Saturday, July 21, 2007

This is how empires end...

And in yet another one of my shameless rips from Lord Patel’s blog...

A selection of last night’s closing prices for $ denominated commodities per the BBC...


I’m ripping it because it’s a nice illustration of something I was banging on about a couple of posts back

When the price of something such as houses, or nickel, goes up that does not necessarily mean that houses, or nickel, are in particularly short supply. It could equally mean that there is too much currency knocking about. The more money you create the less its perceived worth.

And if you continue to create more and more currency out of thin air and expect people to accept it in return for stuff that’s actually worth something, sooner or later that currency will die on its arse.

Blindingly obvious I know but it’s remarkable how little coverage this point of view is given in the mainstream media.

It's easy enough to understand why people don't really want to face up to this stuff though. What's a happier thought? That your house increased in 'value' by 15% last year or that the house hasn't changed in value and money is worth 15% less?

The US is by far and away the worst offender for this sort of thing and has been creating junk dollars to pay for its imports for years now. The US has sustained the perceived value of its junk dollars by the simple expedient of strong-arming virtually every other country in the world to hold trillions of them in reserve and making examples of selected countries that don’t by bombing the shit out of them

Unfortunately for the US it’s starting to looking like this gag is starting not to work any more – too many dollars and too many countries dumping too many of those dollars on the sly and not enough bombs for all of them. Though if the dollar does continue to tank the way that it has it’s a pretty good bet some poor bastards somewhere will be in for a dose of the old Shock and Awe

And to be honest the UK hasn’t been much better behaved with its currency than the US. However, sterling is getting by at moment through the simple virtue of it not being quite as shit as the dollar, plus our government is not too fussy about the cleanliness of much of the money that sloshes in and out of the City of London - it''s not so much a knowledge based economy we've got going here, more a deny all knowledge kind of thing

but our turn will come

as someone once said, this is how empires end…

no worries though, the latest Harry Potter book's on sale today, hooray!

.

5 comments:

paul said...

The free lunch comprises of wholly processed comfort food. In a world where every other commodity drops dramatically in value at point of purchase, where there is nothing but fear beyond your walls, this is indeed something to cherish.
It also makes you feel smart if your cresting the wave, and dumb if you're not.
I think that those that are not should take comfort in being just as smart as those benefit from a 'rising' market they have little hand in. After all, they were smart enough to be born here, rather than one of those dreadful countries outside the G8.

The Cartoonist said...

Stef, I actually found the link to this site on patel's blog way more interesting:

http://www.courtneycoventry.com/index.html

Stef said...

All I can say is if Courtney Coventry is porn star how come I'd never heard of her?

Stef said...

Best porn star name ever?

http://www.imdb.com/name/nm0760349/

Anonymous said...

Maybe,but if her statement is right,then we have all been taken for the biggest whitewash in history.