Posted on 02/01/2012 6:12:40 AM PST by blam
BILL GROSS: 'We Are Witnessing The Death Of Abundance'
Joe Weisenthal
Febuary 1, 2012
In his latest monthly letter, PIMCO's Bill Gross has a long philosophical-sounding discussion about credit, delevering, and the difficult task facing Bernanke.
The money line is this paragraph at the end:
Where does credit go when it dies? It goes back to where it came from. It delevers, it slows and inhibits economic growth, and it turns economic theory upside down, ultimately challenging the wisdom of policymakers. We’ll all be making this up as we go along for what may seem like an eternity. A 30-50 year virtuous cycle of credit expansion which has produced outsize paranormal returns for financial assets – bonds, stocks, real estate and commodities alike – is now delevering because of excessive “risk” and the “price” of money at the zero-bound. We are witnessing the death of abundance and the borning of austerity, for what may be a long, long time.
(Excerpt) Read more at businessinsider.com ...
Looks just like Peter Fonda, to me.
A lot of people who are currently economic parasites are being so out of an economically rational decision. "I won't be better off if I work and support myself." They very well COULD support themselves, but make the rational choice not to.
In other words, I don't think it would be as bad as you think. Those who are choosing dependence will experience some incentives (hunger) to support themselves, and those who are truly incapable of doing so can turn to the churches. The first group may also turn to the churches, but with limited resources, the churches would soon weed out the truly needy from the truly lazy.
By rights that should be true, there is amazing technology coming into use but there is the problem of human stupidity which is unlimited and seems to be multiplying at an exponential rate. Can man overcome his own stupidity?
I mean to point to people who can't make it on their own.
Some people have disabilities.
Some people are old and sick.
Some people have mental health issues.
Some people have low IQs and/or bad attitudes.
Sure, some folks could dig ditches rather than collect welfare checks, but a lot of folks can't perform any sort of beneficial economic function. I'm not saying it is their fault. I'm just pointing to reality.
Again, two choices: Government checks or abandonment.
Increased charity would help a lot but I am not so foolish as to think that increased charity is a 100% solution.
“our side has no answer to that at all.”
Yes we do: freedom. Everyone is free, with a supportive sociopoliticoeconomic system, to earn their survival. If they want to live they will find a way to contribute something and get by (see my tagline). Few indeed “provide no economic benefit to society”, if only an outlet for charity (the providing of which is indeed itself a human need).
The Left, however, insists on controlling others, passing judgement and rendering reward and punishment unto capital. They have made functional poverty illegal, leaving those who “provide no economic benefit to society” only abject dependency or termination.
I see.
I disagree with the idea that there are that many people that are truly incapable. I think the destruction of our culture (respect for elders, family cohesion, accountability to God) has wrought these changes by cutting people adrift.
Maybe for China and other 3rd world countries moving up. Western countries are getting knocked down a peg. I suspect most Americans in the future will have to live like we did in the 1950's. We will live comfortably but won't have all the toys like we did from 1990-2005. In 50 years most countries will be equal economic wise.
I think Mr. Gross's spell checker meant "parabolic". At least I hope it did.
What are you talking about? It is mathematically impossible to devalue by 3500 percent, if something is devalued 100 percent it is worthless, no further devaluation is possible. As for 35 paper dollars to purchase a dollar of legal tender, I can make neither heads nor tails of it, the paper dollar IS legal tender as far as the government accepting it for tax payment even though it does seem to violate the constitution. If you refer to the price of silver it may be 35 times what it was back then, I have not checked on it but I think the price of gold is MORE than 35 times higher.
One thing is certain, I wish that I had the income and the freedom to live the way I could live in 1971.
IF freedom is the answer (and I think it is) then we have to change our culture so that low standards of living for some (and I mean very low) are acceptable. And early deaths for some folks are acceptable.
Productive people? Go and live a wonderful middle class lifestyle. Government is getting out of the way. Be free and prosper!
Can't quite make it? Well, at least you're free. There's a church down the street that might help you, but just be clear: you are not entitled to what I have. I may give something, but you cannot take something of mine.
That's a culture shift, my friend. I think we need it. I think it would be good. But how do you plan to sell that to the people who want either Romney or Obama?
I say you can't get there from here. Which is why I think there will be a catastrophic meltdown in this country in my lifetime.
” Sure, some folks could dig ditches rather than collect welfare checks, “
Not since the invention of the backhoe...
The free market is so hampered by government interference that it is difficult to see how the market might correct the problem. So long as stupid people look to the government for answers we will suffer. Looking to government to solve our problems is as silly as asking the village idiot to teach you nuclear physics.
In the case of a person with an able body and a sound mind you have three options: starvation, prison or they use the mind and body god gave them to figure out a way to become useful to society. Nobody is redundant in a capitalist society.
The “shift” is going to happen, and it will happen to some or to all.
If we don’t make a conscious decision to cut off the dependent class and leave some to a lower standard of living, dependent on the limited resources of private charity,
then the whole economy, perhaps even worldwide, is going to experience a massive shift down in which most people are going to experience extreme hardship, probably even violence and death, as a result.
“I disagree with the premise that the Left wants to kill people....at least not physically.”
So long as sufficient resources can be confiscated to maintain this herd of voters, they’ll be allowed to live. When resources become scarce and insufficient, terminations - however veiled - will begin.
Now you know why the Fed say it won’t raise interest rates for at least 2 years. That is a joke. They will NEVER raise interest rates because they have a loaded gun pointed at the head called the US Government deficit. If interest rates go up, the house of cards collapses.
And how will they keep rates near zero? Easy—they’ll keep on buying Government bonds with non existent $$. The rest of the world will along quietly ‘cause they’re wetting their pants too. Maybe more so.
“1) Put a gun to some folks’ heads, forcibly extract their money, and redistribute that wealth.
2) Allow children to starve in the street.”
The need to make this choice is greatly reduced by not outlawing functional poverty, and by removing inhibitions on creating wealth. As is now, legislation is needlessly forcing us to this choice too soon.
10 years... romney or obama win... NEVER!
LLS
The number of truly needy is well within the capacity of charity.
Please read “You can still trust the communists to be communists” by Swartz & Noebel.
Communists believe that it is perfectly OK for 75% of the population to be eliminated if the remaining 25% are fully communist and not “infected” with bourgeois thoughts.
Indeed, the left wants to kill anyone that opposes their vision of heaven on earth.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.