Friday, December 11, 2009

British Recession Finally Explained - Minus the Agenda

Where did it all go wrong?

Why have Brown, the economic pundits, most economists especially corporate one and the media all misunderstood the economic problems so badly? Debt driven consumer economics became the theology of modern economics. Politicians loved it and so did the banks - they still do. We were all drunk at a party and no-one wanted to listen to 'let's sober up'.

Britain and America are screwed economically. Those with manufacturing and resource economies are all handling the 'global recession' quite well. Those economies which thought borrowing money and ramping up the finance sector was the way to prosperity are heading into depression.

You ain't gonnie get the truth from the mainstream media because they don't really understand it anyway. So, where are you going to get it from?


Below is a video of a fantastic debate. It pitts your typical modern economist - a real money-printing, stimulizing, bail-outing, Brown-nosing Obamanoid against someone who actually knows what he's talking about - Peter Schiff.

You've probably read miles of keich about recovery, economy needing more stimulus, government should be doing more for jobs and so on ad-infinitum. Journalists have published this rubbish unquestioningly as if it were the true path and the word of God. Well, what if spending all that money is taking us from a recession to economic collapse? What if Brown's GBP 850 Billion taxpayer present to the banks is causing more unemployment and financial ruin in the real economy? What if the dogma that has been rammed down all our throats was actually hugely counter-productive?

You've had the phoney debate about economy for years. Now, I present the real debate. Not MSM, banking, politician and corporate theiving propaganda but an explanation of real economy and real money:


Bob said...

I watched that 'debate'. It was very illuminating. Peter Schiff could have been talking about the UK. Our Mr Darling is keeping the bubble afloat long enough to get through the election. The banks that were 'too big to fail 'will actually fail but with more spectacular results when the money printing stops.
That professor was dire and you could see from his body language that he knew he was out of his depth. Gulping his drink and shaking his head. The prof thinks that getting into more debt by borrowing from China is an investment. He couldn't comprehend that a proper investment results in a profit at the end. Like an engineering company building machinery with borrowed money and then selling goods that peole want to buy which then turns a profit.
Peter reckons the US can drag this QE exercise out for another 2 years so I expect a spectacular war is on the horizon. Probably 2011. I can't see any other way out of this situation for the US. They will need a major war to help control the millions of unemployed, starving people.

Alex Porter said...

Hi Bob,
Glad you liked the debate. What a shame that politicians here don't really get it - this debate is going to have to happen and the longer it takes the more damage is going to be done. And you're right, it's the same issues for Britain.

I think that Britain may well be in a worse position than the US. The US has the reserve currency so that kind of helps. Britain's position with derivatives is as bad as the US but the US has a much larger population to absorb the problem.

Yep, the debt load is the problem and Brown is getting the UK into more of it.

The Austrian school of economics seems to be 'on the money' with this crisis. Austrians economists like Schiff have predicted everything that's happening a long time ago and in detail.

The most famous of them was Ludwig von Mises (1881-1973):

"If the credit expansion is not stopped in time, the boom turns into the crack-up boom; the flight into real values begins, and the whole monetary system founders."

and my favourite:

"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of the voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved." - Ludwig von Mises

Alex Porte said...

Just read yor comment again Bob. Yes, I think your fear of war is real. History proves that that is what happens when big powers get into the kind of trouble we're in now! And in ever case!

I have an entry on this. I quote Marc Faber and he has some very well thought out ideas on the subject:

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