The EU has an outstanding debt of $11 trillion, of which Greece "owns" $267 billion. If the Europeans start saving 10% of their product, they may pay back their debts and interest in about 15 years. To whom? The Chinese. China, Singapur, Taiwan are the creditors. Sooner or later China will be forced to impose some discipline among the irresponsible countries, so they can go on functioning and gradually pay back their debts. The Chinese appear to be the only sober race on Earth.
16 comments:
I believe the S. Koreans are also strong net savers. There was a recent article on how hard it is to get S. Koreans to actually take the vacation time which they are allotted - they prefer to work. They need to bring the French to teach them how.
It's not clear how this will all turn out - saving for the future and investing the savings in a "safe" investment such as Russian Imperial Bonds is supposed to be a mark of prudence but the world doesn't always reward prudence. I suspect the Chinese will soon be able to efficiently use all their own savings for internal projects and will stop lending to spendthrifts. The real problem is how can they keep driving their export driven economy if the Western world is in a state of collapse?
K
They can keep giving customer loans with increasingly harsher terms.
Does it matter how harsh the terms are if the borrower has no real intention of ever paying the principal back? We are in a crazy situation now where the Federal Reserve lends money to banks almost for free, so the banks pay consumers almost nothing on deposits (why pay if the Fed will lend you $ for free?). But the true risk of these loans (except for the federal insurance guaranty) is much higher than 1%, not to mention the time value of the $. So the saver is being doubly screwed (and the spendthifts who borrowed too much are forgiven).
K
So what is the upshot K? The clear lesson is that the savers have to spend more, the borrowers less. There is a paradox built into capitalism. To have a well run factory, the management has to ensure rigourous line discipline, quality control with its massive documentation, and generally regiment armies of workers through Taylorisation of work. It is a kind of industrial Calvinism. But to want end is all this massive effort directed? More pixels for the camera, more storage in the disk drive to store pornography and intrusive data and generally more gizmos to enable the brain dead of the world to prance around like Michael Jackson - stuff we can clearly do without. Worse still in order for the consumers to spend more than is necessary they have to be infected with the spirit of decadence in order to borrow beyond their limits. The hard working Chinese and Koreans, who incidentally stole all their technology from the West while keeping Western competitors out, deserve the company of the lotus eaters from America, Europe and the rest of the world (this includes yours truly). They cannot exist without each other.
They (our Oriental creditors) are just biding their time.
Maybe they don't even know what their ultimate motivation is; just that one way or another, they will have us over a barrel.
And we don't care because:
1. Very few people think more than a few months ahead
2. Our 'leaders' are mainly interested in auto-castration, and see weakness as a virtue.
There will come a Day of Reckoning.
Lordy, Lordy.
Anon.
Ivan's post and your words about the only sober race reminds me that a common occupation for Jews in E. Europe was tavern keeper. In order for their business to succeed their customers had to be drunks and often indebted to the tavern keeper (the drunks would run "tabs" that they would pay off when they had money). Although the tavern keepers worked hard and provided a service that their customers demanded (and were themselves sober - Jews have a much smaller taste for alcohol than Slavs), fundamentally they were not really good for their customer's society (not that the society improved when they were gone). I wonder whether the Chinese are in effect the new tavern keepers of the global village?
K
The Chinese are sharing the planet with drunken adolescents
Here is my question: Why are the Chinese so damn poor? Several decades ago Israelis lived in abject poverty, and with much toil they have achieved Western, or near-Western incomes. China's coastal provinces have developed, but the inner provinces have remained backward. Maybe the average Chinaman has no money to develop is village because his country's foreign exchange has been appropriated by his government.
Ivan, I support the onward progress of technology, such progress isn't necessarily futile just because some of it is used on pornography.
Ronduck, you have to remember that the Chinese essentially started from zero only 30 years ago. If you see how much they accomplished in 30 years (even if it mostly in the coastal provinces) it still is impressive. Pudong, across the river from Shanghai has not only some impressive 100 story skyscrapers but literally thousands of 25 story apartment blocks stretching literally to the horizon. 30 years ago it was farm fields.
K
Ronduck, I have to make my points clearer. So called hard working Chinese and Koreans, tighten their belts, exercise frugality, study maths and science, and become the very model of the old Protestants. This is perhaps desirable after a fashion, the question remains though; what are their fruits? Now in the old days the Pharaohs built monuments, the Europeans launched voyages of discovery, founded all the modern subjects electrical engineering, linguistics, literary criticism and cured diseases, name any field and their achievements tower over everyone else. The Americans made the atom bomb, the modern aircraft carrier, put man on the moon and the cinema. For all this the so-called Protestant virtues can claim some credit. But in this age, all of this goes to support rampant consumerism. Who the hell stays up in his deathbed thinking, man I should have spent more time in office or I should have bought that 42 inch LCD set? I can well imagine Korolev the Russian ruing his inability to be beat von Braun in the moon race, but who really cares if this or that car looks slicker than the other. I say this as a cynical engineer involved in automation and vision engineering, as a result of which I am unemployed and possibly unemployable.
Atom bomb - made by Jews
Aircraft Carrier (nuclear) - Adm. Rickover (Jewish)
Man on Moon - Rocket made by Germans
Hollywood Cinema - Jewish
I'm just saying.
Ivan, keep your head up, something will come along.
K
And what's wrong with rampant consumerism? I enjoy being a greedy little consumer, constantly pining for cameras with better resolution and cheaper laptops. Do you propose that we all be happy, poor little serfs living in harmony under our benevolent lords without a care for the future, or any desire for progress?
Oh! To be in a Holy and Pure society where the nobility, monarchy, priesthood, state and peasants are bound together in one sacred vow of poverty!
I'm sure that you will give me some weak response that says something like: "some balance must be struck between greedy consumerism and the human needs of society". Bahh.
Give me the Old Protestants any day. If you find a good colony of such OP here in America tell me where they are and I will gladly go there and convert. As for the Catholic alternative you seem to be suggesting, and possibly yearning for, it has never produced wealth or power anywhere it has been tried because it is little better than Communism.
K, thank you for your encouragement.
Ronduck don't you see a problem here? Sam Walton, pious Methodist and regular church-goer drove out the Moms and Pops which in American mythology is one of the props of their way of life, tough, hard-bitten, poor but honest people, by regularly undercutting the smallholders and local manufacturers with cheap imports. What then happens to core values of independence, frugality and mutual help? Jack Welch, the American patriot set in motion the transformation of GE from a manufacturing giant to a credit house financing engineering imports from China by always touting alleged savings. How then, are the new generation of American engineers to acquire skills that are necessary for national defence ? Paradoxically, this system requires Americans to become debauched, have no sense of patriotism and hemorrhage skills to the cheaper East. To add a point that may be of interest to you, what do you think is the biggest driver of illegal immigration today ? It certainly isn't the Left much as I would like to blame them. It is in fact the business class with its attendant free trade ideology, that in it relentless drive to cut costs that has inflicted much of the damage.
Ivan, I stand by my point.
Ronduck don't you see a problem here? Sam Walton, pious Methodist and regular church-goer drove out the Moms and Pops which in American mythology is one of the props of their way of life, tough, hard-bitten, poor but honest people, by regularly undercutting the smallholders and local manufacturers with cheap imports.
No, I don't see a problem with Wal-Mart driving out family businesses - none whatsoever. Those family businesses would have sold imports themselves, the only difference is that they would have bought the imports from a distributor. Many American manufacturers have been destroyed due to high state and federal taxes, if such taxes were lower then those businesses would thrive. Texas is a good example of what lower taxes can achieve for America manufacturing. Texas consistently expands its manufacturing sector year after year due to low taxes and regulations. I'm not going to blame WM for the consequences of federal and state tax policy.
Jack Welch, the American patriot set in motion the transformation of GE from a manufacturing giant to a credit house financing engineering imports from China by always touting alleged savings.
Again, I'm not going to blame Jack Welch for the consequences of federal and state tax policy. If GE had decided to keep making certain kinds of products here it would have seen such American made products priced out of the US market, and the factories would have closed anyway due to lost sales.
To add a point that may be of interest to you, what do you think is the biggest driver of illegal immigration today ?
The Roman Catholic church is one of the biggest drivers of illegal immigration. First of all the RCC has a network of lobbyists in every state capitol to lobby for policies that the Church finds to be favorable. These lobbyists even have a national association to coordinate their activities when they are not receiving direction from the national bishops conference. The head of the local "Catholic Conference" here in Arizona is a man named Ron Johnson, and his responsibilities include lobbying the state legislature, and monitoring its activities and members.
Second, one of the reasons illegals get hired is because they are cheaper, and they are cheaper partly because they don't pay any taxes. Catholic politicians often lobby for higher taxes to help the "poor", and then often work to make sure that any attempt to either collect taxes from illegals or to deport illegals is frustrated.
You need to remember that the flood of Mexicans coming north is primarily Catholic and the Church would love to have more Catholics here in the US.
Incidentally, since Catholic politicians often work for higher taxes, and since most such politicians originate in the Rust Belt, it is no surprise that the states in the Rust Belt have some of the highest state taxes in the country. These higher taxes lead directly to job losses.
The 2008 election wasn't the first one in which Catholic voters voted for the Left. As far back as the election of 1932 Catholic voters helped swing the outcome of the election to the Democrats. Long prior to the election of 1932 Catholic ethnic groups were known to be extremely fond of voting for the Democrats, once their numbers were stupidly allowed to grow their fondness began to affect elections.
In railing against the Left here yo are partly railing against your fellow papists.
Ronduck,
There are plenty of leftists to go around of all religions (or none). Keep in mind that the Catholics have, in addition to "liberation theology", also a right-wing anti-Bolshevist history. So you can't blame Obama and our whole inflated government and illegal immigration just on the Catholics (or the Jews or any other group except for the group of leftists and fellow travelers) although they all did their part in bringing us where we are today.
K
Excellent, clearheaded explanation of the Greek situation and possible outcomes here:
http://english.caing.com/2010-03-01/100121558.html
I really feel as if the world is turned upside down - to receive clear headed analysis, untainted by ideology, one must now read the Chinese press. It was bad enough when the Chinese passed us in the quality of their railroads or textiles, but for them to surpass us in the quality of journalism, while their press organs ostensibly remain under state control and ours are supposedly "free", is the last straw.
K
Post a Comment