Economics 101 - US Credit fall and coming war

[Shringarey]

This is a primer about Economics. What is money? What is credit crises? What is the future of USA? What will happen tomorrow? Why a war is imminent?

This is from basics. So those who know it, please forgive me as there are many who do not.

The idea is to enable people to understand "money" in a practical sense. How ignorance of money is the cause of all problems

[Shringarey]

There are many people on e-charcha. Suppose we all had a garden that we want to tend. We need to water it every day. However, there is a catch. We cannot leave out of town for any particular work, because the garden will be unwatered and flowers will die. What do we do?

We come up with an idea - TRADE. I water your plants today, so you can leave for town. You water my plants tomorrow, so I can do the same. It works fine. Everyone benefits. But there is a problem. I need to find a person who
a) Is free to water my plants when I am outstation
b) Wants his plants watered when I am in town.

This is double co-incidence of wants.

Sutradhar comes up with an idea. He gives each one of us 10 tokens called "Water My Plants". The idea is this - when I want my plants watered, I give a token to anyone who is ready to water my plants. Similarly, I will water anyone's plants for a token.

This token is money. It is called as M1 (em-one). You hear of the word Money Supply. This is NOT money supply. It is just money. It is a medium of exchange. A unit of value. How does it get its value? NOT FROM SUTRADHAR. It gets its value because everyone agrees that it has value. Period. It is a common standard like a kilo or a second or a metre.

Where does the original coupons come from? From thin air. Just by Sutradhar printing it. It works fine.

[Shringarey]

The total amount of money here is the total amount of coupons. Now Sutradhar, may have millions of coupons in his cupboard. It matters not. It does not enter circulation. Similarly, in US, money (M1) is the total amount of $ notes and coins in circulation. How much notes and coins are in Fed's vaults is immaterial - they are NOT in circulation. This part is clear. HOWEVER......

What if Sutradhar, surrepticiously, for whatever reason, slowly hands over a few coupons to a few of his friends? They enter circulation. Automatically it becomes MONEY. Just as, if the Fed introduced notes and coins from its vaiults into the economy - it increases MONEY (M1).

Now, back to coupon example. Seeing echarcha starting a scheme, another site, gandmastee also starts a similar scheme. Gandmastee is like Fed of another country. There is a difference between echarcha and gandmasti though. The people of Gandmasti are conservative and go out on an average only once a month. They also tend to water someone else's plants once a month. You would realize that every trade has 2 sides, buyer and seller. The average of plants tended by a person = average of plants got tended by another. Its a mathematical truth.

WHAT IS SOLD = WHAT IS CONSUMED

echarcha has a more aggressive people. They go out once a week (as against GM's once a month). They also tend someone else's garden once a week.

You can say that GM people have low income (how many coupons they receive by tending other's plants), and low expenditure (how many times they get plants tended by another).

On the other hand, echarcha people have high income (how many coupons they receive by tending other's plants), and high expenditure (how many times they get plants tended by another).

The Quantity of MONEY is the same. But in GM, a coupon transacts every month, while in echarcha it transacts every week. We call it the velocity of money. echarcha has a velocity of 52 trades per year, GM has a velocity of 12 trades a year. echarcha makes its money work HARDER.

So, there is nothing wrong with consumption. There is nothing wrong with Production. How much your money works for you is the issue.

Just want some feedback upto this part. Is it clear or you have some doubts? Cannot go ahead without this being crystal clear.

[smellyfinger]

Just want some feedback upto this part. Is it clear or you have some doubts? Cannot go ahead without this being crystal clear.

I have some doubts. If gardeners are doing gandmasti in sutradhar's cupboard, how come the rain in Spain stays mainly in the plains?

:dontknow:

[dollyg]

Please carry on, with u so far...

[Shringarey]

I have some doubts. If gardeners are doing gandmasti in sutradhar's cupboard, how come the rain in Spain stays mainly in the plains?

:dontknow:

;););)
:clap::clap::clap::clap::clap::clap:

[echarcha]

Carry on.. this is good!

[echarcha]

Okay here is a related video.

A man with two masters degrees is homeless!

8eNPAH46oI8


55 year old Maurice Johnston lives in Boston, by way of Cleveland. He has a Masters Degree in Plasma Physics from Dartmouth College, and a masters in Electrical Engineering and acoustics from Purdue University. He's worked over 10 years at Lockheed Aerospace & Aerodyne Research Corp. Maurice has taught in Science and physics, and took care of both his parents in their time of need. Maurice is very well spoken, (he sounds like Obama) and is very kind, so why is Maurice homeless.....

Maurice is referenced in the Boston Globe here: http://bit.ly/mSFI0O

Maurice has an in depth "LinkedIn" profile here: http://linkd.in/lK0bdJ

[dhurandhar]

Okay here is a related video.

A man with two masters degrees is homeless!

8eNPAH46oI8

he has 17 years of gap in employment (from his LinkedIn page)...from 1990 thru 2007.

Homelessness is due to many factors...degrees reduce odds of being homeless to a certaine extent:D

[Premi]

he has 17 years of gap in employment (from his LinkedIn page)...from 1990 thru 2007.

Homelessness is due to many factors...degrees reduce odds of being homeless to a certaine extent:D
family problems dhuru pai...

[Napolean]

Interesting.Please go on.

[dhurandhar]

family problems dhuru pai...

how do you know?:D

[Premi]

how do you know?:D


he said so...

youtube working there na.... :)

[badriprasad]

Just want some feedback upto this part. Is it clear or you have some doubts? Cannot go ahead without this being crystal clear.

Shringji ... you may continue since most members are able to follow ... I am in same situation as Smellybhai. Perhaps if you were to try to make it less riddle and more 4th grade simple. For starters ...

US economic mess is like 4 blind men and elephant. Nothing is simple. Huge tangled web. So which segment of economy you are trying to make us understand? Money supply? Once upon a time ... there was no money ... people traded commodities. So in other words Sutradarji's coupons represent a commodity? Do I get it right?

Thanks.

[badriprasad]

Shringji ... Once upon a time ... there was no money ... people traded commodities. So in other words Sutradarji's coupons represent a commodity? Do I get it right?

Thanks.

Intention is not to veer you away from crust of the topic but make it 4th grade simple.

Shringji ... unlike Sutradarji's cabinet full of coupons ... here is what we learnt in 5th grade ... during initial stages of local economics ... commodities had to be produced. For instance ... farmer went to Marwari Seth to borrow some seeds with the promise to pay with farm produce. Rajah's sipoys came and took their share of whatever was left of the produce. Farmer had some coupons left to go trade. That makes Marwari Seth first capitalist and Rajah first federal reserve?

[dhurandhar]

he said so...

youtube working there na.... :)

Youtube working...in 17 years the guy just lived off his savings! I find that hard to believe that he is a modern day "Shravan". He didn't have to sit by his parents all day for 17 years. On another thought, if he could live off his savings for 17 years, he could easily have bought his parent's mortgage and start anew...with a double master's degree a person would atleast think of some logical path to take.

If I find it hard to buy his story..I am sure even a sympathetic HR person would not be able to sell his resume to their engrg dept.

[Shringarey]

Shringji ... you may continue since most members are able to follow ... I am in same situation as Smellybhai. Perhaps if you were to try to make it less riddle and more 4th grade simple. For starters ...

US economic mess is like 4 blind men and elephant. Nothing is simple. Huge tangled web. So which segment of economy you are trying to make us understand? Money supply? Once upon a time ... there was no money ... people traded commodities. So in other words Sutradarji's coupons represent a commodity? Do I get it right?

Thanks.

Nope. Sutradharji's coupons represent MONEY - ie. Dollars and coins

US is in a tangled mess as far as economics is concerned, not as far as understanding is concerned.The situation is UNPALATABLE not UNUNDERSTANDABLE.

I did not use the coupon example to make it a riddle. I need to use the VELOCITY of money very critically in explaining what is happening.

[Shringarey]

There was an island (I forget which) which used Stone Money. The ancestors of the people had brought hughe ring shaped stones from another island by boat, and had kept it on their island. It was their MONEY.

You could not transport it, but everyone knew what everyone owned. That was enough. One particular family while bringing the stone ages ago, met with an accident, and the stone sunk to the bottom of the sea. Everyone believed them. They can use that "unseen stone" for purchases, and it "belongs" to the other party. For smaller transactions, they use shells.

They were attacked by Nazis during WW2. The Nazis wanted to make the island as a base, and tried to use the islanders as labor for a chotta port. The islanders would run away. No gifts or threats worked. Finally, they "confiscated" all the stones. How? By simply putting a cross on them, they claimed the stone as theirs. The islanders were shell shocked. They FELT poor. They agreed to work. The port was done. The Nazis then wiped out the crosses.

Putting the crosses is like Govt taxes, appropriation, port is a public project and wiping the crosses is like public expenditure.

The crazy part is that this is a true story. The islanders could theoretically have continued inspite of the Nazis. But they did not. This shows that every thing works based on EXPECTATIONS of what others will consider as money. This is important.

[Shringarey]

I am writing all this, out of a great emotional reason. When I was growing up, I was taught by my elders all sorts of things about economics and finance - how the rich are evil and poor are good and honest. It took me a loooong time to get the bhoot out of my head. A longer time to understand some economics.

I used to be told that there is enough for everybody's need, not greed.

This is untrue. There is enough for everyone to lead a happy and fulfilled and PROSPEROUS life (see our prosperity vis a vis that of 100 years ago). Believe me, if we get our act together, we can easily beat shortages, including oil.

But because of ignorance of money, people think in a particular way. They take decisons affecting public finances in a particular way (through elected representatives) and we go downhill.

Just trying to exlain here what I can, so at least some people understand money.

[Diplomat]

There was an island (I forget which) which used Stone Money. The ancestors of the people had brought hughe ring shaped stones from another island by boat, and had kept it on their island. It was their MONEY.

You could not transport it, but everyone knew what everyone owned. That was enough. One particular family while bringing the stone ages ago, met with an accident, and the stone sunk to the bottom of the sea. Everyone believed them. They can use that "unseen stone" for purchases, and it "belongs" to the other party. For smaller transactions, they use shells.

They were attacked by Nazis during WW2. The Nazis wanted to make the island as a base, and tried to use the islanders as labor for a chotta port. The islanders would run away. No gifts or threats worked. Finally, they "confiscated" all the stones. How? By simply putting a cross on them, they claimed the stone as theirs. The islanders were shell shocked. They FELT poor. They agreed to work. The port was done. The Nazis then wiped out the crosses.

Putting the crosses is like Govt taxes, appropriation, port is a public project and wiping the crosses is like public expenditure.

The crazy part is that this is a true story. The islanders could theoretically have continued inspite of the Nazis. But they did not. This shows that every thing works based on EXPECTATIONS of what others will consider as money. This is important.

I know this story. Which is why I say everything is relative.

[dhurandhar]

There was an island (I forget which) which used Stone Money. The ancestors of the people had brought hughe ring shaped stones from another island by boat, and had kept it on their island. It was their MONEY.

You could not transport it, but everyone knew what everyone owned. That was enough. One particular family while bringing the stone ages ago, met with an accident, and the stone sunk to the bottom of the sea. Everyone believed them. They can use that "unseen stone" for purchases, and it "belongs" to the other party. For smaller transactions, they use shells.

They were attacked by Nazis during WW2. The Nazis wanted to make the island as a base, and tried to use the islanders as labor for a chotta port. The islanders would run away. No gifts or threats worked. Finally, they "confiscated" all the stones. How? By simply putting a cross on them, they claimed the stone as theirs. The islanders were shell shocked. They FELT poor. They agreed to work. The port was done. The Nazis then wiped out the crosses.

Putting the crosses is like Govt taxes, appropriation, port is a public project and wiping the crosses is like public expenditure.

The crazy part is that this is a true story. The islanders could theoretically have continued inspite of the Nazis. But they did not. This shows that every thing works based on EXPECTATIONS of what others will consider as money. This is important.

More correctly, expectations of value associated with the piece of metal/paper that people call money. Furthermore, expectations are inherited unless critiqued via rational thought. But just because one gets enlightened about economics does not change the reality....both the master and slave affect each other...one cannot do without the other...sometimes slaves may drive one master, but one of the slaves will be a new master...same game different players:D

[dhurandhar]

I am writing all this, out of a great emotional reason. When I was growing up, I was taught by my elders all sorts of things about economics and finance - how the rich are evil and poor are good and honest. It took me a loooong time to get the bhoot out of my head. A longer time to understand some economics.

I used to be told that there is enough for everybody's need, not greed.

This is untrue. There is enough for everyone to lead a happy and fulfilled and PROSPEROUS life (see our prosperity vis a vis that of 100 years ago). Believe me, if we get our act together, we can easily beat shortages, including oil.
But because of ignorance of money, people think in a particular way. They take decisons affecting public finances in a particular way (through elected representatives) and we go downhill.


Just trying to exlain here what I can, so at least some people understand money.

who is "we"? Please justify using an assumption..suppose everybody knew exactly what money was all about...then how will the circumstances evolve to converge to the result you assert?

[Shringarey]

who is "we"? Please justify using an assumption..suppose everybody knew exactly what money was all about...then how will the circumstances evolve to converge to the result you assert?

Sorry for inerrupting the thread, but I will answer you.

Everyone on this site probably knows and believes that knowledge is like a candle. If a candle lights another, its own light does not diminish. Knowledge is NOT a zwero sum game. I can be knowledgeable without reducing your level of knowledge. We can (the whole world) be reasonable literate and knowledgeable. Yet, there are many people who do not accept it. If you see the psyche of SC/ST, a lot of them (bit not all), have a deep unspoken assumption - that if someone's knowledge increases, there will not be enough for him. I have seen Dalits getting angry and upset because someelse is studying!!!! This mentality I have seen with even UC people, especially Brahmins. When anyone talks of opening a superb university with high fees, he opposes it. Just because he cannot get in and someone else can, he feels that the some-one else REDUCES somehow his knowledge. It is ridiculous, but true.

The same illogic is used in case of Wealth. There is a feeling that if someone else's wealth increases, it reduces mine. That is not true. Everyone can be wealthy. Everyone many not be EQUALLY wealthy, but everyone can have wealth to meet the greatest desires. There can be a no loser game. Just as everyone can be educated, everyone can be wealthy. Because people do not realize that, they have anger on the rich.

But we can (each one of us) choose otherwise. We can realize that we can be educated WITHOUT causing loss to another's education. We can, quietly keep on reading and keep on working. Similarly, we can learn to acquire wealt, and aquire it. True, a social revolution can confiscate your wealth, but not your knowledge of creating it.

We (each one of us) acnnot cahnge the world. But we can choose to live by different principles.

[Shringarey]

Now I will explain what is Money Supply (M3) as against M1 (Money). Money is the total amount of Notes and Coins in the system OUTSIDE the Fed.

Let us say that I have with me $ 1000. I use it to pay the landlord, to pay my bills, etc. The money keeps on circulating, till it lands in a Bank as a Bank Deposit. With the Banking system today, a note/coin undergoes a series of transactions and finally lands in a Bank. What do Banks call it? They call it as a Deposit. What do they do with it? They loan it to others to start factories, to buy office and homes, etc. BUT they don't lend out all of it. They keep some as CASH in their vaults, in case the depositor turns up and asks for it. Let us say the keep 5% of deposits as Cash in Vault. This % is called CRR (Cash Reserve Ratio). The balance amount of it, ie 1000 x 0.95 = 95% is lent out to various people. The factory owner who takes the loan trasacts with it to pay the carpenter, the welder, the builder, etc. These in turn give it to others, till finally it lands in the bank as $ 950 of deposit. The Bank has total 1000 + 950 of deposit. There is recounting of money that has come to the bank.

Of these additional 950, 950 x 0.95 is lent out. This cycle continues. What are the total deposits with Bank?

Total deposit = 1000 + 0.95*1000 + 0.95*0.95*1000 + ................
This is a series whose value is 1000 * 1/(1-0.95) = 1000 * 20 = 20000.

This is MONEY SUPPLY (M3).

Money Supply is the total amount of Cash (Coins and Notes) AND Bank Deposits in the economy.

Remember, it is the SAME money which is coming in the Bank as deposit from different people. Money Supply is one of the components that make people feel that they are rich or poor.

No one keeps a lot of cash with him. He considers sub-consciously that the balance in his a/c in the Bank is HIS - after all, he can withdraw it whenever he wants. The cash (Bank Notes, etc with him) are UNDOUBTEDLY his. Yet, the Bank in his account does not have cash backing. The same amount of Cash represents several depositors.

At This point I would like feedback/questions whether the point marked above is understood or not.

[Diplomat]

Yep...nice going there.

[dhurandhar]

Now I will explain what is Money Supply (M3) as against M1 (Money). Money is the total amount of Notes and Coins in the system OUTSIDE the Fed.

Let us say that I have with me $ 1000. I use it to pay the landlord, to pay my bills, etc. The money keeps on circulating, till it lands in a Bank as a Bank Deposit. With the Banking system today, a note/coin undergoes a series of transactions and finally lands in a Bank. What do Banks call it? They call it as a Deposit. What do they do with it? They loan it to others to start factories, to buy office and homes, etc. BUT they don't lend out all of it. They keep some as CASH in their vaults, in case the depositor turns up and asks for it. Let us say the keep 5% of deposits as Cash in Vault. This % is called CRR (Cash Reserve Ratio). The balance amount of it, ie 1000 x 0.95 = 95% is lent out to various people. The factory owner who takes the loan trasacts with it to pay the carpenter, the welder, the builder, etc. These in turn give it to others, till finally it lands in the bank as $ 950 of deposit. The Bank has total 1000 + 950 of deposit. There is recounting of money that has come to the bank.

Of these additional 950, 950 x 0.95 is lent out. This cycle continues. What are the total deposits with Bank?

Total deposit = 1000 + 0.95*1000 + 0.95*0.95*1000 + ................
This is a series whose value is 1000 * 1/(1-0.95) = 1000 * 20 = 20000.

This is MONEY SUPPLY (M3).

Money Supply is the total amount of Cash (Coins and Notes) AND Bank Deposits in the economy.

Remember, it is the SAME money which is coming in the Bank as deposit from different people. Money Supply is one of the components that make people feel that they are rich or poor.

No one keeps a lot of cash with him. He considers sub-consciously that the balance in his a/c in the Bank is HIS - after all, he can withdraw it whenever he wants. The cash (Bank Notes, etc with him) are UNDOUBTEDLY his. Yet, the Bank in his account does not have cash backing. The same amount of Cash represents several depositors.

At This point I would like feedback/questions whether the point marked above is understood or not.

Not entirely correct...The same amount of cash in vault(s) at any instant represents several depositors. This cash is much less than actual expected value associated with deposited amount of currency, as evident from CRR.

Alright, let's move on...

[PeaceSeeker]

Shring, all that u have said was summarized in a single post of mine which said that money was man-made and how much 'value' to give it is man made too. but human beings have moved far ahead of this basic premise.

Not to deny that what u wrote is nice,good,interesting,pleasant for those who r "band ghadis";) (http://www.echarcha.com/forum/showthread.php?t=39192) towards the concept of money.

Though most of what u say is true, there is a difference between 'knowledge' and 'money'. Money is man made & essentially not infinite. Knowledge is not necessarily man-made and is essentially infinite. So at some level they are different. One can 'feel wealthy' without having a penny in his/her bank account but not everyone can have substantial greenbacks in their bank accounts. Everyone can be knowledgeable though.

About 'static money' and 'circulating money'...Like you said, a 'static $1000' (like a bank deposit), is not same as a 'circulating $1000' even though quantitatively they both are same. The reason? well, I can explain it but i will rather keep it short - its because 'Laxmi' is 'chanchal' by nature. She can spread prosperity everywhere only if the 'chanchal' nature of it is not compromised. Which means money lying static (black or white, dont matter; there is no black Laxmi or white Laxmi) is not positivity. Same money in circulation is positivity.

[Shringarey]

There is a difference between the "cash" a person has (notes/coins), Money that he has (notes + coins + bank deposits) and WEALTH. Wealth includes other assets like gold, stocks, land, race-horses, yachts, etc.

We say a person is wealthy, because he has a lot of these Other Assets. He has a house, owns an Island, etc

PeaceSeeker:

Shring, all that u have said was summarized in a single post of mine which said that money was man-made and how much 'value' to give it is man made too. but human beings have moved far ahead of this basic premise.


Money, is supposed to be like 1 metre, or 1 kilo, or 1 second. Its a standard way to measure a variable world. We say that the tree GREW from 4 ms to 6 ms. Its valid. But, what would happen if the metre itself starts reducing? There would be chaos. "Miracles" would take place. The tree would grow by several metres in a day!! (Not really, but when measured against a fault yardstick). The farmer who owns 9m x 10 m plot would find that his plot size has diminished! The guy who has to receive cloth of 100 ms would find he has received only half the cloth. Every person would have to have shirts twice as long. This is the confusion we are entering which will lead to WAR!!!



Though most of what u say is true, there is a difference between 'knowledge' and 'money'. Money is man made & essentially not infinite. Knowledge is not necessarily man-made and is essentially infinite. So at some level they are different. One can 'feel wealthy' without having a penny in his/her bank account but not everyone can have substantial greenbacks in their bank accounts. Everyone can be knowledgeable though.


An ignorant can "feel" more educated than the "savant" as much as the "beggar" can feel richer than the king. But wealth is a product of our knowledge. It is application of knowledge. If knowledge is unlimited, so too is wealth.

This is important. I am not saying that everyone can be stinking rich. I am saying that everyone can be reasonably wealthy - that means having a private plane or two per family at least. I am saying that is possible and within our grasp.

[Shringarey]

Please understand folks, that I am saying things with both pain and passion, because situation can can deteriorate at rapid speed. It will come - it could be as late as 2018 or as early as 2012. Have no time to waste. I AM SERIOUS. Some time back I asked "why there was no crash yet". It is coming. Pleeeeease take care.

Coming back to the echarcha coupons case. Suppose one person "earns" a lot - he "waters others gardens" a lot. He sacrifices going out of town. He has a whale lot of coupons with him in physical form. Banks are not there to save. But since he has collected coupons, someone has forfeited them. A few people lave a lot of coupons. A few have none. So now, echarcha, out of extremely kind feelings, issues some more coupons to these guys. The number of coupons increases. The economy continues as before. But these guys who got some Extra coupons free, are not ready to work. Expectations of what echarcha would do and should do have changed. A lot of people feel that there is no sense in working at someone else's garden, as even they will get free coupons. But the trade has 2 sides. A guy wanting to someone to tend his garden will not find anyone to work at it. He may have to give 2 coupons to entice him to work. The face value of the coupon is 1 days planting. But actual value is 1/2 days planting.

Add to it the complication that echarcha is close to GandMasti.com. The coupons become freely tradeable. That means that rather than have a coupon of echarcha, people are ready to have a GM coupon. But with this dilution of EC coupon. people will recognize that a days effort is 2 echarcha coupons or 1 GM coupon. ie. 1 GM = 2 EC. Exchange rate has changed!!!!

This is what happens in a simple economy WITHOUT BANKS. But with BANKS, where 1 cash not represents SEVERAL depositors, it gets a bit different.

[dhurandhar]

There is a difference between the "cash" a person has (notes/coins), Money that he has (notes + coins + bank deposits) and WEALTH. Wealth includes other assets like gold, stocks, land, race-horses, yachts, etc.

We say a person is wealthy, because he has a lot of these Other Assets. He has a house, owns an Island, etc

PeaceSeeker:


Money, is supposed to be like 1 metre, or 1 kilo, or 1 second. Its a standard way to measure a variable world. We say that the tree GREW from 4 ms to 6 ms. Its valid. But, what would happen if the metre itself starts reducing? There would be chaos. "Miracles" would take place. The tree would grow by several metres in a day!! (Not really, but when measured against a fault yardstick). The farmer who owns 9m x 10 m plot would find that his plot size has diminished! The guy who has to receive cloth of 100 ms would find he has received only half the cloth. Every person would have to have shirts twice as long. This is the confusion we are entering which will lead to WAR!!!




An ignorant can "feel" more educated than the "savant" as much as the "beggar" can feel richer than the king. But wealth is a product of our knowledge. It is application of knowledge. If knowledge is unlimited, so too is wealth.

This is important. I am not saying that everyone can be stinking rich. I am saying that everyone can be reasonably wealthy - that means having a private plane or two per family at least. I am saying that is possible and within our grasp.

Time for some number crunching to prove your point. Anybody can hypothesize, BUT if you can use spreadsheet like software (with some elementary programming) illustrate that everybody can have a private plane or two in a continent like Asia/Europe/Americas(2)/Africa, then it might be worth considering...You are welcome to make as many assumptions you like, but the condition is that you must explicitly state them.You are also allowed to choose the size of population (for example 1 person in your calculation represents 1000000 in real world) to make calculations manageable.

You ready?

[Shringarey]

Now I will come to the crux of our crime. People have done vicious things throughout history. They have raped and plundered and murdered. Yet in the most barbaric of regimes (barring a few), old men, women and children were spared. It was expected that the adults take care of the children and the old. A man who looted (anyone's) children for his welfare, who looted the old, were considered the trash on earth. Ours is the VERY FIRST SOCIETY on earth which has destroyed their old and their children on such a large scale. This was started by our parents and we are continuing it. Our karma will destroy us.

Who do you think, in echarcha would have a lot of coupons? The old. They would have worked when young, to save the coupons for use in old age when they cannot tend their own plants. Who would have squandered the coupons? The adults. With dilution of currency (coupons), the adults are looting the old. It is a fact.

See around you. When a young public sector employee works araaam say because of job security, makes losses and asks govt to pay by printing notes, it is the OLD who suffer. When a reserved candidate, desipite knowing his weakness forces govt to employ him as a teacher, he loots the young. When a man gets angry that business should make money and tries everything to stop it, destroys the old who have INVESTED in that business through pension funds. California is SO business unfriendly and has such quanit laws that they are unable to tax. Many US states are thinking of legislating and legalizing gambling to collect taxes. CA also proposed to legislate Marijuana to collect taxes!!! Thankfully, it got defeated in vote.

[Shringarey]

Time for some number crunching to prove your point. Anybody can hypothesize, BUT if you can use spreadsheet like software (with some elementary programming) illustrate that everybody can have a private plane or two in a continent like Asia/Europe/Americas(2)/Africa, then it might be worth considering...You are welcome to make as many assumptions you like, but the condition is that you must explicitly state them.You are also allowed to choose the size of population (for example 1 person in your calculation represents 1000000 in real world) to make calculations manageable.

You ready?

I am ready with something far better - a REAL LIFE stiuation. Consider that someone had predicted so much prosperity in America 150 years back. That there will be so much food and so much coices. That a family will have 2 or more private vehicles. That each one would have a theater in his house (TV/Cable) and he can watch amy one of 100s programs. That each one will have access to millions of books that he can read at will (internet/kindle), etc etc, you would have thought he was crazy. Would you explain to such a person by a spreadsheet program?

The reason I am mentioning about private planes and all, is because there is a noise made about scarcity of resources. I'll show later on, how that is a bogus claim. While resources are finite, most of our resources (99.999999%) are being wasted.

[dhurandhar]

I am ready with something far better - a REAL LIFE stiuation. Consider that someone had predicted so much prosperity in America 150 years back. That there will be so much food and so much coices. That a family will have 2 or more private vehicles. That each one would have a theater in his house (TV/Cable) and he can watch amy one of 100s programs. That each one will have access to millions of books that he can read at will (internet/kindle), etc etc, you would have thought he was crazy. Would you explain to such a person by a spreadsheet program?

The reason I am mentioning about private planes and all, is because there is a noise made about scarcity of resources. I'll show later on, how that is a bogus claim. While resources are finite, most of our resources (99.999999%) are being wasted.

sorry shring...unless you are willing to get into numbers and quantitative analysis (however primitive but more than trivial arithmetic), you are just hand waving. All of us at echarcha are experts at that.

I am not asking for hi-fi statistics, just create a fictitious (but relevant) problem and show us where it leads and how it supports your argument.

[Shringarey]

I want to show you that expectations play an important role in economics.

Consider for a moment that there is a great devastation/natural calamity in Birmingham (say). Houses are destroyed, people are rendered homeless. The govt moves in. It does all it can. Yet, people too have initiative. Some of them will stay on rent in nearby places. Others are understanding. Most people will offer cheaper rent. Within three years, life will move on, though scars will remain.

Let us say that such a calamity happens in Maharashtra. People are homeless. Yet, no one will give them place to stay because of rent control laws. People will expect that politicians will come and pass law to help them and they will lose their houses. The govt, by foolish actions of the past, have lost its credibility with people.

Now look ata state called X. It was a forest. In order to develop it, it invited farmers from other states. Some came. Govt agreed to sell them forest land. But because the land was not conducive for agriculture and untamed, few came forward. Govt said they HAVE to buy 1 sq km of land minimum. Many left. Some came, took loans. They cut trees, moved boulders, took effort. They tended the land, and made it gold. Repaid loan. Now the Govt says - one person owns so much - is it fair? So by very devious laws land was taken from them and given to tiller. The govt could have easily given forest land to tiller. But tiller would have to "develop" it. This was a good popular move. The same thing govt did with small mine owners. After they had developed mine, govt took over. It LOST ITS CREDIBILITY.

Now that State wants to develop their mines in an organized way. Every one expects that govt will make chootiyas of them. So they are ready to develop it, only if they can get all the money UPFRONT by hook or by crook. A mining company which does not want such deals, does not bid. ONLY those mining companies that are ready to do it, bid. The mining companies are EXPLOITING the people like hell, with expectations that the Govt will take their land away. Make as much as they can. This has created a Naxal problem. A section of Govt wants these mines to be taken over - fueling more expectations. Govt has behaved like a crook, and is only attracting crooks.

People build factories and avoid labor by installing machinery, only because of EXPECTATIONS of labor problems. People avoid Kerela and WestBengal only because of EXPECTATION of dadagiri.

Once we understand this, how expectations are created, we can understand the coming crisis.

[Shringarey]

sorry shring...unless you are willing to get into numbers and quantitative analysis (however primitive but more than trivial arithmetic), you are just hand waving. All of us at echarcha are experts at that.

I am not asking for hi-fi statistics, just create a fictitious (but relevant) problem and show us where it leads and how it supports your argument.

I don't know what problem u r referring to. I thought you were talking about PROSPERITY FOR ALL. That is why I gave real life eg of US.

But if it is a different problem u are talking about, what is it?

[Diplomat]

Numbers.... Yea right. All those intelligent mathematicians and staticians are the one who created those CDO/ABS and proved it can work. Sometimes u need to understand the hypothesis and the logical reasoning, not the numbers behind the game which is not bien played fairly.

[dhurandhar]

I want to show you that expectations play an important role in economics.

Consider for a moment that there is a great devastation/natural calamity in Birmingham (say). Houses are destroyed, people are rendered homeless. The govt moves in. It does all it can. Yet, people too have initiative. Some of them will stay on rent in nearby places. Others are understanding. Most people will offer cheaper rent. Within three years, life will move on, though scars will remain.

Let us say that such a calamity happens in Maharashtra. People are homeless. Yet, no one will give them place to stay because of rent control laws. People will expect that politicians will come and pass law to help them and they will lose their houses. The govt, by foolish actions of the past, have lost its credibility with people.

Now look ata state called X. It was a forest. In order to develop it, it invited farmers from other states. Some came. Govt agreed to sell them forest land. But because the land was not conducive for agriculture and untamed, few came forward. Govt said they HAVE to buy 1 sq km of land minimum. Many left. Some came, took loans. They cut trees, moved boulders, took effort. They tended the land, and made it gold. Repaid loan. Now the Govt says - one person owns so much - is it fair? So by very devious laws land was taken from them and given to tiller. The govt could have easily given forest land to tiller. But tiller would have to "develop" it. This was a good popular move. The same thing govt did with small mine owners. After they had developed mine, govt took over. It LOST ITS CREDIBILITY.

Now that State wants to develop their mines in an organized way. Every one expects that govt will make chootiyas of them. So they are ready to develop it, only if they can get all the money UPFRONT by hook or by crook. A mining company which does not want such deals, does not bid. ONLY those mining companies that are ready to do it, bid. The mining companies are EXPLOITING the people like hell, with expectations that the Govt will take their land away. Make as much as they can. This has created a Naxal problem. A section of Govt wants these mines to be taken over - fueling more expectations. Govt has behaved like a crook, and is only attracting crooks.

People build factories and avoid labor by installing machinery, only because of EXPECTATIONS of labor problems. People avoid Kerela and WestBengal only because of EXPECTATION of dadagiri.

Once we understand this, how expectations are created, we can understand the coming crisis.

You are generalizing too much.

Robots and automation are employed primarily to reduce the cost (not union dadagiri), improve product quality in a consistent manner, implement the idea of Just-In-Time manufacturing (flexibility of operation and new product manufacturing operations) while avoiding having to hoard large inventories of unsold products.

[Diplomat]

I disagree dhurru. What u said is what they want common people to learn. The intelligentia will never reveal these secrets to you even though they are so easily understood.

[dhurandhar]

I disagree dhurru. What u said is what they want common people to learn. The intelligentia will never reveal these secrets to you even though they are so easily understood.

So, let's see...intelligentia has been working from ancient times to avoid using human labor:D...like when somebody invented a chariot/wagon with the hope that he could do away with palanquin bearers (not because humans can only run so fast or carry so much)...or somebody thought to castrate a bull (ox for farming) because that would avoid having to recruit human instead...or somebody thought to ride a horse because riding on a human would be expensive (not because human can only run so fast with so much weight on its back).....the list goes on and on....:D

[Diplomat]

So, let's see...intelligentia has been working from ancient times to avoid using human labor:D...like when somebody invented a chariot/wagon with the hope that he could do away with palanquin bearers (not because humans can only run so fast or carry so much)...or somebody thought to castrate a bull (ox for farming) because that would avoid having to recruit human instead...or somebody thought to ride a horse because riding on a human would be expensive (not because human can only run so fast with so much weight on its back).....the list goes on and on....:D

The inventions themselves were not so. But once the management intelligentia saw the possibilities, then automation became a high priority to rid of unwanted people or groups of people. Trust me, I work on these kind of projects for a living......or was I a doctor? I forget :D

[dhurandhar]

The inventions themselves were not so. But once the management intelligentia saw the possibilities, then automation became a high priority to rid of unwanted people or groups of people. Trust me, I work on these kind of projects for a living......or was I a doctor? I forget :D

even the management itself is not immune to automation....much of the middle-management has been laid off in last 15 years....ultimately if there is no human to manage....the upper level management with degrees in business administration will be replaced with robots and software...leaving only those who have the monies to spend, and those who really have the know-how in the market.

So, if management intelligentia is not an oxymoron...getting rid of unwanted people ultimately leads to shooting oneself in the foot.

[Diplomat]

even the management itself is not immune to automation....much of the middle-management has been laid off in last 15 years....ultimately if there is no human to manage....the upper level management with degrees in business administration will be replaced with robots and software...leaving only those who have the monies to spend, and those who really have the know-how in the market.

So, if management intelligentia is not an oxymoron...getting rid of unwanted people ultimately leads to shooting oneself in the foot.

Definitely...it is a game that needs to be played carefully otherwise u might wipe urself out. The trick is to wipe everybody else out and prove yourself valuable asset :D

U know the Guruji never taught the Gurumantra to everybody but one, and that too only when he was on his deathbed.

[Shringarey]

Now lets understand the role of govt in this. The Govt taxes people/corporates and uses these up to have welfare programs, infrastructure, etc.

If you look at the finances of government then -

Revenue Surplus/Deficit = Revenue - Expenditure.

It is as though the Govt was a commercial enterprize (which it is not). If there is a Surplus or Deficit, depends entire on its revenues (mainly taxes) and Expenditure (usually on social programs).

It also undertakes activities of a long term nature, like building roads, bridges, weaponry, etc. For these it takes loans from people/corporates, etc. These loans are of LONG Tenure and are called Bonds

Nowadays, most Govts spend more on running the Govt than the revenues it collects. So it takes loans to meet this annual shortfall. Most Govts of the world are like a family which consumes more than it earns and takes loans from someone. In this case, it is from people. In India/Japan, it is loan from their own people. In Greece/Portugal, etc it is loans from FOREIGHERS.

Why do govts spend more than it earns? Because of bloated labor and interest due on past loans. That is why. In India, labor and interest payments add up to nearly 100% of revenues collected. In Mumbai Municipality, it is 130%! How do they handle other running expenses like travel, equipment, roads, etc - by borrowing more, increasing their interest payments EVEN more in the future.

This is the situation today of MOST states, central govts and Municipalities around the world. They just don't collect adequate taxes to sustain themselves.

[Shringarey]

Most people say that Govt can easily increase taxes - they can tax as much as they want. Actually, they can't. They can increase taxes - but it sets about EXPECTATIONS of further tax increases. People have difficulty in accepting that Govts cannot arbitrarily increase taxes because they are competing against one another. Yes. This is the crux people are unable to comprehend. So I repeat it in bold -

Governments are competing with each other to provide governance.

When West Bengal had severe labor problems, Industry shifted out. With loss of Industry, taxes in West Bengal are non-existent. Who does the Govt tax? With tax revenues so low, the govts spending so high, deficit keeps on building up. This is the issue.

US cannot arbitrarily increase taxes, as then businesses will move out of USA.
Neither can India increase its taxes arbitrarily. An increase in taxes would not just lead to loss in revenue, but also loss in employment. This INCREASES expenses because of social security costs in US/Europe. In India it increases Naxalism.

All businesses make that decision about where to build their factories by many methods - primary among them is level of taxes charged, and the services provided by Govt in return of taxes.

Please read this again - it is the nub of the issue -

Governments are competing with each other to provide governance.

[PeaceSeeker]

dhurandhar wants some kind of proof on how can all be 'wealthy'.

if money could flow as naturally as air, it would travel from surplus [high pressure] zone to needy [low pressure] zone without negatively impacting the former in anyway. later if the former zone becomes low pressure, money from some other surplus zone could fill it. so all zones are wealthy enough such that all their needs are met at all time.

a rich man has a private jet which he needs thrice a year. rest of the time its lying parked in his backyard. however, for remaining days of the year, someone somewhere is in need of the same jet to reach somewhere urgently. the rich man can think that the private jet is parked in his backyard while it is addressing someone's urgent needs. moreover, the private jet parked for so longer periods caused many parts to get jammed which now does not happen.

so money is finite, yes. but it can make everyone wealthy [enough] if humanity collectively decides to do so. what is luxury for one is need for another. this could be addressed too.

[dhurandhar]

dhurandhar wants some kind of proof on how can all be 'wealthy'.

if money could flow as naturally as air, it would travel from surplus [high pressure] zone to needy [low pressure] zone without negatively impacting the former in anyway. later if the former zone becomes low pressure, money from some other surplus zone could fill it. so all zones are wealthy enough such that all their needs are met at all time.

a rich man has a private jet which he needs thrice a year. rest of the time its lying parked in his backyard. however, for remaining days of the year, someone somewhere is in need of the same jet to reach somewhere urgently. the rich man can think that the private jet is parked in his backyard while it is addressing someone's urgent needs. moreover, the private jet parked for so longer periods caused many parts to get jammed which now does not happen.

so money is finite, yes. but it can make everyone wealthy [enough] if humanity collectively decides to do so. what is luxury for one is need for another. this could be addressed too.

This is different from everybody owning a private jet or two.

What Shring is trying to say is what I call as "backdoor socialism"...if everyone has equal leverage (in terms of money or knowledge or resources), then nobody is either rich or poor...history has shown that humans are incapable of achieving a civilization with equal leverage scenario.

[Shringarey]

Now I am going to say something which could raise a lot of anger - especially amongst economists, because it is contrary to common economic wisdom.

I have stated this in another thread. Consider an equilibrium situation where a couple has two kids. I will assume (for simplicity) that there is no previous kid from another marriage. Now I assume that two people work - man and wife. They have two parents to look after. Each of man/wife has two parents, but also has a sibling to share the work.

Let us consider the situation where parents are independent and NOT dependent on the man-wife. They have to work for forty odd years each (25-65, say), and look after themselves whenthey grow old. They also have take care of children.

I am saying this - it is an impossible situation for most people. The two adults pay 1/3 as taxes. If they have to take care of 40 years of unproductive work, they have to keep aside at least 1/3 of their takehome pay. This leaves 1/3rd of pay to spend. Only if these condtions are satisfied, does he have a chance of suriviving on himself. Why "chance" - because it assumes that he will never ge laid off, his wife will have children without taking any leave, etc. If you work out a more realistic picture, he would -

a) either have to live on 20% of his income OR
b) Be a financial wizard.

WITH social security, more than 97% of Americans are not financially independent and have to depend on relatives. In India, there is no social security. With more modest needs too, the number of people who dont have to depend on anyone is roughly the same.

Whatever be our level of income and prosperity, few people are ready to live on 20% of income. Most of those who do live on that end up - a) Increasing expenses or b) Reducing Income as their needs are lesser and hence shifting to a more "meaningful" but far lower paying job.

I have reached this conclusion after a lot of thought. Please go over the assumptions and verify them. This means that the current lifestyle of independence is unsustainable. The young would have to take care of the old. We have NO ALTERNATIVE to it.

This is critical to understand, before I can show you how everyone can have a plane or two (NOT JET), and why war is inevitable.

[Shringarey]

The Maratha Rule Started in 1672, on coronation of Shivaji in 1672. It ended in around 1850. Maharashtrians are really proud about the fact that at that time, it was a major power. Yet, the British, created more roads, hospitals, education Institutions and transport systems than all rulers all over India for 2000 years. A lot of people say that is because the British got "modern system". But consider this fact - The first Marathi/Sanskrit printing press started in Maharashtra in late 19th century. It started in Britain in 16th century.

Why did it start in Maharashtra so late? Because Brahmins objected to this, claiming that writing is an "art", there have to be intricate borders and designs etc. It was the Brahmin Union, who were protecting their jobs. Simple. One of the earliest cases how Unions stall development.

In order to protect their jobs, or get special rights, people form political bands and stop progress - only to realize that finally they are really really left behind.

[dhurandhar]

The Maratha Rule Started in 1672, on coronation of Shivaji in 1672. It ended in around 1850. Maharashtrians are really proud about the fact that at that time, it was a major power. Yet, the British, created more roads, hospitals, education Institutions and transport systems than all rulers all over India for 2000 years. A lot of people say that is because the British got "modern system". But consider this fact - The first Marathi/Sanskrit printing press started in Maharashtra in late 19th century. It started in Britain in 16th century.

Why did it start in Maharashtra so late? Because Brahmins objected to this, claiming that writing is an "art", there have to be intricate borders and designs etc. It was the Brahmin Union, who were protecting their jobs. Simple. One of the earliest cases how Unions stall development.

In order to protect their jobs, or get special rights, people form political bands and stop progress - only to realize that finally they are really really left behind.

It was not exactly a union mentality that of last century....the Manu designed system of hindu society attempted to maintain peace between different classes by confining each class to a certain category of work, and thus provide equal leverage for all classes...something that you have been trying to propose.

In particular, Brahmins were allotted priestly, scientific and mathematical duties; Kshatriyas were allotted administration and security; Vaishyas were allotted finance and trade; and Shudras were allotted maintenance and service. When this system was introduced, it was supposed to provide equal leverage to all classes..under the assumption that if any class were to stray or attempt to control the other three, the other three will resist and bring the strayed ones to senses.

Also, at its best, the classes worked in synchronization. For example, the design rules for temple construction were premise of Brahmins, and the construction details to achieve that design were the premise of Vaishyas (procure materials by trade and finance) and Shudras (to actually use the materials to build the temple). Same goes in agriculture, Brahmins had the knowledge of timing and seasons (via astronomy & astrology), Vaishyas invested in the farms by loaning money to Shudras(farmers who actually plough).

Of course, what Manu did not anticipate (or knew that as a flaw which seemed unlikely then) was that Brahmins and Kshatriyas could unite to crush the society in their stranglehold. Later, around time of Buddha and Mahavir, Vaishyas got an element of leverage by way of wealth...Brahmins had become dull due to complacence and monopoly...Kshatriyas also were complacent in that they thought money could bring more weaponry (as opposed to collaborating with Brahmins to develop new weaponry) and luxury. So Kshatriyas needed Vaishyas more and Brahmins became unavoidable obstacles...this is aptly reflected in Dhananand's insult of Chanakya.

So, it was not just Brahmin union...it was a complicated union of Brahmin and Kshatriyas.

Brahmins had been traditionally opposed to written medium of communication, not just because for job protection, but because they knew that writing is a powerful communication medium by which the entire fabric of society could be altered for worse. For example, if Shudras started to write, unless trained properly, they could establish a flawed learning system which could destroy the Hindu system. In particular, with increased inter-caste communication, mixing of genes across the caste system could produce people with no respect for the system. What they failed to realize is that Brahmins themselves (for most part) did not know why the rules were set when they were set, and to what extent they could be relaxed. This was a fatal flaw for which Brahmins (and their arrogance) are themselves responsible.

Ironically, with the secular society we are in, the fabric of Hinduism has been altered (to put it in nice way), something that was prevented despite the onslaught of mighty Islam. As correctly feared (but for wrong reasons), giving the medium of knowledge processing and transmission to all can destabilize society.

Imagine if all domestic animals are somehow able to communicate in human language...would you as human like that? You kick a dog...and all dogs unite to rip you and your ilk to shreds:D

[badriprasad]

Please go over the assumptions and verify them.

They are no assumptions. Verifiable facts really. Something is terrible wrong when half the working population is in debt to credit card loan sharks. Proceed please ... thanks.

[badriprasad]

Also, at its best, the classes worked in synchronization. For example, the design rules for temple construction were premise of Brahmins, and the construction details to achieve that design were the premise of Vaishyas (procure materials by trade and finance) and Shudras (to actually use the materials to build the temple). Same goes in agriculture, Brahmins had the knowledge of timing and seasons (via astronomy & astrology), Vaishyas invested in the farms by loaning money to Shudras(farmers who actually plough).



During early initial stages of occupation, Brahmins and Vaishyas were the first to surrender and convert followed by Khshatriyas ... is there any grain of truth to this?

[Shringarey]

As these changes are taking place, we are seeing an EXTREME form of unemployment, and it will rise. There are two premises here

- The employment will be extreme
- Anything the Govt does will increase it.

When man was at an agricultural stage, the great tyranny was SLAVERY. Fellowmen were whipped to do things for the ruling few. While the rulers enjoyed, the slaves/serf were on bread and circuses. The great achievements of that time, like the pyramids, were built on this tyranny.

At the industrial age, slavery had vanished and replaced by willing labor working at slave wages. Productivity had improved. Workers were many, jobs were few. Workers were paid measely salaries to keep body and soul together, for which they woked 12-14 hrs a day, often sacrificing a limb or to. They were not slaves and were free to leave. But for any one person who left, 100s were ready to fill their place. This was a question of willing slavery. It was tyrannical

In this age, the great tyranny was NO slavery. Please understand that in stage 1, ie actual slavery, slaves had no theoretical rights - they could not leave. But they had food, cloting and shelter - the basic minimum. In stage 2, the slave - workers had more theoretical rights - they could leave. But only one in two finally managed to get to eat anything at all.

In this stage, the dispossed will have ALL rights, but his condition will be the WORST. How? I'll explain. The "New World" which is getting created right before our eyes, is a world of "education and skills". Many old skills will dies. New skills will be in demand. Productivity will zoom. Most people will not be able to participate in it. Those who do, will be rich. There will be a huge shortage of manpower along with great unemployment. Opportunity Unlimited to those who can bridge the skills gap. Despair for those who can't.

The tyranny of this age is this - "Sorry, I don't need you - at whatever cost!!!". I don't need a slave. I don't need to explot labor or child worker, for its cheaper for me to have automation. I need robotics experts, which are scare. What can you do? You can build buildings? I need some of you, provided you know how to use liquid concrete technology. You don't, I'm sorry. When a large part of people find that no one wants them, no one even wants to exploit them, then what?

You will see unemployment on a scale rarely seen before. And there will be no employment opportunities at all. The US unemployment rate is 9-10%. But that is bogus. They calculate unemployment rate based on how many people are on dole. In 1930s the rate was 25%, calculated as how many people did not have a job. What about people today who are out of dole and do not have a job?

Look at the uprisings in Mid East. Look at riots in England. A portent of the shape of things to come.

[dhurandhar]

During early initial stages of occupation, Brahmins and Vaishyas were the first to surrender and convert followed by Khshatriyas ... is there any grain of truth to this?

If Islamic rule is what you call occupation, then it is well known that lower castes first capitulated...for example the Jats (or similar tribe) capitulated to Islamic idea of equality which led to fall of Dahir in Sindh. This was a major victory that boosted Islam's hopes of spreading into India.

Capturing citizens, raping women and selling women and children into slavery (or exporting elsewhere for slavery) cannot be considered surrender.

[dhurandhar]

As these changes are taking place, we are seeing an EXTREME form of unemployment, and it will rise. There are two premises here

- The UNemployment will be extreme
- Anything the Govt does will increase it.

.

the correction in red...pls correct me if I am wrong.

[dhurandhar]

The tyranny of this age is this - "Sorry, I don't need you - at whatever cost!!!". I don't need a slave. I don't need to explot labor or child worker, for its cheaper for me to have automation. I need robotics experts, which are scare. What can you do? You can build buildings? I need some of you, provided you know how to use liquid concrete technology. You don't, I'm sorry. When a large part of people find that no one wants them, no one even wants to exploit them, then what?

You will see unemployment on a scale rarely seen before. And there will be no employment opportunities at all. The US unemployment rate is 9-10%. But that is bogus. They calculate unemployment rate based on how many people are on dole. In 1930s the rate was 25%, calculated as how many people did not have a job. What about people today who are out of dole and do not have a job?

Look at the uprisings in Mid East. Look at riots in England. A portent of the shape of things to come.

what you have overlooked is the population dynamics. The upper echelon women have not been very fertile...while the unskilled segment women have been very much so.

In the extreme, one of the four things can happen (after transitory chaos):

1) The unskilled segment is by far larger than skilled segment, and thus it gets to dictate terms. This leads to Dark Ages as unskilled segments are going to be easily led into religious/cult based ideology (and thus slavery).

2) The unskilled segment is rendered powerless and their reproduction controlled by those few (in name of saving environment and earth's ecosystem) in power with their arsenal of robots and controls. Thus, we are back to old form of slavery wherein a few powerful humans were masters and the rest were slaves.

3) The unskilled segment is rendered powerless but is autonomous. It lives literally underground (or is quarantined into a ghetto). Thus, there are two economies, A) the official economy, and B) the underground economy with spontaneous need based interactions between the two, but otherwise distinct. Eventually, it might degenerate into a situation like the one in the movie Matrix, or descend into scenario in 1) above.

4) The powerful skilled segment eventually achieves some major technological breakthrough and develops means to travel to other suitable earthlike planet with pristine resources and atmosphere. It takes some of the unskilled but fertile segment of population and leaves the rest of the populace on earth to live in scenario 1) above.

[Shringarey]

Dhurru,

Let me continue my argument. When there was sudden increase in productivity in England, and people were unemployed, they did a few things -

a) They transfered thieves who stole a piece of bread, away to Australia
b) They gave generous dole through expropriation of colonies.

In US, they just killed Red Indians, grabbed tracks of land and gave them to unemployed.

But there are no more colonies, no more new lands. What then?

As production increased, there was competition for resources from Japan and Germany, as WELL as recession. This tangle was solved by war. In efect, Europe in a mad frenzy destroyed what they had built, than common man could get a job in the rebuilding process.

But the same situation is coming now, exept that the new skills CANNOT be done by common man. I have repeated in many posts on this site about the need to read, feed and spread the seed.

That individually, we can LEARN, LEARN, LEARN (read), we can accumulate wealth (FEED), and we should raise as many children as possible (Spread the SEED). If we do spread the seed, we WILL prevail.

[Diplomat]

what you have overlooked is the population dynamics. The upper echelon women have not been very fertile...while the unskilled segment women have been very much so.
....


Please watch this video...very important to this point.

BXRjmyJFzrU

[dhurandhar]

Dhurru,

Let me continue my argument. When there was sudden increase in productivity in England, and people were unemployed, they did a few things -

a) They transfered thieves who stole a piece of bread, away to Australia
b) They gave generous dole through expropriation of colonies.

In US, they just killed Red Indians, grabbed tracks of land and gave them to unemployed.

But there are no more colonies, no more new lands. What then?
As production increased, there was competition for resources from Japan and Germany, as WELL as recession. This tangle was solved by war. In efect, Europe in a mad frenzy destroyed what they had built, than common man could get a job in the rebuilding process.

But the same situation is coming now, exept that the new skills CANNOT be done by common man. I have repeated in many posts on this site about the need to read, feed and spread the seed.

That individually, we can LEARN, LEARN, LEARN (read), we can accumulate wealth (FEED), and we should raise as many children as possible (Spread the SEED). If we do spread the seed, we WILL prevail.

1) And who is this "we"? Indians, Chinese, ....or along religious lines?

2) Btw, what you are saying seems to be the official policy of white Catholics and other conservative Christian groups in USA...with a minor difference in that it leans towards biblical values

3) Learn, Feed, and Seed cannot be realized in a society that values freedom for females:D

4) Obviously 2 and 3 are going to end up in conflict.

5) That is why so many private companies have jumped into private space launch services...there is certain segment in intelligentia circles (at least in USA) that believes that colonization of other planets (not necessarily in solar system) might be the only sustainable way.

[PeaceSeeker]

like i said earlier, for money to make everyone wealthy, it needs to be in movement bcoz that matches Laxmi's chanchal nature.

there are various ways to keep money moving.

'Everyone earns and everyone spends' is the most simplistic way.

India has found another unique way to keep Laxmi moving. Its called corruption. Roads are constructed and then repaired and re-repaired, thats actually money exchanging hands.

Khadde khodney ka phir bharney ka, phir khodney ka, phir bharney ka. Its all movement of money.

Idhar se khilaney ka, udhar se khaaney ka. thats moving money.

Billions parked in safe havens does not spread prosperity in India but its likely that the havens r using those billions to spread prosperity for themselves.

Oil reserves or gold treasures may figuratively make a nation or community super-rich but not necessarily prosperous.

[PeaceSeeker]

Laxmi does not know 'black' or 'white', 'tax-paid' or 'tax-evaded'. These r man made definitions. God does not interfere in rules created by men. God follows its own rules.

[Shringarey]

Learn, Feed, and Seed cannot be realized in a society that values freedom for females:D



I know. The best you can do is to marry someone who shares the values as you do. When I mentioned in another post about having many children, I was jumped at by calling me backward and retrogressive and anti-women.

This is a very important point, and I will take a detour on this one. Here are my thoughts.

Consider the issue of family v/s career for women. A woman who has produced 4-5 children and who is the primary caregiver is virtually OUTSIDE the job market for 20+ years. Her natural abilities to flourish is curtailed. There are some issues here -

i) Society looks down on caregivers, when it is THE MOST IMPORTANT JOB because there is no income associated with it.

ii) Many, many men have taken their wives for granted because they control (men) the finances

iii) Women are always threatened that if the man finds "another woman", she and her children will be left in a lurch.

It is because of these issues that the problem has arisen. Several books on financial management for women address this issue by
i) Independence before family
ii) Assumption of small family.

Yet, in our fight for equity, we lose out on family. I will give a solution which you could call radical, but WHICH WORKS.

[Shringarey]

I am now considering monogamous marriages only. Though Polygamy offers many solutions, I will refrain from it as most people do not believe in it. The answer lies in one word - ENTERPRISE!!!

The conflict is this - producing the babies, feeding them, taking care of them, is a FULL TIME job. It is a very important job. Because it is so stressful, it leaves the woman very little time to do anything else. That is why she is unable to get an income - not because of lack of skills. In order for getting the woman make money, there are a few changes which I propose to the current work culture in the family. Please dont laugh, be serious.

Cooking, laundry and ironing, house cleaning, making beds, etc are duties that must be taken over by the man, and not left to the woman. Freed from the tyranny of such chores, she can concentrate on babies and career. This division of labor was created in a different era. In this era, we need to relook at it. The duties I mentioned are what completely exhausts a woman when she is managing babies.

Most men are unable to do it, because they don't have the skills. Also, the skills are not taught. He has to LEARN. It will take him a good 3 years to do them profeciently. You can't start learning when a baby is on the way. You start learning way before. Don't dig your well when you re thirsty. There is a recognition that these skills are in shortage, and coaching classes, internet sites, books, have come around this. Take full advantage of this.

Even if you do it, your and her parents will not like the arrangement. They would think it ridiculous and perverse. There will be fights. How to handle those fights is upto you.

There is a problem here. You could have a travelling ob. There could be days when you have to work long hours. What then? Thats in coming post.

Bottom Line : Cooking, HouseKeeping, Laundry is a man's job.
Think it thru. Its the only way u can have both equity and family.

[Shringarey]

Now comes some thoughts about women. I'll give you two case studies

The first one was a gold medalist MBA from a fancy institute. She had a great career. She stopped working after she got a kid. She has two growing-up-kids now. She is frustrated. If she were to be in the job market, she would have been some bigshot by now.

The second is that of a BCom (2nd class). She married a techie and went to the US. Had kids. She realized that techies were in demand, and her innate Gujju entreprize found a solution. She started an HR company (from home). She is making good money (not great), and feels fulfilled with kids and career income. Maybe her ambitions were not so high to begin with.

The point is this - there are many jobs from home that women can do which can make them mothers as well as financially independent. Unfortunately, it becomes difficult being enterprizing when you are not and start being that when you are in the family way. Imagine a girl of 25-30, who is pregnant/has a kid. She wants to stay at home. Can she suddenly decide to be enterprising? Ofcourse not. She has to have been prepared at least 10 years before that. By the time a girl finishes her school (Std X), she has to be introduced to enterprise. This applies to boys too. Since it is not a part of our curriculum that is officially taught, we have to teach our next generation. It is upto us.

I get very upset about the femlib movement missing this point. They shout and shout and shout about this and that. Yet they do nothing o teach young girls, who would be women of tomorrow, anything about entreprize. That is really sad.

I know a papa who has done precisely that. He runs a leather business, where he does made to order wallets, bags, etc. He involved his daughter in that business after her 10th. She learnt. Suddenly, in 2 years a miracle took place. This chit of a girl started getting more sales than her father, at higher prices too! Greater Profits!! How did she do that? It was partly luck, I admit. As a member of NewGen, she was on facebook. She put her leather ware on facebook too. Sudeenly enquiries started coming from Europe and US - small initially, but much more later on. Ofcourse, he father handled most of the affairs like fulfilment and customs, etc. But the point is that the girl had grown!!!

Is this always possible? I do not know. I knew a lady who was quite good in Spread-Volume Analysis - a trading method. When she got a kid, she left her job and started trading on her own. She stopped pretty fast. As she told me, while trading, her adrenaline would be high, she would be tense, especially if she was losing. She did not want the stress while feeding the baby. It was better to let it go.

This is one issue about women entrepreneur cum stay at home mom. The stress of enterprise could easily pass on to the kids. How to stop this? I do not know. I am still trying to figure it out. If anyone has any ideas, they are welcome to share.

[Rakhi]

Yet, in our fight for equity, we lose out on family. I will give a solution which you could call radical, but WHICH WORKS.

I don't think anything you said in your next post is radical. Why, now a days many husbands take over a few chores from their partners so that she can care for the family and yet not fall behind in her career.

What I have noticed is that (purely my opinion and I have nothing to back this), priorities change when a woman is pregnant/mom. Her highest priority is the well being of her child and she is prepared to let go of her career for a short period of time. Like you quoted some woman, a stressful mom would mean that the baby is stressed and restless too. Somehow infants catch the mood of mom and are happy/sad when mom is happy/sad.

Now, lets say she had stopped breastfeeding and after an year or so goes back to work; by then baby is grown up a bit and she is not too far behind in her career too.

I dont think this enterprise thingy would work unless someone from your family is already into it.

I think the trick to well balanced work-life is to have some room to breath i.e hubby taking over some chores or at least hire help to help her out.
Taking an year off sounds like a plan to me.

[Shringarey]

Rakhi, IMHO it is senseless rying to change everyone, just change yourself. The best way to do that, is to LEARN. I believe that lack of skills is ofen the cause of our misfortunes. Have stated this pont of view, I would like to answer you -

I don't think anything you said in your next post is radical. Why, now a days many husbands take over a few chores from their partners so that she can care for the family and yet not fall behind in her career.

Yes, they do. But what I am saying is taking over EVERYTHING. Once, long ago, I was doing pushups (exercize). My mom got angry with me. This was because while doing pushups, I failed to notice that dust had accumulated below the Chest of Drawers. Now this is a perception issue. Were I trained then, I would not have failed to notice what is the obvious. Unfortunately, this training of men is not available formally - so we men have to use our own resources to train ourselves. The skills required are not just about effeciently repairing the potty and sink and moving the lawn, it is about stitching and knitting and ironing and cleaning and scrubbing.



What I have noticed is that (purely my opinion and I have nothing to back this), priorities change when a woman is pregnant/mom. Her highest priority is the well being of her child and she is prepared to let go of her career for a short period of time. Like you quoted some woman, a stressful mom would mean that the baby is stressed and restless too. Somehow infants catch the mood of mom and are happy/sad when mom is happy/sad.

Now, lets say she had stopped breastfeeding and after an year or so goes back to work; by then baby is grown up a bit and she is not too far behind in her career too.


Sorry, I dont agree with the latter part. Who looks after the kid? Creche? Also, what happens when more kids are born? What happens when you have 3+ kids?


I dont think this enterprise thingy would work unless someone from your family is already into it.

It is like saying you have to have a scientist inyour family to be a scientist. This is plainly wrong because sciece is taught in our schools. Unfortunately, enterprise is not. However, we can learn. As I said earlier, you cannot learn when you require it. The learning has to come way before.


I think the trick to well balanced work-life is to have some room to breath i.e hubby taking over some chores or at least hire help to help her out.

That is PART of the solution, yes. Not the full one

[Diplomat]

...

I think the trick to well balanced work-life is to have some room to breath i.e hubby taking over some chores or at least hire help to help her out.
Taking an year off sounds like a plan to me.

The real trick is not to load yourself with stupid work that makes your life "busy".
For people who want to do work, there is lots of time for all of the work.

For example, when I was working fulltime ~50 hrs/week, I started my Master's degree as a part time student but finished my Master's in the same duration as a full time student while also getting promoted for doing excellent work at my work place. In addition I used to do our laundry every Saturday. Wifey would fold them. Everyday wifey would cook, I would help her cook as she was not a good cook then. I would then also do the dishes. Oh, btw, i graduated with 3.9/4.0 GPA. Not bad.

What did I miss all those years? Very knowingly I missed all the TV serials for 2 years because my work and my further studies were far more important than sitting on a couch and see dumb people work and earn millions for that stupid work.

I also missed all the bars, the whores and the pole dancers....

And I stayed away from echarcha too...too much distraction.

[Rakhi]

Rakhi, IMHO it is senseless rying to change everyone, just change yourself. The best way to do that, is to LEARN. I believe that lack of skills is ofen the cause of our misfortunes. Have stated this pont of view, I would like to answer you -

I concur.
Yes, they do. But what I am saying is taking over EVERYTHING. Once, long ago, I was doing pushups (exercize). My mom got angry with me. This was because while doing pushups, I failed to notice that dust had accumulated below the Chest of Drawers. Now this is a perception issue. Were I trained then, I would not have failed to notice what is the obvious. Unfortunately, this training of men is not available formally - so we men have to use our own resources to train ourselves. The skills required are not just about effeciently repairing the potty and sink and moving the lawn, it is about stitching and knitting and ironing and cleaning and scrubbing.

I dont know if its practical to completely take over the chores Shring. Lets for a moment agree that men taking over the chores completely would solve the problem for women (regarding career specially). This would mean that he would be working full time at work and at home. This would leave him no time to spend with the child. If he wants to spend time with children as well, he would be pushing himself hard to do that.
Now, arent you passing on the buck from a woman to a man? Now instead of a woman, there is a man who is taking the burden (loosely using this word). This would mean that his career is affected instead of woman's. Eirher way someone is getting affected na?
Unless you are referring to stay-at-home-dad.

Sorry, I dont agree with the latter part. Who looks after the kid? Creche? Also, what happens when more kids are born? What happens when you have 3+ kids?

Which part dont you agree? That she goes back to work after an year or the daycare?
I do not understand the logic behind wanting more than 2 children, so I cant answer this question. By hypothetically, should I have more than 2 children, I would still be looking for a full time nanny.

It is like saying you have to have a scientist in your family to be a scientist. This is plainly wrong because sciece is taught in our schools. Unfortunately, enterprise is not. However, we can learn. As I said earlier, you cannot learn when you require it. The learning has to come way before.
I agree with you that we dont need a scientist in our family to become one. Now, coming to enterprise, can you give me ideas about how to learn it and where to learn it? Are you referring to voluntary learning from a learned person?

That is PART of the solution, yes. Not the full one

please see my response in blue above.

[Rakhi]

The real trick is not to load yourself with stupid work that makes your life "busy".
For people who want to do work, there is lots of time for all of the work.
I dont know what you mean by this.Are you telling that either a man or a woman has to single handily take care of everything and still have time for yourself?
For example, when I was working fulltime ~50 hrs/week, I started my Master's degree as a part time student but finished my Master's in the same duration as a full time student while also getting promoted for doing excellent work at my work place. In addition I used to do our laundry every Saturday. Wifey would fold them. Everyday wifey would cook, I would help her cook as she was not a good cook then. I would then also do the dishes. Oh, btw, i graduated with 3.9/4.0 GPA. Not bad.
Oh wow...you are really intelligent. This is precisely the point I am making; sharing the chores and not dividing them. the moment you start diving 'my' work from 'yours', I think some kinda resentment would start.

What did I miss all those years? Very knowingly I missed all the TV serials for 2 years because my work and my further studies were far more important than sitting on a couch and see dumb people work and earn millions for that stupid work.
Exactly my point. Priorities change and we have to let go of few things until our new responsibilities are taken care of.
I also missed all the bars, the whores and the pole dancers....

And I stayed away from echarcha too...too much distraction.

Please see my response in blue.

PS: you sound like my family doctor, dont know why you reminded me of her.

[dhurandhar]

Shring...my only interest in this thread is to see how you deduce the coming war.

[echarcha]

Today the DOW fell another 400 points!! Shit!! :down:

[Shringarey]

Shring...my only interest in this thread is to see how you deduce the coming war.

I thiught u wanted to know about a plane or two for everyone! Sorry to get myself derailed.

[Shringarey]

What is recession? People say that in a recession no one has any money. Well, where has the money gone? Disappeared into thin air? The money that a person has, he has. Nothing is gone anywhere. What has happened is that the "movement of money", ie "velocity" has fallen.

Rakhi wants to buy something, but she cannot as I am not returning the 100$ I owe her. I can't return the 100$ because Dhurru is not returning the money he owes me. He is waiting for echarcha to return money that is owed by him.

The money is there. People are there. Only, because the money HAS STOPPED FLOWING, there is a problem. Everyone reduces demand. So, production reduces, people lose jobs, and these jobless people are unable to pay their debts and unable to purchase at all. This makes the problem worse. This is recession.

How does it stop? What causes recession to get over? In normal circumstances, recession is got over by actions of "people of honor". That means that Dhurru decides to clear his debt to me, immaterial of whether echarcha pays him or not. Slowly, debts are cleared. Some people go bust. Some people take a loss willingly (in this case Dhurru). The system restarts, growth picks up. But, Someone has to take the loss. This is the normal situation.

In modern times, just as socialists had "social engineers", capitalaists have "monetary engineers". This means that when there is a recession, Govt prints some money out of thin air, and gives it for some project or another. This money injected starts the cycle going again. No pain, only happiness. This is the magic of creating "money out of thin air". Yet, money in circulation has increased, money supply has increased, and inflation begins to crop up.

[echarcha]

The most awesome thread in a long long while. Thanks to Shring and dhuru and others who have participated so well. I learnt a lot! Thanks for increasing my knowledge!

[Shringarey]

The question is, what creates the recession in the first place? It is bad investment decision. I decide to start a shopping mall. I buy land, I order building made - cement, steel. Suddenly, the project goes belly up. This causes the "cumulative efforts of cement, steel, work done" etc to "disappear" from the economy, and someone has to pay for it. Usually, the suppliers pay for some of it in terms of receivables, shareholders pay for it, banks pay for it. But each of them have considered the risk in their price calculations. Banks know that there will be bad debts and account for it. Sp do investors. Overall, everyone wins even after considering the losses and the system moves on.

The losses are important to the conomy. It destroys all foolish ideas, non-workable plans. However, something else takes place. There is a boom in an industry, many new entrants come in, oversupply takes place and some of the producers go bust. When lot of losses come together, banks panic, and stop lending/reduce it, credit is unavailable, interest rates rise, and there is general turmoil for a while. Jobs are lost and a mild recession takes place. That is why, without government intervention, the economy yoyos between ups and downs, along a growth curve. The typical growth rates of an economy are like this -

6%, 8%, 2%, -3%, 1% 7%, 9%, 1%, -3%, etc.

Negative growth rates are COMMON if there is no govt intervention. Yet, over a long period, economy grows substantially.

Yet, negative growth rates were rare in the modern era, and we are witnessing them now. They are rare. This is because of government intervention. How? I'll explain later.

[dhurandhar]

I thiught u wanted to know about a plane or two for everyone! Sorry to get myself derailed.

Yes, but it started to get into family dynamics...maybe I should have thought before asking the question.

[dhurandhar]

What is recession? People say that in a recession no one has any money. Well, where has the money gone? Disappeared into thin air? The money that a person has, he has. Nothing is gone anywhere. What has happened is that the "movement of money", ie "velocity" has fallen.

Rakhi wants to buy something, but she cannot as I am not returning the 100$ I owe her. I can't return the 100$ because Dhurru is not returning the money he owes me. He is waiting for echarcha to return money that is owed by him.

The money is there. People are there. Only, because the money HAS STOPPED FLOWING, there is a problem. Everyone reduces demand. So, production reduces, people lose jobs, and these jobless people are unable to pay their debts and unable to purchase at all. This makes the problem worse. This is recession.

How does it stop? What causes recession to get over? In normal circumstances, recession is got over by actions of "people of honor". That means that Dhurru decides to clear his debt to me, immaterial of whether echarcha pays him or not. Slowly, debts are cleared. Some people go bust. Some people take a loss willingly (in this case Dhurru). The system restarts, growth picks up. But, Someone has to take the loss. This is the normal situation.

In modern times, just as socialists had "social engineers", capitalaists have "monetary engineers". This means that when there is a recession, Govt prints some money out of thin air, and gives it for some project or another. This money injected starts the cycle going again. No pain, only happiness. This is the magic of creating "money out of thin air". Yet, money in circulation has increased, money supply has increased, and inflation begins to crop up.

Money coming out of thin air....and vanishing in thin air. Let me provide my 2 cents on this one.

1) Money Coming out of Thin Air:
New money is introduced into the system as a result of continual human creativity, trading, and knowledge evolution. I will give three examples for each of the aforementioned features. In each case, it is supposed that the amount of monies in the system worldwide is exactly equal to the perceived value of goods and services at that time.

A. Human Creativity: I want to introduce a new machine into the market for which there is no effective barter (locally), there must be introduced more monies into the system (locally) to provide for it's sale.

B. Trading : More monies have to be introduced into the system due to change in perceived value of the existing goods/merchandise (including stocks and debt).

C. Knowledge Evolution : More monies have to be introduced in the system due to evolution of new knowledge which has to be sold by way of services.

2. Money Vanishing Into Thin Air

When the perceived value of goods/merchandise depreciates drastically, the tremendous amount of loss of monies (actually loss of perceived value) results in bankruptcies that nobody can pay...this is the "trillions of dollars wiped out of existence overnight". Thus, monies can vanish into thin air without circulating.

[echarcha]

Interesting video

Melodies derived from Stock Charts, arranged with Songsmith, the Microsoft Composition Tool. The most expensive Music in the World.

2-BZfFakpzc

[dhurandhar]

abandoning this thread, shring?

[dhurandhar]

Shring, could you not deduce how credit fall results in coming war?

[Shringarey]

Sorry Dhurru,

I am feeling a bit disturbed about writing this, as you will see why presently. That is why the gap.

I have explained why a recession is caused. A owes money to B who owes to C, who owes to D, and the cycle stops. Everyone is scared to lend. The process stops. Some people lose money, others lose jobs, demand falls, etc. The way out followed my most governments is to pump money, so that the rotation starts. However, sometimes the "entanglement" is so high, that no amount of money pumping helps. Banks have huge surplus, but refuse to lend. They even turn dow depositors!!! Lot of money, no jobs!!! It is happenning as seen here - http://online.wsj.com/article/SB10001424053111903366504576488123965468018.html

There is ONE MORE WAY to untangle the mess - rather than pump in money, which has proven ineffective, you shed blood!!!! (I am sorry, but it is the truth). Suppose suddenly there is a storm and lots of houses are wiped out. People die. Immediately, they start rebuilding after the shock is over. What one person owes another is (temperorily) forgotten. The money starts flowing because each one has "accepted the pain". All I am saying is that there has to be a big shock for money to start flowing - and that is by letting blood. Think it over.

Upto now, I have just shown that letting blood is ONE way to solve the problem. I have yet to show that the situation is such that war WILL come whether we like it or not (in high probability). That I will do presently.

Is my gist clear, - that one way to create money flowing is by letting blood?

[Shringarey]

When I say that a war is inevitable, I mean a B-I-G war. Also, it may not be a conventional war. For it to be a BIG WAR, -

i) It would seriously affect most people on the globe, directly or indirectly
ii) It would lead to deaths of 20 million+ people, probably more. The devastation of very many cities.
iii) It would be an Act of Man
iv) It would last for a substantial period of time
v) The shock would be so great, that people would be able to "forget their debts" and begin afresh. It would have a clear end-time, like Jap surrender in WW2, after which people will be ready to rebuild.

It may not be a conventional war. It could be war between factions, a killing based on religion. I know not what. But 9/11, though painful is a far smaller scale compared to what I am talking about. A nuke by an unknown on a city would be devastationg, but by itself, it will NOT be enough for people to forget the things owed to them. It is not a rebellion here or there, or many rebellions in many places at once. That is not enough for people to forget debts.

You get the drift of what I am talking about when I mean a big war. I am not saying it is inevitable - I am saying it is very likely (90+ probability). Why should it happen? I'll explain next.

[dhurandhar]

When I say that a war is inevitable, I mean a B-I-G war. Also, it may not be a conventional war. For it to be a BIG WAR, -

i) It would seriously affect most people on the globe, directly or indirectly
ii) It would lead to deaths of 20 million+ people, probably more. The devastation of very many cities.
iii) It would be an Act of Man
iv) It would last for a substantial period of time
v) The shock would be so great, that people would be able to "forget their debts" and begin afresh. It would have a clear end-time, like Jap surrender in WW2, after which people will be ready to rebuild.

It may not be a conventional war. It could be war between factions, a killing based on religion. I know not what. But 9/11, though painful is a far smaller scale compared to what I am talking about. A nuke by an unknown on a city would be devastationg, but by itself, it will NOT be enough for people to forget the things owed to them. It is not a rebellion here or there, or many rebellions in many places at once. That is not enough for people to forget debts.

You get the drift of what I am talking about when I mean a big war. I am not saying it is inevitable - I am saying it is very likely (90+ probability). Why should it happen? I'll explain next.

While this idea is painful...it is certainly interesting. If the global economy is to be jumpstarted this way, then certainly some groups of people must be acting in concert on global scale to create circumstances and steer it to the desired outcome...in this case, A BIG WAR.

[Shringarey]

Dhurru,

The global economy can be jumpstarted by war. That is just one method. I really do not think anyone in power is steering towards war, or wants war. However, most people in politics, believe that war is a POSSIBLE outcome, and that creates the need to build defenses, which may lead to war.

But the case for war is much, much stronger. We are in an ineffecient system, created by Unions. Yet, by Unions, I just dont mean trade unions - I mean all sorts of unions, including importantly, tax unions.

Under any society in history, the rich paid more tax than the poor. Ours is the few societies in history, where rich pay very little tax. I talk about most of the world. Let me take the case of Americ - I'll take 4 individuals - Beggar Man, Poor Man, Middle Man, Gold man. I'll assume some income and some taxes. Negative figures indicate subsidies FROM the Govt.

Beggar Man
Has no job. Does odds and ends, once in a while. Gets very little income. Pays no taxes. Lives on Govt Food Stamps, Subsidized Housing, free medicine, some clothes. Net taxes per year = -$ 13,500 (Minus Means Subsidies)


Poor Man
Typically makes from 10k$ to 30k$ (US Median = 30k $). Spends about 30k dollars. Has little savings and little loans (assumption of no credit card. With credit card, situation is worse).

Pays taxes = 1500$ (say, as IT) and 4500$ as Indirect Taxes. Total paid = 6000 = 20% of Income

Middle Man
A professional. Makes between 40K and 400k pa. Usually has a lot of savings. Say savings = 20%.

Do calculation - Tax = 25% of income


Rich Man

Makes 10m $ pa. Income is 1 m$ (pays Income Tax). Other is cap gains (pays low tax). Consumes far below income - less Indirect taxes.


This is WITHOUT considering the rich man's ability to make cross currency, cross jurisdiction gains, corpooratization, REITs, etc.

If you look at it, the burden on society falls on the middle class mostly. This is a fact. You have to accept this first - that Burden falls on middle class as a reality which is a consequence of our taxation system.

[dhurandhar]

I still don't see how you deduce that BIG WAR is going to be only *feasible* outcome unless there is a concerted global effort behind the scenes by some kind of cartel.

[Shringarey]

I still don't see how you deduce that BIG WAR is going to be only *feasible* outcome unless there is a concerted global effort behind the scenes by some kind of cartel.

Dhurru, when there is concerted action, like against Saddam, the war is limited. Great wars take place with a spontaneous trigrren, when "conditions" are right. Let me continue.

Whether we like it or not, we have consumed far more than we can produce. By "we" I mean all the Govts of the world. It is nice to blame US for everything, but what the US does is what everyone else is doing. Only - its problems are bigger because the Govt is bigger.

But almost ALL countries are in this mess - producing more than consuming. That is the issue. This is handled by "public Debt". You hear about the case that deleveraging is over. It is not. Leverage by private banks is transferred to Govt. Years and years of rot and misuse and mismanagement have set in. Also, many many governments have LOST THE ABILITY to act!!!!! This is one of the most important part of the situation - "MOST GOVTS HAVE LOST THE ABILITY TO ACT!!!!"

I'll explain next, how.

[Shringarey]

Good. Friday Evening, and got a lot of time. To understand the coming age, we have to recognize that GOVTS HAVE BECOME POWERLESS. This is so important that I have put it in bold.

There are three reasons for this -

i) Artificial Wage Compression
ii) Invisible WalkOut
iii) Sovereign Overstretch

This is my theory, so plz dont ask for quotes/references. Just see the logic.

Artificial Wage Compression refers to the difference between a high paid worker and low paid worker in an organization. It talks about how much variation is there in payscales. In the private sector, the variation is huge. The lowest worker could earn 18k pa or less. The CEO could earn in several million dollars. In Govt, the differential is low. This has been ARTIFICALLY kept low by -

a) Increasing the wages of the lower paid workers, because they have a "right to life of dignity"
b) Decreasing the wage of high paid workers because its a lifetime security and public service.

This is where the problem comes in. Govt after Govt is unable to attract talent. Indi has atleast 800,000 vacancies in Central Govt alone because they cannot attract talent. I know that one regulatory body could not find a skill. They increased the salary to 3 lac pm. Yet, with private sector giving 10 lacs pa to same guy, he is unable to join Govt. Govt feels that if a Chief Justice's salary is about 1 lac, the regulatory person's salary should be lower, and they made an exception by giving him 3 lacs. But the Chief Justice's salary is ARTIFICIALLY KEPT LOW. Govt cannot increase it, because they would have to increase everyone's salary. But the lower scale people are getting FAR MORE salary than outside.

Govt cannot get army officers, police officers, engineers, doctors, statisticians, etc.

Govt has far lower talent base available to it than outside. Decisions are made based on the talent base in Govt. Its difficult man, really difficult. The Govt's ability to detect and resolve crisis is shrinking.

Today, there are people in India who can predict monsoon far better than Meteorological Dept. They dont join the Govt. They join trading house which uses their skills to punt on agri-commodities and pays these people a bomb.

[Shringarey]

The second phenomenon taking place is the concept of "Invisible Walkout". It has to do with choices. Choices available to a person has increased tremendously.

Suppose you have to travel from A to B. In between the road, there are villagers who harrass you and loot. We would have people saying "They don't have jobs, that is why they loot". Collective bargaining would take place between carriers of goods and these people. Today there are many many routes. If someone harasses you in one route, you dont come to the bargaining table. You take another route. Simple.

Federation of Indian Industries does not send people to discuss labor laws. They just quietly open factories in China. Govt asks representatives to discuss newer laws. Few attend. If the laws are favorable, they operate. If not, they operate elsewhere. PEOPLE DO NOT COME TO THE TABLE TO DISCUSS OR BARGAIN.

The Govt may pass whatever laws it wants. The rich don't protest, they walk off. Quietly. No word. People inscientific institutions resign because they are superceeded by a Dalit. No cribs, nothing. Join a finance company in Singapore. No one fights back, the empowered go away.

Government has lost Power!!!

[Shringarey]

The third reason why Govt has lost power, is because of Sovereign Overstretch. Every big organization needs to have reserve funds/capacities/capabilities for use during a crisis. It is common sense. Govts do not have.

They have completely friterred away their capabilities. They have given doles, pensions, free medfical facilities, rent control acts, etc. Their ability to handle an economic crisis is zero!!!

The only power Govts have left is the power to wage war.


You will have to believe that Govts have lost power. - that Govts are unable to handle the crisis that they are facing today.

[Shringarey]

The biggest problem of today is lack of debate. We have, because of choices available to us, because of our productive capacity, created a situation where there is no debate.

If a person troubles me, whether real or imagined, I choose another alternative. An Indian manufacturer, who has capability of manufacturing nuclear power plant thinks like this - "Gawd. These people ie Govt cannot manage. On top of that there is a reservation issue. If they screw up a plant, and there is a leakage, WE will get screwed. He does not argue. He raises no voice against reservation. He just does not bid - or he bids way too high.

The ultimate of non-violence has been reached - where we refuse to even raise our voice against injustice, but just quietly walk away. A guy, kicked out of his job, rightly or wrongly, does not sue/fight the comany. He joins a competitor. He starts his own company. He wals away.

Owners of flats do not rent out, because of rent control laws. They dont create bhashan or any protest. They just walk away.

Now that France has increased taxes, no one will protest - they will move overseas. Quietly, silently. This would create a burden of unemployment on Govt.

The haves have a greater power than ever before. The ability to get out. Chottu people like me struggle to create an internet business to buffer my cash flows. I may or may not succeed. If I dont, I'll try again - same thing or something else. If I do, I'll operate virtually from a server in XYZ where rules are more flexible - tax rules that is. When people distrust the Fed, they dont protest, they buy gold. RBI can say what it wants, but if people feel that RBI will not be able to control inflation leading to loss of savings, they quietly move to FMP systems.

It is this silent revolution that is causing the common man hardships. He is unable to understand why prices are rising, why wages are falling and whom to blame. He expects the Govt to act. But Govt cannot act.

Greece can do nothing but rob old of their pernions. After that they can not even do that. They raised taxes once, arbitrarily, because of a populist agenda. The ship owners migrated to England, and are not coming back.

Govt of India started the New Pension Scheme. Its returns are 1.8% in two years. What happenned? Simple - people, believing that Govt cannot manage its debt, pushed bond yields up, causing serious losses to Pension Schemes.

Yet, these cataclysmic changes are taking place, and no one can do anything, because NO ONE COMES FORWARD WITH THEIR PROBLEMS. They opt out. Around the world

Next:Bizarre Reasons of Opting Out

[dhurandhar]

A contradiction in what you said (or so I think)...

People walk away from within govt because people feel powerless to fight the government...but that would mean that govt has not lost power...it has lost the trust of the people.

[Shringarey]

A contradiction in what you said (or so I think)...

People walk away from within govt because people feel powerless to fight the government...but that would mean that govt has not lost power...it has lost the trust of the people.

No Dhurru, No. Govt has lost power, because people have choices. 20 years back, a law unpopular to industry would have raised heckles. Today, individuals have choices, and they shrug it off.

[dhurandhar]

No Dhurru, No. Govt has lost power, because people have choices. 20 years back, a law unpopular to industry would have raised heckles. Today, individuals have choices, and they shrug it off.

The govt has not lost power...just accumulated far more INERTIA to be able to adapt to the needs of people. In fact, there has been gradual concentration of govt power over citizenry (or lack of freedom) in democratic countries.. counting from WW 2 era.

[Shringarey]

Dhurru, there seems to be a gap in understanding here. Let me elaborate -

A Govt has some power. It uses the power to expand its boundaries. Yet, it has to constantly keep the occupied territories under watch, as there are continuous rebellions there. It now has no power left to handle other problems. Its power seems to have grown, based on its area. Yet, it could be facing Imperial Overstretch, and its power to solve problems that would come in the future could be diminished. Whether aquisition of new territories actually enhances its power or causes imperial overstretch depends on the situation.

I am agreeing that tday Govts weild far more power than after WW2. I agree with you. However, I am also stating that it has caused imperial overstretch. Govt has, in order to weild power, spread itself too thin. It has taken too many responsibilities like pensions for o;d, free medicare, unemploymen benefits, free education, subsidies for agriculture, etc. Its power has increased in that sense. However, it does not have the power to handle the issues that are now emerging, as all its power is spent away.

I hope the confusion is resolved.

[Shringarey]

Now please do this - go to the net and see the situation in 1930 - 37. There was a massive collapse then. The collapse of 2008 is similar in size, but it has been kept under the carpet because of reckless money printing. Here was the situation -

i) There was massive unemployment due to sudden increase in productivity. There was also massive underemployment. In Austria, there were 4 clerks in banks where one would do. Adding machines were banned.

ii) Banks were tottering (as they are now) because of bad loans (Housing bubble now) and were flush with funds!!! (As they are now). This sounds paradoxical. Many people had no jobs. Those who had, were scared to consume and would save by depositing in the banks, because they were not sure if they would lose their jobs (Sounds familiar?) This suppressed demand, causing more companies to crash. Banks were NOT lending to companies as there was no certainty of them recovering their capital. They were sitting on top of depositor's cash. Yet, with banks having lost so much due to companies going bust, and their OLD loans to these companies having turned sour, that they had wiped out all their own reserves. In effect, banks were sitting on a pile of cash and were at the same time under-capitalized!!!!

iii) Bankers and Financial Institutions CANNOT sit on a pile of cash for so long. They need to find out a way to deploy capital. That is why their dalliance with Emerging Markets, etc. But no one trusts India or China fully.

iv) Since 1934, Banks found out one player that showed promise. In the whole mess, there was a shining star that loomed over the horizon. It was Germany. With a new Fuhrer called Adolf Hitler, the country showed the world what it could do. Everyone was ready to lend Germany money. Hitler was building an efficient and highly productive industrial military empire of that time. This required Steel, factories and what not. Banks in Europe and US bent over backwards to help Germany. Germany had almost zero unemployment. Everyone was happy. The world seemed to be getting out of the recession led by Germany. Only some foolish people like Churchill complained. But no one listened to the cantankerous man.

The same thing is happening. Banks are desperate - real desperate to find an outlet for capital. India is a growing World power, only in its own fancy dreams. No one will invest too much in India. Ditto for China. But is there any country that needs to build factories and infrastructure and other such things fast, and is able to pay for it? There are!

There are a lot of countries that have a superb record of exports because they are endowed with oil. Their oil is not going away anywhere too soon. How about stimulating them to expand? A simple nudge may not work - it requires a lot more than a small expansion. There is a need for a very very large industrial complex - it may have military use, but.....

[Shringarey]

Shit!! The way ECB is acting, Euro could collapse faster than I expected. Be ready for war so0ner than I thought.

[dhurandhar]

Now please do this - go to the net and see the situation in 1930 - 37. There was a massive collapse then. The collapse of 2008 is similar in size, but it has been kept under the carpet because of reckless money printing. Here was the situation -

i) There was massive unemployment due to sudden increase in productivity. There was also massive underemployment. In Austria, there were 4 clerks in banks where one would do. Adding machines were banned.

ii) Banks were tottering (as they are now) because of bad loans (Housing bubble now) and were flush with funds!!! (As they are now). This sounds paradoxical. Many people had no jobs. Those who had, were scared to consume and would save by depositing in the banks, because they were not sure if they would lose their jobs (Sounds familiar?) This suppressed demand, causing more companies to crash. Banks were NOT lending to companies as there was no certainty of them recovering their capital. They were sitting on top of depositor's cash. Yet, with banks having lost so much due to companies going bust, and their OLD loans to these companies having turned sour, that they had wiped out all their own reserves. In effect, banks were sitting on a pile of cash and were at the same time under-capitalized!!!!

iii) Bankers and Financial Institutions CANNOT sit on a pile of cash for so long. They need to find out a way to deploy capital. That is why their dalliance with Emerging Markets, etc. But no one trusts India or China fully.

iv) Since 1934, Banks found out one player that showed promise. In the whole mess, there was a shining star that loomed over the horizon. It was Germany. With a new Fuhrer called Adolf Hitler, the country showed the world what it could do. Everyone was ready to lend Germany money. Hitler was building an efficient and highly productive industrial military empire of that time. This required Steel, factories and what not. Banks in Europe and US bent over backwards to help Germany. Germany had almost zero unemployment. Everyone was happy. The world seemed to be getting out of the recession led by Germany. Only some foolish people like Churchill complained. But no one listened to the cantankerous man.

The same thing is happening. Banks are desperate - real desperate to find an outlet for capital. India is a growing World power, only in its own fancy dreams. No one will invest too much in India. Ditto for China. But is there any country that needs to build factories and infrastructure and other such things fast, and is able to pay for it? There are!

There are a lot of countries that have a superb record of exports because they are endowed with oil. Their oil is not going away anywhere too soon. How about stimulating them to expand? A simple nudge may not work - it requires a lot more than a small expansion. There is a need for a very very large industrial complex - it may have military use, but.....

If you think either US or Russia would be Germany of the previous year..you are very mistaken:D

Iran can't do a dick...and is in no way having skilled manpower and engineering and scientific infrastructure (historically speaking) to do what Germany did in previous century.

Did I miss any particular country?

[Shringarey]

If you think either US or Russia would be Germany of the previous year..you are very mistaken:D

Iran can't do a dick...and is in no way having skilled manpower and engineering and scientific infrastructure (historically speaking) to do what Germany did in previous century.

Did I miss any particular country?

No. You have NOT missed a country. I never said US/Russia/China would be like a new Germany.

The only way out of the mess is to sell planes/ships/what have you to oil rich countries. Get them to fight one another. Its in every one's interest. (I am NOT saying this SHOULD be done. I am only saying something like this WILL be done, whether we like it or not)

With oil rich nations fighting one another, demand for armament increases, giving boost to economy. Reconstruction takes a further boost. Their need for ready cash makes them sell oil more and drops the price - thats the third benefit.

Please remember, I had felt that the Euro would be safe for 2+ years min. If it is not, expect greater war, sooner!!!

[dhurandhar]

No. You have NOT missed a country. I never said US/Russia/China would be like a new Germany.

The only way out of the mess is to sell planes/ships/what have you to oil rich countries. Get them to fight one another. Its in every one's interest. (I am NOT saying this SHOULD be done. I am only saying something like this WILL be done, whether we like it or not)

With oil rich nations fighting one another, demand for armament increases, giving boost to economy. Reconstruction takes a further boost. Their need for ready cash makes them sell oil more and drops the price - thats the third benefit.

Please remember, I had felt that the Euro would be safe for 2+ years min. If it is not, expect greater war, sooner!!!

Yes, but in the war the oil refineries may be destroyed...thus sending oil prices curve into stratosphere.

What say now?

[Shringarey]

Dhurru,

I gave A possible scenario. I do not know what exactly will happen. I dont know exactly how or what. We (humans) do not know how to settle our disputes except through war. We have to learn as a race.

In the meantime, I would still thik of destruction, painful as it may be.

[echarcha]

Got this in my Inbox


US National Debt Crisis Simplified

http://i.imgur.com/d0RsV.jpg