Greece 2012 vs today

[steamingbill]

Its my perception that few years ago there seemed to be widespread concern that a Greek default would have world wide ramifications and cause various economic issues that would ripple around the world.

Flash forward a few years to today and there seems to be far less concern about defaults and Grexits etcetera

Whats changed ? Have the economic systems and world stock markets and currency exchange markets somehow "Greece Proofed" themselves

Any good summaries out there explaining the relatively lower concerns today compared to previously ?

Bill

[Evanism]

My first career was as a futures, bonds and currency trader. I have "the head for it"

I was very very good at it, so I can speak towards this. I was a Gordon Gecko superstar in the bank, but I left as I don't have the heart for it.

First, Greece is utterly insolvent. Next, so is Ireland, Spain and Portugal. The US is not insolvent, or bankrupt, they are 100 times worse. Most of Europe, Russia and all other countries cannot repay their debts, which is the definition of bankruptcy. Wait, read on.

Distilling your answer into a small space is this answer: Free debt. Money is debt. Money is NOT a store of value, but a debt raised by the central banks, issued as bonds to banks, which "monetize" this into "money" by issuing loans - usually to the government, or by buying corporate bonds or other things (lending you money for houses, cars and 5 credit cards)

Not many know that. Money isn't made by Company A making a thing, selling it to B or making a profit. Prior to Fiat money, this was true, but now Money is debt made by central banks out of nothing.

Now, to your question. Greece has not been allowed to default on its debts for the simple reason that France/Germany have forced the European Central Bank to keep reissuing debt. Mario Draghi, head of the ECB, has said public ally "what ever it takes". It is doing this as a Greek default creates two problems.... First, it will trigger a wave of defaults in most other European countries (they alllll owe each other and utterly reliant on A to pay B to pay C) and, most importantly, it will create a ridiculous situation where nobody knows what to do now interest rates are negative. Wait... Read on.

Central Banks are now selling debt at negative interest rates. What? What does this mean? Well, it's simple, but insane.... Government A goes to the ECB and says "lend me a billion euros". Everyone knows you borrow money and pay an interest rate that reflects risk and a return on your capital. Country A isn't paying 5 percent, but minus 1.3%. What is happening is Country A is being PAID to borrow money. They borrow a billion, make their repayments and get a cheque back for 130,000 euros for the trouble.

It's not FREE, they are being PAID to take it ..... (but here's the catch, you still need to make repayments!).... But wait, there's more.....

Now, to answer your question. Why isn't Greece defaulting, or bankrupt? Is has and it is.What is happening is the ECB is pumping "liquidity" into "the system"... It is effectively giving Greece, and all others, the money in which to make the repayments with too...

This is essentially the same tactic drug pushers, mafia loan sharks and lenders of last resort operate. They lend and lend and lend until the client is insolvent, even if they are even lending the repayments....the client is pumped dry and eventually is killed or kneecapped.

This situation is EXACTLY what is occurring in every country of the world since 2008.

World debt has climbed $93 TRILLION since the GFC. What was the cause of that? Debt. Now, there is more debt. Heck of a way to solve a debt problem is by borrowing more.

Imagine this scenario in your own house..... Car loan paid with credit card, which in turn is paid out by using the equity in your house..... That game of musical chairs ends at some stage in tears.

To make you really really REALY sweat about your, your children's and great great grandkids future isn't this, or Greece, or the price of money, it's the DERIVATIVES market.

That number? That number beyond comprehension? 1600 Trillion dollars.

Yep. ONE THOUSAND SIX HUNDRED ***THOUSAND*** *****BILLION**** dollars . That market is unknown, unregulated and so precariously balanced with debt upon debt upon debt upon debt.....

THAT, ladies and gentlemen, will not be the GFC when it unwinds, it will be every single human on earth being directly in the centre of their own nuclear blast like the sun going Nova.

You, your stuff, your assets, your investments, your future will be worth exactly zero to the tenth decimal point.

When Greece disappears down a hole for a thousand years, they will be the lucky ones.

[Evanism]

ah! Your question about where to find out more....

These are excellent resources.

http://www.dailyreckoning.com.au/
http://www.zerohedge.com/

The Daily Reckoning produces a large number of excellent daily free newsletters on a huge range of subjects. There are also paid versions that are specific. I REALY love all their newsletters.

Their perspective is unique. Each author has their own theories and they can get quite combative with each other. They are not a "consensus publisher" so they make you really think. They often give diametrically opposing philosophies, but both sides are very clearly considered.

Zero Hedge is a financial site for nutters and doom enthusiasts. Sometimes they are too "American" and loose the focus and go all libertarian and right wing on a story, but the info is good.

If you are interested in something that makes you wonder where all the crazies hang out there is http://www.kingworldnews.com ... This bunch of moon howling lunatics will make you question your sanity, but the information is excellent. Just learn to read through to howling, window licking and frothing at the mouth.

[steamingbill]

Evanism,

Thanks for the detailed replies.

So there is relatively less concern today, compared to 2012, because everybody believes France/Germany and Mario Draghi will be able to do "whatever it takes" ?

Bill

[Twisted Tenon]

So Evanism
I have a hard time getting my mind around this, but one question kept coming to mind while reading your excellent reply. Cui bono orwho or what is the ultimate beneficiary of this process?

TT

[Evanism]

I know this is very heavy stuff indeed. Largely, it's completely invisible.

I fully expect to be very vigorously attacked over what I've written. Some would argue its politics, but I'm sticking to the pure economic scenario, spin free, and completely leaving out left/right opinion or good/bad.

When I discuss these things, which I do which is very rarely, I get three responses.

First, is absolute confusion. WHAT did you say? What does it mean? What do you mean about "money" not being whatever-I-think-it-is. What about my money? With a few bottles of red and a good table of dinner guests, much arm waving and a bit of theatre it makes a great conversation.

The first reaction people get is disbelief. Then fear. They see I'm not BSing them. It is all verifiable via a google and a read on Wikipedia.

Second, they want to know "who" let this situation develop. They want someone to blame. "They" must be doing something about it. Why are "they" not stopping it, etc. There is no who. It is a natural development of markets in a largely unregulated capitalist system. Banking, that is retail, merchant and functions of central banking are regulated.... But these are trivial components of a very big machine. (well, central banks aren't really regulated, for they are answerable to no one. They are engaged in a game of perception management)

Third, and most people say what I'm saying is 100% certified rubbish, "they" wouldn't let what I'm saying happen and "they" control the system and "the system" is somehow controlled by magic. I'm called an imbecile, or worse. People, especially the smart ones, and very especially the rich smart ones get very aggressive with me.

Well that's OK. BUT, what I said above isn't opinion. It is fact.

TO THE QUESTIONS!

Steamingbill. Less concern? Oh, no, my friend. Concern isn't the word for it. We are in unchartered waters. There be dragons! To those who work at central banks, what is happening is the beginning of the end. They know it and there is nothing to be done other than perpetuating the situation to its inevitable end.

We are waaaaayyyyy beyond fixing it. Time for concern is over. The ONLY way to fix it, if it's fixable, which it is not, is to repay debt. Repaying debt creates deflation (remember, money is debt). By causing deflation the value of all things, even money, reduces. Deflation is The Great Evil...why? Simple... Why buy today what will be cheaper tomorrow. That's it in a nutshell. This must not happen in any managed consumer capitalist system for the simple reason is it stops the incentive to invest. Why risk your capital (that $1000 dollars in the tin) when you can buy more stuff in a week? I.e. you don't. Business doesn't. Consumerism breaks down and the deflationary cycle becomes more vicious.

Whew!

Hoping all this makes sense. It can be troubling.

There are only four possible outcomes. All of them are horrific, uncontrollable and will end up with the entire system ultimately resetting itself back to zero. These are hyperinflation, hyperdeflation (which is what is occurring), biflation or stagflation. What will occur is for the crystal ball and TV economists, but ultimately, in 4 weeks, 4 months or 4 years, the system we have will be gone.

My guess, my crystal ball, is we will wake up one random Tuesday morning and the entire banking system will be no more. No more stimulus is possible because currency will be zero. Interest rates will be simultaneously 1 billion percent and minus ninety thousand. Entire countires wealth will go to zero in 6 hours. Banks will not open. Bills will stop being paid. Trade will stop. Zero. Overnight. Game over. No more. Go home and open a bottle of red. Enjoy being with the family.

What happens next? I don't know. I've thought about this very very very VERY hard since the GFC. I don't know. Life, obviously will go on. I try to think of the lessons of Iceland. I just don't know.

NEXT question!

To TwistedTenon, who benefits? This isn't a planned exercise. There are people who obviously will make money out of any situation, no matter how horrific. I'm sure trade existed in the concentration camps (sorry to everyone, that was an example only). Is there an underlying assumption that this whole debacle was engineered by some evil conspirators bent of world dominance? The Rockerfellers, illuminati, some dark cabal of those fiends who meet in Davos? No, there isn't. What we are experiencing is the inevitable consequences of a fiat money system.

Free minded traders, bankers, algorithmic AI's trading on tiny inconsistencies in the AUD to JPY bond yields via the Latvian Zloti (arbitrage and carry trades).... There are hundreds of millions of these systems all competing to "win". All of them are using the illusory monopoly money we have created. Debt at a positive price restricted them. Debt at zero interest inflamed them. Debt at negative interest rates has created an unstoppable Chernobyl Fukushima chain reaction.

THE REAL dangers are as I pointed before. Derivatives will implode the financial universe.

The reasons are complex, but simply expressed: counterparty risk and moral hazard. I'll keep it real simple. Counter party risk is when you loan money to a dodgy mate who promises to repay you on Monday. You know the bloke owes money to some very dodgy dudes too. None the less, he has promised to repay......right? Moral Hazard is when one person takes more risks when someone else is responsible for the consequences.

Moral hazard is the reason for the GFC plus the Next Great Happening. In short, bankers took spectacular, enormous, mind boggling risks with their customers money knowing that WHEN it all failed they would be bailed out.

TwistedTenon, who benefits? Politicians (the parties themselves to obtain power). The greedy. The banks. Big Business. Car companies. Corporations. The traders who work in those systems. The Algos who now dominate world trade.

They are richly rewarded for taking risks beyond comprehension knowing full well they will be bailed out. Again. And again. And again.

It is still happening. It's free money now.

[rrich]

Most interesting discussion.

It reminds me of a conversation that I had with a co-worker some years ago. She was in very severe financial difficulty. Her car was about to die and still had a large balance. Her solution was to trade in the car on a new one. All the advertisements from the dealers tend to lead the financially unaware to believe that the car dealer can solve their financial problems.

After about an hour, doing the math, I convinced her that it is not possible to buy your way out of financial troubles. When it was all done, she asked why do car dealers do that. When I answered, "Because car dealers make money by selling cars. They sell you a car for a piece of paper. They then sell the paper to a bank. The car dealer takes the money and runs."

A sad statement but reality.

[Evanism]

I'm a bit surprised more people haven't pitched in. There should be a lot of negative responses to what I've written.

Perhaps what I've written has created a complete "this man is full of it" response... or, perhaps, just perhaps, it all makes sense.

Tell you what. Print it off, take it to a mate who is an accountant, economist or trader (even a day trading mate) and ask them.. "is this guy full of it?"

100% guaranteed they will: read, squirm, look you in the eye, squirm some more, humm a bit and say "no, he is fundamentally correct".

Perhaps the best thing to do is simply ignore it. I have. I can't work out what to do. When it all fails it won't matter whether you have gold and silver coins, 200kg of rice, pigs, chickens and a shotgun.... it isn't going to help. The finish line is 100% new.

[FenceFurniture]

I know this is very heavy stuff indeed. Largely, it's completely invisible.

My guess, my crystal ball, is we will wake up one random Tuesday morning and the entire banking system will be no more. No more stimulus is possible because currency will be zero. Interest rates will be simultaneously 1 billion percent and minus ninety thousand. Entire countires wealth will go to zero in 6 hours. Banks will not open. Bills will stop being paid. Trade will stop. Zero. Overnight. Game over. No more. Go home and open a bottle of red. Enjoy being with the family.It's *rather difficult* to comprehend.

Just taking one of the fundamental things, because it affects EVERYTHING: if this happens then power companies won't be able to buy coal (because they can't pay for it because there is no banking system, and money is worthless anyway - apart from the fact that all the electricity workers would bugger off to fend for themselves because they know they either won't be paid or what they are paid is useless anyway - even IF there is a way to get the money to them). That means there'll be no power in the grid, which means there'll be no water in the pipes because electricity gets it up into the reservoirs). Therefore there is a total and utter collapse of society.

And it's too late to do anything? It will happen within the next half decade?

Is this your own theory (no disrespect meant there) or is it shared by others?

"Interest rates will be simultaneously 1 billion percent and minus ninety thousand." ¿Que?

[Twisted Tenon]

To TwistedTenon, who benefits? This isn't a planned exercise. There are people who obviously will make money out of any situation, no matter how horrific. I'm sure trade existed in the concentration camps (sorry to everyone, that was an example only). Is there an underlying assumption that this whole debacle was engineered by some evil conspirators bent of world dominance? The Rockerfellers, illuminati, some dark cabal of those fiends who meet in Davos? No, there isn't. What we are experiencing is the inevitable consequences of a fiat money system.

Free minded traders, bankers, algorithmic AI's trading on tiny inconsistencies in the AUD to JPY bond yields via the Latvian Zloti (arbitrage and carry trades).... There are hundreds of millions of these systems all competing to "win". All of them are using the illusory monopoly money we have created. Debt at a positive price restricted them. Debt at zero interest inflamed them. Debt at negative interest rates has created an unstoppable Chernobyl Fukushima chain reaction.

THE REAL dangers are as I pointed before. Derivatives will implode the financial universe.

The reasons are complex, but simply expressed: counterparty risk and moral hazard. I'll keep it real simple. Counter party risk is when you loan money to a dodgy mate who promises to repay you on Monday. You know the bloke owes money to some very dodgy dudes too. None the less, he has promised to repay......right? Moral Hazard is when one person takes more risks when someone else is responsible for the consequences.

Moral hazard is the reason for the GFC plus the Next Great Happening. In short, bankers took spectacular, enormous, mind boggling risks with their customers money knowing that WHEN it all failed they would be bailed out.

TwistedTenon, who benefits? Politicians (the parties themselves to obtain power). The greedy. The banks. Big Business. Car companies. Corporations. The traders who work in those systems. The Algos who now dominate world trade.

They are richly rewarded for taking risks beyond comprehension knowing full well they will be bailed out. Again. And again. And again.

It is still happening. It's free money now.

You see, you left out the Great Depression of 1929 there Evanism. Who benefited from that? The rich. They simply withdrew their money from the markets and created a void and rode out the storm. I've long thought of the scenario you speak about but do not have your knowledge of the mechanics of finance. However logically the worlds economy can't continue to expand at 3-4% per annum. something must give. Other simple minded folk are fearing the worst which gives rise to those "survivalist" groups in the US who stock up on guns & ammo and long bows because they believe it's all going to crumble one day and the world will return to dog eat dog.

I've a belief that we are in the thrall of the 1%ers. Yes they do exist. Plenty of data released recently in the US & Australia which shows the staggering amount of wealth controlled by so few families. They have a vested interest in keeping the money were it is. Of course money equals power. No money and they are just as stuffed as any one else. Simplistic but there it is. I do believe that we are in danger of heading into a new period of the "serfdom" of the middle ages. No money = no rights. You just have to visit a country like the US to see what the have nots do to survive. Russia is even closer than the US to this.

So I don't think you're mad Evanism. I think we are going to hell in a basket. This isn't about the tall poppy syndrome either. I own my home and will be reasonably secure on my retirement (crash permitting). My son has just presented me with my second grandchild this morning, and it's for them that I worry.

TT

[Evanism]

It's *rather difficult* to comprehend.

Just taking one of the fundamental things, because it affects EVERYTHING: if this happens then power companies won't be able to buy coal (because they can't pay for it because there is no banking system, and money is worthless anyway - apart from the fact that all the electricity workers would bugger off to fend for themselves because they know they either won't be paid or what they are paid is useless anyway - even IF there is a way to get the money to them). That means there'll be no power in the grid, which means there'll be no water in the pipes because electricity gets it up into the reservoirs). Therefore there is a total and utter collapse of society.

And it's too late to do anything? It will happen within the next half decade?

Is this your own theory (no disrespect meant there) or is it shared by others?

"Interest rates will be simultaneously 1 billion percent and minus ninety thousand." ¿Que?

Yes, but it isn't without precedent in recent history - even TODAY. The scenario you describe is EXACTLY what is happening in Venezuela TODAY. Power outages, stoppages, no water (stay in a hotel you bring your own), no toilet paper, soap, toothpaste... shops empty... rampant escalating crime, black markets in currency trading, hyper inflation.... its all bad.

What will be the core difference with the scenario I outlined and Venezuela, is the Venezuelan problems are fairly classical economic breakdowns brought on by deflating oil prices (which are principally over supply and reduced demand). They have happened a thousand times before and will happen again. Its all a bit yawn-able... the stupid baztardz forgot to diversify their economy off one commodity, or save the money during the good times (geez, does that sound like Australia?).

What is DIFFERENT with the scenarios I'm outlining is it isn't just one country, region, or economic bloc, but the entire planet. All at once.

Can one do anything? Just like other failed areas, people live on. Everyone doesn't drop dead because the Local Peso goes into a 10,000 fold hyperinflation and ceases to exist. By an unbelievable coincidence, I actually experienced this first hand in the early 90's. I took a break from the bank and went to south America backpacking through Peru, Bolivia and Chile. The Bolivian Inti was literally hyperinflating overnight. One would go to a bank with USD$5 and come out with a huge sack of notes. They were overstamped with extra red 000's!!!! Todays 1000 became 10,000 by afternoon, overnight it was 100,000 and the end of week two we had wads of 100,000,000 inti notes. I still have them. I still have photos of my brother and I doing things like buying bread with a WAD of notes. The power died during the day, the water was on in La Paz for only an hour a day... police were on the take and doubled up as cab drivers (the cab being their brothers 350 year old death trap)... but it was good. The people were happy.

Every currency in all of history has failed. All fiat currencies do, its a fundamental mechanism built into their very creation. There is only one exception - Gold. but that isn't this discussion.

My own theory? No. I glad you asked! What I'm saying is mainstream unbiased truth. Every single last fact can be attested to by Wikipedia or using google to "News" or images for graphs. Highlight my terms and do a quick search. All the numbers are real. All the facts are true. All the quotes are taken from main stream... I haven't twisted anything to fit an agenda. I am speaking from deep knowledge, a curious mind and continuous reading. This isn't right-wing left-wing anti-anything ranting. I might be guilty of oversimplifying things such as negative interest rates (because I was trying to tell a story in a narrative that made sense)... but over all I'm trying to be really forthright.

Interest rates - glad you asked! What will happen? Nobody knows. BUT, there are pretty convincing arguments that interest rates are going to 0.0000% and staying there for a decade, perhaps forever. My best guess? A global currency war will break out. QE1,2,3,4 and all other forms of liquidity have failed and I'd wager a beer that governments will start litterally printing money... give everyone a cheque for $50,000, then another, then another.

I was talking with a close neighbour about this JUST before the GFC hit. He didn't believe me. I was wrong about the cheques-to-the-peons then. But I wasnt, for the government has created debt of $580 billion here (thats $20k each) and given it to the banks and in the US they have generated $19 TRILLION in debt... again, to the banks.

This is why negative interest rates were introduced... in an EFFORT TO FORCE the banks to lend to the peasants. They have not. Interest rates are going to go to -1%... minus 5%... minus 19%.... minus 90,000%.....

[Enfield Guy]

Like Twisted Tenon, I blame the 1% he infers to in his post, (we won't be making religious affiliation accusations in this place though), and those that choose to live their lives in a sea of credit. If you need it enough you can save for it, and then buy it. A principle place of residence or a new car purchase are maybe exceptions.

Less waste and more considered purchasing decisions would solve a whole lot of problems in our world.

Cheers

[Evanism]

You see, you left out the Great Depression of 1929 there Evanism. Who benefited from that? The rich. They simply withdrew their money from the markets and created a void and rode out the storm. I've long thought of the scenario you speak about but do not have your knowledge of the mechanics of finance. However logically the worlds economy can't continue to expand at 3-4% per annum. something must give. Other simple minded folk are fearing the worst which gives rise to those "survivalist" groups in the US who stock up on guns & ammo and long bows because they believe it's all going to crumble one day and the world will return to dog eat dog.

I agree with the ridiculous BS chant of continuous growth. Growth isn't prosperity. Growth like we have had for 25 years isn't wealth. It's inflation.

There has been very little real wealth generated, in real terms, since about 1978. Sure, everyone is earning more and their house is "worth" more, but this isn't wealth, its inflation. Money is worth less. On the macro (i.e everyone) people have more debt, a lot more debt... but most of the houses are still the same (new suburbs aside). The jobs are the same (internet jobs aside!)... what isn't the same is the volume of debt. e.g. 25 and buy a house in Sydney? Ho-leeeee COW!!!

It irritates me to no end when I hear pollies crap on about generating growth. Growth isn't delivered via a mantra from the government or a feeling of goodwill. Its generated by industries making stuff. Things. businesses generating profits and paying dividends. That is wealth. Enough of this rant.. its a bit off track :)

I don't think this survivalist thing will happen. I like shows like The Walking Dead and Revolution... in a way they explore these ideas (they don't really, but in mind they do). People are intrinsically nice. They want to get along. Drink beer. Do business. Perhaps places like the USA may go down the path of civil war and tear themselves to pieces... but I'm not an American and can't say what the Man On The Street thinks. But, Id care to wager, there are a few people who think its getting pretty feral there.



I've a belief that we are in the thrall of the 1%ers. Yes they do exist. Plenty of data released recently in the US & Australia which shows the staggering amount of wealth controlled by so few families. They have a vested interest in keeping the money were it is. Of course money equals power. No money and they are just as stuffed as any one else. Simplistic but there it is. I do believe that we are in danger of heading into a new period of the "serfdom" of the middle ages. No money = no rights. You just have to visit a country like the US to see what the have nots do to survive. Russia is even closer than the US to this.

Serfdom. Man, you are right dead on. I would argue we are economic serfs right now. I would say we are about to experience debt slavery.

Debt. This word is intrinsically tied now to free money.

On the wealthy 1%. I have a lot to say there, but I wont. I believed as you did a long time ago. Not now. Not for a long time. I've seen behind the curtain and the Wizard of Oz isn't impressive. I've worked for some of the very wealthiest men in Australia. I've had them invest personally in businesses I been involved with, several times. They certainly have a lot of money, but power? No. There is no dark coven of businessmen dry washing their hands while they chortle with glee as they assert their master plan. There is certainly a group of vested individuals who would do anything to gain more wealth, but they have no power. Not power like we imagine it being exercised.

I do think the economic model we are pursuing is inequitable. It is fundamentally unfair. I do believe it will end with necks in a guillotine. I do believe people will be dragged from their beds and hung from light poles. The people, the mob, is ugly. When they again are forced to repay the debts caused by the moral hazards imposed by bankers they will look for someone to blame. It's the cycle.

I'm also hopeful that from revolution comes new models. Fairer models. Models based on what people do, rather than rent-seekers. There is no need for hunger, despair and poverty. Im not being a socialist there - just a human.



So I don't think you're mad Evanism. I think we are going to hell in a basket. This isn't about the tall poppy syndrome either. I own my home and will be reasonably secure on my retirement (crash permitting). My son has just presented me with my second grandchild this morning, and it's for them that I worry.

Family. Time. This important. As I get older I realise that time and family are the ONLY things that matter. My youthful passions were folly and as I get older, I actually know nothing!

[FenceFurniture]

I'm also hopeful that from revolution comes new models. Fairer models. Models based on what people do, rather than rent-seekers.There must be something I'm not getting here. Talking about Venezuela sounds like a reasonably temporary thing. Worldwide, and ongoing (not just a glich here and there) no electricity, ergo no water, ergo no food will surely mean the virtual end of civilisation. Ok, we've only had electricity for a hundred or so years, but because we are so utterly reliant on it..... Not even much point in trying to grow veges unless you live in a reasonable rainfall area......and you have good stocks of seed.

So how does a revolution come out of nothing left? I mean, really what you are describing is a complete holocaust, when it's simplified and the implications considered. It would no doubt involve a few nukes here and there too, just to complete the holocaust. You know "you've got stuff, we haven't, we want yours" BANG "oh bugger now it's irradiated".

[Enfield Guy]

Family. Time. This important. As I get older I realise that time and family are the ONLY things that matter. My youthful passions were folly and as I get older, I actually know nothing! Quoted from Evans previous post.

Yes, as we get older the smaller things seem to matter more. I am no longer inclined to worry for what the world may come to, I'm more concerned about the tomatoes growing in my garden.

It is amazing how people will waste money that they don't have. I'm 51, I remember being a child and having blankets and sheets as curtains till my sole male parent had saved enough money to buy real curtains. We always had good food on the table.

Today, and probably for the last 20 years or so, young folk want it all today. But, with that, they want a "look" a "style", not a "value". They do this on credit. Credit that will follow them through life. They will be keeping up with the "Joneses" but they will have nothing of real value. I have in my possession, a Nortikake dinner set that was passed to me from my father who passed away a few years ago. The same set we used as kids. Yep, I use it now. Day to day, same as we did as kids. Some say it could be worth a lot of money, I say, "Its just nice crockery". There are a few bits missing, I'm sure I broke a few of those, but the point is, dad bought once, with a long term goal in mind and it seems to have stood the test of time.

Relate that to tools and equipment. It is all too easy to buy something for the job at hand and then throw it in the bin. "It didn't cost much, and suits the purpose for today". I too am guilty of doing that in the construction work I have done in the past. Nowadays though, I am more likely to but a hacksaw frame and a couple of blades and do the work rather rather than buy a drop saw a leave it behind.

Waste in our society is an enormous problem, the one that will see our downfall, unless Evans theory comes first. The marketing companies that are behind corporations like the "Big Green Shed" take choice and value away from the consumer to the point that the consumer no longer understands what value really is.

Bring on the zombie apocalypse. I know I can defend, can you?

Cheers

[Enfield Guy]

Interesting discussion, isn't it.

[FenceFurniture]

Waste in our society is an enormous problem, the one that will see our downfall, unless Evans theory comes first.Just to go OT for a moment.

For me, this is the biggest problem, and it's becoming increasingly difficult for us to have a say in it, particularly with herd mentality. I'm thinking iPhones here with the built in "do not allow recharge after 24 months". Now if we knew about that before it was purchased, we could do something about it - and that is not buy it (those of us who do not need every release of iPhone, that is), but the problem is that for very obvious reasons, that information as kept as secret as possible until either a whistleblower or discoverer comes along. Not a case of buyer beware at all. My Nokia is coming up for 8 years old, on it's 3rd battery, and funnily enough makes excellent clear phone calls, and still feels robust. Ummm, do I need anything else from a "phone" besides clear phone calls?


The marketing companies that are behind corporations like the "Big Green Shed" take choice and value away from the consumer to the point that the consumer no longer understands what value really is.Somewhat true, but it's also up to us to sort the wheat from the chaff, and make a decent decision on what we purchase - due diligence and research. Spend the money once on decent quality and all that. This is a case of buyer beware - if it looks cheap, feels cheap, and is in fact cheap then it's probably cheap crap and will perform as such, and with a bit of research (too easy these days) one can purchase much smarter and spend less in the long run.

Ok, back OT.

[Twisted Tenon]

There must be something I'm not getting here. Talking about Venezuela sounds like a reasonably temporary thing. Worldwide, and ongoing (not just a glich here and there) no electricity, ergo no water, ergo no food will surely mean the virtual end of civilisation. Ok, we've only had electricity for a hundred or so years, but because we are so utterly reliant on it..... Not even much point in trying to grow veges unless you live in a reasonable rainfall area......and you have good stocks of seed.

So how does a revolution come out of nothing left? I mean, really what you are describing is a complete holocaust, when it's simplified and the implications considered. It would no doubt involve a few nukes here and there too, just to complete the holocaust. You know "you've got stuff, we haven't, we want yours" BANG "oh bugger now it's irradiated".


FF
Thinking about the great revolutions of the past - the French, Russian, Chinese maybe even the Cuban. (I don't consider the US as a revolution rather it was an economic civil war) They began as the 1%ers lost control of their countries. Revolution then erupted spontaneously across the population usually precipitated by an event like The mutiny on the Petomkin, the storming of the Bastille, The Long March, The Bay of Pigs, before it was centralised into one group/organisation. Then those countries drift into total anarchy was avoided before total collapse. Therefore, taking Evanism's point that globally we are heading for a fall to its logical conclusion, we are due for a world wide revolution which is possible if the 1%ers allow it. So if Greece does not self destruct it's because of the 1%ers stepping in.

Evanism
I don't mean that the 1%ers are organised as such by race or religion/cult other than their common greed. They naturally look after each other because it's human nature to protect your patch by uniting with like minded people. It's the 20%ers I worry about. Who are they? They are the people who control the next greatest amount of money in the world. They run governments, corporations and the IMF and owe their positions to the 1%ers. They are ruthless.

TT

[Twisted Tenon]

Just hearing on the ABC that the Greeks have borrowed $1billon on a 6 month short term loan through the Russians.

TT

[FenceFurniture]

FF
Thinking about the great revolutions of the past - the French, Russian, Chinese maybe even the Cuban. (I don't consider the US as a revolution rather it was an economic civil war) They began as the 1%ers lost control of their countries. Revolution then erupted spontaneously across the population usually precipitated by an event like The mutiny on the Petomkin, the storming of the Bastille, The Long March, The Bay of Pigs, before it was centralised into one group/organisation. Then those countries drift into total anarchy was avoided before total collapse. Therefore, taking Evanism's point that globally we are heading for a fall to its logical conclusion, we are due for a world wide revolution which is possible if the 1%ers allow it. So if Greece does not self destruct it's because of the 1%ers stepping in.The rub is though that things spread SO much faster these days (in the last 20 years). The world has shrunk dramatically since the internet. Unless it's censored we hear about it instantly......as long as there is still electricity of course. Even if it is censored we find out about it if a Snowden comes along.

In those revolutions people had little if anything to lose, except their lives. From what I can make of Ev's comments, everybody loses everything, and overnight to boot, without any warning. It sounds like there will come a time when just one too many housing loans (or whatever) is defaulted on and the lot goes up in smoke.

So if there's nothing that anyone or group or indeed country can do about it, then I definitely can't do anything about it. I think it's time to go to the shed and polish some tools for the hell of it.

[Twisted Tenon]

So if there's nothing that anyone or group or indeed country can do about it, then I definitely can't do anything about it. I think it's time to go to the shed and polish some tools for the hell of it.


Exactly. Come the revolution Comrad, that's where they will find me...... :2tsup:

TT

[Dareen]

This is all a bit more than I can handle in one or two sessions. Needs some time and serious thinking.

Looks like we will be pretty right if we think along the lines of the Barter System. Time to start preparing.

Gotta keep a positive outlook. Back to the shed.

[steamingbill]

Hey Evanism - thanks for the discussions.

Ok so we have a worldwide ponzi scheme going on.

Why cant it just continue forever - as long as enough people dont know about whatever problems exist and carry on behaving the way they are doing at the moment ?

Whats likely to be the tipping points that wake people up on Tuesday that enough of them/us realise the house of cards hasnt fallen down yet but we want to get out today because we think its gonna happen tomorrow ?

I guess people woke up in 2008, but what would have happened if they didnt wake up and everyone carried on doing the same thing.

Seems like a sort of prisoners dilemna scenario where it is to everyones best advantage to continue as before, but if one person disagrees and bails out he is better off than the rest.


Bill

[planemaker]

http://www.wnd.com/2008/03/59405/

[planemaker]

http://moneymorning.com/2015/04/09/china-gold-reserves-rise-to-threatening-level/

[Simplicity]

I'm getting a brain hurt just trying to understand all this [emoji16][emoji16]

[Evanism]

Hey Evanism - thanks for the discussions.

Ok so we have a worldwide ponzi scheme going on.

Why cant it just continue forever - as long as enough people dont know about whatever problems exist and carry on behaving the way they are doing at the moment ?

Whats likely to be the tipping points that wake people up on Tuesday that enough of them/us realise the house of cards hasnt fallen down yet but we want to get out today because we think its gonna happen tomorrow ?

I guess people woke up in 2008, but what would have happened if they didnt wake up and everyone carried on doing the same thing.

Seems like a sort of prisoners dilemna scenario where it is to everyones best advantage to continue as before, but if one person disagrees and bails out he is better off than the rest.

I've read everyone's comments and think the same as you. What can be done? What can I do?

Glad you asked!

First, do me the favour of reading this brief article about wolves, elk and trees in a national park: http://www.nbcnews.com/id/19997826/ns/us_news-environment/t/yellowstone-trees-get-help-wolves/#.VSh17ldhiK0

It took PhD students and the great minds of nature to unravel the complexity of wolves, trees and elk.

Three factors. Three.

An economy in any country has tens of thousands of influences. The world has millions. Banks, trading houses and reserve banks operate models with millions of axis.... Inputs for rain, temperature, UV irradience, humidity, soil salinity, wheat/corn/oil/titanium/bacon production.... Everything.

Each thing has its own balance. Some things we can't control.... Too hot, too cold, too much rain. Floods, cyclones or last years sorghum stockpile unsold. Volcanoes. Some things we can via taxation, entrenched monopolies and political influence: GM crops, fish, potatoes, wheat....etc.

Second, I think about these things a great deal. The older I get the more I realise that the idea of managing an economy is a complete, total and impossible farce.

We can't do anything but SPECULATE as to whether wolves were the key to the returning trees.

It's obvious isn't it? Wolves ate the elk and the trees grew back. Orrrrrr, it could be that UV wasn't intense enough for seeding, or rainfalls were 0.1% higher or the elk had moved or there used to be fires but now there are none, OR OR OR.

We don't know. We model these things until we understand them, then the model breaks. We play with the knobs a bit to make it fit. It's works for a while. Then it breaks.

I'll wrap this up here. You get it.

Next i'll talk about the price of fiat money, return on capital and why we are all utterly, completely and irretrievably doomed. Utterly doomed. (yes - mass starvation, war, dog eat dog, WW3 and a return to the dark ages)

[Evanism]

Next, money.

Let's assume, for a moment, that you KNOW that money (as we use and perceive It) is not a real thing. Imagine that it is entirely fictional. An accounting entry on a computer that says "20 billion more dollars" every 7 days.

Assume it is created out of thin air, at will, in secret, by people who are not regulated, who are unquestionable and who wont (no, can't) tell you the truth.

Assume it is not a store of value. That it in no way reflects your work, effort, saving or life's toil.

This, is money.

Scandalous? It's what we have. Watch this 30 minute video:http://youtu.be/iFDe5kUUyT0

Watch it. Do it. Take 30 minutes out of your life and listen to this video. Do it.

The reserve banks are not the government. You can't vote for them. You can NEVER find out what they do. You can never see how they opperate.

This applies to all reserve banks around the world. No exceptions.

I'll come back this arvo and explain why it will all fail (and always has.... History repeats!)....

BUT THIS TIME IT'S DIFFERENT.

[FenceFurniture]

k, so i watched the video, and that's all pretty easy to understand. He's got a few heavyweights at the end backing him up.

Then...... we get to the sales bit....visit this website. Gee, I wonder if they are selling those silver Pegasus rounds for a profit. (no question mark). Just a thought.....


I also note that nowhere does he (or anyone else) state what they think will be this magic solution that we can apply if we all know how rotten the system is.

Now that makes me deeply suspicious:
"Here's a really big problem that everyone in the world MUST know about if we are to avoid being wiped out in a dog eat dog situation (as Ev probably correctly describes it). In fact this is the biggest problem the world has ever faced.

So the answer to this problem is for everybody in the world to watch my video, and I'll get billions of hits, making my site very commercially viable (at least until the wipeout hits).

Oh and by the way, you can also purchase a silver round at something above the current real market value of silver. That will help keep me afloat until I can cash in on my webhits. And you better hope the bum doesn't drop out of silver."



The guy clearly has vested interests.



Hmmmm. :think:

[Evanism]

k, so i watched the video, and that's all pretty easy to understand. He's got a few heavyweights at the end backing him up.

Then...... we get to the sales bit....visit this website. Gee, I wonder if they are selling those silver Pegasus rounds for a profit. (no question mark). Just a thought.....

I also note that nowhere does he (or anyone else) state what they think will be this magic solution that we can apply if we all know how rotten the system is.

Now that makes me deeply suspicious:
"Here's a really big problem that everyone in the world MUST know about if we are to avoid being wiped out in a dog eat dog situation (as Ev probably correctly describes it). In fact this is the biggest problem the world has ever faced.

So the answer to this problem is for everybody in the world to watch my video, and I'll get billions of hits, making my site very commercially viable (at least until the wipeout hits).

Oh and by the way, you can also purchase a silver round at something above the current real market value of silver. That will help keep me afloat until I can cash in on my webhits. And you better hope the bum doesn't drop out of silver."

The guy clearly has vested interests.

Hmmmm. :think:

I'm sorry for the sales pitch. Ignore that. Should have remembered. Its a clearly stated video (that while Ra-ra Amercian) explains the Fed Reserve system in a comprehensible way. (albeit theatrically)

Gold and Silver won't save you.

I want to state clearly... I do not know what the answer is. I sincerely don't want this to be a gold discussion, because that isn't a fix. That won't save 23 million Australians.

I do, however, believe there is no fix. Repeat. There is no "fixing" this. There is no managed process.

Every single time I sit down with a big pot of tea (enough for 4), sugar it up and hum and ahh until its either drunk or stone cold, I have never once come up with a method of fixing it. Every scenario ends in the obvious.... 90% downturns followed by 20 years or more of utter smoking ruin.

A few(!!!) people on the forum have IM'd me to ask questions and say, in general, they agree with what I say. I expected more vigorous attack!

Anyway, I am however, interested in other areas that I think about a lot on. Lessons that are learnable. Take a time, if you would, to read a bit about these subjects. They might give you hope....

-- http://en.wikipedia.org/wiki/Marshall_Plan (that is, the effect of TAXES)
-- Gold, the gold standard and the history of money. Take time to read the creation of fiat money and Bretton Woods
-- Post WW2 rebuilding of Japan
-- The great depression (the prevailing theory, which is a contraction of the money supply)

Man, I have to go do some woodwork. This is getting me down!!!!

[FenceFurniture]

Oh man, I really am having great difficulty taking this Mike guy seriously. Guess who pops up on the Goldsilver.com website.......

http://goldsilver.com/buy-online/1-oz-Silver-Round-Pegasus/

where the purchase price of 10-20 rounds is USD18.71. The Sellback price is USD16.55 - a hefty 11.5% discount, but thanks for coming and watch your step on the way out.

The site then goes on to say "In Australia, get your gold coins here:
http://www.guardian-gold.com.au/products/australian-bullion-coins

and amongst other things they offer a complete service....including storing your gold/silver for you. Puh-lease, gimme a break! If this world crisis erupts then guess who'll get to my gold/silver first! I would have NIL chance of access to it, mainly because I have no doubt that "for security reasons" the location of the vault is kept secret from everyone, including the owners of the contents.
"Sorry sir, the rules have changed since the crisis began yesterday - it's not yours anymore"
"But you can't change the rules"
"You're right sir, we just robbed you. What would you like to do about? And I bring your attention to the armed trigger happy security guard over there, whom we gave one of your gold coins so he would protect us. We're pretty sure he is developing Parkinson's starting with his trigger finger. St Vitus Dance at the very least."

However, the biggest rub is the array of 1 ounce gold available.
1 ounce gold ingot $1633.09
Same, but with fancy Canadian Maple leaf stamp $1659.13 (+$26)
Same, with chest beating kangaroo stamp (to really appeal to the gullible, I suppose) $1689.89 (+$56)

Ok, it costs more to put the fancy stamp on it, but that doesn't add to the value when you want to sell it - I can't see how it would be worth more than gold to the market.



I have to say that it looks like the same sort of thing that his video is entitled.

[FenceFurniture]

It's kinda a bit like this:
http://www.abc.net.au/news/2015-04-11/ed-queensland-director-of-child-safety-facing-child-sex-charges/6385814
(http://www.abc.net.au/news/2015-04-11/ed-queensland-director-of-child-safety-facing-child-sex-charges/6385814)
That is to say that the people in charge of prevention (or whatever) can sometimes be the perpetrators (of whatever).

[Evanism]

Read this headline article on NEWS: http://www.news.com.au/travel/travel-advice/i-went-from-broke-to-an-instant-millionaire-here/story-fn6yjihw-1227300495540

Then repeat after me:

-- it can't happen here
-- it's different here
-- the authorities would never let it happen

Then read my posts.

Ignore the gold and silver hooey. You will be killed for it.

Just remember Dorothy, it's different here.

[Twisted Tenon]

Read this headline article on NEWS: http://www.news.com.au/travel/travel-advice/i-went-from-broke-to-an-instant-millionaire-here/story-fn6yjihw-1227300495540

Then repeat after me:

-- it can't happen here
-- it's different here
-- the authorities would never let it happen

Then read my posts.

Ignore the gold and silver hooey. You will be killed for it.

Just remember Dorothy, it's different here.

That's the way I see it for Australia too Evanism. It sounds like you're predicting a world wide crash of gargantuan proportions and you may be right of course:). I don't get the finer points of international finances and I accept that you do. But Venezuela has been a basket case since the Spanish landed there in the 1500's and their current predicament is nothing new.
I do believe that the 1%ers transcend governments and their borders so am not surprised when things like that happens in single countries. In my scenario, the "authorities" are the 20%ers and will do as they are told hence maybe Venezuela. One day when it suits, a 1%er will come in and sort it out for them and get the oil rolling again:D

I'm not a conspiracy theorist, just an observer of Newtons third law. I see events and wonder if they are actions or reactions....

TT

[code4pay]

Oh man, I really am having great difficulty taking this Mike guy seriously. Guess who pops up on the Goldsilver.com website.......

http://goldsilver.com/buy-online/1-oz-Silver-Round-Pegasus/

where the purchase price of 10-20 rounds is USD18.71. The Sellback price is USD16.55 - a hefty 11.5% discount, but thanks for coming and watch your step on the way out.

The site then goes on to say "In Australia, get your gold coins here:
http://www.guardian-gold.com.au/products/australian-bullion-coins

and amongst other things they offer a complete service....including storing your gold/silver for you. Puh-lease, gimme a break! If this world crisis erupts then guess who'll get to my gold/silver first! I would have NIL chance of access to it, mainly because I have no doubt that "for security reasons" the location of the vault is kept secret from everyone, including the owners of the contents.
"Sorry sir, the rules have changed since the crisis began yesterday - it's not yours anymore"
"But you can't change the rules"
"You're right sir, we just robbed you. What would you like to do about? And I bring your attention to the armed trigger happy security guard over there, whom we gave one of your gold coins so he would protect us. We're pretty sure he is developing Parkinson's starting with his trigger finger. St Vitus Dance at the very least."

However, the biggest rub is the array of 1 ounce gold available.
1 ounce gold ingot $1633.09
Same, but with fancy Canadian Maple leaf stamp $1659.13 (+$26)
Same, with chest beating kangaroo stamp (to really appeal to the gullible, I suppose) $1689.89 (+$56)

Ok, it costs more to put the fancy stamp on it, but that doesn't add to the value when you want to sell it - I can't see how it would be worth more than gold to the market.



I have to say that it looks like the same sort of thing that his video is entitled.
You can stuff directly from the Perth mint (not sure why you would go via a third party) people rationalise the difference in price between the coin and the market price for gold in the fact that the coin is recognizable by others therefore would be more readably tradable. I'm not sure really how that'd work in a practical sense, not like you could go down to Coles and hand them a gold coin for some milk. If an economic disaster did happen it would take quite some time for a trade in gold at a local level to work at a practical level.

I am a member of a lets system where they have their own local currency and traders. These are already established world wide and I could see these becoming quiet useful for local trade if the something like hyper inflation started side the infrastructure is already present and working.
https://www.communityexchange.net.au

I read an account of some one in the Bosnia war.
He said that when things where tough the best items of trade where luxuries perfume, alcohol, makeup etc. People are really desperate to escape the reality of the situation by some indulgence.

[Evanism]

http://www.zerohedge.com/news/2015-04-14/banks-across-europe-pay-borrowers-buy-homes


Tumbling interest rates in Europe have put some banks in an inconceivable position: owing money on loans to borrowers.

At least one Spanish bank, Bankinter SA, the country’s seventh-largest lender by market value, has been paying some customers interest on mortgages by deducting that amount from the principal the borrower owes.

The problem is just one of many challenges caused by interest rates falling below zero, known as a negative interest rate. All over Europe, banks are being compelled to rebuild computer programs, update legal documents and redo spreadsheets to account for negative rates.

Banks set interest rates on many loans as a small percentage above or below a benchmark such as Euribor. As rates have declined, sometimes to below zero, some banks have faced the paradox of paying interest to those who have borrowed money from them.

[steamingbill]

I copied the attached image from this page

http://www.businessinsider.com.au/report-greece-is-getting-ready-to-default-2015-4?nr_email_referer=1&utm_source=Sailthru&utm_medium=email&utm_term=Markets%2520Chart%2520Of%2520The%2520Day&utm_campaign=Post%2520Blast%2520%2528moneygame%2529%253A%2520Look%2520at%2520how%2520little%2520Americans%2520are%2520spending%2520on%2520their%2520debt%2520payments&utm_content=COTD

The idea of a bank paying me to borrow money is "interesting" ............ boom boom I claim a pun.


Bill

[Toymaker Len]

Thanks Evanism, great coverage of a difficult topic. My FIL (retired economist) has been warning of this impending doom in great detail for some years and it looks like it might happen. I guess we need to look to our local community, family etc. The classic situation is a shipwreck, when individuals selfishly grab for themselves everybody perishes but when the whole group sticks together then most survive. Good luck everybody.

[TermiMonster]

..... when things where tough the best items of trade where luxuries perfume, alcohol, makeup etc. People are really desperate to escape the reality of the situation by some indulgence.

Right...first thing tomorrow, down to empty the bank account, then to Liquorland to buy up on 12 year Scotch (and maybe a bottle or two of Chanel No 5 to keep SWMBO quiet;).
Who's with me?
TM

[cava]

Right...first thing tomorrow, down to empty the bank account, then to Liquorland to buy up on 12 year Scotch (and maybe a bottle or two of Chanel No 5 to keep SWMBO quiet;).
Who's with me?
TM
Perfume goes off after a few years, however scotch lasts considerably longer. :wink:

[FenceFurniture]

Right...first thing tomorrow, down to empty the bank account, then to Liquorland to buy up on 12 year Scotch (and maybe a bottle or two of Chanel No 5 to keep SWMBO quiet;).
Who's with me?
TMReckon you'll get away with 8 yo because it'll be getting on for 12 yo by the time it comes down on us. Just make sure you keep the receipt for proof of current age. :;

[AlexS]

Perfume goes off after a few years, however scotch lasts considerably longer.
Not in my house!

[Simplicity]

I will have for swap soon ,one hand made boutique dovetail saw.
18 tpi brass back hand shaped Black Bean handle French polished 15 thou plate .
Will swap for 500 cans of spam and 200 baked bean cans .
Delivery meet half way ,no post option .
Send homing pigeon for confirmation .

[FenceFurniture]

Perfume goes off after a few years, however scotch lasts considerably longer.Errrr, which one?


Not in my house!

[Bushmiller]

Evanism

That is a most fascinating take on the world economic scenario. Even though I only understood about a third of it, I was nevertheless intrigued from start to finish.

I have an understanding of economics that starts and finishes with supply and demand.

Consequently, the ability of the US to pull itself out of the mire by printing more money was bewildering to say the least. Why then doesn't Australia do the same thing as we are half way into a recession ourselves? I had reluctantly concluded that the Americans are just better printers than us. Probably because the relatives of William Caxton found their way to the New World in the 17th century (citation needed for this piece of fantasy :rolleyes:).

In a more serious vein, I have been bewildered by the constant assertion that for an economy to survive, it has to grow, needs more people and generally has to develop. Surely that is just greed.

There has to be an equilibrium point I would have thought.

Thank you for taking the time to explain the idiocies of world economics: A revealing read, albeit a tad depressing.

Regards
Paul

[FenceFurniture]

An economist me is not, but wouldn't a small amount of growth be required to keep up with an expanding population (so that the slightly expanded economy is ready for the pop expansion)?

[Bushmiller]

An economist me is not, but wouldn't a small amount of growth be required to keep up with an expanding population (so that the slightly expanded economy is ready for the pop expansion)?

Brett

That may be the case if the population is expanding, but my impression is that amongst the developed, western countries population growth on average is static.

Regards
Paul

[Evanism]

Glad you asked.

Populations in ALL western and "first world" economies are in precipitous decline. EVERY SINGLE ONE has a birth rate dramatically lower than the replacement value. Every single one is propped up from the bottom with new immigrants from poorer, war torn or economically undeveloped nations.

Every one of them is getting older. Much older. This is the exact reason why the governments of the world have flung open the doors to immigrants under 30... its to ensure the Great Ponzi scheme stays alive. Its a Ponzi, plain and simple.

Open your eyes. This is why the Intergenerational report is being flogged: http://www.challengeofchange.gov.au/

Personally, I'm sick to death of living in an old-white-mans-western society and fully welcome the rich diversity other cultures bring. My area of Canberra is fantastic. Love it.

BUT, it solves the problem only by staving it off for a short while.

BushMiller, you wrote "Consequently, the ability of the US to pull itself out of the mire by printing more money was bewildering to say the least. Why then doesn't Australia do the same thing as we are half way into a recession ourselves? I had reluctantly concluded that the Americans are just better printers than us."

Good question. WE ARE!!!!. Every advanced economy of the world is experiencing a titanic money-explosion of galactic scale never before seen in history. The printing presses you point out are now not physical machines, but Reserve banks selling debt paper to banks... with the major buyer being governments. This explanation is going to get complex, so bear with me, it might be over simplified, but its true...... (I will warn you, as you understand this more you will rip you hair out and wail. If you don't break out in a cold sweat and have the dread cold grip of death in your guts, you don't understand it enough)....

-- A Reserve Bank sells a Bond (an IOU) via auction to anyone. Anyone is a Bank. The Banks will bid for this "paper". This bidding essentially sets the price, or base interest rate.
-- The Banks will re-lend this money to anyone. Anyone is usually the government. The government will get this at 0.01% above what the banks paid for it. The government uses this money to build infrastructure, pay public servants or entitlements. ($360 billion. This can be seen here: http://aofm.gov.au/ )
-- The second market for bonds is the banks themselves. They essentially magnify this debt by re-lending it to you for credit cards, boats, cars and home loans.

The last point is where Fractional Reserve Banking comes from. They take $100 (from the reserve bank), lend $99 of it to Adam. Adam buys a thing. That things money is reposited. Bank then lends it to Bob.. then Carl, then Dave, then Evan... and so down to Zachary. That $100 is turned into $X-zillion. The "zillion" is restricted by lending ratios and mandatory reserve holdings. This number used to be something like 10%... i.e $1 in $10 needed to be held in case too many chickens came home to roost at once. This was one of the reasons for bank runs of the past (its called capital adequacy).... BUT, this number, now, is effectively zero. The government (reserve bank) will guarantee deposits, so the need for the old capital adequacy is essentially gone. (this is a deep deep rabbit hole, so I'll stop there - ok ok, its not zero, but as it approaches zero the bank just buy more bonds, so it never gets there)

As the lending ratios and reserves approach zero, something horrific occurs... the amount of "money" very quickly goes exponential.

This is why there is so much debt. As the amount of debt increases, the price of money decreases (please read below). This is partly why interest rates are effectively zero around the world. (this is not entirely true: the real reason is that *people* are repaying debt, but not companies nor governments).

The entire system is entirely reliant on debt. MONEY IS DEBT.

Normally (normally!) the more money that is created causes inflation. A natural balance to inflation is those with capital (money) want a higher interest rate to counter inflation. Why would you lend money at 5% when inflation is 10%? (you'd go backwards). A natural process would have the interest rate just above inflation. Normal and Natural, however don't apply any more.

What is occurring, however, is people are repaying debt (but not companies and governments). As people repay their loans, the total amount of money decreases. Remember above how I showed fractional reserve levels and it effect on exponential growth? Well, that can happen in reverse too. Exponential deflation.

THIS IS HAPPENING. This is why central banks around the world are seeling bonds (printing money) at unholy rates. They are desperately trying to reverse the titanic deflation caused by debt repayment.

The value of money is doing a VERY CURIOUS THING. It is both inflating (because the various reserve banks of the world are selling bonds like there is no tomorrow) and deflating as loans are being repaid (except Australia, it would seem). Everyone knows about hyperinflation and wheelbarrows of cash to buy bread, but there are things like deflation, stagflation and biflation - concepts that are foreign and are difficult ideas to grasp.

So, while companies are loading up on debt (never to be repaid) and governments are loading up on mind boggling debt ( http://www.usdebtclock.org/ and http://www.australiandebtclock.com.au ) poor taxed Joe Citizen (people) is trying to swim against their own rip-tide..... (Aussie houses anyone?). When this consumerism ending apocalypse ends, Poor Joe Citizen is going to feel the wrong end of the pineapple in the wrong place for a looooonnnngggg time!

Now, this is going to bake your noodle. Company debt and Gov debt have to be repaid. Hmmmm. How? Taxes. You will be bailing big companies out forever (its already happening. "To Big To Fail"... look it up), Enforced inflation with negative interest rates will be the end result(you will PAY to deposit cash with the banks and banks will PAY you to borrow it) .... taxes, silver/gold confiscation, super gone, cash over $x illegal.... remember, I mentioned in a post above, inflation is the value of money decreasing, not the price of margarine/car/boat going up.

Want to try something really scary? How about the idea that governments FORCE you to borrow money? $50 grand. All yours. Catch? The repayments... but guess what? You will be charged to have the money in your account (negative interest rates) and large holdings of cash will be illegal/difficult. (I KNOW that there are conversations for removing $100 and $50 notes from circulation or changing them every few years... making the old ones "void").

Now, if you're really keen to know where this magical fairy story will end, the answer is simple. Zero. You, your kids, your great grand kids, the billionaire next door, broke. Gone. Evaporated. Confiscated. Zero. Nil. Null.

As I mentioned in a post above. Print this out and take it to an accountant, economist or stock broker and ask them if its "the truth". The answer will mortify you.