Monday, January 29, 2007

Making the Case for Deflation 5….

I didn’t forget about you, I just took sometime off to enjoy life with family and friends. I promised you I was going to make the case for deflation and here I will give you the leads you need to know and understand why there will be deflation.

There was a comment that Finster made in reference to inflation, about it being the growth of the money supply in relation to the population, which made me finally understand what I had been trying to articulate.

http://www.itulip.com/forums/showpost.php?p=4934&postcount=3

I will not reinvent the wheel; since Huerta de Soto has already done an excellent job in explaining why we must have deflation in the excellent treatise here:

www.mises.org/books/desoto.pdf
and some background as to how bank notes became to be accepted as currency in the common law countries is explained by John Kutyn here:

www.ces.org.za/docs/NofM.pdf

The reason I am trying to share with you this information is because of the many people I observed getting hurt in the financial services industries. The Japanese gave a name to the scam I witness in the credit derivates game the banks were pulling on the people and it is called a: “TOBASHI”

http://www.rieti.go.jp/en/papers/contribution/kobayashi/07.html

First, let me speak about lesson (1). Throughout the 1920s, the government and the BOJ pumped an abundance of funds into the business sector to bail companies out. Such relief measures are said to have exacerbated forbearance lending and window-dressing, and put problem banks and business management into an unimaginable state of lawlessness. The post-bubble 1990s also saw rampant window-dressing, known as "tobashi," to hide sour loans and forbearance lending in connection with land deals. This situation, where corporate society became corrupted a result of neglecting to deal with the nonperforming loan problem, was no different in the 1990s from what it was in the 1920s. We should further note that the person who aggressively pursued these bailout measures in the 1920s was the same Junnosuke Inoue who later put deflationary policies into force.
By the way, when comparing the 1920s with the present, it may seem that putting post-bubble issues on the backburner is a bad habit unique to the Japanese, but in fact it is a universal trend. This postponement of necessary reforms has become a serious problem in Latin American countries, especially since the 1980s. In the United States, the savings and loan (S&L) industry was saddled with a serious nonperforming loan problem in the 1980s, which was finally sorted out in 1989 with the infusion of a massive amount of public funds. However, the S&L crisis first surfaced in the early 1980s. In other words, the U.S. government left the S&L problem untouched for nearly a decade and as a result deepened the wound. It is safe to say that this course of events was virtually the same as that seen in Japan's banking administration from the 1990s onward.
The measures taken to assist the business sector in the 1920s were the same as the economic pump-priming steps implemented in the 1990s (the use of fiscal stimulus and monetary easing to funnel funds to the private sector) in the sense that they poured a huge amount of BOJ funds and fiscal funds into the corporate sector. However, such stimulus measures - just as in the 1990s - failed to put an end to deflation and recession, because the funds were sucked up by nonperforming loans. This indicates that economic stimulus measures cannot be effective if the "cancer of the business community" (ie the nonperforming loan problem) remains untouched.


This brought about an internal crisis in me. How could someone commit harm on another with out pains of conscience? I kept asking my-self; then I came across the answer here:

The Scientific Study of Evil Adjusted for Political Purposes

by Andrew M. Lobaczewski

http://www.qfgpublishing.com/product_info.php?cPath=21&products_id=54&osCsid=fa25795324cbe101f6eaf92c2a960fcf

But the search began because of the conclusion on this paper:

http://www.nzls.org.nz/conference/pdf%20files/KokushoF5c.pdf

If you are one of us that have a conscience, take heart and know you are not alone.

My best to you.

-Sapiens

Friday, January 26, 2007

Don't be Sad...

It is dark. My palms and finger tips feel the smooth cold cement of the floor on where I am sitting. No light. The back of my head and back reclines again the cold and rough cinder block wall.

I am angry at you. I am not afraid. I finally know!

My flesh wants to curse you, but I know better.

Thanks for the ignorance. I understand you will give it to me once again.

Ah mortality! What a wise and sweet gift you made.

I am not afraid. I finally know!

I love you.

Goodbye my flesh, you served me well; forgive my abuse of you in the early years.

Ah Joy! Joy! Come and journey with me as I render my account.

What magnificent splendor!

You are I and I am you, here is my Spark return Divine.

I finally know!

The Corporation Movie Part 1

The Corporation Movie Part 1