Schlagwort-Archive: debt

Over and over and over again

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I warned (see http://fdominicus.freecapitalists.org/?s=central+bank) and other liberal – minded people (liberal in the old fashioned European sense), that central bank are part of the problem never part of the solution. And here you get some other support for that:

http://www.zerohedge.com/news/2016-09-27/bridgewater-calculates-how-much-time-central-banks-have-left

If central banks “own” the debt of state all chances are in vain. It never had worked, it does not work and it never will work.

There is but one thin that can stop this madness, one has to end central bank and never ever let states mangle with the currency again. If that is not changed, all hell MUST break loose at some time.

 

There may be a slight chance

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That even deledefs have to serve their contracts.

In some german blogs it is mentioned that the “haircut” discussions for Greece are stopped. There seems to be some Hedge Funds (what a luck that they exist) which will not agree
to the voluntary debt cut. And they may have a chance to succeed. see also e.g. https://www.nytimes.com/2012/01/19/business/global/hedge-funds-may-sue-greece-if-it-tries-to-force-loss.html?_r=1&pagewanted=all

It would be a hallmark for responsibility. Yes the Greece have made the debt and yes they have to pay their obligations. This would be fantastic news and we had at least some handling against the
disposal of governments. I hope they have at least enough bonds to hurt the deledefs of all countries considerably.

Don’t believe

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in anything you hear from any state. You can bet 99,99 % of it are lies.

I give you but one example: The purchase of Greek bonds. In 2010 the German government asked the banks to buy Greece bonds. A year later they
declared that half of the value of this bonds are “gone”. And it’s of course the speculators which did not buy or sold the bonds which they do not have trusted any more,
which are the defrauders.

It of course not that the deledefs of all countries have collected debts as if they were the most valuable things one could have.

So I repeat myself. don#t believe any promises of states. And do not believe that states will pay their dues. If you believe, you are doomed.

So run to sel all the bonds of states you have and let them crumble. See that you have good relations to producers of food and shelter. Even better see that you can produce food or shelter or
have deal with someone who can. Yes the problem is if you are bound to a country, you are bound to the disposal of the “leaders”. But they can not take everything from you, if they try they sooner or later
will die a miserable death. And it’s not that they want to die, just remember they want but one thing. Live on your expenses.

So I repeat myself don’t believe in anything from deledefs…..

Remarkable

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Saving the delebets way does not mean cut one’s expenses but highering ones income. Now this time it Italy.
A higher tax for the rich, a higher tax on capital gains etc, but not mentioning cutting down the expenses FIRST.
I guess that’s what GDP related debt mens. All you property belong to use. We just decide when and where we take it.

Another astonishing development. Forbidding free trade, you think that some stock are to high and do start selling them, empty. It’s now forbidden in three or so countries here in EUR land. France, Italy, Spain. Remarkable? Not really that are those which most distruste. As I’ve seen yesterday even buying Puts short should be forbidden. That means you can not express your opinion that markets are too high. And that will surely help. It will make everyone feel much better. Or not?

It fits very nicely to my predictions that the worse the state of affairs get, the more the delebets will try to “steer” control. The delebets do know they are wrong-doers but they would never admit it. So they are looking for scape-goats and there they are speculants…..

So one can see the usual lies are not langer sufficient, now they introduce some newer ones. BPOHs

As expected

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It seems I got that right in my last entry. Over the weekend they are facing for a “smaller” solution. And it hurts like nothing else what they’ve to give in
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Charade

2007 there was a debt of around 60% of the GDP now we are beyond 100 % and what’s the “solution”. Raise the ceiling more debt. Still burning money in enormous quantities and suprise, suprise the QE does not have worked. The People keep their purses more shut than open. But one exception. The banks again are making tons of money.

Not while they serve their customers but they “please” the government. So what has changed?

Nothing, the same people before the crisis which were not able to get income and expenses in sync are still sitting in Parliament and have driven but a few quenches of sanity out of it. Yes the evil rich people do not pay enough, Obamacare was established with new laws, new bureaucracies and so we know the prices will start skyrocking.

So what has changed really?

Do you like Thriller?

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With an open end? Or are a fan of horror movies? Now I’ve found something for you:
http://wallstreetpit.com/13428-total-us-savings-rate-lowest-in-recorded-history

Do you feel the cold of death? Or do you fell hells heat? Well whatever it is pray that this chart changes soon.

Or if you are against government as I am pray that the State goes bankrupt. It will be on of the ugliest things you ever will imagine, But then “markt” will be the only
thing left to survive. I just can tell you see the problems we Germans had. And we got a really good revival. But now we are following the US to our own bankrupt.

Yes savings are now starting and yes that is good, but still there is too much debt in the developed countries. What will happen if the money will be used for buying things?
You can see the assets are rising but are they raising because of good business? That’s the question.

I found two very different videos on youtube about it:

and http://www.youtube.com/watch?v=fRV_b2AFnKw&feature=related

We must also keep in mind the Fed has pumped literally tons of money into the economy. They name it the quantitative easing. But the Fed has accepted securirties which do not deserve that name.
And the banks surely have not lend overly much of the money but the bought bonds and I bet assets. So a question not answered to met yet is. How much of the raising stock prices is due to money looking for profitable investment and how much is really driven by more profits from the corporations. AFAIKT is the unemployment rate still raising. http://www.youtube.com/watch?v=0nsehkDwxBA&feature=related

A profitable recovery looks a bit different to me.

So I’m afraid the recovery still seems to be debt driven and not profit driven. So in my judgment peter Schiffer may lie but there still is no recovery but the money is driving up all the prices. So the higher stock markets are currently bubbled and not sustainable. I don’t know if this will change the next months. But because of all the hampering of free markets I’m not very optimistic. And I just can see the signs that inflation is a problem and this of course is due to the insane printing of money. But the FED never ever will admit that. It’s everything else but the loose money policy of the FED. It’s the greedy bankers, the speculators and everything else. And even if it’s worse now it would be even more worse without all the “actions” That’s the fed way and you can not reject it. The unemployment may be even higher without all the interventions and so they are “good”. But is that really true?

I’m afraid it will get worse and worse, there comes the day the bonds will mature and then? There will come the day where the asset bubbles will bust…. I just can repeat myself, don’t trust government. If you do you’ll be among the first losers… Do not buy anything but values yet. Do not buy any bond of the US or you’ll be sorry. That’s my opinion, feel free to decide differently.

Another 12 billions on their way

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The highest court in Germany will start “thinking” about the lawsuits tomorrows. This were initiated a year ago before the first money was transferred. Just imagine you know a defrauder, he is caught and one year “nothing” happens. That’s the situation of the “greece helpers”. It’s illegal, it’s against the no-bailout clause. and guess what nobody cares.
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In fact Germany violates the treaties for the Eu convergence critera. Just hat anyone can remember. 1) not more than 60% debt of the GDP, b) not more than 3% new deficits a year. Nearly no-one fullfilles this things and what happens? Exactly nothing. Greece is beyond 150% new debt of the GDP and probably that’s the most after Japane which over 200% debt /GDP.
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Just imagine you will among the richest men in Germany with 12 Billions. Probably among the top ten earner. And at the top of this earners Aldi stands. And they exist for now 50 years. So the worth of 50 years of work and service to the people gone today. For scammers. And still the same responsible for the scam are in charge in Greece. Everything they have done was lying and stealing but giving them more money is without alternative?
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Was Greece saved?

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The Greek Parliament has agreed and will get another few billions.

Has this changed the fundamental problem? Well let us assume the Greeks really will be able to sell of a few “assets”. How often are you able to do that? Exactly one time.
Now if still the income is not sufficient without this sellings, what will happen then? Now if the Greek have a deficit of more than 10 % in their budget and the selling just bring in this 10%, what
have they won then?

Next years they have the same amount of debt. They have not paid principal they just have used the money for the runnings costs. Well lthe stuff is sold and what now?

Let us assume they do nothing else to make the gap between expenses and income smaller. Then in fact they are worse of next year. They have lost “assets” which potentially can be profitable. But this “profits” are “gone”.

No it’s playing on time. One hopes that in year or so everything will be better. But how will that be done. How many new production lines can one open in a year. And what should they produce? They have not find a way of producing enough for the last 10 years but next year everything will be “solved”?

What you see is what happens if government takes it all. Too many bureaucrats to less productive workers. The result is obvious and still do they start changing that? Well it seems unemployment is on the raise. And now guess what government can not extend the expenditures and if you’d produce in Greece and Greece may default. What will happen to your products. Assume they will get buyed mostly in Greek and the people are unemployed and government also can not afford anything. What are your chances then?

Now without a really reduction of the debt and without budget surplus they have no chance. As I wrote just the payments last year and this year are probably twice as much as every Greek earns a year. So the debt will probably raise up to 180 – 220 % of the GDP and Greek is not known of being a big exporting country. Indeed they earn their money more or less with tourism….

Here are the economic figures of Greek according to http://www.querschuesse.de/griechenlands-industrieproduktion-im-marz-2011-mit-8-zum-vorjahr/ the production has gone down around 8% !!!
the output is down to a level from 15 or so years ago !! the producing part on the BIP in Greece is as low as 9,17%, the overall BIP is something around 320 billions, 10 % of it are 32 billions. Their debt is somewhere in the 400 billion region. Just with 5% interest they would have to pay 20 billions on interest. Fact is the interest they have to offer on the markets are somewhere above 20 % !!!
The import/export budget is 4/2. That means the Greek have to import much more than they could produce. I have not found any figures about the capital in/outflows. But I bet those Greek having something have brought their money abroad. And so tell me whose going to invest then?

A sound rescue looks a bit different to me….

Let’s get over it.

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For year now the establishement tries to save themselves while taking every tax paying cititzen as hostage.

I started my other blog some 3 or so years ago and added the Mises Blog last year. I just cite myself from my outer Mises Blog
http://fdominicus.blogspot.com/2008/09/its-not-plan-at-all.html

or a bit earlier:
http://fdominicus.blogspot.com/2008/09/capitalism.html

I may bore you to death with it, but I think it still is needed that there always was and is another way. If you just have but one plan you have at least two choices. Follow the plan or DO NOTHING.
If you are at the edge of a cliff and see the other side you can try to make one extra step. Or you can just stay, and think.

After a while of thinking you may see that it would be a bad idea to make the step and drop a few hundred meters. You won’t get on the other side while falling to death. So than you think a little longer and you could think of another way of getting to the other side. And you may start looking for bridge or the like. If you find one other “solution” you probably find some other solutions.

Now let’s come back to the state of affairs. If the politicians had stopped three years ago and thought. They might have realized the debt are too high and it won’t help to pile them up even higher. This never has happens with the majoritiy of hte politicians and so they became deledefs. Now everything else is a follow-up to this. And still the economic reality (the abyss) is real. I don’t know of the Deledefs have make the next stupid step. But even if, men will survive. Especially those having lived within their bounds.

You still may declare yourself independent of the stupidness of the deledefs….

For us all the declaration of independence would be sound money, while breaking the money monopoly of any government. Sound money means if you have money you still will be able to exchange that against goods you need. Unsound money may just be stuff to play with for children. So help to fight the central banks and fiat-money, and let’s the deledefs do the last stupid step alone…

Some will never get it

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There are at least two of them here in Euro land. Named Merkel and Sarkozy

Why do I write that? Well they want to keep Greece floating with anohter staging 120 billion bill fo all the europeans. Well they did not tell us they will give this money out at once, but in the end
we’ll have given the Greek something around 200 – 400 billions.

That you got an idea on how much that really is. There are roughly 500 millions living in Europe. (According to Wikipedia) so now let’c caluclate with 300 billions new debt

we have 300 000 000 000 / 500 000 000 = 600 €/each. So for a family of four nearly 2500 €. This money will have to be “spend” in roughly 3 years. So this makes every year for 800 extra payments for paying principal (you know the
other EU countries simply do not have any reserves they just can “pay” this help with another round of debts)

Now how many Greeks are there? 10.688.058 according to: http://www.geographixx.de/einwohner/infos.asp?land=Griechenland

Now three hundred billions of debt are per inhabitant: 300000000000/10500000 = 28571 €.
Surely more than what each inhabitant earns a year.

Everyone but the deledefs can see that this is not bearable. And so things will come as they have to Greece will default. No surprise at all but for the deledefs. And
two of the most stupid are deciding that sinking that much money will “help”. This is so ridicoulous stupid that it’s beyond any understanding.

Let’s have another look at debts

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There are quite a few sites which do care about the careless money printing of the FED and the lending of government.

Just a few actual links:
http://blogs.law.harvard.edu/philg/2011/05/23/visualizing-the-debt-ceiling/
and even more frightening (at least to me):
http://www.usdebtclock.org/

I mentioned Obamas Obamacare which will drive piling new debts onto another level. IMHO the US are beyond the point of no return. They have lived on debt for too long and the longer it persists the harder the hangover.

However I simply have difficulties to believe the numbers from this link:
http://blogs.law.harvard.edu/philg/2011/05/21/california-ballot-propositions-regarding-public-employee-spending/
Robbery is a too weak word for that. Does anyone can support this figures?

However if you read Bastiat you’ll find an interesting chapter head-titled with “The Law”. And as I understand it we are talking not longer about laws to safe one’s property but the plunder version of it. And according to Bastiat it means every one is free to fight that. You can see how “nice” laws were crafted for those plundering. So you can not simply pay no taxes anymore. If you go to the supermarket you pay taxes at the point of the cashier. At least the VAT must be paid. If you do not pay your taxes you will get prosecuted, jailed and disowned. You see the inbalance. The state has all the weapons and enough plunderes helping him. The legislatives holds an executive and the executive must obey the laws of the legislative. And fair enough the executive is paid by the legislative and so in fact all policemen, or anyone else working for the government piles up another level of injustice. They never would see it that way because they are “obeying” the laws, and I’m in do doubt they do. But obeying laws of plunderers means, being a plunderes itself.

And unjust law is just that. And on of the most infamous plunderer laws is that government has the monopoly of issuing worthless paper money. And put force on every one to accept this as “money”. The debt is just another word for slavery. The own population has to work to buy the interest and principal and not one cent from it is beared by bureaucrats or the legistlative. Sure they pay the VAT they pay income tax. But this income tax does not come from serving any customer it just comes from “serving” the law.

And then you can see things like this:

Public Service Is a Noble Calling, Some Say

I’m sorry but everyone working for the government is not honorable, quite the opposite they all work on suppressing every men in a country.

There’s just one thing left.

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Which will stop the deldedefs to ruin us completey. We have to take away the possiblities to mess up with money.
So it all ends in, we need to have a stable money. We have to get rid of the central banks. The problems with
the current state of affairs just show it over and over and over and over again.

Just read the coments of Bernanke or Trichet, the most prominent examples of the heads of central banks.
Just remember the 700 billion TARP money? Just see the 750 billon money for the “european (un) safety net”.

Fact is: The leading countrie are drowning into debts. Expecting that they will pay for it is just “wishful-thinking”. They claim they will start saving, but
this is a lie. So what they will do is inflate the money. This will still from those having savings, but that is
the way it has gone since the 2nd world war. Just look back into the 1970 ies. With their extremly high inflation rates.

That we currently do not see the inflation rate rising is just “by chance”, with all the new money printed they will start raising. And then imagine central banks which will claim
stabiity is reached as long as inflation rates stay below let’s say 10 %. Just let them keep this for 7 years and the value of the debts just have halved….
But if they try to steer back they have to raise the short-termed interest rate, this will get a very very very harsh stop….

I’d prefer not to try this route, so I’m for. Stop the central banks, let’s work for “stable” and valuable money.

A few calculations

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Well our German politicians claim that the speculants are the reason for the turmoils around the EUR. Now let us see whether they may be right or wrong.

Let us assume the following situation interest rate at 10%, time-frame 1 year (to avoid compounded interest)
Now let us assume the probability on not getting back a credit is 10 % (which is extraordinarily high)

So if we spend 100 EUR today what will we have in one year.
– 100 + 110 * 0.9 = -1
This is well negative, and therfor one would not take that much of a risk
Now let’s take failure probability of 5% so the calculation is.
– 100 + 110 * 0.95 = 4.5

Well that sounds “reasonable” you get en expected return of 4.5.
When would you consiser spending the 100 whatever?
Well in case that you get “more” back.
Now let’s see what this means to bonds of Greece. The 10 % is currently a number which the Greece has to offer. So currently the markets think that Greece will not pay with around 10% probability.
Now what if the speculant thinks the likliness on failure is around 20%
When will he/she accept this rate?

– 100 + x * 0.8 = 5

So x has to be 118.75 or 18.75 % interest rate. Well Greece will not ever offer this much interest so there must be another way.
We know hat Greece will have to pay back 100 % of the value of a bond. So we can write:
– x + 100 * 0.8 = 5
or
-x = 5 – 100 * 0.8
x = 75
So the speculant is just willing to buy bonds if the course is that low.

You can see high risks inevitable ask for high interest and/or low prices. Now the figure changes unexpectetly.The speculants “hope” that the EU bails out the Greeks. Suddenly the
75 course is very tempting, because it’s high income with “low risk”. That’s what every speculant is dreaming of. So in fact while the other EU states
offer this credits to Greece the speculants do make a good surplus. Now is that a fault of speculants?

Who has enforced the governements to offer the credits? No one, so the politicans action to back up the Greeks will lead to a “victory of the speculants”. So it’s the other way round
it’s not the speculants will earn big while Greece fails, no it’s the speculants earn big because of “stupid” and very doubtful (legal) actions of the political leaders.

Now it’s getting really absurd. One would not buy any bonds from Greece, but the politcians say. Come on people please buy the bonds we have to help the Greeks.
So the politicans are asking the to help them back up their stupidity and raids. I can not say how distasteful that is.

The whole economic reasoning is lead ad absurdum. In fact defrauding is right, honesty is wrong. Laws are made to save the defrauders and enforce the costs of this action to the honest people.

Moral hazard-² or not?

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Just a reminder the EU president Baroso, wants an action to help out Greece.

The Maastricht Vertrag is very clear about this:

Die Union haftet nicht für die Verbindlichkeiten der
Zentralregierungen, der regionalen oder lokalen Gebietskörperschaften
oder anderen öffentlich-rechtlichen Körperschaften, sonstiger
Einrichtungen des öffentlichen Rechts oder öffentlicher Unternehmen von
Mitgliedstaaten und tritt nicht für derartige Verbindlichkeiten ein;

 

Read the union if not liable for the debts of any other country.

So the presidents asks for exactly the opposite. And he’s still in charge….

Another “paper tiger”. the EU countries are not permitted to have more than 3% new depbs of the GDP. Well there’s probably just one or two countries around adhereing to this.

And again it shows, Fiat-money always falls back to it’s intrinsic value -> nothing.

 

 

Getting the figures straight

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Just found. The assets of the Deutsche Bahn are estimated at around 150 Mrd EUR. Now let’s assume the DB is there now for 60 years.

The new debts of German in 2019 are 100 Mrd (currently, still open to higher values, unlikely to be lower). So our Politicians just destrory something 

the Germans have paid for 60 years in just 2 years. This is so unbelievable that I hope someone can proof this figures wrong.

And again we have robber : people 100 :0….