Schlagwort-Archive: credit expansion

The spiral of interventions

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Well now we see another template example of interventions.

Argentina, has obviously left the area of markets due to the “politics” of Mrs Kirchner and her spouse. In a side-note
of the newspaper of my wife I found: Inflation 25% and official course between Peso and $. And what has happened before.

It started with good running exports and higher as usual prices for the exported goods. So far so normal, then comes the Kirchners and what did they do?
They spend this money on welfare (and if there is but one way to get money burned faster, really burn it). This has bought here enough votes (yes the merits of democracy) to
get re-elected. and it has come as it always comes.

The prices for the export goods are falling and she does not have enough money for their “welfare” operations. Well one might think well one must cut them back. That’s normal thinking, but not the
Deledefs way, and so they make more debts (one just can say as usual) and started to make restrictions on free trade. Well if you mess with the markets the only answer there is appears, the prices start
raising. And indeed even the stupid newspaper of my wife at least has to “admit” that inflation is beyond 25%. 25% means in a little over 3 years your property halfs in money value. You can bet the only things raising as fast as inflation are always the all-day-needed goods. And so the poor start paying the bill immediately.

Now the people act logically and try to get rid of the Peso and that means they buy other currencies, and this get the next reaction. Controls on the money export/exchange and indeed this is what Frau Kirchner and the Poligangsters did, they “forbid” exchanging into $ and now $ are scarce and a scarce thing does what? Exactly it raised in Price, now the official exchange rate and the “paid” exchange rate differ around 40%.
Very “appealing”, the members of the parliament (probably of Mrs Kirchners party), do what? They buy more Dollars and they can, so much to “equality” before the law

So the end is coming, and the interventions gets more and more by the hour. People which have gained at least some wealth are not expropriated by the inflation initiated by interventions of the state. The sucker spiral turns faster. I guess within the next 5 years Argentina will fall back below 3rd world level. So dear Argentines, say “thank you” to your deledefs. And bite yourself because of your stupidity.

It never rains but it pours.

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Well we see the catastrophes coming.

Spain, Greece, Ireland etc. have suffered (and are suffering) severly under a credit expansin. We know that this will lead to a catastrophe sooner or later.
Von Mises has told us, Hayek hase told us and many others also. Currently it looks as if the Deledefs world-wide would like to be the template for credit induced defaults.

Anywa that is not all that has hit Greece, Span or Ireland. The other big big big problem are the subsedies of the EU. This money was of course not given to the people but other governments for “developing” their countries. And so they did. New streets of highes quality, bridges etc. All a bit larger because of he “expected” growth. Anyway in a free market that never would have happened (at least not so long and that absurd) and now they are hit not only with overwhelming credit but with a infrastructure too big (but anyway one has to support it or it will break down). I guess for the next few years thise cuttings will come and with it another wave of defaults (this time in the building industry)

The problem shows that one fault often leads to another while trying to fix it. And this time they are completly wrong. The problem was credit expansion but now they want even more form that and ECB should finance the states. That surely will not do. It’s the biggest faule they can do. And so the header will struck with force but it’s the Deledefs own fault. They never understand and work for markets always and ever for ever expanding government. Surely the way to hell.

Examples

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of von Mises credit expansion, and less disturbed markets.

Since a few month there is just one way for stock: up. Driven by?

Well as we learned some of the companies (in the IT section) are earning really big. Isn’t it amazing? They live under constant price pressure, and indeed falling prices since at least 20 years.
Now you can buy mobile phones with more computing power as super computers some 10-20 years ago. And here in Germany we have more mobile phones than inhabitants. This is a an example for
more free than strangled markets. Assume other area where less is regulated etc. So indeed they are earning their money. People want to have this phones.

There are other areas where much is earned (even measured in records) the German car industries. VW, BMW they nearly never have earned more. Fair enough it’s with ol’e fuel burning cars. The so wished for cars driven by electricity do not have any real market share. Again people seem to be willing to buy German cars wold-wide

But what about all the other raising prices. Well AFAIK they are driven by “free” money. And indeed this money was not earned but “generated” from central banks, and this money disturbes every thing. We simply do not know any more what parts of the raises are due to “demand” and which one are just due to the inflated money base. The prices are loosing more and more their indication value of sparseness. And that is the von Mises credit expansion. There are “success” stories of employment but is that really true. A lot of figures to seem to indicate this is not the case. And who publishes this statistics organization of the states. In Germany we just know one thing the low paid , half time working day is on the raise. I can’t tell if it’s due to the people wishing to work shorter times or simply not finding normal paid working days. I can’t tell, but at least it seems this is not what most are wanting. But the raising part-time working days do have effects on everything. Of course the people do earn less, and so they surely demand less. And this means the current fired demand by “cheap” money can end and in fact will end one day. We do not know when, we’re lacking the “base” information undisturbed do give us. Most of the prices are not set any more by offers/demands, but by prices set independently just by different taxes.

We know e.g that oil prices are near their highs from around 2008. We also know what has happened the last four years, will it be different this time? We can doubt it. As von Mises has told us, some day credit expansion has to stop. The earlier the better, but the central banks to have prevented that “healing” for now at least 2 – 3 years, and if we follow von Mises this means the crash of whole currencies is inevitable. So yes be happy that the stock prices are raising, but do not forget to sell in time….

As I wrote examples of earning and burning….

Look who is printing now

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Obviously the ECB could not stand the misery of the FED alone. This poor guy, just think printing money will solve the problem caused by too much money. (too much cheap money indeed). And so the ECB in it’s own mercy decided: “We print money also”, an offered a three year long tender at an interest near zero. The sum is now well above 1.2 trillion. Money not saved, just introduced by the supermen/superwomen of the central banks.

So the plan must be to ruin the currencies completely. The do not stop credit expansion but adding to it way to much. It should prolong the illness and or prepared for the total break-down. Why they do that? Well it’s the believe that you can generate money out of the blue and nobody should notice. Well you can see where it ends. We know have much higher market prices for nearly everything. Are the shareholders that much richer?
No they are not they just get more calculation units as before.

The reason of this money printing is most charming. Working against some credit crunch. Ah yes that’s our problem too less credit, or not? If a private company would make such manipulation, they would go out of business, but the beneficial (for Deledefs) central bankers, see themselves as the last frontier to barbarism. Central banks suck.

Fed Money at work

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What a suprise a new bubble is growing.

According to a German Magazine the prices for land are soaring. Within just a few years a hectare has seen an increase in price from 5000 USD to 30000 USD. That’s a raise or 600 % and you can bet
this is the next bubble. Fueled and fired by the ever expanding credits (called money from the FED). It all happens because of new laws and the mania to subsidy “renewable” energy. But of course the base for that
all is the zero or below zero interest politic from the FED. In short money printing at work. The Fed sucks

The other big driver is the granting of patent privileges, enforced by the all so loving state. States suck.

The magazine write about the vanishing middle class. What a surprise if you take from the middle to pay the top, they surely will not get richer. Anyway the middle classes believed also in “easy” money, while using credit for buying houses. Too much credit and now what has happened this bubble has busted. And now they are in trouble, what a surprise. It’s not alone the fault of the authorities (but they have made it so easy to get credits) but also the believing that this could be sustainable. Sorry vanishing middle class you suck also. You’ve build on credit and you get what you deserved. Not needing credit is the way to go for the middle class. Especially not using credit to pay consumption. Sorry guys, credit sucks very badly.

If you trust on credit you trust on hot air. Only real savings yield wealth. That’s the all and ever true way.