Crbon rip-off continues.

[ScottA]

Even the carbon credits that they say will save the planet are fake.
Where's raindog when you need him?
http://www.theaustralian.com.au/business/news/european-emission-trading-rocked-by-scandal-over-recycled-carbon-permits/story-e6frg90o-1225842148852

[Sassy]

Seems ethics has just about become extinct...   

[glenn kangiser]

Raindog.... hmm ... He decided  he doesn't want to play with us anymore because we won't let him be rude and run the show his way....

[pagan]

The whole carbon issue is such a farce.

glenn,

I think I know RainDog from another forum. Same types of posts, language, etc., although his language here was cleaner. He quit that forum when he was asked to clean up his act.

[muldoon]

It's always been about revenue.  It's always been about tax. 

cap-n-trade, healthcare, financial reform and regulation

We are all Greece; we are all California, there is no easy way out. 

[pagan]

muldoon,

Given the nature of fractional banking, wouldn't it be more damaging to world financing for the U.S. government to pay off the national debt?

[muldoon]

muldoon,

Given the nature of fractional banking, wouldn't it be more damaging to world financing for the U.S. government to pay off the national debt?

Every dollar in existence was born of debt.  For every dollar in your pocket or bank account someone somewhere owes a debt because of it.  That's a house note, a car note, a college tuition, a bank loan for a business, a foreign country loan, etc. 

If every debt were to be paid there would not be a single dollar left in existance.  In fact, only the dollars to repay the principle even exist.  The money to pay the interest on those debts was never created.  By definition the system requires two things 1) perpetual growth.  every year it must get bigger because the money to pay off the interest needs to be created.  2) confidence.  anyone who ever used the exponential button on a calculator can see where this leads; you cannot have exponential growth in a closed system.  One needs to know (or pretend) that it always will be that way and accept it.

We have already rolled over in both to some degree but have not seen our oh sh*t moment yet.  I dont know if we will in our lifetimes.  It could be this year, I dont know.  Mathematically I can make the case that we have lived within the conditions for it for decades.  That fraud and corruption and outright theft have been commonplace in politics and finance longer than I have been alive.  One could make the case that we should have crashed in 87 or in 92 or from the dotcom or in 2008.  I dont really like the notion of calling crash and I've only done it once before. 

[pagan]

I think the "oh sh*t" point has come for some of us, and that might expand to others depending on how things play out over the next year or so.

My thought was that by paying off debt you essentially remove the ability of banks from lending based on your debt, thus removing money from the system. If the system needs debt to feed itself wouldn't the U.S. paying down even a fraction of its massive national debt cause disastrous economic ramifications on a massive and global scale?

Do you see where I'm going with this?

[muldoon]

I think the "oh sh*t" point has come for some of us, and that might expand to others depending on how things play out over the next year or so.

My thought was that by paying off debt you essentially remove the ability of banks from lending based on your debt, thus removing money from the system. If the system needs debt to feed itself wouldn't the U.S. paying down even a fraction of its massive national debt cause disastrous economic ramifications on a massive and global scale?

Do you see where I'm going with this?

yes, the destruction of credit is the reverse of the printing press. 

You ask if I see where your going with this.  Here are some relatively current charts from the federal reserve that are from March 2010.  Is this where you were going with this?  as in were already here?  Its called deflating. 

I borrowed some of these from Nates economic edge, hope he doesnt mind. 

Our Nation's Income year over year in billions of dollars


Our Current Government Receipts rose to approximately $2.5 Trillion and has collapsed to less than $2.2 Trillion, again expressed here in yoy change in Billions:


At the same time that our receipts are falling, our Federal Net Outlays are in an exponential growth phase, spiraling up in a now very out-of-control fashion. This is THE most important chart of the modern era! When this chart begins to roll over, and it will, it will mark the end of the last leg of support for our debt crippled economy:



The combination of rising outlays and falling receipts produces a negative Government Savings rate, clearly not sustainable but on an accelerating downward plummet into the depths of nation changing events that are right on the nearby horizon:



You are being told that the economy is improving, the only "improvement" is the amount being spent by the government. Take a look at the Consumption of Fixed Capital, one of the components of GNP:


Sales are up, REALLY? Below is a chart of Real Final Sales of Domestic Products yoy in Billions. Not only is it not positive, but it is still crashing:


The tell in regards to sales is in the tax collected on sales. State and Local Government Sales Taxes are now down about 5% on a year over year basis:


Here's the same chart expressed in yoy change in Billions of dollars – no change of path, not even a wiggle or a waiver:


How about Imports and Exports? Aren't we being told that they are increasing again? Absolutely not the case, again, nothing but collapse. Take a look at Exports of Goods and Services expressed in yoy change in Billions:


Now take a look at the yoy change in Real Imports of Goods and Services:


Historic collapse, take a look at the magnitude of the collapse and how far back those charts go in time. It aint where were headed, its where were at. 

[pagan]

Not exactly, I was thinking our government has no interest in paying down the national debt because of the potential ramifications to the global economy. From your last post I can see we've fallen fast and hard and it doesn't appear to be letting up, contrary to what the media and politicians may claim.

Do you think the deflation was/is a deliberate attempt of making the national debt, and/or trade deficits appear smaller?

[MushCreek]

See the train? Hear the train? Heck, I can SMELL the train! There's a part of me that just wants to crawl under a rock and die, then there's the pessimistic part of me.......

Despite all of the doom and gloom, industry in my field (plastics) seems to be picking up. We bought 4 machines @ $150K each in December, and just spent another $150K on equipment this past week. We've hired about 10 people in the last couple weeks to keep up. Dead cat bounce in manufacturing? It would seem so, as much as I want to believe we are turning a corner of some kind.

[muldoon]

pagan, it's not that I think a deliberate attempt was made to arrive at deflation, I think deflation is the guarenteed reaction to hyperinflation.  I think that we did crash in 2000/2001 and that our "solution" to that was fraudulent securities born on the real estate boom.  Easy credit guarenteed it.  We had hyperinflation not in our gasoline or vegetables but in the securities - dark pools and derivitives markets that most people never saw.  Given the number one 1 from above, the system requires perpetual growth.  When perpetual growth was limited, they created new structures to have paper growth.  How did we go from 100billion in derivitives in 2000 to 54 quadrillion in 2007?  Thats hyperinflation, and the result of it was the crash of 2008.  Deflation is actually the enemy of bankers because assets depreciate. 

There is a very viewer friendly documentary called "Money as Debt" that speaks about how money and debt relate.  I think the section on what happens during defaults is what you are thinking about.  What happens when people stop borrowing?  When they pay off debts or default on them?  The reverse of a printing press.

http://video.google.com/videoplay?docid=-2550156453790090544

mush,
I hear you.  We cannot discount that the us treasury has spent 1/10th of the GDP so some movement is certainly to be expected.  I also was being quite honest that if one only looks for doom and gloom and the math one can certainly make the case that we are on track to crash for decades.  It is possible that we will "muddle through" this somehow and another profit center will open up and we will be saved again.  it was the internet and the computer that saved us once before; it was the housing boom that saved us once before.  Perhaps a renewed manufacturing effort as a reaction to strained ties with China will give us a push, certainly many have speculated that "green energy" would be the next $$$ center.  Again, I do not know the answer.  I will say that I am glad to hear your anecdotal experience that business is picking up and your compnay is hiring people.  My company continues to constrict and outsource.  I swear the absolute worst thing that can happen to use right now is to see an "actual recovery".  If things reversed we would see a turnover of at least 60% before the corporation knew what hit them.  They have made some terrible decisions in how they treat people.

[pagan]

People paying off debt was what I was thinking about.

If "green energy" becomes the new "perpetual growth" venue, wouldn't that then create hyperinflation in that market?