In the Temple of the Absurd, Turds of the Absurd, Floating Voters. Turds all the way down.

rogerglewis Says: Your comment is awaiting moderation.
October 5, 2020 at 7:06 am | Reply
Morning Guido,
Greetings from Sweden.
This paper I found very good.

The principles of tax policy by Dr. Adrian Wrigley (RIP)

I was reading this from David saw your comments and thought I would drop by.

The Disloyal

guidoamm July 21, 2014 at 3:16 pm #
Arithmetically speaking, yes. The implosion is inevitable.

Ours is a monetary system predicated on debt. Since we seem hell bent on tweaking and modifying everything under the sun except the monetary system, we must assume that this is the construct we are going to labor under till further notice… (to be kept in mind for the purposes of this discussion).

Under this monetary system, there are only three things you can do with debt:

a) you can increase the debt provided that each new unit of debt gives you at least one unit of GDP

b) you pay the debt off

c) you have the debt written off

The moment that each new unit of debt gives you less than one unit of GDP, you are then left with options b & c

Regardless of how you calculate GDP, option “a” is off the table today. In fact, TARP and the various iterations of QE along with Draghi’s Outright Purchases or Abe’s Three Arrows were stratagems aimed at presumably addressing this very issue. These stratagems have clearly failed in that particular regard.

What we are left with therefore are options b & c.

Options b & c both require coercion however.

At this point it is useful to keep in mind that most people think that the West’s largest creditors are countries like China & Japan. That is false of course.

The largest holders of Western sovereign debt are Western citizens through their pension and insurance funds.

Thus today the choice is to either have the debt paid off or written off.

Clearly, even by confiscating the wealth and property of the entirety of society, Western sovereigns would still be short a few Trillion to repay all creditors. And even assuming they could confiscate the wealth and property of Western citizens along with that of Japan and China and other holders of Western debt, they would still be a few bob short.

We can safely assume that the debt will not be paid off therefore. There are neither plans nor are there suggestions emanating from anywhere or anyone in this galaxy that suggest Western society should have their pensions and insurance funds refunded. Certainly, no Western government is mulling the idea of repaying a foreign sovereign either.

So option “a” is a non starter not least because, other than the above, it would call for a drastic reduction in government too. Can you see politicians and civil servants willingly relinquishing their positions…???

I did not think so.

As a by-the-by, at this point, the latest suggestions emanating from the IMF that advocate the confiscation of pension funds to make good on the debt come into focus. Incidentally, this is not the first time the IMF has put forward similar ideas in the past three years.

You are now left with option “b” therefore.

The trouble with option “b” is that when you work through the numbers, the ramifications are rather dark and violent….

Getting the debt written off is going to be ugly, violent and bloody.

We have already started incidentally.

To make a long story short however, here is where we are going (skipping a few connecting dots).

By inducing macro instability at the monetary level, all those countries that accept US Dollars as reserves are correspondingly destabilised. Destabilisation will manifest in the break-down of all those equilibria that existed at the social, political, ethnic, territorial and religious levels. Socio/economic/religious/political instability brings about strife and destruction.

In light of where global industrial capacity is located, my speculation is that in the next fifteen years we are going to induce the complete destruction of the infrastructure and industrial capacity of South and South-East Asia. Schools, bridges, roads, hospitals, factories, water depuration stations. The entire gamut of infrastructure will be obliterated.

This will take care of a chunk of the “writing off the debt” side of the equation.

That done, we are going to be left with handling the issue of our own creditors at home. All those people that have paid their taxes and have contributed to their pension and insurance funds and that today fully intend on claiming their services from the sovereign.

Yet, the funds are not there. The funds never were there in the first place and they are not there today.

So, what do you do?

What do you do when the unemployed, homeless and soon hungry throngs will be roaming the streets???


Author: rogerglewis Looking for a Job either in Sweden or UK. Freelance, startups, will turń my hand to anything.

2 thoughts on “In the Temple of the Absurd, Turds of the Absurd, Floating Voters. Turds all the way down.

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