Wednesday 26 August 2015

Watch Superman it will teach you about economics

As you will know, the world's economic system has gone into a bout of crisis again, and I do not apologise for reminding you that I warned that this was very likely. We had better get used to such crises in the future as they will become a recurring feature of our lives. I listened to several interviews with different economists analysing the cause of this recent crisis and I again concluded that none of them really know what they are talking about because they fail, or simply refuse, to address the real underlying cause, that the dominant free market economic model that governs the global economic system is a lie and a fraud.

Does anyone ever pause to reflect that we were told that one trillion dollars was wiped off share values in one day and nothing really happened? In a real world that operated by real economic activity, a loss of one trillion dollars would cause whole countries to collapse in bankruptcy. The entire global economic world is one of make believe and fantasy. This is money that doesn't really exist. This trillion dollars is a paper exercise. Does anyone remember the Superman film where Richard Prior finds that he is part of a team who round up accounts to the nearest dollar and he discovers that no-one really knows what happens to the cents and dimes that are sacrificed by this process, so he simply creates an account and channels all the cents and dimes into it thereby becoming a millionaire? He has no money, it is all fictional and is simply a notation on a computer programme. It nevertheless allows him to go to a machine and withdraw money, and buy things on the strength that other computers will confirm that he has an account that apparently exists. It is all a world of smoke and mirrors.

That is why a crisis such as the Greek crisis is an illusion. The Greeks, in common with the rest of the world, built up an economy founded on unsustainable debt. Their debt wasn't particularly any worse than anyone else's but this economic model works on trust, and other people lost trust in the Greek's ability to repay their debt and so they forced the Greeks into crisis. If the world's bankers simply wrote off the Greek debt it would not make a blind bit of difference, because these people create money and wealth where there is no real wealth there. Adam Smith's book was entitled An Enquiry into the Nature and Causes of the Wealth of Nations and he identified the Nature of the wealth of a Nation as the goods it produces, and the cause of that wealth, the human labour that went into the production of those goods and the complexity of the division of that labour. Smith was quite clear that the wealth of a nation had nothing to do with money or finance. I am not an expert, but I am sure that one of the principal sources of wealth in Greece is tourism. Should the world help the Greeks to develop their tourist potential I am sure that this would be of far greater value than all the EU bailouts that are simply going into the pockets of financial gangsters around the world.

Your politicians are lying to you and deceiving you as to the nature of wealth and poverty, and to the real sources of wealth and prosperity. It is a major part of their programme of impoverishing and eventually enslaving the majority of their populations to consolidate their wealth and power. You have been warned.

Your Servant
Doktor Kommirat  

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