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GENERAL ECONOMICS

THE DEVOLUTION INTO A VAMPIRE ECONOMY.

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THE DEVOLUTION INTO A VAMPIRE ECONOMY.

"There Ain’t No Such Thing As A Free Lunch"

The Real Laws of Economics are analogous to The Laws of Thermodynamics.

Classical economics was called the "dismal science" by those individuals who have more imagination and desire than ability!

Because Classical Economics places a limit on their utopian fantasies, it has always been attacked by politicians, intellectuals, and mystics.

The Laws of Classical Economics are not an issue in a healthy society, because most of the population is engaged in productive activities.THE BEGINNING OF A HEALTHY ECONOMY! ACCUMULATION!

A new economy begins with the establishment of a region that is conducive to trade and production. The region does not have to be new, but it must offer the producers a major incentive to establish new enterprises in that region.

Post WW2 West Germany is an example of an older area that prospered by radically changing their business climate. In June of 1948, Ludwig Erhard, the West German Economics Minister (1949-1963), implemented the economic strategies that brought Western Germany back to life.

Singapore represents a new economy being created. There was no past to be reversed as Singapore soared to prosperity. As news of its existence spread through the world, more talent arrived to make their contribution. The economy quickly adapted to those newcomers, and even more prosperity was generated.

THE SECOND STAGE OF A HEALTHY ECONOMY! THE TREND TURNS UP!

The producers soon find themselves constrained by limits on their activities. The first constraint is time. Soon, there are not enough hours in the day to get all the tasks done. The best workers are soon hired, and the enterprise begins to thrive.

As the successful producers continue to prosper, they expand their physical plants, such as additions to their factories, warehouses, and machinery.

The new spending spills over into the entire community, and service businesses are started, or expand, to meet the new demand.

The message spreads that employment opportunities are available in this region.

The banking and financial sectors now expand. Soon, there is a clamor for "educated workers" to do the clerical functions needed by banking, insurance, and general office work.

The government also expands its ranks to cash in on the prosperity. They have a need for many clericals to collect all the fees, fines, tariffs, levies, and taxes that are needed for their rapidly expanding payrolls.

A massive expansion of colleges to train clericals is begun!

 

THE FINAL STAGE OF THE HEALTHY ECONOMY! FINAL TOP!

In 1964, The nation adopted a new national anthem! "People who need people, are the luckiest people in the world!"

"So many needs to meet, so many laws to make, so many taxes to collect!"

This is the culmination of an economy’s productive output! The region is now being governed by bureaucrats, and the intellectuals from the various colleges. Central planning is the key word!

Once a society has achieved wealth and leisure for a sufficient amount of time (approx. 40 years), the masses are no longer concerned with the objective reality of producing goods and services. Social and psychological needs become the "burning issue". State subsidies for the production of needy people has begun.

The fact that business is cyclical is beyond their ken. Permanent prosperity is now presumed by the masses. Businesses and governments commit to long term security promises that will later prove to be worthless when the Big Cycle turns down. Once it was deemed impossible for the wealth train to go off the tracks in West Germany, but it did go off the tracks as a result of the philosophical shift that occurred in the 1960’s. "Ideas have  Consequences" Ayn Rand.

The school system is exploding by governmental dictate, so that the freshly graduated collectivists become the teachers in the schools. Consequently, their students are trained as collectivists. This assures the creation of a new culture for the next generation.

The government has created an army of clericals and bureaucrats that are focused on "social progress". It’s probably just a coincidence that each new level of social progress requires a large increase in government budgets. As these government workers are also voters, the policies of the region automatically become more redistributionist.

Job seekers from distant regions flock to the area in search of opportunities, The service economy continues to explode. It’s now common knowledge that wealth can to found in this region.

THE FIRST STAGE OF THE VAMPIRE ECONOMY HAS BEGUN! DISTRIBUTION!

The waves of job seekers now overwhelm the economy’s ability to absorb them in the workforce. They find it more difficult to secure desirable employment!

Crime begins to increase.

Security becomes an issue, and the security business begins to boom. This is hailed by the government, and their media, as the basis of job creation! The logic becomes, the more crime, the more new jobs. Let’s hear it for crime!

This new "share the wealth" ethic results in the creation of social programs to help the neediest citizens. The news of these programs quickly spreads. A flood of

needy immigrants now appear to collect their entitlements! Now the region goes into political turmoil over the issue of illegal immigrants receiving the citizen’s dole.

More of the area’s citizens now begin engaging in social activism as the government begins funding these activities. This money is stolen through taxes from the producing sector, and then given to the "socialist" activists so they may persuade more people to tax the productive sector into extinction! There is nothing like a good collectivist plan in action.

All this frenzied activity is presented as good because it is "helping "society". It is heralded as creative and correct by the intellectuals, the government, and their media.

The era of building, and production is now over. Enter the service economy!

THE SECOND STAGE OF THE VAMPIRE SOCIETY! THE TREND IS DOWN!

The political environment is now openly hostile to the producers! Productive businesses are portrayed as environment destroying exploiters of the working man.

By these signs shall you know the Vampire Nation! The public sector has turned into a giant fraud machine, as all the "pension funds", and expense accounts are slowly looted by the proletariats. All the government programs to help the needy will finally be revealed as scams that allow the proletariats to steal the producer’s hard earned wealth.

 

"Where have all the production jobs have gone? Far, Far, Away!"

Taxes now rocket, as the government attempts to pay for all of its promises.

Politics has now been reduced to electing the politician that promises to steal the most money from the producers, and give the money to their constituents (vampires).

Real estate is now in a roaring bull market, as all efforts are directed towards presenting it as a great investment. It’s your time to prosper is the mantra! The current land holders know that they need to sell now (distribution), because real estate has no liquidity in an economic disaster.

A apparent economic anomaly is the financial institutions providing more credit to more people at this time. Many critics are calling this tactic insane. Actually, it is a necessary maneuver to achieve distribution in Real Estate and the Stock Market.

Their strategy can be revealed by two facts.

1. The government is actually in control of lending at this time. Should you doubt this, ask yourself this question; how many private banks currently exist in the US? As long as the Fed banks recover at least the reserve requirement of the money underlying the loans, there has been no loss in reality. The current reserve requirement is ten percent, which means that all loans currently are 90 percent funny money.

2. The issuance of credit cards to almost everyone may be a brilliant tactic. The Fed is forcing the reporting of all transactions. This is destroying the "underground" economy. The Fed is making the bet that the additional taxes received will exceed the losses on the credit cards. It is a very high risk, but it’s your nation that the Fed is putting at risk, so the Fed is indifferent to the outcome! The City of London is secure.

Financial markets appear to be in total confusion, as the old rules no longer hold. Smart money has gotten very cautious at this time. Only the speculators are in the game now Speculative money is scared money, or dead money. We hear the histrionics, and see the volatility steadily increasing. In some markets, the shills have turned the buy, buy, buy rhetoric into a new Buddhist chant.

Businesses that have international capability begin using their option to get out of Dodge before the gunfight. Most new expansion is done in other areas that are deemed a better long term investment!

The difference between this and prior economic adjustments is that no sane person

will volunteer to be vampire food. This is not just another economic adjustment.

This is the host fleeing from a financial Transylvania!

THE FINAL STAGE OF THE VAMPIRE SOCIETY!

This is class participation exercise. We all just guessing how bad it’s going to get!

Let you imagination be your guide.

I can give you one harbinger of the daymare to come! The UK has just passed a new law giving government credit cards to the neediest!

 

BUILD IT AND THEY WILL COME. AND THEN, THEY WILL STEAL IT!

 

Wayne N. Krautkramer

Onlypill@cox.net

onlypill.tripod.com

Successful investing is anticipating the anticipations of others.
JOHN MAYNARD KEYNES