July 18, 2017

Behind The Curve

Posted in Articles · 104 comments ·

There’s something unsettling about finding yourself at home in bed, under the duvet, Pringles in one hand, remote in the other, binge-watching ‘House of Cards’.

As you try to come to terms with where you have ended up, can you take some comfort in the fact that a significant chunk of the reasonably well-educated bourgeoisie is also addicted? Are we, at all hours of the night, gorging on Netflix, checking emails, responding to Whatsapp groups, booking an Uber or buying something on Amazon?

Is technology taking over our world and what does it mean for the global economy and for our way of thinking about the world?

In this update, let’s tease out some of the connections – not always apparent – between technological innovation, low productivity, wage deflation and the conundrum faced by central banks everywhere. The central banks’ dilemma is that they are itching to raise rates but finding no reason to do so.

Economics is constantly evolving

At the beginning of every year, when my students sit down in front of me at Trinity College in Dublin, I can’t stress enough the importance of not only what they’ll learn in textbooks, but what they see happening in the world around them. As the world changes, our understanding of the economy should change too. But sometimes it doesn’t.

Too regularly, economists – and in particular policymakers – display a form of ‘groupthink’ and seem wedded to old models that appear impervious to the changes that are taking place in the real world.

Groupthink, when wrong, can lead to huge policy errors and have enormous unnecessary repercussions. As the global economy is growing and unemployment is falling, the default position of central bankers, from the Fed to the BoE to the ECB, is that inflation has to be around the corner.

But, what if it’s not?

What if policymakers in their ivory towers wedded to old ideas do not appreciate that technological change and the likes of Whatsapp, Uber, Amazon and Netflix, are driving deflation not inflation?

Furthermore, the data suggest that wages are not rising and productivity is on the floor. How do we explain this at a time when productivity should be rising and wages too?

Both issues, (1) the deflationary impact of technological disruption and (2) the productivity paradox, are interrelated and have huge policy implications. Let’s explore them and more, but for the sake of clarity, take each one in turn.

When is a curve not a curve?

Now it might be helpful to remind ourselves that central bankers believe in the Phillips Curve. The Phillips Curve is the traditional relationship between inflation and unemployment. Every religion has a creed – a set of core beliefs. For central bankers, the creed is the Phillips Curve.

The mantra goes like this: as unemployment falls, more and more firms want to employ more and more workers, but there are fewer and fewer workers available. So wages rise. The worker knows that if his boss doesn’t give him a rise, he can go across the road to the guy with the ‘vacancies’ sign in the window and get paid more. This process triggers wage inflation.

At some point the economy runs out of workers and wages rise. Traditionally, this threshold was an unemployment rate of between 5% and 6%.

While higher wages give more income to workers, they constitute higher costs to employers and ultimately less profit. Because companies traditionally work on a fixed profit margin basis, as the employer’s costs go up, the company simply increases retail prices to sustain profit margin. And, because everyone is getting a pay rise, everyone has more income. This increased income allows the market to absorb the increases in prices as everyone has more money.

Therefore, the traditional mantra of central banking is based on two crucial beliefs: first, the ability of the worker to push up wages when unemployment is falling (or at least falls to a certain level) and second, the subsequent ability of the employer to pass on the increased costs through higher prices.

Years ago, as a rookie economist at the Central Bank of Ireland, my first job was to assess these inflationary relationships. Sure we did lots of research, but my favourite was ‘crane counting’. This highly sophisticated approach involved standing on the top floor of the bank, one of the tallest buildings in Dublin (a low-rise Georgian city) and counting cranes on the horizon. The more cranes, the more activity, the higher future wages in construction and somewhere down the line, we could be sure of an uptick in inflation.

Common sense works – or at least it did.

However, the relationship between unemployment and inflation appears to be breaking down or at least shifting. Could technology be the reason?

Unemployment is falling everywhere but inflation isn’t rising. In the US and the UK unemployment has been falling and falling but wages have remained depressed. Even in the eurozone, which has created more than five million new jobs in the past three years, wages remain depressed.

This creates problems for the major central banks because after years of QE they are trying to ‘normalise’ before the next downturn. By ‘normalising’ the bankers mean they want to unravel QE, shrink their balance sheet and raise interest rates. They want to get back to the pre-crisis status quo.

The last thing the central banks want is to enter a new recession with rates close to zero because if rates are already at zero, how can the central bank fight a recession?

But in order to raise rates they need an inflation trigger. The dilemma for the central banks is that there is no inflation, even though unemployment is below the level (5-6%) where we traditionally see rising wages.

This defies economic wisdom, particularly in the US, which is about to enter its ninth year of economic expansion and unemployment is headed towards 4%.

So what is happening?

Why are wages and inflation in general not rising? And what might watching Netflix have to do with all this?

Creative destruction

To explain this, let’s go back to theory. The Austrian economist Joseph Schumpeter came up with the term ‘creative destruction’ to explain the natural process whereby recessions and human ingenuity create innovations and these innovations produce ‘disruptive technologies’. Such disruptive technologies like Uber, Amazon, Whatsapp, Google maps or Netflix, destroy old industries, slash prices and change the ground rules. Schumpeter argued that these forces are so strong they drive down inflation structurally.

In terms of Uber, Whatsapp and Amazon, these new technologies are driving down prices undermining the old fixed margin businesses. Taxis, retailers, telecom companies and all sorts of leisure companies can no longer add margin to their price to make up for increased costs.

So the issue is what if Schumpeter is right and Phillips is wrong?

In a sense, Schumpeter argues that we should embrace change because it is invigorating, while the central banks using Phillips are constantly trying to deploy policy to get us back to where we were before.

Could we be in a Schumpeterian world of technologically-inspired deflation, where the old relationship between wages, employment and inflation has broken down?

For this to be the case, something profound also has to be happening to wages.

Amazon undermines the fixed profit margin model of retail, but what if some other deflationary force is going on in the labour market even before the company worries about margin?

This brings us to robots and the productivity paradox.

The productivity paradox

Part of the ‘technology is everywhere’ story is the notion that robots are taking our jobs. This sounds plausible, very 21st century and is part of the general giddiness about Silicon Valley, tech stocks and general market hype. But the economist in me is concerned; if robots are really taking our jobs, why is productivity so low?

Robots replacing people should drive up productivity, but productivity clearly hasn’t read the script. Furthermore, because productivity increases determine wage rises, depressed productivity means depressed wages.

But, you might ask, are we not surrounded by all this amazing technology that is changing our lives? Well, yes and no. Clearly in entertainment, lifestyle and media, new technology is everywhere. And because we are all using it, like my Netflix addiction, we feel that it is more ubiquitous than it actually is. The hard data shows that technology is taking over not so much our lives, as much as taking over our spare time.

If we were actually living through enormous technological change four things would be happening. First productivity would be rising as we use this fabulous new technology to create more things. Second, wages would be rising too. Third, employment would be falling because companies would be investing in cheap robots to take over from more expensive humans. And fourth, all this investment in new technology would be captured in a surge in business investment.

But none of these four things are happening. Actually, the opposite is occurring.

More and more, rather than less and less, jobs are being created. Productivity is not exploding but stagnating. Wages are depressed and business investment is not surging but is, in fact, tepid.

So, it’s not that we are embracing technology but we aren’t embracing it enough. It’s not that there are too many robots out there – there aren’t enough of them!

Incidentally, when you think about it, the robot problem – employed workers getting paid more to do less – would be a ‘nice’ problem to have. Instead we are experiencing the opposite: workers are getting paid less and working more.

So why is this?

It has to do with three potential factors.

The first is structural. In the past thirty years, each recession has been taken as an opportunity to wring more inflation out of the system. In plain English this means that the worker pays. In a recession unemployment rises and wages fall and when the economy finally turns and the worker gets up off the canvas, he does so at a lower real wage than before. This outcome is policy-inspired wage compression.

The second factor is that technological disruption has made workers cheap all over the world. Technology allows companies to scour the world for cheaper workers and there has therefore been a convergence of the cost of labour around the world. Granted certain professions have done well as a result of technological change but, on average, wages have been kept in check due to competition. The global supply chain means that the global supply of workers, rather than the national pool of workers, sets the national price of labour and thus wages.

You could say the labour force has been Uberized!

You could also look at the productivity paradox from another angle. Many believe that productivity is low because investment has been weak, so workers have not had access to enough capital investment. But what if it’s actually the other way around? What if investment in technology, which drives productivity, has been low precisely because wages are low?

We are seeing low levels of productive investment because there’s no real need for companies to save money as workers are already cheap. The financial imperative for a company to invest in order to lower costs has gone away.

Therefore the causal relationship is from wages to technology, not from technology to wages.

It’s not that there is no productive investment going on, but it is not as much as the tech evangelists of Silicon Valley might have us believe. We are seeing more of the same. There’s nothing new about humans being replaced by machines. Ask the Luddites. It is the story of the global economy and will continue to be.

When those workers lose their jobs they don’t disappear, they try to get other jobs. Typically, they slip backwards into jobs that are less well-paid because they still have to put bread on the table. This competition also pushes down wages. And, the lower wages are relative to profits, the less investment there will be because companies won’t bother to invest in expensive machines when people are cheap. This same type of rationale explains the industrial under-development of the Southern slave-holding states relative to their Northern counterparts in the Antebellum US.

As a result, we get low productivity being driven by low wages, not the other way around.

Societally, this leads to higher levels of inequality between citizens who depend on wages for their income and those who depend on rents, dividends and assets. Politically, this drives populism as the disenfranchised worker might not have a good wage, but he has a legitimate vote.

Now let’s go back to the central bankers’ immediate dilemma.

To raise, or not to raise…

Despite central banks’ desire to tighten monetary policy, persistent deflationary pressures appear to be the problem, rather than incipient inflationary stresses. This is being driven by disruptive technology, which is undermining the ability of firms to pass on increased costs. This is keeping retail prices low.

Then there is the productivity paradox. How in a world of mass technology and robots, can wages be so low? Rather than taking our jobs as everyone is suggesting, robots aren’t taking enough. Wages are not low because productivity is low but rather the opposite is the case, productivity is low because wages are low.

Low wages mean cheap workers will do the job just fine, while the split between profits and wages will continue to go increasingly to profits. This split towards profits rather than wages has profound ramifications for the general economy because if wage growth remains weak, demand remains weak because rich people don’t create demand – or jobs for that matter.

Poor people spend, rich people hoard.

The average guy with a good wage, buying little bits all the time creates demand. Rich people in general hoard money rather than spend it. Therefore, if more of the return from the economy is going to dividends than wages, this money doesn’t filter down through the economy in the same way.

In Keynesian terms the poor guy’s multiplier is much larger than the rich guy’s. You get a much bigger bang for your buck from the poor guy than the rich guy.

Therefore, aggregate demand in this cycle has remained fragile.

So what’s the rush to normalise monetary policy?  Why the rush to get back to the pre-crisis status quo?

It is because of ‘groupthink’ deep in the central banks. They want to get back to the status quo because that’s the way it’s always been. It’s an intellectual form of mean reversion!

There is no need to rush. In fact, the immediate issue isn’t inflation. It’s deflation, implying that the rate of unemployment can go lower and lower before wages begin to rise. The unemployment rate at which wage inflation rises could be 4%, it could be 3% or even lower!

If central bankers rush to raise rates mistaking a structural issue for a cyclical one, they may end up doing untold damage.

    • Well done Adam. #1 yet again. Brilliant weather here. Dry, warm and water restrictions. forest fires plague half the province. Sailing out here is divine this time of year. We eat well, live in a great spot, and have very good company. Enjoy your Summer

    • Good article but over complicated, I think.
      I believe that there are simply a shower of parasites at the top of the economy both nationally and globably who oppress everyone eles.
      Those c**ts can fix and rig everything and anything to maintain and grow their power and wealth.
      Their toxic desires dictates everything including wages.
      Politicans, governments and media are just part of the props to prevent the slaves from turnig around and smashing the sculls of their opressors so as to be as free as birds.

  1. Original-Ed

    It’s very interesting – another Henry Ford is needed to push productivity and wages.

    • michaelcoughlan


    • Mike Lucey

      Henry Ford realized that his Model-T had to be affordable to his workers. It made sense and proved a very successful business model. His workers bought Model-Ts in big numbers as did the common man.

      What have we got now? Chinese manufacturing cheaply and middlemen upping the retail price to Western consumers. That model can’t last as the Western consumers will not continue to have the £€$ to buy because they will not be producing themselves.

      The Donald, like him or loathe him, seems to be the only World politician that is talking about this situation, although I don’t agree with his proposed solutions.

      We have Globalisation now entrenched with the aid of cyber-tech and it’s not going away. It looks to me that the solution will be …… and I hate to say it ….. a New World Order. I think it’s gathering momentum and the IMF have the SDRs at the ready. If they can do a deal with the BRICS, its fait ccompli for the Central Banksters, they will still be producing magic money with interest.

  2. Adelaide

    Well, there is one explanation to David’s paradox.
    His unemployment figures, sourced from officialdom, are wrong.
    There’s not 4% unemployment, but perhaps 24% unemployment, it depends on your calibration (spin) of what defines unemployment.
    The only paradox is we’re in a decade long global depression and officialdom has yet to admit it.

  3. michaelcoughlan

    Hi David,

    I just read this and when I read the first few lines I finally thought a chink of light was appearing in the challenge you were making to the status quo economic consensus.

    Then you collapsed into a load of self contradicting over thought economic mumbo jumbo and my heart sank.

    This one sentence is where you should start to attempt to see the light;

    “But none of these four things are happening. Actually, the opposite is occurring.”

    KNOW WHY? The stats are bogus. Lets just say though the are not and accept your luddist hypothesis re technology. In extremis; since the industrial revolution all the advances should have rendered the human population living in abject poverty redundant to the needs of industry from this perspective.

    lets go back to “But none of these four things are happening. Actually, the opposite is occurring.” You CLEARLY don’t know the difference between deflation and a contracting economy so here is a simple link;


    From the link;

    “Deflation is when the amount of currency in an economy decreases, which leads to a drop in prices because everyone has less money to use. Likewise inflation is when more currency is put into the economy, leading to an increase in prices. Recession is something different, and while inflation or deflation play a part, they’re not the same thing. Recession is simply a temporary period of reduced economic activity. While both things can cause each other, they’re not the same.”

    Inflation Dathi is RAMPANT in the stock market. For example contrast the new highs in the dow and the S&P 500 with YOUR OWN OBSERVATION of; “”But none of these four things are happening. Actually, the opposite is occurring.”

    When is the penny going to drop with you? All the QE stuff got gambled into the financial markets driving up the price of assets for the people who now have less money to spend in the economy as well as paying the increased takes to fund QE itself.

    Take this statement;

    “Unemployment is falling everywhere but inflation isn’t rising”

    Unemployment in a concentration camp in 1942 or a cotton field in Mississippi in 1863 or the desert beside the pyramids in 1000 BC were ZERO and so were COSTS.

    This statement;

    “Despite central banks’ desire to tighten monetary policy, persistent deflationary pressures appear to be the problem, rather than incipient inflationary stresses. This is being driven by disruptive technology, which is undermining the ability of firms to pass on increased costs. This is keeping retail prices low”

    Is nothing short of deplorable. It’s being driven by out of control central bank policy.

    Irving Fisher is the guy to study and here is his ACCURATE hypothesis;


  4. “The central banks’ dilemma is that they are itching to raise rates but finding no reason to do so.”

    More correctly put is.
    The central banks have succeeded in destroying the economy that higher interest rates cannot be afforded. The central banks are contracted to issue money as a debt. It is always loaned into existence. The commercial banks take deposits and central bank loans which are used as reserves for the basis of the mother of all leverages. It is called fractional reserve banking. It is reliably reported that the commercial banks lend out 30 times more money than their reserves. (Tell me I am wrong David, and If I am give us the real figures)
    Every amount is issued into the economy as a loan. Interest is charged on those loans. Initially the interest rate could be high as there was plenty of business and not much debt (1913 onward) since 1972 the restriction on lending practices evaporated. It was the USA discarding the final vestiges of restriction by abandoning the gold standard for the USD. Lending increased but is now exponential. The debt is so large a share of the economy that nobody can afford normal interest rates so down the rates must stay or the catastrophe occurs very quickly.

    The bankers have raped and pillaged till there is nothing but a shell of an economy.

  5. patricia03

    If the current definition of unemployment is nonsense and that all jobs will, in the future, be uberised, then not only will the definition have to altered, but in order for productivity to be increased there will HAVE to be a UBI for everybody.

    • michaelcoughlan


      Whats a UBI?

      • patricia03

        A Universal Basic Income indexed to inflation and wages for everybody. It is a hot topic through out the world these days.

        • michaelcoughlan

          Its a bad idea to index anything to a false inflation index. This would suit the bankers.

          • michaelcoughlan

            Better to set a BUN.

            Basic universal NEED which must be met irrespective of inflation or deflation.

          • patricia03

            It is better than nothing. Actually here in New Zealand we have had a type of UBI for every New Zealander over the age of 65 for the past 60 odd years. It is indexed to inflation and wages and every April it is increased. It works very well indeed. There are next to no people over the age of 65 who are in poverty. Neither wages or other benefits are indexed to wages. There is a lot in poverty under that age here though.

          • michaelcoughlan

            Thanks patricia. I was in that beautiful country in 1996. Eltham in Taranaki to be precise.


        • Looking at an article on UBI and the automated economy there are two assumptions. First that the savings generated by automation go straight to the bottom line as profit and thus should be taxed in part to fund the UBI.
          Second is the implied assumption that people’s buying power remains the same if they go from employment to UBI.

          The first assumes that everything else remains static. That the products sell for the same price. It assumes that people continue to be able to afford the same spending patterns. Markets are fluid and there are no guarantees. Reduced cost of production might result in lower sales prices.
          There is the assumption that the world remains otherwise static. Look at the the agrarian and industrial revolutions. Millions of people went from farms to cities. Tractors displaced horse and oxen. One man could do the work of 10 then 100. Food production rose and prices fell. Products were produced that never before existed. Canals were built, highways and railways too. Sure there was hardship, huge displacement and disruption but overall wealth grew too.

          That will likely be the case again and will be ongoing. Occupations that are unknown will be the norm in 30 years.

          A UBI will impede that development and distort the markets and lead to malinvestment and a lower standard of living. The Luddites will reign.

          • patricia03

            The past does not predict the future but it rhymes. The dislocation that occurred in the past and will occur with a technology that occurs far faster now means war and violence will be never ending. Surely that is to be avoided? If we are going to have a world where people can live in peace and harmony, and that includes the Anglo Saxons of this world, we have to find a better way. The market has never provided a solution and never will.

          • War is a factor of politics and dominion, and control. War is proscribed to divert attention from the economy.
            The fabled markets which balance supply and demand and thus equitable distribution are no longer allowed to function.
            Money supply is unrestricted but rather than be the choice of mankind is forced on us by fiat.
            Central and commercial bankers issue all money as a debt thus ensnaring all in a debt spiral . The money issued also charges interest which is simply usury, of which we were warned about in ancient scripts. The interest siphons off the production of the real economy and puts it in the pockets of the banker elites.The unlimited debt has destroyed the functioning economy. This economy is now only supported by artificial tenets, adjusted statistics, hedonic and seasonal adjustments, lies and deceit.
            For instance the Japanese central bank is reported to be directly buying large amounts of the Japanese stock market in the midst of otherwise thin trade. The Fed buys key stocks in the DOW, sponsored by the Presidents working group on financial markets aka The Plunge Protection Team. (Look it up). Canaries in the coal mine warning of dislocation and malinvestment are fed oxygen that they do not die and warn of the systemic poisoning of the imaginary mine. That is, precious metal prices and mining stocks are systematically attacked by bare naked short illegal paper attacks on a daily basis. The other arm of the Plunge protection Team.

            Major corporations are borrowing heavily but not for investment or research but to purchase or “buy back” their own shares. Such shares go up in price because of artificial demand, and the executive reward themselves with millions in performance bonuses while the debt remains on the corporation books. This is the insider controlled pump and dump.

            So to say the market will never provide a solution is to say that all should be controlled by endless 5 year plans. Disaster communist economics.

            True the markets are not working because they are already controlled by the financial elites headed by the central banking system.

            If you want harmony and peace (don’t we all) then the cancer that is the central banking system must be destroyed and the markets released to do their job. Central to disease control is proper diagnosis. The use of acute observation points the finger straight at our debt based interest charging mandated monetary system. The ancients warned that “money is the root of all evil” and so it turns out to be, but not in the way we were taught at Sunday School. A free man’s honest money will act as a medium of exchange and a store of wealth resulting in a stable economy. This stability cannot be realized with the fiat money. In fact the fiat is doing what it was designed to do. Enrich the one hundredth of the one percent at the expense of all else. Fiat is designed to drain away the fruits of our labour. It is successful.

            No universal income plan will change that. It will only give more control over the people to the one world government , globalist , bankster, fraud artists.

            Read Andy Hoffman for example

  6. Hello David,

    When introducing the topic of disruptive innovations I think you should also have included blockchain technology.

    This technology is here to stay and it’s going to have a revolutionary impact on the world economy and indeed on the way we live our daily lives.

    If you get a grasp of it earlier than your conservative colleagues then you are going to be one step ahead of them yet again as the full implications of blockchain technology continue to unfold.



    • michaelcoughlan

      @David McWilliams;

      From adam’s link;

      “While many economists attributed much of the insecurity to technological change – sophisticated new machines displacing low-skilled workers – Rodrik suggested that the process of globalisation should shoulder more of the blame. It was, in particular, the competition between workers in developing and developed countries that helped drive down wages and job security for workers in developed countries. Over and over, they would be held hostage to the possibility that their business would up and leave, in order to find cheap labour in other parts of the world; they had to accept restraints on their salaries – or else”

      And this one JUST FOR YOU DATHI! Keynes himself writing in 1933 on how he changed his mind and decided that national self sufficiency is in fact a GOOD IDEA!


  7. McGoo

    Excellent article David!
    It started badly, talking about Netflix etc. allegedly causing global deflation, but you got it right in the end:

    “The global supply chain means that the global supply of workers, rather than the national pool of workers, sets the national price of labour and thus wages.”

    Or to put it another way, globalisation and immigration mean that workers will eventually all end up with the same, low and falling, standard of living, worldwide. I predicted this back in the 1990′s when globalisation was being touted as a good thing.

    “You could say the labour force has been Uberized!”
    Or you could say that the labour force has been de-unionized!
    I’d like to say that the unions will make a comeback to drive wages higher, but if they did businesses would just relocate to places with cheaper non-unionized labour.

    “the disenfranchised worker might not have a good wage, but he has a legitimate vote.”
    Exactly. Workers fight back by electing Trump, Corbyn, etc., who want to go back to a pre-globalisation, pre-mass-immigration, maybe even pre-free-trade world. I don’t know if that’s possible, but I can certainly see why they want to do that.

    The vote is currently the workers best weapon. Does that mean that it will eventually be taken away, or rendered impotent? That would be a logical move for the forces of globalisation.

    • patricia03

      I don’t think that unionism can make a comeback unfortunately. With the progression of technology and jobs being uberised a person will have to have so many part time jobs of different types to try to make ends meet they will not have time to unionise. The only tool they will have is a political party. But I don’t hold my breath there either. If you look at how the media controls thought and how all the so called “experts” just spout their own or the existing ecomic theory it will have to be a very powerful and charismatic person to change things but all we get are the Donald Trumps of this world. Personally I do think it is organised by a very very powerful group of people mostly in the western world. The people will be allowed to vote but nothing will change.

    • michaelcoughlan

      “The vote is currently the workers best weapon. Does that mean that it will eventually be taken away, or rendered impotent? That would be a logical move for the forces of globalisation”

      It has already. Wealth taxes on your house transfer your wealth to the banks from the govt tax paying interest on their loans in an environment where the people in charge know your income will fall over time. Hence the necessity to impose wealth taxes.

  8. Deco

    As you try to come to terms with where you have ended up, can you take some comfort in the fact that a significant chunk of the reasonably well-educated bourgeoisie is also addicted? Are we, at all hours of the night, gorging on Netflix, checking emails, responding to Whatsapp groups, booking an Uber or buying something on Amazon?

    At which point, I digress.

    I am reminded of the T-shirt, showing the progress of mankind, which goes from ape to human, to somebody at a desk.

    There has to be a better path.

    None of the above is improving productivity.

    Maybe we need to balme the infantilism of present-day American culture, which is at it’s most accentauted form in Central California.

    In fact, I am not even convinced that those mentioned corpo-techno-utilities are even functioning business models.

    Is this anything more than Pets-dot-com rolling on easy monetary policy, propped up by a supportive (compromised) media, facilitated by mobile devices, and engineered by Python scripting ?

    All of them can be avoided, with considerable efficiency with the possible exception of Amazon.

  9. Deco

    GDP in Ireland, and it’s derivatives, are misrepresentation.

    Unemployment statistics in the US, are also misrepresentation. This is obvious. America is caught up in a complex myriad of policy interventions that cause some people to do as little as possible, and that cause others to work endlessly, with no real gain. [ Maybe a McCreevy is needed to realign this ? I acknowledge that the Irish media has indoctrinated the populace to hate McCreevy. And they have succeeded.].

    And I am not convinced about Euro area inflation calculations. For one thing the ECB is printing money, but it is flowing in the wrong places. It would be better to write off the Greek debts, and not print euros that end up causing inflation in DE, NL, FI, AT. Better even for the European centralists. They seem to be functioning as if they are alreayd bought in.

    To be honest, they are all “too clever for their own good”. It is all far too complex. And deeply disturbing.

    • michaelcoughlan

      Hi Deco,

      I learned here on the site that deflation and inflation are no cause by the printing of money or lack thereof. It what’s done with the printed money is whats causing the problem; Inflation in financial markets and deflation in the real economy.


  10. This article got me thinking about ‘economics’ again….briefly….

    An interesting sketch of some of the pertinent issues but the emerging Big Picture is missing from this analysis. Culture drives Economics. Always has, always will. As the dyanamics of Brexit bite I see more and more ‘for hire’ signs in casualised retail environments which will soon have to ditch their zero hours race to the bottom and accept the power is now returning to those lucky enough to remain behind the Velvet Rope of the UK economy when it turbo-charges at warp factor speed away from the next Eurozone downward spiral which is due….about…….what’s the weather like in Greece these days? The molten core of Grexit bubbling to the surface should raise it a few degrees soon.

    Anyone seriously interested in unravelling all this needs to put down the calculator and start browsing around ‘Afro-Futurism’ & ‘Robotic Japanese Elder Care’, alongside have a good aul LOL at the Brexit shenanigans. I spluttered over my free coffee in Waitrose this morning as I saw this Independent (UK) headline:

    ‘The former head of the Vote Leave campaign has branded the Brexit Secretary as “thick as mince” and “as lazy as a toad”.’

    #RTWD [Remainiac Till We Die] continues to be the mass delusion de jour here in Albion & Caledonia. I’ve just driven 1250 miles in 4 days to watch Bryan Adams over 4 nights from Exmouth to Inverness and the beat on the streets and motorways tells me something no ‘economist’ has grasped:

    Brexit is the Big Bang of what hapless Central Bankers and their media cheerleaders call ‘Populism’ or ‘Nativism’. They simply do not get it so let me explain. We Brexit boys’n'girls, whether BrummieBoys like me or Sarf London wide-boys like David Davis have already won. Either we Brexit ( & there’s no ‘soft’ or ‘medium-boiled’ option) or we have the opening stages of the C21st English Civil War with the Welsh also lining up for fisticuffs with the various eejits in Brussels, Berlin, Paris and the noxious epicentre of all things dodgy in finance: Dublin.

    The Japanese robot solution to both elder care and sex is the next cultural tsunami to hit. Don’t bother with Silicon Valley it’s just a bunch of accountants & geeks in black polo-necks trying to be Steve Jobs.

    Above all look to Africa for the next serious disturbances based around China’s new colonies & the rise of Afro-Futurism in education, science & technology as Africans finally tear free from the guilt-tripping do-gooders like Bono & Geldof.

    With every good wish

    Andy Mooney
    Shamanic Economist Extraordinaire.

    ps: to make it absolutely clear-once Africa Rises Up as the ‘critical mass’ of education/information/infotainment makes their mobile-phone cultural connectivity the seed bed of Afro-Futurism then the West is absolutely and totally fcUK’d. Other than us/them Brits, of course, who just seem to be able to see into the crystal ball and realise the EU is banjaxed once the UK stops putting all that £ in the budget.


  11. Tull McAdoo

    I think that iPhones/iPads have become the new “Opiate of the Masses” with the so called “Millennials” being a great example of fuck all productivity or anything else as they Social Mediate their way to obscurity….

  12. [...] McWilliams: Central bankers behind curve and risk doing “untold damage” (DavidMCWilliams… [...]

  13. Truthist

    Crushed by the curve ;
    But, now AHEAD of the curve AND “TRENDING”
    So, how about this increasingly famous Professor’s proposal to offer “accredited” academic Degrees in the Humanities with study online only, & student paying only for examinations ?
    How credible can such a biz model be ?
    I hope that they have modules in Austrian Economics [ also known as "Jewish Economics" ] ;
    Because, I am a fan of this as “real” economics ;
    Although, already with some modifications ;
    I would add solutions & principles of mine that are seemingly not part of that school of thought yet.
    Tony Brogan & Grzegorz I would welcome to be examination paper correctors because they are NOT “Useful Idiot” Economists ;
    But, rather top notch Austrian Economists.
    Let’s hope that the total examination fees are super cheap yet feasible for this venture by Peterson.

  14. mcsean2163

    Poor people spend, rich people hoard.

    So true here in the UK.

  15. [...] McWilliams: Central bankers behind curve and risk doing “untold damage” (DavidMCWilliams… [...]

  16. [...] McWilliams: Central bankers behind curve and risk doing “untold damage” (DavidMCWilliams… [...]

  17. [...] McWilliams: Central bankers behind curve and risk doing “untold damage” (DavidMCWilliams… [...]

  18. [...] McWilliams: Central bankers behind curve and risk doing “untold damage” (DavidMCWilliams… [...]

  19. [...] McWilliams: Central bankers behind curve and risk doing “untold damage” (DavidMCWilliams… [...]

  20. [...] McWilliams: Central bankers behind curve and risk doing “untold damage” (DavidMCWilliams… [...]

  21. Truthist

    Globalisation is NOT Globalisation !
    Globalisation is just increased control of the world by The Dreadful Few ;
    And, similar to that they are seeking to erode THE CONSTRUCT OF UR “MORALITY” BORDERS — e.g. whomsoever gets brainwashed to become “Gender Fluid” — they seek to erode THE CONSTRUCT OF UR “COUNTRY’s” BORDERS.
    And, they get u either to :
    willingly do this
    slavishly do this.
    Of course, they nominate 1 country at any era to run each phase of their centuries old ongoing scheme.
    The prized globe within the Ark of the Covenant is said to have been officially transferred from USA some year ago ;
    The country who are current official holders of that particular globe — I heard that there are actually more such globes [ Ref. Mr. Hallett, or Mr. Wright ( of Spycatcher book fame ; And, in his long career, the chief inventor & scientist for MI5 & MI6 I recall ) ; Hallett & Wright are 2 different persons ; Although, colleagues & allies ], but there being only 1 most special globe — are, whilst they officially have it, the are the “official” master country of the world.

    UK previously
    Then, USA
    And, already — “because they have it & so will use it” 8-) [ Echoes of Mr. Charlie McCreevey ( Vulgar FINE-FAIL AGAIN / FINE-GAY / REGRESSIVE DEMON-CRAPPERS / DEMON-CRAPIC LEFT / LABOUR-DOES-NOT-WORK ; Says I because they're all in collusion against the decent poor JOBLESS -- NOTE ; NOT "UNEMPLOYED" -- PERSON DEPENDENT ON SW FOR SURVIVAL & decent sole Self-Employed & decent Employer & decent Public Sector Employees & the very few % of decent Civil Servants who steadfastly act for the decent & suffering true owners [ the Irish People ] of the Irish State, after all “We the People OWN the Irish State”, not the jumped up arse F R E E M A S O N S here who usurp it & us, the holder of this emblem to rule the world is CHINA.
    But, to do so, China must command the Malacca Straits.
    But, the USA is not giving up without a fight.
    Anyways, guess who is always there to facilitate even the co-opted [ e.g. Philippines ] + earn a Shekel in the process ?
    Well, here’s who ;

    • Truthist

      Typos :
      FINE GAY should be FINE GAY-LE
      decent Public Sector Employees should be decent Private Sector Employees

    • Globalisation is just increased control of the world by The Dreadful Few ;
      And, similar to that they are seeking to erode THE CONSTRUCT OF UR “MORALITY” BORDERS — e.g. whomsoever gets brainwashed to become “Gender Fluid” — they seek to erode THE CONSTRUCT OF UR “COUNTRY’s” BORDERS.
      And, they get u either to :
      willingly do this
      slavishly do this.

      A good valid synopsis!

  22. Truthist

    Just like Bee’s to the Honey, they found the Honey ;
    God help this unfortunate woman from the Cryptos who are The House of Saud & are proving to be even more barbaric to innocents ;
    Think of poor suffering Yemen besieged & undergoing mass starvation at the hands of Saudi Arabia with much help from The Dreadful Few’s USA.
    And, all for to undermine Israel’s next target ; IRAN.

  23. [...] McWilliams: Central bankers behind curve and risk doing untold damage (DavidMCWilliams.ie) [...]

  24. [...] McWilliams: Central bankers behind curve and risk doing untold damage (DavidMCWilliams.ie) [...]

  25. Truthist


  26. Truthist

    @ Grzegorz,

  27. McCawber

    David it is a sad day today.
    One of my very first posts here was about the fact that a target inflation rate of 2% was bad policy and that “things” should be getting cheaper and that CBs needed to wise up.
    The reason as you, sort of, suggest is technological advance.
    And it’s only starting.
    Now either I’m one smart motherfucker or the CBs are just fuckers out to screw us or they’re a bunch of idiots.
    I quickly ruled out option one which leaves us with the other two options.
    My money is “just fuckers” make selfish selfserving fuckers and it applies to all bankers.
    I don’t like or trust bitcoin but when you look at the alternatives well enough said.
    You’ve been very circumspect about bitcoin by the way.
    That bitcoin as in generic rather than Bitcoin btw.

  28. Truthist

    I did not read this yet ;
    But, I expect it to be very cleverly written for to downplay the “cosy shop” that the Irish State Civil SERPENTS have.

  29. Grzegorz Kolodziej

    David McWilliams writes:

    “Unemployment is falling everywhere but inflation isn’t rising. In the US and the UK unemployment has been falling and falling but wages have remained depressed.”

    David, in your good, erudite and informative article you seem to have completely missed an even more important factor for inflation and wages are not rising: because the velocity of money has been FALLING:



    Btw, inflation is rising – just not in goods now included in the basket to measure inflation, such as housing:


    or beef:



    P.S. Grzegorz Kolodziej
    April 17, 2017 at 1:40 pm

    “On the other hand, would the collapse of the US stock market not help to diminish inequality in the US that David is writing about? Because, who benefits from the US stock market the most? – in a pre-bailout era, it used to be whoever was smart and willing to take a risk – but, henceforth, it is the insiders (who, the less risk they have to take thanks to bailouts, are getting more and more stupid and disconnected from reality). So who would benefit the most from the stock market collapse? Provided that there is no more bailouts and QE, ordinary people would benefit the most by financial capital moving from stock market speculation and property speculation to investment in factories and SME’s – “creative destruction”, as Joseph Schumpeter called it.”

    • Truthist

      Off DMW’s topic ;
      But, on just 1 of the constant GK topics,
      Communist Intrigue upon Ireland
      Latest article from Henry Makow — Jew ethnic who lost 2 of his grandparents in the GERMAN CONCENTRATION CAMPS OR DEATH CAMPS OR TRAINING CAMPS PLANTED ON POLAND — is politically incorrect for timid hipocrites ;
      But, it is yet another article that is damn interesting.
      Here is a passage worth saving with appropriately named title ;
      EXCERPT ;

      “Olaf Palme relatives L-R:
      Nazi August Von Knieriem:
      IG Farben lawyer Rajani Palme-Dutt:
      UK Communist Party(UKCP) founder, Comintern member (Moscow), Indian Communist Party supervisor;
      Hella Wuolijoki: Finnish Communist Party founder and aunt of Palme:
      Clemens Palme-Dutt: Controlled (w. his brother Rajani) the famous club “Apostles” at Cambridge which created the “Ring of Five” KGB spies,
      UKCP Founder w. brother Rajani, headed colonial bureau of UKCP and tried to form communist connections in
      ! ! !
      ! ! !
      and Palestine.
      Involved with Comintern and Indian Communist party.”

      • Grzegorz Kolodziej

        Last minute news: Poland is threatening to sue “The Guardian”! From my sources, I can say that a legal action against “The Guardian” is now almost certain – and it will be a massive one.
        For this statement: “This is state-sponsored Holocaust denial.” “The Guardian” also wrote that the royals “should be ashamed” for visiting Poland.

        Speaking of shame, I would like to remind everyone that they still have not apologised for covering the Holocaust of the Ukrainians in 1930, and firing a journalist who dared to write about it in “The Guardian” (following “The Guardians” subsequent and repeated denials that any planned mass starvation took place in the Ukraine).

        • Grzegorz Kolodziej

          for covering the Holocaust of the Ukrainians in 1930, = for covering up the Holocaust of the Ukrainians in 1930s

        • The Guardian needs to be sued out of existence. It’s a propaganda rag, false news purveyor.

          • Grzegorz Kolodziej

            The Guardian supported Lenin, Trotsky and the Bolsheviks through Arthur Ransome, who was friends with a man who killed more people than Hitler – Felix Dzerzhinsky.

            Then the Guardian supported Stalin.
            When their journalist Malcolm Muggeridge wrote about the genocidal Ukrainian Famine, they sacked him.
            They were British counterpart to The Völkischer Beobachter – and now they come back to that mode.

          • Truthist

            Anyways .. Anyways … Anyways
            Because … Because … Because

    • michaelcoughlan

      Hi Grzegorz,

      “David, in your good, erudite and informative article you seem to have completely missed an even more important factor for inflation and wages are not rising: because the velocity of money has been FALLING:”


      Velocity of money is falling in Japan too. Makes a nonsense of articles like this.


      • Grzegorz Kolodziej

        I think that Japan was a guinea pig with QE for other countries. To simplify the post-Bretton Woods Japanese economic history, it went like this: the 1970s western consumption was driven by demographic growth, spending previous years savings and cheap products from Japan. This is when outsourcing of jobs began – speeded up by highly-unionised, unwilling to reform growing public sectors in the US (high wages were retained, but at a cost of outsourcing). In the 1980s, Japanese products were no longer cheap, so the 1980s western consumption was driven by promoting credit cards to buy expensive Japanese products (the whole bullshit of “we can grow an economy based entirely on services”) and cheap products from other Asian countries. The 1990s were an era of an illusion of wealth sustained by importing cheap products from China for borrowed money, which made wonders for inflation indices. This has crashed with the dot.com crash, so QE was invented, and in 2001, Japanese politicians volunteered (against their own economic advisers – including from Bank of Japan!) to be a guinea pig, flooding commercial banks with excess liquidity to promote private lending, and leaving them with large stocks of excess reserves = little or no risk of a liquidity shortage – (this is a very comprehensive study on it:


        same as out Bertie pumped the property bubble in 2002 against his own economic adviser.

        One of the side-effects of QE were property bubbles due to zero-interest rates: these bubbles suited some voters, and didn’t at all suit other voters – so you had more credit cards borrowing (+ public spending) to bribe those that that situation didn’t suit.

        All in all, the main culprit is Marxism in its various shapes (not necessarily branded as Marxist) – convincing people that there is no link between work and entitlement and that you can have entitlement based purely on “rights to” = read: borrowing from future generations (which is what had to be done to keep the show going in a system once driven by now negative demographic growth – I find it very valuable and worth examining that the banks may wish to promote corporate singles culture because that way they could flog more products).

        As to the velocity of money, how interesting that since 2005, the US no longer publishes official M3 velocity measures!



        • Grzegorz Kolodziej

          “I find it very valuable and worth examining that the banks may wish to promote corporate singles culture because that way they could flog more products)” – I’ve noticed an important omission: examining your idea, Michael.
          Of course, in the long run it is better for the banks too to have demographic growth and large families.
          In a world where no one really owns anything like Henry Ford did, and where there is no risk for the banks (bailouts), banks CEOs do not think in terms of the long run.
          They are incentivised to think in terms of their careers spam as CEOs (10-15 years), and in terms of corporate bonuses (so growth rather than profits – loses will be bailed out anyway).

          And thus here is a question to Mr McWilliams to think: when and if the creative destruction will entail banks (Hayek’s idea of “free banking”)?

          P.S. I really liked this video of Maccer (on Schumpeter v Phillips).

          • Your vision is too narrow. Expand to those who’s wish is to control the world.
            Bankers in general and corporate executives are all patsies used for the greater end.

            The central bankers desire to create chaos. War, terrorism, destitution, moral degradation, social disruption etc .

            Then to Control the problem used the military and armed domestic forces and martial law.

            Hopefully the fiat money corruption, implodes and honest , age old money reasserts itself.

            See http://www.jsmineset.com posting below.

          • Truthist

            Typo ;
            seize = cease

        • M3 is the rate of growth of the overall money supply, not velocity of money.

          Velocity of money is the speed of circulation of money in the economy.

          A slowing in the velocity indicates a slowing in the economic activity.

          For example the money supply could in theory double. The velocity halve (50% less circulation) resulting in no change in economic activity. It is known as stagflation . A growth in money supply is the true definition of inflation. A lowering or reducing economy at the same time is a recession (2 quarters) or depression (longer than 2 quarters). The combination of monetary expansion (inflation) combined with economic contraction is defined as stagflation.


          Note M# discontinued as observed by Greg and 2006 to to-date as calculated by John Williams.

          • Truthist

            Very elegant clarification.
            Also, great to see that ur understanding is constantly improving.
            But, there are still gems of insight from Grzegorz’s posts above.
            I will be copy & paste this mini-thread, & add to it Grzegorz’s recent interpretation of modern economic epochs that he posted in discussion to previous article.

          • No need to patronize.

          • Truthist

            I did not patronise.
            And, I never do either.
            And, that comment I made about “understanding is constantly improving” also applies to myself ; Thankfully.
            It’s a sad day when we seize to get greater understanding of matters.
            And, also we should be always improving on our explanations.
            By the way, I still await ur updated understanding on this particular matter ;
            Apropos of “The Real Bills Doctrine” as proposed by Fekete, & as enthused thereon by Hugo Salinas Price, & ur good self Tony, is there in any way Usury involved in that process ?

          • Grzegorz Kolodziej

            “Your vision is too narrow. Expand to those who wish is to control the world.” – I was not referring to the general topic of “what’s wrong with the world’s economy”, but merely pointing out that David missed the correlation between inflation and money velocity – and then to Michael as in how Japan ended up (as first) with the QE.

            “M3 is the rate of growth of the overall money supply, not the velocity of money.”

            a) Who says that M3 is the rate of velocity of money? Read what I said!
            b) No, you are wrong – M3 is NOT the overall money supply because it does not include the commercial paper, Banker’s Acceptance, and Money Multiplier (M1/MB).

            As for someone who just patronised me on M3 and velocity of money, Toney, you quote too much, Tony, and do too little own thinking and writing: then, as a result, you sometimes get conceptual chaos – and now with M3…

            “For example, the money supply could in theory double. The velocity halve (50% less circulation) resulting in no change in economic activity. ” – which is what we are seeing nowadays (of course, with d i f f e r e n t proportions!), wich was the point of my comment and my charts…

            Take care

    • Rather the velocity of money is falling because the economy is decayed and dying. Debt and interest are killing the world economy. Cui Bono?

      One can offer an interest free loan or a loan at negative 10% and still people cannot afford to borrow. Circulation of money is grinding to a halt. It is the signal of recession/depression.

      This time there will be huge stagflation like the nineteen 30′s Germany, but this time world wide. 10 million dollars for a loaf of bread!!!!!
      Poverty will abound.

  30. Truthist

    GET IT !
    The Mainstream Media — eg. CNN, New York Times, Reuters, United Press International, The Sun, The Sunday Times, Hollywood, are NOT “Prestitutes” ;
    Because, “How can the Client stock be simultaneously the Prostitute of himself ?”
    Their mothers should know ;
    After all, the mothers may be sisters or even 1 AND the same 8-) ;
    It all is traced to the Mothers anyway 8-)

    Anyway, neither The Dreadful Few or particular junior to them MSM really hate Trump.
    Rather, they hate “The Sons of Japheth” who voted for him.
    Makow just tweeted ;
    “Now that Trump is in the White House, Tim Gill says he [ Gill ] is out to “Punish Christians” for electing him.”

  31. https://www.jsmineset.com/

    The coming reset will be a combination of market activity and edict. Few if any know what it will look like, and even fewer will know how to make a fortune because of it. I understand how to do this, and so do you who have remained with us the last 14 years. Some know and others will find out. We are on the precipice of a wealth transfer. Some of you are already prepared and just haven’t realized it yet.

    I will outline in detail the “how” as the time approaches. My 14 year veterans will not be surprised to know they are already there.

    This reminds of one of the oldest and world’s worst criminal agent against humanity – still alive and kicking – Henry Kissinger:

    “Who controls food, controls the people; who controls energy controls entire continents; and who controls money controls the world.”
    Critics often talk of an overhaul and reform of the system. This monetary system cannot be reformed. It is privately owned and rotten to the core. None of the private owners, the Rothschild, Rockefeller clans et al, would allow interfering with their wealth, usurped of the back of the world’s workers and populace at large. Former attempts (e.g. under JFK) to bring the FED (Federal Reserve) under national reign, have resulted in failure.
    It is not by chance that today’s western US-dollar based monetary system, with its center, the Federal Reserve (FED), has been created just at the onset of Phase I of the Hundred Year war, i.e. WWI. In 1910, Rhode Island Senator, Nelson Aldrich, with his heart close to the world of bankers, organized a ”hunting trip” for five top Wall Street (WS) bankers to travel in disguise by train to Jekyll Island, off the coast of Georgia, where they concocted in a few days the concept of the modern FED – which was to become the ‘mother’ of the new dollar-based world monetary system, now reduced to the western monetary system. The Federal Reserve Act was signed into law in December 1913 by President Woodrow Wilson.

    • Truthist

      ? ? ?
      And so, how about Griffin’s, & Armstrong’s, et all’s, refutation about JFK issuing Treasury Dept. Currency*, backed by Silver Reserves, into the ecomomy
      I refrain from calling it “Debt-Free” ;
      Because, it can be redeemed for Government’s Assets.
      A thought which, by the way, says the same about “The Fed’s” / “The Dreadful Few’s” Assets ?
      JFK did not such directive
      Rather, JFK copper-fastened the restrictions upon Treasury Dept. doing that.
      above excerpt
      “Former attempts (e.g. under JFK) to bring the FED (Federal Reserve) under national reign, have resulted in failure.” ?

      • Did you read the total essay posted at jsmineset.com.

        Kennedy controversy.

        • Truthist

          But, will do so now.

          • Truthist

            Versus x]”Complicit or y]”Total” Conspiracy by “The Federal Reserve Bank”
            [ Really, of course, NOT "Federal" ; But, rather, a private syndicate -- with, if memory recall serves me well, some token representation by USA publicly elected government + specialists assigned by them -- of private Bankers whom ultimately are but fronts for The Rothschilds + their littler Super-Bankster side-kick, "The Rockefellers"
            And, all ultimately traceable in geographical administration aspect to "The Crown" / "The City", London, England. ] IN THE ASSASSINATION OF JFK [ serving PRESIDENT OF USA ] ;

            inter alia
            Critics of the theory note that Kennedy called for and signed legislation phasing out Silver Certificates in favor of Federal Reserve Notes, thereby enhancing the power of the Federal Reserve; and that Executive Order 11110 was a technicality that only delegated existing presidential powers to the Secretary of the Treasury for administrative convenience during a period of transition.[

          • Truthist

            Apologies for customary trivial fault of Typos.

      • Truthist

        I refrain from calling it “Debt-Free” ;
        Because, it can be redeemed for Government’s Assets.
        A thought which, by the way, says the same about “The Fed’s” / “The Dreadful Few’s” Assets ?”
        Yes, Government [ Treasury ] issued “currency, & even “money [ Precious Metals only ; And, practically speaking ; Gold or Silver ]” can be redeemed for Government’s Assets.
        But, upon issuing it into circulation, the Government did receive value then equal to it.
        So, in that respect the issue of Currency / Money is not debt free to the nation.
        Issue of the initial currency or extra currency did incur an immediate debt ;
        But, which was simultaneously paid for with whatever equal in value.
        However, if there also operates Fractional Reserve Banking in the economy, well that is a separate affair [ completely or partially ; I am unsure at this shut-eye time-point ].
        Ditto per Private Central Bank [ Federal ( Heh Heh Heh 8-) ; Nothing "Federal" about it ; "Smoke & Mirrors" again ) Reserve ( And, now agreed by all Truthists that it has NO Reserves ( i.e. NO Money i.e. NO Gold & / NOR Silver to back up the intrinsically useless paper currency it issues ) ; Yes, it had 100 % ( But, I very much doubt that % ever was the case ; Maybe not even 50 % ever ] Gold & / or Silver Reserves for a while ; In Fort Knox, I think ; Or in Fed. Reserve Bank’s vaults in New York, I think ].
        Moreover, Fed. Reserve Bank actually charges interest too.
        And, even more sinister is that the Principal + Interest is not given to the Government.
        Rather it only goes to the Fed. Reserve Bank ;
        That syndicate of private Banksters.
        Sorry for any resulting misleading of readers.
        I trust as I wearily type this peering through my eyelashes that Tony Brogan will find justifiable need to correct & clarify sins of commission & omission done by me in this actual post.
        Adieu to ewes all … & to the Federal Reserve Bank 8-)

  32. Truthist

    TRUMP IS A RAT to the decent & waking-up people who voted for him.
    PROOF !
    Of course, Hillary — Pedophile — Clinton would do the same.

  33. Truthist

    Apropos of u should go the the Civil SERPENTS route ;

    HEADING OF MAKOW’s Tweet ;
    Toronto says steps will cost $100K ;
    Man builds them for $550
    Don’t ask what government can do for you, just do it
    City says steps will cost at least $65,000; man builds them for $550
    By Lionel Lim, CNN
    Updated Fri July 21, 2017
    (CNN) Update:
    The stairs are gone! On Friday morning, a group of workers descended upon the staircase and dismantled it with power tools. According to a local Toronto radio station, the city decided the stairs were unsafe and had them removed.
    Original story: A retiree in Toronto was unhappy with the length of time the city was taking to build a flight of stairs on a precarious slope.
    And so he did it himself — at a fraction of the cost.
    Adi Astl, with the help of a homeless man he hired, built eight steps for $550, more than 100 times cheaper than the $65,000-$150,000 the city had estimated for the job.
    Astl told CNN affiliate CTV News that members of his gardening group thanked him for building the stairs. One of them had broken a wrist falling down the slope that leads to their community garden.
    But not everyone is happy about Astl’s seemingly good deed.
    While the flight of stairs has been a welcome addition for the community in Tom Riley Park, the city is now threatening to tear down the stairway because it was not built according to the city’s regulations.
    The city insisted that Astl should not have bypassed the legal steps and should have waited for city officials to handle the problem. Mayor John Tory acknowledged the absurdity of the city’s estimates but said it does not condone private citizens bypassing city bylaws to build public structures themselves.
    “We just can’t have people deciding to go out to Home Depot and build a staircase in a park because that’s what they would like to have,” Tory told CTV.
    Astl, however, thought that his safety — and that of his fellow residents — was a bigger priority. “To me, the safety of people is more important than money, “Astl said. “If the city is not willing to do it, I have to do it myself.”

  34. Truthist

    Read it and weep:
    QE, the largest transfer of wealth in history

    Dan Glazebrook

    Self-Blurb about Author “Glazebrook” ;
    His first book “Divide and Ruin: The West’s Imperial Strategy in an Age of Crisis” was published by Liberation Media in October 2013. It featured a collection of articles written from 2009 onwards examining the links between economic collapse, the rise of the BRICS, war on Libya and Syria and ‘austerity’. He is currently researching a book on US-British use of sectarian death squads against independent states and movements from Northern Ireland and Central America in the 1970s and 80s to the Middle East and Africa today.
    This is, or should be, unsurprising. QE was always bound to fail in terms of its stated aims, because the reason banks were not funneling money into productive investment was not because they were short of cash – on the contrary, by 2013, well before the final rounds of QE, UK corporations were sitting on almost £1/2trillion of cash reserves – but rather because the global economy was (and is) in a deep overproduction crisis. Put simply, markets were (and are) glutted and there is no point investing in glutted markets.

    This meant that the new money created by QE and ‘injected’ into financial institutions – such as pension funds and insurance companies – was not invested into productive industry, but rather went into stock markets and real estate, driving up prices of shares and houses, but generating nothing in terms of real wealth or employment.
    Read more
    © Ohde / face to face The Finance Curse

    Holders of assets such as stocks and houses, therefore, have done very well out of QE, which has increased the wealth of the richest 5 percent of the UK population by an average of £128,000 per head.

    How can this be? Where does this additional wealth come from? After all, while money – contrary to Tory sloganeering – can indeed be created ‘out of thin air’, which is precisely what QE has done, real wealth cannot. And QE has not produced any real wealth. Yet the richest 5 percent now have an extra £128,000 to spend on yachts, mansions, diamonds, caviar and so on. So where has it come from?

    The answer is simple. The wealth which QE has passed to asset-holders has come, first of all, directly out of workers’ wages. QE, by effectively devaluing the currency, has reduced the buying power of money, leading to an effective decrease in real wages, which, in the UK, still remain 6 percent below their pre-QE levels. The money taken out of workers’ wages therefore forms part of that £128,000 dividend. But it has also come from new entrants to the markets inflated by QE – primarily, first time buyers and those just reaching pension age.

    Those buying a house (which QE has made more expensive), for example, will likely have to work thousands of additional hours over the course of their mortgage in order to pay this increased cost. It is those extra hours that are creating the wealth which subsidizes the spending spree for the richest 5 percent. Of course, these increased house prices are paid by anyone purchasing a house, not only first time buyers – but the additional cost for existing homeowners is compensated for by the rise in price of their existing house (or by their shares for those wealthy enough to hold them).

    QE also means that newly retiring pensioners are forced to subsidize the 5 percent. New retirees use their pension pot to purchase an ‘annuity’ – a bundle of stocks and shares generating dividends which serve as an income. However, as QE has inflated share prices, the number of shares they can buy with this pot is reduced. And, as share price increases do not increase dividends, this means reduced pension payments.

    In truth, the story that QE was about encouraging investment and boosting employment and growth was always a fantastical yarn designed to disguise what was really going on – a massive transfer of wealth to the rich.

  35. Truthist

    No doubt our own Peelers, & the worsening caliber of Army personnel [ And, this a relatively recent regrettable development ; Because, actually, our army folk were in the main very good ; Certainly when compared with the Gardai ] have undergone the following “self-slogan” hostile training from that charming little democracy in the Middle East currently — by proxy & directly — making the life of the long-suffering large democracy Syria a living hell ;

  36. Truthist


  37. Truthist



  38. Truthist

    @ Tony Brogan,
    Ur link above ;
    Again, Jim Sinclair is very good today.

  39. Truthist

    Re ;
    Yes, I know, … shades of what then Taoiseach Mr. Brian Cowan called Fine Gael, & no doubt would call Mehole too

    • Truthist

      And, no “Escrow” aul bollox ;
      Because, “A bird in the hand is worth 2 in the bush”.
      Put it in Dublin Castle ;
      Yeah, the same place that “guards” the name of the Garda of codename “The Badger” who helped MI5 + MI6 + Posh Unionists + Vulgar Unionists / Loyalists + British Army’s SAS + Mshd + other Garda-Landlords / Landlord-Gardai + “Deep State” of Irish State to commit the Dublin + Monaghan Bombings ;
      The largest loss of life in Irish Isles & British Isles from any bombings associated with Conflict in North East of Ireland.
      The Garda-Landlords / Landlord-Gardai have done a great job protecting “The Badger’s Identity” all the same.
      But, on 2nd thoughts, scrap Dublin Castle as the Irish “Fort Knox” ;
      Because, the Garda-Landlords / Landlord-Gardai Investigation File into those bombings has completely disappeared from impregnable Dublin Castle ;
      Fancy that …
      I wonder who did that directly ?
      And, I wonder who is their ultimate boss ?
      Hmm … m

  40. Tull McAdoo

    I think it was the British Economist Charles Goodhart who once suggested that once a feature of an Economy (say inflation rate or unemployment rate) is taken as an indicator of that Economy then it soon ceases to be that indicator as people start to game their policies to suit or game the system in other words.

    I mean the changes that took place under Thatcher about how unemployment figures were calculated are beyond a joke at this stage.

    Then you had Milton Freidman spouting his old guff about monetary policy, Reganomics, Tony the spoofer Blair who wanted to endear himself to the City of London to become PM.

    Not to mention the great financial whizz kid Bertonomics and his less that useless side kick “When I have it I’ll spend it “Mc Creevey who the EU for some weird reason appointed competition guru.

    The truth of the matter is that the European Central Bank doesn’t have a coherent monetary policy because the depression shattered any notion of convergence. Rates were dropped to suit the Germans and it was fuck the rest, with the Greeks hung out to dry and Paddy Irishman taking one for the team as our monetary policy expert/ geography teacher Noonan likes to tell it, gobshite.

    Go back to hounding poor unfortunates in hospital beds Noonan, that’s your forte and leave monetary policy to people who can add 2+2 and get 4. The next time you or your buddies in FF/FG get some notion about the workers of Ireland taking one for some German Bankers we will like to see ye put that to a vote and ye will get an answer.

    5 million people will a bill of 200 Billion or whatever……….even Phillips wouldn’t have a curve for that nonsensical piece of manipulation, which I am sure the boffins in the DoF have costed.

    Anyway David it is in the area of convergence and how successful that is managed within monetary policy that will decide whether the EU survives.

  41. onq

    A few points your comments seem to miss

    Millionaires do not create Aggregate demand

    You cannot create ore demand by making prices lower

    You cannot both add more robots AND create aggregate demand

    You have to create demand partly by making more disposable income available

    You cannot keep taking money out of the economy and expecting the economy to work

    You have to stop overpaying executives and stop allowing companies to extract profits our of economies and both of them rendering this wealth inert by hiding it in offshore tax havens

    You cannot create a health economy by continuing to transfer wealth from the 80% of taxpayers to the 0.001% who pay no tax.

    I’ll leave these two clues for you to watch in between your Netflix moments


    Nick Hanauer “Rich people don’t create jobs”



    Wealth Inequality in America

    People (in America at least) are seeing drops in real income, lower life expectancy in certain demographics, healthcare sykrocketing, education skyrocketing and at the same time are experiencing a growing sense that there is no point living longer, or paying a fortune for an education that cannot be translated into a job at the end of it.

    Its all bullshit, and people aren’t going to take it any more!

    So they will do the minimum they need to survive

    Congratulations Fascist Capitalist apologiests

    You have broken the will of humanity

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