Monday, January 19, 2009

Years of Slow Torture

The total credit market debt of the USA is 51 Trillion Dollars...It's also the money supply of the USA. So the total debt of the USA is 51 Trillion Dollars.

The public debt or US Federal Government debt is the amount of money that the US government has borrowed from the money supply of the USA which is the total credit market debt...

US consumers since 1944 have requested the commercial banking system to manufacture 51.2 Trillion dollars of new money...which is credit...which is debt.

While in the same time period the US Congress has authorized the US Treasury to issue 10.6 Trillion Dollars worth of Bonds that were sold into the market or used to borrow 10.6 Trillion Dollars of the 51.5 Trillion dollar money supply.

The US Government has not expanded the money supply of the USA...The consumers have.

M3 in 2006 before it was discontinued was 10.2 Trillion dollars. While the total credit market debt or money supply was 45.3 Trillion.

M3 was discontinued to hide the collapse of the real estate sector...It would have shown up in M3.

And then you could point to the great depression of 1990 and say...look it's an instant replay of that collapse...But with it discontinued...You can't and the just think positive cheerleaders can just deny for 2 years basically.

And by that time the general population would forget who was the FED chairman in 2006...

By the time all the yuckies showed up and could not be explained away by the don't worry be happy fanboys anymore...Ben was the FED ventriloquist dummy.

That little trick postponed realization by a year and a half.

The bond markets that are driven by consumer requests dictate the direction the FED has to go. Rates have been driven down by consumers for the past 28 years in the USA and ultimately the world...the FED has just followed along the whole time.

Sure the FED could have said...sorry Idiots...the rates are too low so we will not follow along...the US and global economy would have imploded to oblivion and the culprits...The FED would have been blamed.

Sorry idiots...But it's all of you functioning on a daily basis that dictate what the FED does.

The FED has been following along for its entire history.

The FED tells the sheeple that they can set rates and the sheeple believe them.

That's what sheep are trained to do.

You disagree? I don't all...In the slightest.

I'm not a sheeple and I'm well aware that sheeple have been brainwashed to think the FED has magic powers. They don't...the FED has almost zero ability to set rates...and a very limited ability to engineer rates.

It's the consumers in the economy which dictate profit yields. If consumers are maxed out and broke..there is nothing the FED can say or do. The only power the FED has is the power the sheeple believe the FED has.

For years you sheep were telling me that hyperinflation was going to happen...Because Ben told the sheeple about the magic printing press in 2002 and all the sheep believed him.

That's all Ben did in 2002...Engineer the inflationary expectations of the sheeple.

And the sheeple piled up all their bets on hyperinflation and lost...

The whole time I was saying that it's not going to's going to implode.

That's what it is doing because I'm not a mindless sheeple that believes the FED has magic powers...I actually took the time to figure out if the FED could set rates like they say they can...and they can't.

They can't set rates...They can engineer rates higher or lower for short periods...But without volume to back up the engineering...the rates will not hold.

Lets say the FED needs to hold rates at a certain level...But there is massive volume driven by desperate consumers pouring into the bond markets...When bonds are bid up in price yields are forced down...All the FED can do is sell treasuries into the market to increase supply by the required amount to stop the rally.

One slight problem...The FED can't issue treasuries...The US Treasury can increase the supply...but requires authorization from Congress.

How does the FED keep rates from dropping too fast if their supply of treasuries runs dry?

And sure the FED can buy Treasuries to cause rates to drop...but without volume to back that up...the rates will rise and the FED will be forced to follow along.

Trillions of Dollars of bonds trade on a daily basis...The FED does not have an ability to sustain engineering efforts for long.

The consumers in the economy must back up anything the FED does or it will fail.

If consumers are maxed...there will be no way for the FED to hold these rates down for long..and they will explode upwards.

The consumers have stopped playing along with the FED because the consumers are maxed out and can no longer request the commercial banking system to manufacture the required amount of new money to sustain the FED's game.

The free market is as free at the owners decide.

None of you own it...none of you ever will.

As for JPM...Currently the social engineering is that irresponsible gamblers made insane bets that were wrong.

What is really going on is the reaching of maximum potential compounding.

So when JPM implodes...The masses that have been conditioned for years will accept the current social engineering as true.

It's why the derivatives are being piled up into JPM...

Keep your eyeballs fixed on JPM.

The Banks you hear nothing about are the real culprits.

As far as I know JPM was turned into a front back in 2002...

Bankers know that it's impossible to compound forever...solution...set up a new bank and run the old into the ground or just create a front bank and rescue its assets for fractions of their former price.

The derivatives are just like the explosive changes planted in an old crap heap scheduled for destruction.

The free market price of GOLD is currently 831 US Dollars per 1 troy ounce.

So all you have to do is tell me how a Gold backed currency would work.

From the U.S. Constitution

Section 8. The Congress shall have power...

...To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures .

Ok what is the US Congress defined Dollar?

What is the value of 1 troy ounce of Gold according to the US Congress?

Who invented Congress and who gave it the above power?

Attachment of interest to money will convert the entire money supply into debt that will have to compound forever...

Interest rates are dictated by consumers...

VOLUME...If the volume does not show up to support these currently low rates...Then the rates will have to rise.

Which will annihilate the consumers...

Production cuts are being implemented to cut supply so that at some point demand will outstrip supply and cause prices to rise.

Around that time the FED will point out that inflation is a problem and will say that they have to raise rates.

To play catch up with the actual rates being set in the debt markets as bonds are dumped to position to catch the minor upswing.

The market crashed in did not reach bottom until 1932.

There are stimulus packages in all the major economies that are going to hit as well...The officials will come out and point at a bunch of green arrows and the devout followers of the just think positive ignore the negative religion will breathe a sigh of relief...

After all this hijinx is consumed and crapped out...Everything will begin collapsing again...but worse.

There's years of slow torture in store for all you idiots.

Increasing taxes on the rich or stupid...The top sucks from the bottom to the top...Increasing taxes on the top only causes the suck from the bottom to the top to accelerate.

Where do the so called rich get all the money to pay their taxes now?

Like all things the rich have...from the bottom.

Demand more from the rich and they will have to demand more from the bottom to supply the demand.

The top wants you to strive to become absolute capitalists...That way if the system is threatened you will rush to its defence also when it reaches maximum potential and implodes in your stupid will quickly rebuild it for them.


"The subjects of every state (Bottom) ought to contribute towards the support of the government (Top), as nearly as possible in proportion to the revenue which they respectively enjoy under the protection of the state."--Adam Smith, Wealth of Nations 1776

Governments of the absolute capitalistic hierarchial food powered make work enterprise are administration systems of the enterprise constructed and sustained by the bottom or employees at the demand of the top or owners of the absolute capitalistic hierarchial food powered make work enterprise.

"(Absolute) Capitalism is the astounding belief (delusion or a lie you tell to yourself) that the most wickedest of men will do the most wickedest of things for the greatest good of everyone."--JOHN MAYNARD KEYNES

"America's abundance was not created by public sacrifices to "the common good," but by the productive genius of free men who pursued their own personal interests and the making of their own private fortunes."--Ayn Rand (Absolute capitalist)...Entertains the above mentioned astounding delusion.

"I am rich and proud of every penny I own. I made my money by my own effort, in free exchange and through the voluntary consent of every man I dealt with — the voluntary consent of those who employed me when I started, the voluntary consent of those who work for me now, the voluntary consent of those who buy my product. I shall answer all the questions you are afraid to ask me openly. Do I wish to pay my workers more than their services are worth to me? I do not. Do I wish to sell my product for less than my customers are willing to pay me? I do not. Do I wish to sell it at a loss or give it away? I do not. If this is evil, do whatever you please about me, according to whatever standards you hold. These are mine. I am earning my own living, as every honest(?) man (Woman) must. I refuse to accept as guilt the fact of my own existence and the fact that I must work in order to support it. I refuse to accept as guilt the fact that I am able to do it and do it well. I refuse to accept as guilt the fact that I am able to do it better than most people — the fact that my work is of greater value than the work of my neighbours and that more men are willing to pay me. I refuse to apologize for my ability — I refuse to apologize for my success — I refuse to apologize for my money."--Ayn Rand again (Absolute capitalist) who became rich taking more than she gave entertaining the masses with fiction (Lies) Which she claims to be better than most at telling.

Economic carnage caused by big government run amok...Is an effect of the cause...not the cause.

It is a comedy...You all stare at effects and think they are causes.

Like really at some point you all will start picking sides in a war and basically fight to the death trying to reacquire what you never had to begin with or obtain what you never will.

In the end...You all will choose to do it all over all those who existed before you all existed.

Human beings can choose to be responsible capitalists and share as equally as possible as opposed to choosing to follow the path of least resistance like bacteria do by default.

The whole Universe is escape capitalism...You would have to figure out how to escape the Universe.

Taking more than you give is the same as chopping down tress faster than they regrow...A mindless animal would choose to do that...Like bacteria consuming and reproducing until the supply of food is used up and then having a massive die off.

But Human beings are not like bacteria following the path of least resistance by default.

Human beings can choose.

To be responsible capitalists instead of absolute capitalists.

But following the path of most resistance is much too hard.

It's much easier to choose to follow the path of least resistance like mindless bacteria.

Marching to your doom with glee.

Which is what you animals trained to call yourselves Human beings have done for the past 65 years.

Taking more than you give...chopping down trees faster than they regrow...

Until there was nothing left to take...The trees ran out.

Time to suffer the consequences of that choice.

Taking more than you give is also plunder.

"When plunder (Absolute capitalism) becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it." (An ecosystem where yield locusts thrive and multiply)--Frederic Bastiat, The Law

Loss of Internet will be due to lack of funds to sustain it...You think all that you see is free?

Just to sustain the continued operation of the USA and world during 2007 required US consumers to request the commercial banking system to manufacture 11 Billion dollars of new money/debt per day.

The modern technological versions of these absolute capitalist hierarchial food powered make work enterprises require massive monetary expansion to sustain. Without some kind of emergency actions it will be impossible to sustain electricity and such.

The NWO take over plan...Is a fairy tale to keep the hoodwinked busy trying to implement it.

The top have known all along that it's impossible to sustain the compounding Interest equation.

They figured it out 1000's of years ago...

This implosion was inevitable...

Those that have accepted the NWO programing will of course believe that the implosion is all part of the plan.

Internet down because the top is worried that you will use it to organize?

The top offered it to you for free to get you hooked in the first place...and you just spent years socially engineering each other.

You are in control of you...If someone else chooses to take more than they give...There is really nothing that can be done...

The system has not changed in all its history...All it is designed to do is inflate to maximum potential and then implode.

That's all it can do...It's a wave.

Until you all choose to stop taking more than you give...There will never be a change.

Divide 100 by get 33.33333 repeating sharing everything as equally as possible is hard...or the path of most resistance.

But if you just chop it up into 33 33 and find that taking more than you give is easy...the path of least resistance.

You all can choose to follow the path of most resistance...but you choose to follow the path of least resistance like lightning bolts and bacteria...That are mindless...and basically follow the path of least resistance by default because lightning bolts and bacteria have no choice.

You all have chosen to be mindless followers basically.

It's why you all constantly ask me to answer questions...

How do I know the answers and you do not?

It sure is easy to sit back and let others do the thinking that you are supposed to be doing...

The top does not actually control you all...You all choose to follow the path of least resistance and the top just capitalize on that knowledge you all are unaware of.

It's up to you to figure out where you fit in...

Truth can not be shut up...whether I point it out or not...Truth exists and can not be escaped from.

Solution? Your solution is to just think positive and ignore the negative.

Lies and delusions, which are lies you tell yourself, are positive.

Truth is negative.

Cherished delusions are lies you tell to yourself and fall in love with.

You will fight to the death to protect that which you cherish.

Truth is the enemy of lies.

Those that employ the just think positive ignore the negative equation see Lies and Delusions, which are lies you tell yourself, as positive.

and Truth is negative.

You are in a searech for something you don't want to find.

You did not come here in search of came here to promote or are looking for support for your cherished delusions.

The top know that the Universe is capitalistic...The top want you to fall in love with absolute capitalism.

That way when the system, which is a mass cherished delusion, is threatened you will fight to the death defending it...Also when it reaches maximum potential and implodes in your stupid will quickly rebuild it for them.

The above is Truth whether I'm here to point it out or not.

As long as you see truth as negative the solution will be to run from it and embrace delusions.

But ultimately you are running from that which you will inevitably smash into.

There is no solution to the problem of Truth...

Basically you are all searching for the answer to 1+1=? but ? can not be 2....because 2 is truth which is negative and ignored/rejected in favor of that which is positive...lies and delusions.

It's why none of the solutions in all recorded history have worked or will work.

That's the hell all those who worship the just think positive ignore the negative religion burn in.

I'm not the one burning...You are and it's up to you to choose to stop...It's not my choice.

If freewill is not given a choice it will resist...If you are forced to wake will basically fight to the death to remain asleep.

You will either choose to wake up or not.


Anonymous said...

I believed we would hyperinflate.
I am still not sure a hyperinflation could not happen but we are definately in an
deflation, a deflationary negative feedback loop.
I am glad I started reading your post's on GIM back in 2005 or so.
It got me thinking about the system.
I hedged my bets. No debt, hold cash and PM's. Although I lost my job and am looking for another at least I am not saddled with a mortgage I cannot pay and credit card debts. Thx,
Walter Mitty

Unknown said...

NOT to banks that would encourage debt which CAUSED this. Just give OUR money BACK to us. Money we EARNED. (Debt free, not borrowed on credit at 21 percent.) Its right there in front of everyone. But the democrats do not want THAT part,
Become Debt Free

HYPERTlGER said...

All money is debt or eventually is transformed into debt by people choosing to take it out of circulation and rent it out back into circulation.

Anonymous said...

SO hyper,

Are you implying that all of these crap "plans" are actually going to give us a short term boost in the near future (inflation)?

Are you implying they are in the process of destroying the current banking system to reset it to the new one?

Is it as easy as that?

Anonymous said...

It is ultimately me and every other US consumer that is to blame for this collapse, as well as the absolute capitalist.

I believe any system of money (allowing the attachment of interest or not) is doomed to fail.

The top will find a way to provide the path of least resistance for the bottom to follow and profit (compounding interest or not).

Money facilitates the consolidation of power and incentive for the system to corrupt itself.
Attaching interest just speeds up the process.

Anonymous said...

WHO? I am asking WHO?? WHO are the powers that would prevent a "jubilee" forgiveness of all debt and clean slate?

WHO stops that? Who says NO to that?? And why? Saying "because they are the top and that is just how it is" is NOT an answer.

WHO and WHY?

I notice, HT, that that is NEVER sufficiently answered.


Anonymous said...


I have been reading this blog for sometime and a question keeps occuring to me. You predict that the the financial system will inevitably implode given its very nature however you assume that the TOP(?) will start the game over again. If the global financial system collapses into oblivion then how will the value of anything be determined? How will the TOP be able to maintain its own wealth? What will be the medium of exchange used to reboot the sytem? You seem to imply that the TOP has some way of maintaining its wealth which the rest of us are not able to access and that this will somehow form the basis of the next game. Could you clarify your ideas regarding this problem.

Anonymous said...

Hey buddy, my pals and I are having a 24x7 party in your gut right now. If thats mindless then I'm in brainless heaven thank you very much

Anonymous said...

Leave HT alone. He's a one hit wonder just like we were.

Anonymous said...

Credit and debt are the same thing, that is money. So why do they use different words then?

OK I've had enough. I'm going to take up something much easier to understand than HT's missives...perhaps gene regulation.

Anonymous said...

What happened to the industrialists?

Are they all dead?

Anonymous said...

HT, Hello. What message boards are you posting at? Hope you are well.

Anonymous said...

The US consumer is maxed out, therefore the need for the Amero and NAFTA (more "US" citizens to borrow more Trillions of metamorphosed dollars into existence, thereby postponing the inevitable for a while), am I right? Or a BIG Kissingeresque SUCK-UP to China? HAHA

Anonymous said...

Everyone here is missing the whole point of this entry. There are two ways to stop deflation. Deflation is, by nature, demand destruction, in this case caused by consumers' inability to create (borrow) more "money".

The first is to inflate, but we've already reached the maximum inflation potential. There are some inventive ways to continue this, but not beyond previous inflation.

The second is supply destruction. If inflation less than previous inflation is deflationary, then supply destruction greater than demand destruction would be inflationary. 1+1=2.

This wouldn't be the first time it was tried, and it wasn't pretty. HT likes to use the example of the Brits dumping grain into the ocean while people starved. There are even more insideous ways I can imagine this to happen in the modern era, like a terrorist event, sabotage to the power grid or communications network, or a superspike in the price of oil (which would serve the dual purpose of creating more demand for dollars).

Warning: Speed Bump Ahead

Anonymous said...

Excellent post Skaven!

The Ethanol mandates are the new form of grain destruction. Spun as saving the environment.

Anonymous said... this you at GLP...or an impersonator?

Poster "hypertiger" wrote:

"Because you all have no ability to think for yourselves.

You log on to the Internet to share a brain.

The top offered the Internet to you all for free at the start to get you hooked...

You are all flies caught in the world wide web of lies."

Heads up you may have an impersonator over there. Just letting you know. Not much you could do about it though.

I'm banned over there. So it's not me.

Anonymous said...

What the hell is GLP?

Anonymous said...

HT has provided NO compelling evidence that maximum potential has been reached.

I don't know what he means by taking more than giving. Significant advances in science require ENORMOUS funds, and Bean Counter USA just doesn't get it nor does the HONEST MONEY gang.

So lets say the masses understand monetary phenomena in depth. What change does that bring about in TODAYS REALITY (aka vast over population, automation, etc) ?

mannfm11 said...
This comment has been removed by the author.
mannfm11 said...

I am ready for some more HT. Even though he is hard to follow, the point is that we have been told something in a fashion all our lives that disguises the truth. The truth is that the economy expands by 3%. It can only produce 3% more than next year than it did this year. When we have money, we might draw 5% on it, 2% for inflation, 3% for return, but the makers of the money lend $10 for every dollar they have and they draw, net of losses, 10% or 15% or 20% on their money and they owe us all the money that we owe them except we owe them more than they owe us. If you have $5 and I have $1 and my $1 grows at 10% and your $5 grows at 3%, you have $10 in roughly 24 years. I have $2 in 7 years, $4 in 14.5 years, $8 in about 22 years. You gave me $5 to hold and I took my $1 and now you owe me almost all your money. If we take this forward another 24 years, your $10 becomes $20 and my $8 becomes about $144. There are a lot of exponentials that don't add up that are being sold. One is the stock market. One side always gets too big for the other side to handle and it implodes.

Anonymous said...

Can someone give me an example of a "global credit market"?

I THINK I know what their purpose is defined as: they facilitate lending and borrowing between banks.

But I don't understand it without an example in real world I need an example.

Thank you

Anonymous said...

what is a "bad bank" being proposed by Obama?

I asked this of HT before this was proposed, prior to it being announced...because I knew it was coming...but I did not get an answer.
Now that it is proposed, anyone want to answer?

Why will it NOT work?


Anonymous said...

HyperTigers "brilliant insight" appears to be that fiat EVENTUALLY goes bad. Wow. Thats the stuff of geniuses.

So I guess he's changing his tune from "unimaginably bad" to "years of slow torture".

These "bailouts" are a complete scam to feed global companies that don't give a crap about Nationhood.

And its time for Hypertiger to stop feeding the fear and provide EVIDENCE THAT MAXIMUM POTENTIAL HAS BEEN REACHED, otherwise he's just another clownbear saying look at the charts "its absurd". Yawn, its been absurd for years and years now.

Anonymous said...

Look, the Superbore has been cancelled and the people are being machinegunned down in broad daylight. Banks are closed and the tanks are rolling in the streets.

Cue Cheryl Henderson to post a story where *2000* protesters are making a snit somewhere.

This is sure some collapse huh? A dumb ol sheep like myself thinks its a looting spree with every fucking robber baron declaring "bankruptcy" to grab some loot. And why not kick some employees onto the gov benefits list once in a while. What a fucking scam. This is what the American individualism fad has brought them brilliant consumers. Go ahead be an individual and be so so smart like HyperTiger.

HYPERTlGER said...

Evidence?...It's showing up day in and day out.

And fiat has never gone bad...all money is fiat or by decree.

The top says...this is money...or else.

period end of story.

It's the entire system that is bad...

All it can do is inflate greater than previous inflation to maximum potential then implode.

Regardless of what money is or is not.

Yes years of slow torture...There is going to be no recovery...

Bad bank?

Those people proposing it are rich in money and power beyond your abilities to comprehend.

I'm just a mentally retarded loser of society.

Sure it will work...they said it will so it should...

What is it supposed to do?

Magically return the economy of the planet back to what it was in 1945 in the blink of an eye to give you all you a glorious second chance?

Well if it doesn't do that...It's not going to do anything significant.

Anonymous said...

The bad bank idea doesn't seem like it will help anyone. Even if Uncle Sam buys up all the bad debt from banks, thus freeing up credit, isn't the real problem that consumers can't borrow?

Consumers cannot inflate this economy anymore. It has nothing to do with banks not lending.

I don't see any way out of this other than wide-scale debt relief or a considerably lower standard of living.

Anonymous said...

"Consumers cannot inflate this economy anymore"

Consumers have wasted vast forests full of trees via the Microsoft Office Crap Machine for the past 20years. And yet the accounting fraud game goes on.

Look, HT can sit there with his "wisdom" and contempt for the money tree dreamers and what not for another 10 years for all I care. What I do know is that the guy is not worth a damn penny of predictive value in any reasonable time period.

Cheryl-Lynné said...

"Cue Cheryl Henderson to post a story where *2000* protesters are making a snit somewhere."

It starts small and then builds. Some things take time and, as with the collapse itself, I am grateful... :)

From The Sunday Times
February 1, 2009

Violent unrest rocks China as crisis hits

The collapse of the export trade has left millions without work and set off a wave of social instability

China's new year of the ox portends calm but there is little sign of it as workers in Shezhen protest over unpaid wages as factories shut

Michael Sheridan in Hong Kong
Bankruptcies, unemployment and social unrest are spreading more widely in China than officially reported, according to independent research that paints an ominous picture for the world economy.

The research was conducted for The Sunday Times over the last two months in three provinces vital to Chinese trade – Guangdong, Zhejiang and Jiangsu. It found that the global economic crisis has scythed through exports and set off dozens of protests that are never mentioned by the state media.

While troubling for the Chinese government, this should strengthen the argument of Premier Wen Jiabao, who will say on a visit to London this week that his country faces enormous problems and cannot let its currency rise in response to American demands.

The new US Treasury secretary, Timothy Geithner, has alarmed Beijing and raised fears of a trade war by stating that China manipulates the yuan to promote exports.

However, a growing number of economists say the unrest proves that it is not the exchange rate but years of sweatshop wages and income inequality in China that have distorted global competition and stifled domestic demand. The influential Far Eastern Economic Review headlined its latest issue "The coming crack-up of the China Model".

Yasheng Huang, a professor at the Massachusetts Institute of Technology, said corruption and a deeply flawed model of economic reform had led to a collapse in personal income growth and a wealth gap that could leave China looking like a Latin American economy.

Richard Duncan, a partner at Blackhorse Asset Management in Singapore, has argued that the only way to create consumers is to raise wages to a legal minimum of $5 (£3.50) a day across Asia – a "trickle up" theory.

The instability may peak when millions of migrant workers flood back from celebrating the Chinese new year to find they no longer have jobs. That spells political trouble and there are already signs that the government's $585 billion stimulus package will not be enough to achieve its goal of 8% growth this year.

The American economist Nouriel Roubini said growth figures of 6.8% in the fourth quarter of 2008 masked the reality that China was already in recession – a view privately shared by many Chinese financial analysts who dare not say so in public.

Even security guards and teachers have staged protests as disorder sweeps through the industrial zones that were built on cheap manufacturing for multinational companies. Worker dormitory suburbs already resemble ghost towns.

In the southern province of Guangdong, three jobless men detonated a bomb in a business travellers' hotel in the commercial city of Foshan to extort money from the management.

The Communist party is so concerned to buy off trouble that in one case, confirmed by a local government official in Foshan, armed police forced a factory owner to withdraw cash from the bank to pay his workers.

"Hundreds of workers protested outside the city government so we ordered the boss to settle the back pay and sent police armed with machine-guns to take him to the bank and deliver the money to his workforce that very night," the official said.

On January 15 there were pitched battles at a textile factory in the nearby city of Dongguan between striking workers and security guards.

On January 16, about 100 auxiliary security officers, known in Chinese as Bao An, staged a street protest after they were sacked by a state-owned firm in Shenzhen, a boom town adjoining Hong Kong.

About 1,000 teachers confronted police on the streets of Yangjiang on January 5, demanding their wages from the local authorities.

In one sample week in late December, 2,000 workers at a Singapore-owned firm in Shanghai held a wage protest and thousands of farmers staged 12 days of mass demonstrations over economic problems outside the city.

All along the coast, angry workers besieged labour offices and government buildings after dozens of factories closed their doors without paying wages and their owners went back to Hong Kong, Taiwan or South Korea.

In southern China, hundreds of workers blocked a highway to protest against pay cuts imposed by managers. At several factories, there were scenes of chaos as police were called to stop creditors breaking in to seize equipment in lieu of debts.

In northern China, television journalists were punished after they prepared a story on the occupation of a textile mill by 6,000 workers. Furious local leaders in the city of Linfen said the news item would "destroy social stability" and banned it.

At textile companies in Suzhou, historic centre of the silk trade, sales managers told of a collapse in export orders. "This time last year our monthly output to Britain and other markets was 60,000 metres of cloth. This month it's 3,000 metres," said one.

She said companies dared not accept orders in pounds or euros for fear of wild currency fluctuations. Trade finance has all but ceased. Some 40% of the workforce had been laid off, she added.

Nearby, in the industrial hub of Changshu, all the talk was of Singapore-listed Ferro China, which exported steel products to customers in Britain, Germany, Korea and Japan. Last October its shares were suspended.

The company is reported to have been weighed down by $800m in debts and, according to the specialist business magazine Caijing, has started a court-or-dered restructuring.

A researcher found the gates closed and under tight guard, 2,000 employees out of work and witnesses who told of company vehicles being seized by impatient creditors. Holders of Ferro China debt include Credit Suisse and Citi-group.

Even in the city regarded as the most entrepreneurial in China, Wenzhou, the business community is reeling. "We estimate that foreign companies have defaulted on payments for 20 billion yuan (£20 billion) owed to Wenzhou firms," said Zhou Dewen, chairman of the city's association for small and medium-sized businesses.

"British businessmen are better than other customers because even if they owe money they can be contacted and promise to pay their bills if they can raise the cash but many other foreigners just disappear," he said.

Slumping demand for consumer electronics in Britain has been blamed for the crisis engulfing the southern city of Shunde, in Guangdong, where a cluster of 3,000 electrical firms has grown up around big exporters like Kelon, a white-goods manufacturer.

"The impact on us from the slowdown in the British market will be huge," said a manager at Kelon, who asked not to be named.

Shunde is one of the amazing one-industry Chinese towns that has come from nothing to generate 20% of China's export production of domestic electrical appliances, making 60% of its sales to Europe.

Now the whole province is wrestling with sudden, sharp decline. A researcher who watched officials handling complaints at a local labour bureau reported "class hatred" among workers.

"Why did the boss cut your salary? You must be lazy or absent from work," an official told one group of petitioners.

"What do you mean? Are you an official of the people's government or a slave of the bosses?" demanded an irate worker.

Their claim dismissed, the group warned onlookers: "We are thinking of taking extreme action."

A legal advocate for migrant workers, Xiao Qingshan, told a tale of violent intimidation by the state in collusion with unscrupulous businessmen.

On January 9, Xiao said, 14 security officers from the local labour bureau broke into his office, confiscated 600 legal case files, 160 law books, his computer, his photocopier, his television set and 100,000 yuan in cash.

"That evening I was ambushed near the office by five strangers who forced a black bag over my head and then threw me into a shallow polluted canal," he said. His landlord has since given him notice to quit his rented home.

Xiao said he was defying bribery and threats to speak to the foreign media because he wants international businesses to know what is really happening in "the workshop of the world".

SLV Trader said...

I don't think you guys are really paying attention to what's going on. Nor do I think you understand the context of HT's commentary within the current global "crisis". Let me clarify for you. This is not a crisis, it is a systemic meltdown. Things are not going to get better until they get unimaginably bad. Things will get that bad much sooner than you think. The speed at which events are occurring is indicative of a fractal decline in asset values and an accelerating destabilization of global stability.

This is not a linear process. It is an exponential/geometric process - think thermodynamics, not linear equations. It is a positive feedback loop of negative consequences.

If you are on a chess board, but are playing checkers, you won't know your ass from your face, as seems to be the case with many of you who are asking "where's the evidence? where's the horror?"

Don't you get it? The warning signs and red flags are GOING UP AS WE SPEAK. But most of you don't seem to be able to interpret them properly...

The irony is that many of you here reading HT are products of the outrageously pathetic US education system and would actually have to discard many of the core foundational beliefs you've picked in order to have an objective understanding of this reality, let alone being able to comprehend future events...

Do you see what I'm driving at? Doubtful...

Anonymous said...

"it is a systemic meltdown

fractal decline in asset values

This is not a linear process

warning signs and red flags are GOING UP AS WE SPEAK

pathetic US education system

Do you see what I'm driving at?"

No, not at all. You're pretending to be a physicist is my best guess? My demands are modest. I'll ask again nicely. **When** is this bogus credit society going to blow up already? I've been waiting for decades with the rest of the apocalypse crowd for decades. What I've seen lately is looting by our "leaders", not collapse in progress.

Anonymous said...

Hi Hypertiger,

When government monetize debt into money, is that "new money" debt-free or is it still a debt? If it's a still debt, a debt to whom?

Monetization increase money supply (money that are not requested by consumer), doesn't it?


Mantis said...

Your writings are corroborant to the arc of history. The peasants want bread crumbs, not Truth. I cannot tell if your quest is quixotic or courageous, but it matters not. I've learned much from you, "Hypertiger."

Thank you.


Anonymous said...

Another day of tank tracks getting gummed up from peasant flesh...NOT!

Notice HT hasn't had a repetitive post in a while..?

Okay so how is Iceland doing again?

Cheryl-Lynné said...

Popular Rage Grows as Global Crisis Worsens


As the global economic crisis deepens, tempers around the world are getting shorter. French and British trade unions are organizing strikes, Putin is sending troops into the streets and Beijing is trying to buy itself calm.

A rally against car import duties in Krasnoyarsk, Russia: Citizens around the world are protesting against their governments' handling of the economic crisis.

In the cabinet of French President's Nicolas Sarkozy, there was talk of a "Black Thursday," and from Sarkozy's perspective, that was exactly what Jan. 29, 2009 turned out to be. Schools were closed, and so were railroads, banks and stock markets. Theaters, radio stations and even ski lifts were shut down temporarily. Trash receptacles were set on fire in Paris once again, and a crowd gathered on the city's famed Place de l'Opéra to sing the "Internationale," the anthem of revolution.

The global financial crisis has already reached France, bringing business failures, mass layoffs for some workers and reduced working hours for others. On that infamous Thursday, it drove up to 2.5 million people into the streets, in cities from Marseilles to Brest and Bordeaux. The situation was not like in May 1968, when France was in a state of emergency. Nevertheless, the country's unions called the demonstrations "historic," characterizing them as the most important protest movement to date against the current French president.

Paris is not the only place plagued by unrest. Across the English Channel in Britain, workers protested at a refinery near Immingham in Lincolnshire, triggering solidarity strikes in 19 other locations in the United Kingdom. The demonstrations became a symbol for the fears of the British lower classes, because the country -- according to the International Monetary Fund -- faces the worst downturn among all highly developed economies. Prime Minister Gordon Brown's approval rating is following the decline of the British pound.

In Russia, dismal labor statistics have driven Communists and anti-government protestors into the streets from Pskov to Volgograd in recent days, and in Moscow members of the left-wing opposition even ventured onto Red Square. They ripped up pictures of Prime Minister Vladimir Putin, until police arrested and removed them.

In China, workers returned from festivities marking the spring festival to hear shocking news from their own government. Beijing announced that about 20 million migrant workers -- more than the combined populations of Denmark, Sweden and Norway -- would likely become unemployed in the coming months. The fast pace of economic growth that has lent legitimacy to the Communist Party's hold on power until now has slowed considerably. According to a government spokesman, 2009 will be the "most difficult" year since the turn of the millennium.

About 50 million jobs could be lost worldwide in the next 11 months and more than 200 million people could drift into total poverty, warns the International Trade Union Confederation (ITUC). Guy Ryder, the group's general secretary, believes that these changes represent a "social time bomb," and that the resulting instability could become "extremely hazardous to democracy" in some countries.

In the West, the crisis could cost heads of state their jobs, as was recently the case with the prime minister of Iceland. But what does it mean for the giant countries in the East? Could the regime in Beijing falter as the country faces its greatest challenge since the beginning of market reforms? Are the Russian people terminating their political moratorium with the government, because prices are rising while the ruble falls, or could the middle class even be about to rebel?

Cabinets in London, Moscow, Beijing and Paris have been overcome by a sense of helplessness. Self-confessed workaholic Gordon Brown is trying to cope with calamity by taking constant countermeasures, while Putin sends his police officers into the street and Beijing distributes gifts to the poorest of the poor. French President Sarkozy, on the other hand, remained silent for a full seven days after the first major, large-scale demonstration.

The French president, who usually seizes every possible opportunity to grab the limelight, waited an entire week before finally reacting to nationwide strikes. Last Thursday evening, on instructions from the Elysée Palace, 90 minutes of broadcast time was made available for a television interview, and Sarkozy quickly switched into propaganda offensive mode on multiple TV and radio stations. The gist of his message was that there would be no change in direction, and that the government would continue to emphasize reforms.

In light of what he dubbed a "crisis of brutal proportions," the president knowingly pointed to "hardships" and "worries" and massaged the soul of the nation with therapeutic platitudes. But that was the extent of it, because Sarkozy knows that the Jan. 29 demonstrations did not reach critical mass by a long shot. The motley alliance of protesting professors, nurses, steel workers and students lacked a shared list of economic and political demands. Their banners made a case for wage increases, purchasing power parity or the repeal of tax reforms for the rich. At the same time, however, the protests revealed a deep-seated malaise that penetrates deeply into the conservative electorate of the governing UMP. The overwhelming majority of the French are plagued by fears of unemployment, lower incomes and shrinking savings.

The galloping decline in the economy has further damaged the president's standing. Now that his approval rating has dropped to only 39 percent, Sarkozy is very much on edge. After being booed by angry citizens during a visit to the normally tranquil town of Saint-Lô, the president reacted by imposing a disciplinary transfer on the town's prefect and chief of police.

Two-thirds of the French believe that their government -- despite the €26 billion ($34 billion) economic stimulus package, which even includes plans to renovate churches, government ministries and prisons -- is not engaging in effective crisis management.

Politically speaking, the man in charge at the Elysée Palace will remain unchallenged until 2012. Sarkozy has a solid majority in both the National Assembly and the Senate. The Communists have shrunk to the point of insignificance, and the Socialists are crippled by internecine feuds. This week, however, the alliance of trade unions is discussing new battleground tactics, and it knows that it can depend on the support of the majority of French people.

"The sympathy for the strike movement highlights the ever-deepening rift between the French and their president," warns political scientist and opinion researcher Stéphane Rozès. "We are on the brink of a new epoch, one that will be marked by growing political instability."

'The Fight Goes On'

British Prime Minister Gordon Brown's popularity is falling even faster than Sarkozy's. Despite a temporary boost last fall, when Brown showed leadership strength at home and internationally with his plan to recapitalize the banks, fewer and fewer Britons are now confident that the man at 10 Downing Street has the right recipe for the crisis.

According to recent polls, the opposition Tories have further widened their lead to a comfortable 10 to 12 percent, while only one in three Britons would vote for Labour today. The drop in the approval ratings of Brown and Chancellor of the Exchequer Alistair Darling is especially dramatic on issues of economic competence, where the pair lost a full 12 percentage points within only a month.

These are disconcerting numbers, especially for Brown's Labour party, which almost kicked the prime minister out of office last summer. Coming to grips with the public's growing anger will be one of the prime minister's most important tasks. Although Brown's smart, academic analyses against protectionism are impressive to listeners in places like Davos, the premier is increasingly alienating concerned traditional voters like the folks in Lincolnshire.

In better times, for example, the strike in front of the Lincolnshire refinery would have elicited nothing but a shrug from most British workers. The operator of the plant, the French energy company Total, had wanted to use 300 skilled workers from Italy and Portugal, provided by an Italian subcontractor, for a construction project. According to the unions, the workers were being paid less than they should have been, which Total denied.

After days of unruly strikes, the parties reached an agreement last Wednesday, in which Total agreed to provide 102 additional jobs for British workers. It was a courtesy gesture by the company to preserve the peace. Under the current law, there was nothing illegal about temporarily employing the Italian and Portuguese workers.

The 102 additional jobs are the price the company paid for social peace, but whether it will last is more than questionable. "We may have won the battle, but the fight goes on," says Shaune Clarkson of the GMB union. No one knows whether the message has reached Brown in London, where more and more observers believe that the prime minister lost touch with the public long ago.

Buying Patience

If anyone has a receptive ear for angry grumbling in the streets, it is governments like those in Beijing and Moscow. Both China and Russia experienced serious crises in the 1990s, when their old communist, state-owned enterprises were shut down. In China, 50 million people became unemployed within a short space of time, and in Russia the economic crash almost cost President Boris Yeltsin his reelection in 1996. But both regimes persevered, because both the Chinese and the Russians, after long years of communist planned economies, were undemanding. But in the wake of the economic boom of recent years and the growing prosperity of large segments of the middle class, those days are over.

Ironically, in the year in which the Chinese Communist Party plans to celebrate the 60th anniversary of its rule with a great deal of pomp, the country, for the first time in a long while, will not be able to boast impressive economic statistics. The economy grew by only 6.8 percent in the last quarter. To keep high-school and university graduates employed, China must increase its manufacturing production or the services it provides by about 8 percent annually.

No one truly believes that Communist Party leader Hu Jintao or Premier Wen Jiabao could suffer the fate of former Indonesian President Suharto, who was swept away by the 1998 Asian economic crisis after ruling the country for more than 30 years. Nevertheless, "Chinese society will likely be confronted with more conflicts and clashes in 2009, which will test the abilities of the party and government even further," warned the government-owned magazine Outlook.

Preventing unrest is the order of the day, and to that end Beijing has approved an economic stimulus package worth €460 billion ($598 billion). A portion of the money is to be spent on better social insurance programs, so that people will save less and consume more. A plan to raise the minimum wage has been postponed. Nevertheless, local governments handed out so-called "red envelopes," each containing 100 to 150 yuan (€11-17 or $14-22), to the poorest of the poor during the spring festival so they can buy food.

In addition, Beijing came up with an unusual program. As of Feb. 1, farmers are receiving a cash rebate from the government equivalent to 13 percent of the purchase price when they buy television sets, washing machines, motorcycles or refrigerators. The Communist Party hopes the program will increase consumption -- but also that it will buy it patience and sympathy.

The party is especially concerned about migrant workers, who are losing their jobs at a breathtaking rate. There is hardly any one left in their native villages for farming. The tenseness of the situation is palpable in China's so-called "job markets," such as the one in Canton's Huadu district. Last week, on a side street wedged between factories, shops and apartment buildings, hundreds of men and women jostled up to tables at several leather factories that make bags for the domestic, Russian and American markets. Jobs were available -- for a 10-hour day and without employment contracts.

Nevertheless, the mood in Canton still seems relaxed. And yet no one can predict how long the public's confidence will last. Those who, despite all efforts, can no longer afford the tuition to send their children to school or their parents to the doctor may eventually lose patience with the authorities. In recent weeks, several protests in front of factory gates have turned violent, with police vehicles going up in flames and workers ransacking party offices.

The party is especially concerned about students, who have rarely dared to take to the streets since the 1989 Tiananmen Square massacre. But this could change when their dreams of enjoying a successful career in return for the hard work of their student years threaten to evaporate.

Of the roughly 5.6 million Chinese who graduated from universities and technical colleges in 2008, about a million are still without work. This year, the number of graduates entering the job market will be even higher, at 6.1 million. "If you are worried, you can rest assured that I am even more worried," Premier Wen told a group of students.

Strong Steps

These are not the kinds of words Russians hear from their prime minister. Since the fall, when Putin was still publicly denying that the world financial crisis posed a threat to Russia, Moscow has primarily been preparing itself for one thing: to keep its own people in check if worse comes to worst.

The rulers' fear of the ruled has plagued every Russian government since the days of the czars. It suddenly reappeared when Yevgeny Gontmacher, a respected social economist, published his essay "Novocherkassk 2009," in which he warned against uprisings in the provinces. The essay alluded to the riots that broke out in the southern Russian industrial city of Novocherkassk in June 1962, following price increases. Five thousand angry workers took to the streets, and the police and army were ordered to shoot the protestors. More than 20 people died, and seven ringleaders were executed.

The mere mention of this long-suppressed drama was enough for the authorities to threaten to withdraw the license of the liberal business magazine Vedomosti, which had published Gontmacher's article. The magazine was accused of "incitement to extremism" -- and this despite the fact that the author had held an important post under Putin.

But in taking this approach, the Kremlin merely confirmed Gontmacher's core thesis, namely that the Putin system, which increasingly emphasized central control and repression of political foes already during times of economic growth, is incapable of responding flexibly in a serious crisis. Indeed, the government reacted in panic immediately after the first demonstrations by angry merchants in Vladivostok, who were incensed over an increase in import duties for Western used cars, by portraying the protestors as the victims of foreign intelligence services.

Pavel Verstov, a member of Putin's United Russia party until recently, can also attest to the Kremlin's helplessness. Verstov, a local journalist, had reported on suicides at the largest steel mill in Magnitogorsk, an industrial city in the Ural Mountains region. Four workers had killed themselves because they could no longer repay their debts. Hundreds of thousands of Russians are now under similar pressure, after having taken out euro or dollar loans from banks to buy houses or cars. But now that the ruble has lost 47 percent of its value against the dollar since last September, the borrowers' salaries are no longer sufficient to service their debt.

Verstov was expelled from the government party. A local party official branded him as a "troublemaker" and declared: "the security forces will take strong steps to thwart all attempts to destabilize society." He called upon his fellow party members to stand behind President Dmitry Medvedev and Prime Minister Vladimir Putin.

The two men are still strong in the polls, with Putin's approval rating at 83 percent. However, polls conducted by the public opinion research institute Levada Center show that confidence in the government is vanishing almost as quickly as the country's financial reserves. While only 27 percent believed that the country is moving "in a wrong direction" in October 2008, that number had already risen by half by the end of December. Almost one in two citizens fears that "the government cannot effectively combat inflation and salary losses."

To bolster the banks, the ruble and heavily indebted major companies, the government has already spent a third of its once formidable foreign currency reserves. After a still-respectable economic growth figure of 5.6 percent in 2008, German Gref, a former economics minister who now heads the country's largest bank, now expects three years of recession and stagnation. "The government does not have a plan to cope with the crisis," says Gref.

In this situation, it is not Garry Kasparov, the leader of the extra-parliamentary opposition, who poses a threat to the Moscow power elite, because the former world chess champion has far more supporters in the West than in Russia. And Communist Party leader Gennady Zyuganov, for his part, has made his peace with the powers that be.

The real threat comes from another direction. The Kremlin fears that members of the middle class, loyal Putin supporters, will withdraw their support if the prosperity of recent years vanishes. In December alone, disposable income sank by 11.6 percent, and 5.8 million people are already officially unemployed. Arkady Dvorkovich, economic advisor to President Medvedev, believes that the unofficial figure is closer to 20 million.

So far, few have protested in Putin's giant realm. But the fact that there have already been open calls for Putin to resign -- as in Vladivostok -- shows how quickly supposedly stable power can be eroded.

A respected Moscow political scientist points to a dangerous disaffection between the "ruling elite" and the passive majority, warning that there are no longer any functioning relations between the country's rulers and its population, television excluded. In times like these, he says, this could prove to be devastating -- and it could ruin the Putin system.


Translated from the German by Christopher Sultan


Anonymous said...

Just back us our money.


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