Monday, January 28, 2013



Actually, the contents of words must be considered carefully: the entire idea of "Growth", the word "Growth" really means completely different things for an Economist - Politician - Bank - Corporation compared to what most people imagine it means: what "Economic Growth" really means and what is really desired is the Growth of Real Estate Prices and Home Prices so as to get a profit from Home prices and Home Rents always going up (while salaries go down, so much the better): the profit from property, not growth in terms of more wealth distributed to more people, this is never taken into account for the Economists, what counts is ever increasing Home Prices and Rents, ever increasing Real Estate Prices, ever increasing fixed costs, as this can be turned into profits, means growth of profits, they always really like to confuse people with all of these words and people buy into it easily, oh yeah, growth (and most growth in the end is mostly in real estate prices, values and rents, etc.) is good, that means there will be more jobs and such, when what they all really want is growth in Home Values, this is the great Independent Variable of the Economists that chant that Home Values going down is "Bad" while Home Values going up is "Good": nothing more contorted and false ever has been dealt to the masses and they suck it up like little babies since they too can think they are "Rich" by having a property, a home whose values keeps on going up, this should make them feel rich and such, and they should then like to consume more and such BS, etc.

But actually Home Prices and Values going down is what is really good for the Economy, is what frees resources for other things since so much money is no longer tied into the Iron Fist Grip of Property Posession and the High Walls the prices impose on the real flexibility of an Economy (not the fake flexibility of labor and labor laws they all like to chant about in Southern Europe, trying to hose their workers as much as possible, and in Southern Europe the Home Values never go down but always up but they lament the rigidity of their economies, why they don't grow: how about collapsing those Home Values down really fast ?): low property values means people can easily rent homes anywhere at a low price compared to their puny salaries, offices can rent space at a low price, stores can rent space at a low price and these are all things that should be good for the Economy: but alas, it is all useless, the brainwashing has been achieved, the words twisted in their meanings, the people forever confused and nothing will ever change for the better.

On a side note, societies will always tend to stagnate and remain fixed in the end economically, they just can't grow past a certain limit since even selling 10 million cars a year in the USA, replacing a car evey ten years on a population of 100 million cars, means that just by keeping the values of sales constant (hence according to economists, a zero growth economy, a stagnation) always means that a very high level of production remains fixed structurally: it is the expectation of growth that defines economies as good and bad, but they never look at the absolute values of production and never realize how much they have grown, how large production already is, how high the standards of living have reached: but they impose this ideology that either you keep on growing or everything will fall apart, either up or down, either you are getting richer and richer or you will become poorer and poorer, the ideology imposes a false instability on a machine that naturally reaches a steady state equilibrium, that doesn't really need to grow much anymore since it has achieved all the growth that it will ever need: look at the McMansions in the USA, they had all the houses they needed, they even had relatively low prices compared with the rest of the world (look at house prices in London, insane or Rome or Paris or Tokyo, those prices are so high it is insanity, but that is supposed to be good according to the economists, what a farce) but they needed to keep on growing so they built huge homes like McMansions all over the US (mostly the Southern States and Midwest, a lot less in the East Coast but anyways) and hiked up the prices and then gave out free moeny as subprime loans and you know the story.

Anyways real Economic Growth, as understood and experienced in the 20th century in the USA, EU and JAPAN is over now, it won't happen anymore (for example they all chant how bad off JAPAN is, since they stagnated (thanks to their own real estate bubble collapsing 20 years ago, all due to the myth of hiking up home values and prices, free wealth for all, what an idiotic thing to do!), but JAPAN has kept on having a hugely high standard of living compared to 90 % of the world, very few countries wil ever come close to their standards of living, but the Growth myth imposes that they are bad off since they didn't keep on growing forever: what a comic book view of the world if ever, they never look at the absolute values of things, at how things appear not compared to before, but compared in general, absolutely, not always imposing this growth myth and trend for eveything), but it won't happen especially since when real growth can no longer kick in, the only thing left to make growth occur is to hike up real estate values and prices and such: exactly the thing that ended the growth of JAPAN and hosed the USA and Spain recently.

So Growth is mostly doomed for the following reasons in order of importance:

1) High Home Values, Prices, Rents killing off all possible future growth, killing off the possibility of young kids being able to rent or buy, high home values and real estate values create a very high wall and freezes a situation where the economy becomes static especially for this, since interests must be protected, those that got rich during the good years of growth, must protect their wealth by keeping the values of real estate high, blocking any future growth of the economy, killing off all flexibility in the economy, and forcing it to become static and stagnate: the satus quo protects itself.

2) A Technological Economy needs less and less work anyways, the work is too productive, can easily saturate markets with all kinds of goods.

3) You can only produce so many new cars and homes, etc. only so much can be produced in the end no matter what, the economies will tend to a static steady state no matter what, it is very hard to keep on making a fully developed economy grow every year and in fact both JAPAN and the USA have been having a hard time growing, now all the spotlights are on the emerging markets, China, India, Brazil, since these are simply going from poor to rich, that is a case where it is very easy to grow, more people buying their first cars, TVs etc. and they are creating an expanding market and growth the economists and investors love, but this will end in a few years anyways, they shouldn't fool themselves too much and already the high real estate value negative feedback loop on growth is already starting to kick in for those countries so watch out.

4) Environment can only take so much, all circuits get saturated, traffic jams, crowds, energy limits, a population getting older and older, political conflicts freezing governments and so forth, huge past debts that must be paid, etc.

5) That one time lucky combination of new inventions, technology at a certain level and so forth that the USA had (and after EU and JAPAN) during the 20th century creating the growth will never come back again: the Airline Industry was born, the car industry, the TV, the Computers, so many new inventions hiring millions of workers and then at that time there weren't a billion new cheap workers avaiable in China India and Indonesia that can do your job and so forth.

And especially all of the EU problems with the debts and all of the attention on wanting growth is because the debts were made with the expectation that the future economies would keep on growing and be able to cover the debts: nothing further from the truth, especially in the EU and especially in Spain, Italy, the negative feedaback loop of high real estate values and prices, high homes prices killed all future growth once and for all with no hope in sight of these values ever going back down again, the owners (80 % of the population) will prefer to starve than make their homes go down 90 %, what their real values should be.

So the Economic Growth myth comes from the Investment Myth (money must make profit) and is imposed by the past Debts having to be paid back by an imaginary - comic book world of constant and never ending Economic Growth. If they really wanted that, then why don't they all chant for huge deflation of all costs, and huge deflation of real estate values (values that are really independent variables imposed by what a country decides it wants its prices to be, it is all an internal fight in a society of owners against renters), one of the very few things that could get some growth kicking in again.

But growth is doomed anyways, you may have 5 or 6 good years of 3 percent growth in the USA, EU and JAPAN but make no mistake, you will then get maybe another 8 years of zero growth and recession, and the cycle wil repeat for a few decades, ever longer amounts of time of zero to negative growth with only a few years of growth in between: the markets will become completely saturated, overproduction of homes and cars and all else will be achieved, the entire idea of Economic Growth is flawed from so many points of views it is not even funny.

But the economists will always chant their same old BS, it is the workers fault, they are not flexible, there are too many public workers, governments should fire their workers, we need more innovation, more education, more training (and then training for what ? for what jobs ? who on earth knows ? no one ever says what all those unemployed must be trained for because no one knows or even cares to know since the contents of words are never really examined, only the ideological BS of the economists is stated, always talking about things abstractly, so you never really know what they are talking about) and so forth, they will find all kinds of excuses, all of the morality wrongs people do to blame why the economy doesn't grow (and I dont' care whether it is seen from left or right, the economists say that even the capitalists and banks are at fault, but it is always a game of finding who is morally at fault), the capitalists are hogging up too much cash, they don't invest (and why should they ? with so little return from most endeavors, who cares), and so on, always trying to find someone to blame, someone who is doing something wrong, someone morally at fault.

But it is not so, the economies can't grow anymore structurally, no matter what you do, no matter how many government workers you fire, no matter what, the growth myth is just a myth, just because it happened in the 20th century doesn't mean it is a law of physics, an invariant.

And then the politicians promising growth, they will create jobs, they will create growth, all illusions to get voted, always making believe they can actually control something so vague, intractable and impossible to achieve as economic growth...

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