Portugal Reduced to Junk

The economic crisis is far from over and I guess most of us haven’t a clue what it is about.  Moody has just slashed Portugal’s credit rating to junk.  Greece is screwed, Ireland screwed and Spain and Italy look very vulnerable.  Germany is riding high, doing export-led manufacturing (which is where Britain should be an is not) – and this is partly due to the low Euro – something of a German currency manipulation.

Economics is at its best when you can be safely ignorant of it – and nearly everyone is ignorant of economics.  The standard now on undergraduate courses is that of a little knowledge being dangerous.

What people need to understand now is that freedom is at stake.  Money is no longer linked, other than negatively, with genuine effort.  Productivity has been rising sharply since WW2, but over the last 30 years wages have been falling.  You need to earn 20% more in the UK this year to maintain last year’s position and inflation is stocked up to rampage soon.  This situation is much worse if you are poor to average.  No political party is responsible for this – politics in this sense hardly matter, though public sector cuts are not the answer.

We have been borrowing to maintain ‘GDP increases’ (this applies to China too, where 12 ghost cities remain with no one in them and massive local government borrowing is being written-off).  This borrowing is odd because we could have prevented private borrowing through higher wages linked to productivity, and governments are using our ‘money’ (futures almost) to prop up idiot and greedy banks.  Essentially, like likes of Fred Goodwin have had it off with our ‘money’ and Lord knows what else.

The nightmare story lurking beneath any notions we are encouraged to have about profligate Greeks, Portuguese and so on, is that ‘our banks’ are the real culprits having made reckless loans and had it away on their toes with bonuses and so on.  I have little doubt this is true on the figures.

The real question is why ‘you’ don’t know.  I’m no ‘commie’ and always detested the Soviet Paradise.  What I’ve seen is the collapse of what was worth believing in – reasonable freedom gained by work reasonably easy to get and reasonably paid in reasonably dignified conditions.  This is almost swept away now.  The classic example may well be Gadget and his claims that to tell the truth would mean he would have no mortgage-paying abilities.  This jobsworthness is now writ large almost as our organisations.  With the ‘Zil Chill’ factor this was the hallmark of the Soviet Block.

The ‘world’s debt’ has not been spent on anything we have as public capital.  You’ll find none of this in Portugal or Greece or Italy or Ireland – it’s gone on speculative gambling and a pernicious form or organised crime.

The plan is to re-adjust money through inflation (you’ll be noticing the price of your food and energy) – quantitative easing and other jargon – but also to buy up public assets to rent them back to us.  This is incredibly similar to Hitler’s plan – Nazi Germany’s expansion was all done on credit they could not repay other than through war-looting.  So who is going to be the target of looting now?  The USA is in Germany’s old position, brimming with debt and military.

We need a new politics to stop what’s coming and there is no sign of any.

Advertisements

5 thoughts on “Portugal Reduced to Junk

  1. Pingback: Let’s Get the Party Started! The Politics of American Debt and the Parochialism within the Social Sciences « The Socio-Political Observer

  2. Pingback: Profit taking shouldn’t derail S&P500 bulls | Hades Research

  3. Part of the scam is that the major banks first pissed their clients money away, then held the various national governments (with the willing collusion of the politicians) to ransom to get the taxpayers to replace the money and are now happily speculating with PIIGS national bonds, raking in profits, simultaneously betting against the collapse of those bonds while pressuring the IMF and ECB and the European finance ministers to guarantee their holdings should the bonds finally collapse.

    The bank always wins, but they’ve built a roulette wheel which is composed solely of green zeros …

  4. Pingback: Portugal Reduced to Junk » Greece on WEB

  5. I used a similar betting system in economics teaching – one or two tried it in practice having not listened to why the maths only appeared to work and missed the later explanations on how the losses feed back! I’m sure we can read organised crime for banks now.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s