No announcement yet.

Economic pressures

  • Filter
  • Time
  • Show
Clear All
new posts

  • Crashing oil,,, crashing finance

    2/10 Junk bond yields highest in four years, Goldman discusses oil in teens – Mish
    " Back in the late 90s, a barrel of Brent crude fell to as low as $10 in the wake of the Asian financial crisis. " Debt, defaults, and devaluations: why this market crash is like nothing we've seen before - Telegraph
    "Oil tankers are circling the Gulf of Mexico in large numbers."
    Trade and export; " The US exported 400,000 empty containers in 2015 (LA, Long Beach, NY, NJ)"
    "Suncor posts huge $2bn quarterly loss, and S&P downgraded 10 firms. Appearing is a big wide red ink river as oil hedges expire. Big firms have been running at losses while working capital goes rotten."
    So, it's pretty clear, the finance industry depends on the energy industry. International trade has come to a skidding halt.

    The FED hasn't overtly printed as much as other CBs. There is enormous "money" creation flowing through the "reverse repo window" but, it isn't out in the open. Because of the appearance of stability, there are tons of capital flight to the safety of the dollar. So, what do you think happens next?
    "The S&P500 has critical support level at 1870, it is going to break and the TNX 10-yr yield is heading to 1.5%. This is the bond black hole that sucks in global capital. Afterwards comes the RESET and New Scheiss Dollar to reduce capital value within the hole. There are two missing liquidity channels: Fed/WallSt and Bush narco money."
    History strongly suggests that America will get a new currency that will devalue all the global capital that was sucked in by the (temporary) appearance of strength in the dollar.

    The rest of the world is breaking away from the U.S. dollar and trying to move to gold.
    "Gold is “a barbarous relic.” How many times have readers heard this vacuous statement during their lifetime? If a gold standard is our only protection against monetary crime (according to the most esteemed monetary authority of our lifetime, Sir Alan Greenspan), how could gold be either “barbarous” or a “relic? ”If gold is “a barbarous relic, ” how could it remain (to this day) an official monetary asset of every government on the planet? If gold is “a barbarous relic, ”would the world’s central banks (creators of all our paper currencies) have ever gone from being net-sellers of 500 tonnes of gold per year to becoming net-buyers of 500 tonnes of gold per year?"

    The truth is very simple; The parasites need an elastic money supply. Those who are actually productive, can survive quite nicely on what they produce.
    The parasites can be divided in to 2 general groups. Those who never have any intention of doing anything productive and those who would be productive but, have no job niche.

    "USEconomy from a new domestic-only Scheiss Dollar whose devaluations will be done in sequence until the trade and federal deficits are eliminated and closed while shortages arise, the bold move (effective but fascist) will have USGovt requirement to capture private pensions to cover the $1trillion annual federal deficit, "
    " the Global RESET having begun with the New Scheiss Dollar (domestic only) coming into view with federal deficit support by means of forced nationwide pension fund investments"
    GOLDEN JACKASS.COM - The Golden Jackass Knows Gold, Currencies & Bonds"
    This is NOTHING new. GOV always forces pension funds to buy GOV bonds.
    Last edited by Danny B; 02-10-2016, 03:35 PM. Reason: more info


    • I wasn't around during the gas crisis in the late 70's. I can't help but wonder if we are in the same trap again. There was no shortage but $4.50 a gallon gasoline was ridiculous. And here we are, oil is coming down and interest rates are increasing. Will they continue to high teens like the early 80's? Probably not but I still wonder.


      • Gas Crisis

        I lived through that. I was young, healthy and had a job. I lived through it and it had its downside, but I lived through it. My suggestion is never grow old, never get sick and never lose your job. Now I am old, sick and jobless. Well, not that sick really, but still... I do the best I can. Try to develop a valuable skill. Your value will go up as the cost of living increases.
        There is a reason why science has been successful and technology is widespread. Don't be afraid to do the math and apply the laws of physics.


        • nowhere job for nobody

          Wayne, think of the recent college grads who have a degree in basket weaving, Gender studies, communication, art history, comparative religion, etc. They are SCREWED.
          Impact of automation puts up to 85% of jobs in developing countries at risk | KurzweilAI


          • Contagion from Deuitches bank

            Deutches bank is definitely on the chopping block. The result; "Jim Willie: If Deutsche Bank Goes Under It Will be Lehman TIMES FIVE!" "Barclays admitting a £12.8bn capital shortfall Tuesday) "
            " 3 major banks are in trouble, and these 3 banks are fighting every single night to fight off insolvency and failure. He says CitiGroup in New York, Barclays in London, and Deutsche Bank in Germany- every single night are in trouble.

            The important thing to keep in mind about Deutsche Bank is that it won’t go down alone if it goes down at all. If it fails, it will take along with it 3,4,5,6 or 10, or 15 other banks! It will be 1 or 2 quickly, then a 3rd and 4th a few weeks later, another, then before you know it, all of Italy and their major banks would be kaput."
            " Dont bet your money that Deutsche Bank will go down, but if it does, the next day its going to be Citi, Barclays, HSBC, Morgan Stanley, Soc Gen, and big threats to JP Morgan and Goldman Sachs!

            In conclusion, Deutsche Bank owns $25 trillion in OTC swaps with the Central banks and other major banks, so expect a daisy chain of derivative failures for the $1.6 quadrillion derivative market if it were to fail!
            Deutsche Bank cannot break down by itself. It would result in the complete breakdown of the European Monetary Union!"
            Jim Willie: If Deutsche Bank Goes Under It Will be Lehman TIMES FIVE! |
            How long will it take? "It May Take Less Than 48 Hours to Take it ALL Down" - Bill Holter |
            "Two of the biggest losers, Bank of America and Morgan Stanley, are down 27 per cent and 28 per cent respectively. Citigroup, also down 27 per cent" Five reasons behind US bank stocks sell-off -

            Col. Wilkerson; "“Today, the purpose of U.S. foreign policy is to support the complex in the national security state that is fueled, funded, and powered by interminable war and the ramifications thereof,” Wilkerson explained, later noting: “Capital is the driving force of the world.”

            According to his analysis, corporate and commercial interests are steering the “ship of state” in the direction of unsustainable growth, which in turn requires an ever-expanding war machine. "
            America’s business is the war business. Stopping America’s Endless Wars Could ‘Sink The Ship Of State,’ Fmr. Bush Official Warns

            • Europe Banks May Face $27 Billion Energy-Loan Losses (BBG)
            • European Banks: Oil, Commodity Exposure As High As 160% Of Tangible Book (ZH)
            • Europe’s ‘Doom-Loop’ Returns As Credit Markets Seize Up (AEP)
            • Distillates Demand Signals US Recession Is Imminent (BI)
            • US Oil Drillers Must Slash Another $24 Billion This Year (BBG)
            • Italy, A Ponzi Scheme Of Gargantuan Proportions (Tenebrarum)
            Italy is the third largest bond market but, the tenth largest economy. This is great on the way up and a real killer on the way down.


            • The PBGC and negative interest rates

              The word on the street is that the German GOV will bail out Deutches bank. I guess we have to wait a bit longer for a major detonation. China now seems to be a likely candidate for a banking detonation; "Fasten Your Seatbelts": Kyle Bass Previews The Collapse Of China's $34 Trillion Banking Sector | Zero Hedge
              "This new world order of NEGATIVE INTEREST RATES is so insane and focuses solely on trying to stimulate borrowing. This is undermining pensions for the elderly and creating the economic storm of the century that is on the horizon that will be far worse than the Great Depression of the 1930s. "

              2/11 US stock futures join global sell-off – Bloomberg
              2/11 Move over Greece, it's Italy's turn – Financial Sense
              2/11 Ecuador's oil industry catastrophe... to spread around the world – SRSrocco Report
              Something Very Disturbing Spotted In A Morgan Stanley Presentation | Zero Hedge Morgan Stanley is calling for the cashless society and negative interest rates. They can't make money honestly so, they can just subtract some of your account every month.

              The Pension Fund Guarantee Corporation guarantees pension funds for about 41 million Americans.
              "In fiscal year 2015, PBGC paid $5.6 billion in benefits to participants of failed single-employer pension plans."
              Negative interest rates are killing pension funds. ZIRP does too but, not as fast. It also makes life very hard for hedge, mutual, insurance, et al funds.
              The insanity will continue until morale improves.


              • Disintigration of the financial sector

                The language gets better all the time. It is also raw and direct.
                "Bloomberg News reported in January that a $29 trillion corporate debt hangover could spark a recession. There is no historical precedent for the scale of corporate debt today as a share of wages and GDP -- not even close. Total cumulative claims accruing to the existing debt preclude growth of world real GDP per capita in perpetuity, which leads to a binary outcome. Either demand increases immediately, allowing for the growth in income needed to service existing debt and add new debt, or a debt-deflationary wipeout unfolds and resolves.

                That's all folks."
                Why Gold Is the Only Place to Hide
                Armstrong; "I have warned, get out of financial stocks. The game is over."
                "2017 is going to be the year from political hell. . The world as we have known it is coming undone."
                Kunstler; "It’s one thing for the financial system to crack up, and another thing for social norms to disintegrate, and still another for the political system to become a locked ward of obvious psychopathology."
                "Beyond all the political histrionics, is there not some broad recognition that whoever occupies the White House in 2017 will preside over a financial debacle like unto nothing in scale that the world has ever seen before? With all the reverberating side effects imaginable among the traumatized nations? Something wicked has been creeping through the stock markets since the year began."
                "This is not just about Wall Street and its counterparts in London, Shanghai, Tokyo, and Frankfurt. This is the financial world (and underworld) catching up with the Economy of Actual Stuff. In the USA, that economy has bled out like a hapless bystander with a sucking chest wound for the last eight years."
                Notes from the Locked Ward | KUNSTLER


                • Your broker has done well; "Their performance is simply terrible. And $21 billion in fees have been paid to mutual funds for no performance in a ten-year period. " The Biggest Financial Scam Ever (Hint: It’s Not Madoff) - The Daily Reckoning

                  " General Motors GM creates about $1.85 of market value per dollar of physical assets, while Tesla creates about $11. GM creates $240,000 of market value per employee, while Tesla creates $2.9 million. You don’t get differences like that just by being more efficient. Tesla, though in the same business as GM, is a fundamentally different idea."
                  Why every aspect of your business is about to change - Fortune

                  JPM, "gold at $1,200 an ounce, what does that tell you? It tells you that in a flight to quality, in a safe haven, people have more confidence in gold than in bank deposits or paper money. I think things have gotten out of control."
                  Technically, this isn't correct. It is confidence in GOV that is lost. JPM: "Things Have Gotten Out Of Control: People Have More Confidence In Gold Than In Paper Money" | Zero Hedge

                  "Debt was like a popular drug. Everyone was doing it.
                  But when the bubble burst in 1989, asset prices collapsed. And companies that had borrowed heavily were left with nothing but debt.
                  Kongo Gumi didn’t go out of business right away. The company was able to limp along for more than two decades on basic life support.
                  Soon they were borrowing money just to pay interest on the money they had already borrowed, even though interest rates were at record lows.
                  But eventually the company’s revenues were no longer sufficient to service the debt.
                  And in 2006 Kongo Gumi was forced into liquidation.
                  This company lasted over 1,400 years."
                  After 1,428 Years, Here's What Brought Down The World's Oldest Business | Zero Hedge

                  Debt is used as the bludgeon to steal sovereignty from a nation, Central Banks Are Trojan Horses, Looting Their Host Nations Washington's Blog

                  The Dow elevator; 18, 17, 16... – Best Minds, Inc.
                  2/12 If credit is right, the S&P is facing a 40% crash – Zero Hedge
                  2/12 The NIRP "doom loop" that threatens to wipeout banks, global economy – Zero Hedge

                  "Why are Central Banks desperately trying to “save” stocks? Because the markets have lost faith in their abilities.
                  The Bank of Japan launched Negative Interest Rate Policy or NIRP two Fridays ago. Japanese stocks rolled over and crashed just one day later. They’ve since lost over 6%."
                  "Consider that for a moment. The Bank of Japan, launched NIRP for the first time in history, and instead of exploding higher, stocks collapse.

                  Japan ALSO had to cancel a bond auction for the first time in history because investors didn’t want to buy bonds at negative rates.

                  The End Game has begun for Central Banks. Desperate interventions may push stocks higher temporarily, but the next Crisis has officially begun."

                  The doom loop; " In a way, the move below zero was a gamble. The theory went like this: Banks would take a hit, but negative rates would get the economy moving. A stronger economy would, in turn, help the banks recover.
                  It appears that wager isn’t working."
                  It wasn't a gamble at all. Only wages will/would get the economy moving. The feces-for-brains in academia never went hungry for a day. They have no conception of "unemployment".

                  Armstrong, "European Council President Donald Tusk has warned that the EU is in danger of a total collapse. He has come out to say that David Cameron’s referendum in Britain will be copied by other member tactics for their own “egotistic goals.” He has said this will unleash the unthinkable: democratic rights for Europeans to disagree with the elite in Brussels. He called this a populist political movement that will bring the EU bloc to the brink of “suicide.”
                  No kidding??? The stupid Europeans don't want to be part of the Brussels chapter of the Borg.

                  Edit; More on NIRP; "Negative Interest Rates

                  The urgency of their move to ban one of the longest-lasting pillars of daily life means that the backroom elites think it will be necessary soon. It would appear that the central banks, the IMF, the World Bank, the BIS, and all their backers, see the elimination of cash as a central survival strategy.

                  The reason is simple: cash would allow people to escape from the one thing that could save their larcenous currency system: negative interest rates.

                  To make this clear, I like to paraphrase a famous (and good) quote from Alan Greenspan, back from 1966, during his Ayn Randian days: The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.
                  The preservation of an insolvent currency system requires that the owners of currency have no way to protect it."
                  "Your $1000 in January becomes $950 by December. And where does that money go? To the banks, of course, and to the government. They syphon your money away, drip by drip, and there’s nothing you can do about it. This accomplishes several things for them at once:

                  It finances government, limitlessly and automatically. Forget tax filings; they can just take as they please.

                  It pays off the bad debt of the big banks. (And there are oceans of debt.)

                  It forces you to spend everything you’ve got, as soon as you get it. (Otherwise it will shrink.)

                  It gives the system full control over your financial life. Everything is monitored, everything is tracked, and every single transaction must be approved by them (or not). If they decide they don’t like you, you’re instantly reduced to begging."
                  Last edited by Danny B; 02-13-2016, 03:10 AM. Reason: More on NIRP


                  • bad theories,,,, bad outcomes

                    2/12 US oil prices jump 10% on hopes for production cuts – CNBC
                    2/13 Crude oil rally based on 'false hope': Analyst – CNBC
                    Dead-cat bounces just don't last like they used to.

                    2/13 Desperately seeking signs of inflation – Reuters
                    Investors Have Lost $1.78 Trillion So Far This Year. It’s happened in only 31 days
                    Yep, hard to find inflation with losses like these.
                    On average, investors have lost a collective $57 billion per trading day this year. Ouch. Investors Have Lost $1.78 Trillion So Far This Year

                    2/13 Earnings outlook is getting even worse as first-quarter expectations tumble – MarketWatch
                    No matter how much money is pumped into the stock market, there are no earnings without consumption.

                    2/13 Looking for the next crisis; try student debt – SafeHaven
                    2/13 Auto loans, student debt lead household re-leveraging – Mish
                    We don't have to look for the next crisis. It will surely find us.

                    2/13 Faber says market selloff is 'an appetizer of something larger' – Fox Business

                    2/12 Yellen's dilemma: a downturn with no easy response – Yahoo! Bernanke left the old broad a bazooka with no bullets.

                    The playbook of the central bankers is full of bogus ideas and theories. Some don't work. Some work the opposite of what is expected.
                    Is This Debt's Last Rattle? - The Automatic Earth

                    "GM creates $240,000 of market value per employee, while Tesla creates $2.9 million." Employee productivity has been going up, more or less in lockstep with automation. Naturally, the number of employees needed is going down. Society and the economy are groping around trying to keep consumption growing at the same time that employment is falling. Originally, GOV tried to employ those people who were not in demand by the private sector. This is coming to an end with no viable replacement plan.


                    • energy markets gone crazy

                      This is a repost of the last link. It has an astounding number that I missed earlier.
                      "It’s stunning to see for everyone at first blush that the “book value” of global proven oil reserves is down by $120 trillion or so since summer 2014. And it certainly is a big number; the S&P has lost ‘only’ $2 trillion in 2016"
                      " over the past five years, coal producers have closed nearly 300 mines and lost 76 percent of their value"
                      "Peabody Energy, the world's biggest coal company, hit their lowest price ever, dipping below $1. A year ago, Peabody's share price was hovering above $15; it peaked at $72 back in 2011. The stock plunge at Arch Coal was even more extreme—it fell from $3,600 to under $2 between 2011 and August 2015"

                      Natural gas is at a 20 year low.
                      The rebound from all this should be real dramatic.


                      • 2008 coming back at us

                        Most people would like to live beyond their means. The masters of credit are willing to make this possible.
                        "Hormesis is a little-known term with huge implications. It refers to a fascinating phenomenon: a favorable biological reaction to low doses of chemical toxins, radiation or some other form of stress that is damaging, even fatal, in higher doses"
                        This same definition applies to credit. Too much is fatal. Man has always lived with a business cycle. He forgets that good things, done to excess, lead to a bad outcome. He gets starry-eyed and greedy. He forgets that credit is just debt.
                        The Chinese are well known for being savers and hoarders. They save 30---40% of their income. Traditionally, they have saved assets. Unfortunately, debt is masquerading as an asset AND the Chinese have hoarded debt.
                        "Today, China’s $10-trillion economy is starting to choke on its $28 trillion of debt, most of which it has added in the last 15 years."
                        "Debt swells as more and more entities are drawn by its temptations and sucked into its vortex until eventually, as in a black hole, we get so far into it that it becomes impossible to get out."
                        Forbes Welcome

                        Here; "Rep. Brat: ‘Won’t Be One Dollar Left’ for Defense, Education, Transportation in 11 Years" "Rep. Dave Brat (R-Va.) warned the American public that the national debt is going to reach “$30 trillion in no time,” explaining that every federal dollar will apply to “unfunded liabilities” and interest on the debt in 11 years, leaving no room for spending in other areas."
                        "“In 11 years it’s all over and I don’t know if we can turn it around. You’re going to have to have the will of the people somehow grasp that, vote against their own self-interests,"
                        51% of Americans receive a check from GOV. Millions more work in secondary jobs that depend on the flow of GOV money. How many towns would dry up if the military bases and military contractors left / closed?

                        We have returned to the conditions of the 2008 crash,,,, or even worse; Alarm Bells Go Off As 11 Critical Indicators Scream The Global Economic Crisis Is Getting Deeper
                        The CB bazooka is out of ammo.

                        "Simplistically, productive Credit is constructive, while non-productive Credit is inevitably problematic" Credit Bubble Bulletin: Weekly Commentary: The Global Bubble
                        Through regulatory capture, the bankers were allowed to create gobs of unproductive credit. The prospect and execution of bailouts removed all caution and moral hazard.

                        2/14 In Venezuela, "savage suffering" amid frightening "food emergency" – Zero Hedge
                        Individuals and States spend money that they hope to earn in the future. If this money doesn't appear, they have to cut way back. In the case of Venezuela, Nigeria, Saudi Arabia, et al, they have to cut way back on the standard of living that their people enjoy. Most people are unhappy,,, some are dead.

                        The 2008 crash was an opportunity to cut WAY back on the financial system until it was commensurate with the actual productive economy. This didn't happen because of greed and regulatory capture.
                        "You can ignore reality but, you can't ignore the effects of ignoring reality. " The Western productive economy shrank when China took over manufacturing. . The financial sector didn't want to shrink. Reality is catching up to it. We, now are about where we were in 2008 BUT, this time, money printing won't buy more time.

                        Andy Hoffman believes that the last "tool" left to the CBs is hyperinflation.


                        • I think certainly we have seen all the hyperinflation already here in the US. Everything has peaked and is now deflating. Unless the FED or GOV tries helicopter money on steroids to the masses we should not see any more hyperinflation. In fact history shows that economies do well after hyperinflation, so long they don't have to come up with a new currency. I think Hoffman is trying to sell gold. Granted as traders try to exit the market they will most likely go to PM, but it's a temporary bump I believe as the crash happens. Once it bottoms out everyone will be trying to sell their gold to buy stocks again.


                          • not enough rich people

                            ,,,,"bottom rungs of society, because that’s where the deflation first takes hold, and where it spreads out from." ,,,"impoverishes society’s poorer (at some point to a large extent the former middle classes). Whose lower spending, as nary a soul seems to comprehend, is the origin of the deflation to begin with. "
                            "All the attempts by central bankers to boost inflation that we’ve seen so far squarely ignore this, and operate on the false assumption that if only prices for financial assets and real estate can be raised even higher -artificially-, deflation can be warded off.

                            Thing is, deflation starts not at the top, it starts at the bottom." "The top makes its fortune for a while getting the bottom ever deeper into debt, only to inevitably find that this kills off the entire economy. Then they do some more of the same, and find ever more of their own kind becoming part of the bottom.

                            The problem for the rich is simple: there’s not enough of them. Well, that and they don’t understand how societies function. Let alone economies. Scraps off the table won’t do the trick. Next stop pitchforks."
                            Where Deflation Comes From - The Automatic Earth

                            The simple fact is; the rich were happy to increase their margins with wage deflation. Did they ever think it through?


                            • consensual hallucination is ending, holographic wealth, cerebral wealth

                              • Pakistan Default Risk Surges as $50 Billion Debt Bill Coming Due (BBG)
                              Wait a minute,,, I thought we were worried about a default from Italy. No, no,,, it was Puerto Rico that was defaulting. Or, was it Portugal?
                              The Automatic Earth (TAE) is quite correct. If the masses don't spend, the few rich can't make up the difference to keep the economy going. The very BIG problem is that wages are falling. We don't have the buying power to keep our former levels of consumption going. We did it for a while but now, our credit is maxed out.
                              EVERYBODY is in the currency war to try to keep a share of manufacturing,,, the premier value-added industry. SO, which State is going to be first to raise wages to get consumption going again? Raise the wages and,,, you lose market share of manufacturing.

                              Junk bonds; " The last time yields had jumped to that level (20%) was on September 20, 2008, in the panic after the Lehman bankruptcy, as we pointed out. Today, that average yield is nearly 22%!"
                              " These risks had been there all along. But “consensual hallucination,” as we’ve come to call the phenomenon, blinded investors, among them hedge funds, private equity firms, bond mutual funds for retail investors, and other honorable members of the “smart money.”

                              "But now that they’ve opened their eyes, they’re running away. "
                              According to UBS, about $1 trillion of these junk bonds are now “stressed” or “distressed.” This is How Financial Chaos Begins | Wolf Street

                              " McKinsey produced a report last year showing the world had added $57 trillion of debt between 2008 and the 2nd quarter of 2014, with global debt to GDP reaching 286%." "With $142 trillion of global debt enough to collapse the global economy in 2008, only a lunatic would implement a “solution” that increased global debt to $212 trillion over the next seven years thinking that would solve a problem created by too much debt."
                              " Central bankers, who formerly graced the covers of Time Magazine as saviors and heroes, are now being revealed as nothing more than glorified money printers with PhDs and no plan B."
                              "European bank stocks are collapsing faster than they did in 2008. The Too Big To Trust Wall Street banks have seen their stocks fall 25% thus far. Bank debt has fallen even faster. The lying and denials by bank CEOs sounds exactly like the summer of 2008. The most smoke is coming from Deutsche Bank, and where there’s smoke there’s fire."
                              DERANGED CENTRAL BANKERS BLOWING UP THE WORLD « The Burning Platform

                              Once the bankers really screw up the economy, socialism starts to look attractive. Sanders is staring to get a lot of attention. Where does all this lead? Venezuela has more oil reserves than Saudi Arabia. They spent lots of oil money and made everybody happy. They assumed that it would go on forever. A dangerous assumption.

                              " they began forcing farmers and food manufacturers to sell anywhere from 30-100% of their products to the state at the price the state opted to pay, as opposed to stores and supermarkets.

                              But that wasn’t enough to keep the population fed. (Isn’t it astonishing how much less motivated people are to produce food and supplies when they are no longer allowed to benefit from their hard work? Historically, collectivism and farming have never gone successfully hand in hand.) This January, the government told citizens that they would need to produce their own food. "
                              "The Ministry of Urban Farming was created to oversee this. While self-reliance sounds great, it isn’t so great in Venezuela. Just so the urban farmers don’t get too self-reliant, a registry of the crops and livestock will be required. (And obviously, they’ve already proven that they have no issue forcing farmers to hand over what they’ve produced.)"
                              Venezuela Is Out of Food: Here's What an Economic Collapse Really Looks Like
                              Socialism is the firewall between non-producers and Darwinian pressures. This firewall comes at a cost. Socialism kills motivation because it removes the profit motive. I went to East Germany in 1984. NOTHING happening. Nobody happy or productive. Lethargy everywhere.
                              Free-market capitalism isn't the perfect system, mostly because of human nature. BUT, socialism and human nature is even worse.


                              • Originally posted by Danny B View Post
                                Socialism is the firewall between non-producers and Darwinian pressures. This firewall comes at a cost. Socialism kills motivation because it removes the profit motive. I went to East Germany in 1984. NOTHING happening. Nobody happy or productive. Lethargy everywhere.
                                Free-market capitalism isn't the perfect system, mostly because of human nature. BUT, socialism and human nature is even worse.

                                A free market is a system in which the prices for goods and services are set freely by consent between vendors and consumers, in which the laws and forces of supply and demand are free from any intervention by a government, price-setting monopoly, or other authority. It is a result of a need being, then the need being met. A free market contrasts with a regulated market, in which government intervenes in supply and demand through non-market methods such as laws creating barriers to market entry or price fixing. In a free-market economy, prices for goods and services are set freely by the forces of supply and demand and are allowed to reach their point of equilibrium without intervention by government policy, and it typically entails support for highly competitive markets and private ownership of productive enterprises.

                                Although free markets are commonly associated with capitalism within a market economy in contemporary usage and popular culture, free markets have also been advocated by free-market anarchists, market socialists, and some proponents of cooperatives and advocates of profit sharing.[1]