale factory-line construction or Britain's shipbuilding prowess that lasted centuries, and doesn't cover the effects of war at all.

So to answer in a much shorter form the question in your subject line: it's just fair, even if it's painful to some.

strong, weak or just plain fair?

pyro9

Thu Dec 13 12:32:42 -0800 2007

manage

I have always found it "interesting" that the one manipulation of the monetary supply that has never been up for discussion is to inject the new fiat at the BOTTOM of the economy. I can see no objective reason that giving everyone below the poverty line a hundred dollars would be any less stimulating or more harmful to the economy than the same amount of cash released at the top.

exactly....

zogger

Sun Dec 16 08:28:10 -0800 2007

manage

...and in my previous economic manifesto I outlined that same concept with the new design of a currency system. The currency based on the top traded 100 commodities, open and auditable and based on tangible wealth creation (wealth is grown/mined/and manufactured from the above two, nothing else counts as wealth creation, all the other "busy-ness" is wealth service and rearranging). New money creation is based on that year to year diff of the wealth creation, and on nothing else. The government pays its bills first directly, no borrowing or interest needed, a lot gets into circulation that way, then all the leftovers go to the citizenry, in equal checks, where the remainder goes into circulation or can be stored or invested or whatever.

No income taxes needed then, ever, corporate or individual. States and local municipalities might need sales taxes, as the currency has to be common and is a function of the federal government treasury, but that's it, perhaps a federal law mandating so much very low percent than nothing more, a cap that is carved in stone, perhaps 3% state, 2% local, that should cover it. Get rid of property taxes as well, you should be able to buy a home, pay it off and own that sucker without being subject to pay a government forced rent bill forever. that's just lame, and always has been.

As for external trade, the fed government could run a "quid pro quo" tariff system at the border, with the other nation(s) setting the rates. They charge x-whatever % tariffs for importing our stuff, we match it. They charge zero per cent, we match it. All the onus is on them to be free traders then, so they really can't complain. Any cheating by running through tax dodge paper office havens, and they get caught, they get slapped with 100% tariffs the first time, say for one year, the second time trade is banned totally for some length of time in multiple years. Any cheating internally/domestically, screwing over some honest foreign nation, immediate corporate dissolution, auction of the proceeds, and all the officers banned from ever being in any sort of executive position like that forever.

exactly....

pyro9

Mon Dec 17 06:51:37 -0800 2007

manage

If I understand your proposal correctly, it effectively makes everyone a stockholder in the economy itself.

I'm unsure on the measurement of the economy, but your plan would go a long way towards attaching the fortunes of the wealthy to the fortunes of the masses and encourage real wealth creation rather than money for having money schemes.

The most important part is that you're actually willing to consider that the current economic system is not the final answer. Too much of economics seems to be back-justification of the de-facto state of affairs after feudalism collapses rather than an actual attempt to find an appropriate system.

As a programmer, I believe that the current system has many bugs, warts, and mis-features but by examining it systematically, economy 2.0 can be genuinely better. The first step is to recognize that the economy should exist to serve the people. The people do not exist to serve the economy.

The first question to ask (which few people seem to have ever asked) is what would we like our economy to do for us? (within reason, of course).  The next step is the difficult process of architecting a solution. This will need to be somewhat experimental and should probably count on an iterative approach so we can get feedback on what does and does not work. Since we're dealing with people and lives here rather than machines we can just shut off, it will have to include a plan to protect everyone from unforeseen system failures. A-life type simulations may be helpful to simulate the effects of a change to help avoid the worst of the problems.

In short, economics should be a scientific and engineering discipline not a liberal art or a religion. From that perspective, the current U.S. economy has some serious bugs that cause real people to suffer needlessly and that require a continuing act of "plate spinning" to keep an inherantly unstable system from crashing down.

doesn't change basic problem

rubycodez

Sun Dec 09 10:46:25 -0800 2007

manage

The push is to get everyone to be a "recurring revenue source" for all needs, renters instead of owners.  the push is to get more and more money in motion, a large economy based on frequency of transactions.  the push is to get all transactions traceable, no anonymous transactions and no secret wealth piling up, no action possible where a piece of the action can't be taken.

Go ahead a laugh at me for being a conspiracy theory nut, but I've seen astounding leaps and bounds in this direction and to this goal in my lifetime, lead by big banks and megacorporations.

doesn't change basic problem

Martin Blank

Sun Dec 09 11:45:33 -0800 2007

manage

You can still opt out of this, and with only marginal inconvenience for the most part.  Get your check from your employer and cash it at the source bank if it's available locally, or deposit it into your bank account and withdraw it in cash.  Use that once a month to buy money orders, which can be purchased anonymously using cash from various sources, and pay your bills with those money orders.  (There are limits put in place to counter money laundering, but most people will never run into these ceilings.)  If you're really paranoid, you can go to different money order issuers to spread the tracks around.

Even some online retailers accept methods to remain anonymous, allowing use of mailed money orders, and this includes some who don't openly advertise it.  It's slower, but it still works, and as long as the money order is good, they don't much care whose name is on the delivery address.

doesn't change basic problem

rubycodez

Sun Dec 09 13:29:41 -0800 2007

manage

You can still opt out of this

opt out of life in the real world, not doing business with checks and credit cards and paypal...means I would have to quit my current job since expense reports can only be based on credit card, just for starters.

How about we fix the system and change direction instead,

I see indications growing numbers of even very young people are waking up to the racket because they're seeing results of issues, for example out of control credit and spending of U.S. government funds things that only benefit a very small oligarchy and cause hardships at home and misery and death abroad. 

People are starting to see the stranglehold cartels have on our way of life, whether we're talking about entertainment or news or megacorps, the beginnings of the 21st century have been a real wakeup call.

doesn't change basic problem

Martin Blank

Sun Dec 09 17:13:57 -0800 2007

manage

Companies require credit cards for a variety of reasons, including verifiability (you spent $129 per night at the hotel and not $49 and are pocketing the other $80 per day), disputability, and their own convenience.  I wonder -- what do they do if someone doesn't have a credit card?  I ran into this a couple of years ago, and found a rather obscure and poorly-documented method of having the company pay for things up front.

If you have some ideas of ways to fix the system, please do mention them.  I hear many people talking about how it needs to be fixed, but I'm not hearing many solid suggestions.

doesn't change basic problem

rubycodez

Sun Dec 09 17:20:04 -0800 2007

manage

a couple companies I worked for had "company" cards issued to employees, but of course the employee had to sign paper that they would be absolutely responsible for balance and anything on it, in other words, anything the company didn't feel like reimbursing they didn't


If you have some ideas of ways to fix the system
for starters, vote for people that see the problems, rather than are good ol' boys (or *galz*) who are part of it. 

doesn't change basic problem

Martin Blank

Sun Dec 09 18:06:55 -0800 2007

manage

And in reality, those company-issued cards have policies that come with them.  The company can't approve your selection of hotels for a trade conference, send you to it, and then suddenly decide that it doesn't want to pay the bill for it.  My company has a simple policy: hotels that are approved, flights that are the least expensive within the required travel times, car fit for the intended need, and $50 per diem for food and miscellaneous expenses.  Most others have similar rules, and pretty much everyone approves the same things.  If I eat $75 worth of food per day, I'm going to have to cough up some extra money.

for starters, vote for people that see the problems, rather than are good ol' boys (or *galz*) who are part of it.

Maybe I asked the wrong question.  What specifically do you believe are the problems?

doesn't change basic problem

rubycodez

Sun Dec 09 18:42:08 -0800 2007

manage

Should mention I never had reimbursement problems with either company or my credit cards, but the point was credit cards required for my jobs for over a decade.

what are the problems?  way too open ended a question, could spout off dozens of things relating to oligarchy and cartels and megacorps and central banks, usury, resulting loss of freedom and wealth, government monitoring and interference....

I'll have some vacation time soon, will write some technocrat articles about some of the problems.

doesn't change basic problem

The Baron

Mon Dec 10 06:21:16 -0800 2007

manage

Well, I see one problem with your basic premise, as far as the solution goes. You see, it's the oligarch/cartel/monopolys that determine who gets onto the ballot for you to vote. Look at the current harvest of slime being paraded nightly before us as our "choice". Not a one of them I would trust to to take care of my cat for a weekend, let alone run my country.

Someone not approved by the privileged group has exactly zero chance of even even getting to a primary ballot, let alone into an actual election. The only real chance for change is armed insurrection, but as long as the powers that be insure that everyone is just comfortable and fat enough to remain docile they can insure that won't happen. Living through a revolution is painful, messy, and (to vastly understate it) uncomfortable. Is anyone reading this blog willing to throw away their comforts, their electricity, their computers, let alone possibly their freedom or even lives, just to disrupt the system? I know I'm not.

Further, just because the banks, the merchants, etc. are pushing you to buy things on credit, doesn't mean you have to do so. You are still free to pay as you go, and keep yourself free from debt, though that generally requires that you give up or delay some of the 'luxuries' your neighbors might have. Who was it that said something to the effect that the number of people willing to forgo a meal today in exchange for a feast tomorrow can be counted on the fingers of one toe?

doesn't change basic problem

rubycodez

Mon Dec 10 09:30:30 -0800 2007

manage

well, there are a couple candidates (I assume we're talking about U.S. elections, just for all our many technocrat readers elsewhere) that actually identify the racket, but they of course have a snowball's chance in Satan's bunghole in the upcoming elections.

This brings up something that technocrat will soon get into, there are some very good hearted and caring people who would like to see the initiation to solutions of some of the long standing problems that have been facing a growing number of people in the U.S.A.  They will want to advocate the Democratic party's candidate as the proper choice for those reasons.  I expect Bruce to start doing this soon, it's one of the reason's technocrat exists, for him to have his voice heard on matters of freedom, liberty and empowerment for people.

So I'll just say my opinion on the matter once here, in Slashdot-speak just for impact and emphasis, and then I'll shut up on the subject forever: even though Hillary is willing to toss the bone of promised healthcare reform, and some other reforms, to get the vote of kind hearted and very well meaning people, Hillary R Clinton is essentially a G.W. Bush with b00b135, nothing more and nothing less.


keeping oneself free from debt doesn't solve the basic problems

Lots of cash = target

Matt T

Sun Dec 09 18:50:52 -0800 2007

manage

I actually did this for about two years. Two money orders used for housing ($500 limit per order, if I recall correctly) and cash for everything else. Other than the possibility of being robbed, which remained the same as when I had an account , I had fewer worries. At the very least, you can never mis-balance your wallet.

Being robbed might have impacted my family for more, as all of the money for housing, utilities, and food for the month may have been lost. I'm not certain how that would have turned out, as one never knows what they will do in a true crisis until they are actually in it, but someone's life would have changed.

Idealized banks, if they ever really existed, were safe places to store your money. Now, they seem to all be about providing credit services, not about saving and investing. Even using a regular debit card, the one that transfer the funds from your account to the merchant's with no in between step at Visa/MC, not a check card which processes as credit against the checking account (think secured credit card), is getting to be difficult as fewer merchants want the cost of supporting credit and debit transactions.