economists are idiots

Lots of companies started small, in a bedroom or a garage, with no outside financing, and grew on earnings. That is possible if government doesn't make it difficult. I started my company in California, with just a little personal savings, and I've never borrowed money. I have a friend in France who did the same, but it's much more difficult for him, especially difficult for him to have official employees.

Of course, it's not easy for us to have employees either. Government overhead and regulations absolutely discourage it. And government thinks that all they need to do is make it easier for us to borrow money (which isn't working anyhow.)

If government wants to encourage employment, they don't need to do more, they need to do less.

Yikes. There are some New York $25-100e6 condos that get up around $7K per square foot, but London sounds insane. Bubble for sure.

In SF, prices are being driven up by the Google Bus effect, namely big Peninsula tech companies paying young things insane salaries and bussing them into the city so they can squeeze into tiny apartments and party all night. Dolores Park (see pic) used to be deserted and now in any reasonable weather it's a sea of young flesh. Zuck lives a couple blocks away. Developers are building more apartments here than condos. This is not so much a real estate bubble as a tech bubble; but it will still likely crash. I read that there are 600K iPhone apps that have sold less than 100 copies.

But there is a serious leading indicator: I saw a *dirty* Google bus the other day. The end is near.

If I work 9 more minutes, I can afford lunch!

Yes. Yesterday Detroit, today California, tomorrow the rest of the USA.

That's how capital (and power) moves. It (in our knowledge of history) started in Rome, then went to Venice, Antwerp, Amsterdam, London, USA, and now it moves elsewhere. There were there's money to be made by inflating a country's economy, getting the profits out (get to own the assets _and_ the people), destroying the country (or whole region for that matter) in the process, and moving it somewhere else. (Africa?)

It's very macro, because that's how the power brokers (banks' owners -- I won't mention names) think.

learn to live with it, joe

That's so heart-warmingly optimistic :)

joe

oh... I can't wait until voters 'get it' and... don't vote at all... How can anybody be elected that receives zero votes? Oh, the thought of it. It would just be sooo beautiful... the look on the faces of all those politicians...

But, better stop dreaming. The voters can only choose between two puppets who serve the same interests, so any vote is a lost vote. Zero votes is the answer. (I must be dreaming...)

No, into the abyss. But at least the politicians for now will survive temporarily by borrowing their way out of the problems, kicking the can down the road.

joe

The problem with _not_ borrowing money, is that your competitor will borrow it, at a very low interest, and will compete you out of business.

joe

They can print money, but it will only go into the shadow banking system, not in the real economy. That's why they set that interest to negative.

joe

It may not be 'in their domain', but they are the root cause of the problem: Causing the debt burden for countries that could as well have created their money themselves out of nothing, instead of letting the (private) central banks do it and pay an ever mounting interest for it.

This is the root cause of all the economic problems of this time.

Don't look to 'central banks' for a solution, because they are the problem.

joe

Only because the rest of the USA (population) refuses to learn the lessons taught by Detroit and California.

If it can't move, it dies. Freedom is like that. Instead of trying to hold it hostage, threatening it at every moment, why don't you let it be free? It will work out better for everyone.

Perhaps you should start with learning.

and

But that's fairly trivial compared to the parasitic load of government, which takes roughly 40% in the U.S. (and acts like a diode across a negative feedback resistor), plus another 20% in lost productivity just trying to comply with it.

Government has also created huge hordes of bank-cash in the U.S., at the same time as the incentives for them to horde it.

It's all up-side down.

And, the gov't is doing all of this to try to shore up promises of benefits that they'll *never* pay. There literally isn't enough money or value on the planet to pay off what we've promised in debt and future benefits, something north of $100 trillion, all told.

Cheers, James Arthur

That's the Marxist idea that Capital wins. That's not true any more. Maybe it never was true.

Let my competitors borrow millions, billions, and hire a hundred engineers off Craigslist. I still have better circuits and better products.

That's too micro... The (real) owners of the USA would prevent a success.

We are on totally different wave lengths...

That's what I thought I have learned.

joe

U.S. banks are being forced to do that--it's called "financial repression"--and they don't mind because it stuffs their mouths with gold.

Here's the trail: o Barack Obama spends roughly $1.50 for every $1 in federal revenue. o We have to borrow. o The feds borrow by selling bonds, Treasury bonds. o There aren't enough suckers wanting to buy our Treasury bonds these days-- we're borrowing too much. The demand isn't there. o So we buy our own debt--the Federal Reserve buys almost all our bonds these days, with money they create. It's magic. o Allowing the newly-created money to circulate would create inflation. So the feds required banks to increase their reserves, sequestering the new cash created by the govt's over-spending.

It all starts with the gov't living far beyond our means. The parasites that feed off it are 2nd-order effects, minor by comparison.

Cheers, James Arthur

Ok, I congratulate and applaud you for that. Or, hey, I even believe you. But basically I assumed equal competence as a boundary condition.

Like the one entrepreneur who invents a delicious recipe for some snack, bakes a few, sells them and the public goes crazy for more. Sadly, his wife tells him they only have so much to invest, which by far isn't enough to serve all the people who now have heard about their fabulous new snack, want to buy some but can't because there is no supply and turn around to another guy, also fabulous recipe. Crowd goes crazy again, and this entrepreneur's wife tells him to run to the bank for a loan at extremely low interest, which he gets and uses to produce as many snacks as the public wants.

So, the first entrepreneur goes down and the second goes up. Until interest is increased 'to fight inflation' and all his assets, his company's assets, and his wife's assets get forfeited by the bank...

joe

I was more talking JFK trying to get rid of the FED, ending up murdered, instead of 'forcing' the banks to 'do that'.

It doesn't matter if the gov't lives beyond its means or not. There are two financing options:

1. Create the money to account for the increased spending,
2. allow private banks to create it, and borrow it from them at interest.

Option 2 is always more expensive (and ultimately destructive) than 1.

Try to find out how the US got there...

joe

We still have our guns, there may be a revolution, I'm not sure how much of the military would side with this government. Mikek

ll buy gold bullion instead.

ake > it difficult. I started my company in California, with just a little personal

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I don't think that the government is that foolish. They also put a lot of m oney into educating potential employees. The US isn't as good as that as it used to be.

they need to do less.

Not true. The US government is doing less than the German government to enc ourage people to invest in some kind of tertiary education - the Germans cu rrently hold the record for highest percentage of the population with some kind of tertiary education (including trade certificates and apprenticeship s) and the costs of US education - for the students - are rising rapidly.

The US government is doing less than most other advanced industrial countri es can manage, and they get less skilled workers in consequence. That's not helping employment.

see chapter 8 for more detail.

Education is precisely the kind of long-term investment that the country as a whole does a lot better than private free-market initiatives can manage.

Since you gave up slavery, investing in the education of an individual who can go and work for somebody else hasn't been a good way of making money fo r yourself, though it turns out to be a great investment for the country as a whole, even allowing for the fact that many people who start tertiary ed ucation drop out without getting a degree, or graduate without learning as much as they might have.