You truly are the People's Poet, Sir!

Your instincts are right – what the Keynesians, Neo Keynesians or Monetarists or whatever the hell they call themselves these days who are running the economy don't understand is that real stuff comes first, then money. NOT the other way round. That's why Quantitative Easing can only give us higher prices and nothing else. What's the first thing people do with the paper money they've got on them if they get standed on a desert island? Use it to start a fire. 'Nuff said.

They are quite happy printing money, bailing out their kind, and passing the cost onto the tax-payer. They will bend any rules they made earlier, or re-interpret them using some opt-out escape from responsibility.

There is no reason to assume that what any of them think is a tolerable solution to this worldwide crisis, is remotely similar to what we have in mind. When they don’t like the figures –whether it is fantasy growth, CRE mark-to-myth, Bank stress-test, Greek debt, Repo 105, HFT volatility, Fanny & Freddy mortgage defaults, M3 money, and so on – they just ignore them.

Never-ending economic summits in 5-Star resorts (all expenses paid) can shield you from reality quite nicely; and as was said last night on Newsnight (paraphrased somewhat) ‘If these guys fail, their academic tenure is not even at risk. The rest of us pay through the nose’

I think it is 'holding to ransom'. It's Blackmail.

There's a hideous asymmetry in the fact that the UK government is ignoring the pleas of the two British hostages held by Somalian pirates, yet heeding the banks' cries for help when they say there is no 'confidence'.

It's probably slightly off the subject (my speciality…) but Peter Owen Jones' recent series on trying to live and travel without money has been thought provoking stuff; it wasn't easy (even with a cameraman in tow) and he reckons there's a lot less trust around than there was a while back.

http://www.telegraph.co.uk/culture/tvandradio/bbc/7687158/Rev-Peter-Owen-Jones-Taking-financial-advice-from-St-Francis-of-Assisi.html

http://exiledonline.com/the-stress-test-scam/

I contend that the nature of o ey has changed findamentally in the last 15 tears. The theiry of fiat currency is outdated and fails to captuyre most of what is important about money and finance.

For a start it is not central governments who 'print' the money nor who have any control over how much. Natinal currencies are printed, but they are a fraction of the amount of debt-backed currency which the babnks 'print'.

They control both the supply and what it is based on/ backed by. This is the root of our crisis.

I have written about this on and off for two years or so and thought I should return to it. I will write more in the next few days.

Thank you for the link. I will read with interest.

For while that money, which by now has mutated into a vast monster of mutual indebtedness, grows exponentially, the wealth it is supposed to represent cannot grow at the same pace for very long. While there is no limit to the number of zeros we can create on a computer, there is a limit to the amount of oil in the ground, the wheat in the fields and the livestock in our farms.

Capitalism, banking and growth become inseparable, but logic dictates that the virtual economy must eventually peel away from the real one and sooner or later the day of reckoning arrives – when the gulf separating these two economies is too large to be sustained – for no power on earth can match the power of compound interest in the ether.

Ned