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The Rotting Carcass

Early November in 2008---For a long moment in time we toyed with the idea of writing another “final article” to the website, but could not decide whether to name it “ THE ROTTING CARCASS” or “The Mad Hatter’s Tea Party” -- as an excerpt to that wonderful children’s story called “Alice in Wonderland”. The final decision is that it be one article --- divided into two parts, using both headings.

The “Rotting Carcass” is intended to describe the present Global Economic Fiasco in all its sordid details, including an expose of the fallacies and failures of the so-called “UNITED NATIONS! The Mad Hatter’s Tea party is merely a short --- and “to the point” comment of the fraudulent collusion between governments and the Auditing profession, including the “shortcomings” of both.

Before continuing, it is perhaps time to make a “confession.” All the articles within this website emanates primarily from “ ANGER AND FRUSTRATION. While others were written, purely to express either a different “perspective” to other majority-held opinion; and finally --- a few were intended to honestly express new concepts to old ideas. Again, for the first --- only ---- and the last time, religion, or religious comment will be made, purely to make or emphasize a point or “point-of-view.” There is no intention to be derogatory of religion as such, or to do so to any specific religion.

THE ROTTING CARCASS:

Its origins lie perhaps within the birth of the “The League of Nations” at he conclusion of the “First World War”. It ‘reigned” for a relatively very short period from 1919/20 until 1938 before actual hostilities began in 1939. It was just as dysfunctional and in effectual as is the “United Nations” today! At its demise it had no more than 58 members, controlled primarily by the remnants of “Empire Builders.” Within the period it existed, it neither promoted “harmony” nor “did away with” WAR. However, during its existence, several wars and border disputes took place, in which the League had no power to stop, as it had no army itself to stop disputes, or diplomatic or economic “Muscle” to enforce boycott or sanctions. And finally, neither America, Russia nor Germany were members!

The United Nations  --- ‘born” after the Second World War, is even more dysfunctional, having at this moment in time 192 members. Imagine trying to get consensus with that number of disparate membership with 192 disparate economic—philosophic – and ethical agenda’s! Add to this conundrum the power of  “THE VETO” held by a select few within the “Security Council” each having disparate agendas  --- and it becomes a hopeless mess

Always short of money – filled with thousands of people ensconced in cozy jobs, generating “resolutions” that are never adhered to, passing sanctions that suffer the same fate --- and spawning “Committees” and “bodies” scattered around the world whose membership and “ethical philosophy” belies their intended functionality. To all of these one has to add genocide; the occurrences of Rwanda, Darfur among many more, where millions of people starve to death, are raped and murdered with impunity, while the UN dithers as to what should be done! No REPRISALS; NO ACTION; and above all with insufficient or no money forthcoming to alleviate the existing situation. A ROAR WITHOUT SOUND  --- JAWS WITHOUT FANGS!!

Paying lip service to the ethics and humanity that differentiates the human species from the animal! Natural disasters that strike the conscious pity of mankind, that offers aid sporadically, pledges money that is often not forthcoming --- or well below the “quoted figure” stated to the media. Hypocrisy of the worst kind, where lip service is paid to the genocide of the 6 MILLION HUMANS slaughtered in the gas chambers of the SLAUGHTERHOUSES OF THE NAZI ERA! Which brings us to RELIGIOUS HATRED.

THE CURSE OF MANKIND  --- RELIGIOUS HATRED AND CONTEMPT:

TWO THOUSAND YEARS OF ANTI- SEMITISM!. Incredible as it sounds to the ears, to the eyes, to the mind, the world has ignored and paid lip service to the most abhorrent blot on humanity that has been in existence for TWO THOUSAND YEARS   --- and shows no signs of eradication, and remains a curse and a blot on the conscience of mankind..

Religion has spawned innumerable wars down the ages of time. So too has it spawned barbarism, torture and terrorism. People “burned at the stake” for either their beliefs – or “disbelief.” The Spanish Inquisition, The Crusades and The War of he Roses. In modern times Terrorism in Northern Ireland, Spain, Chechnya, the Middle East and now rapidly spreading its deadly carnage around the world indiscriminately in the name or guise of Muslim or Islamic extremism. The Muslim world decries its responsibility, calling it “Islamophobia,” forgetting that it is being propagated within the confines of its Mosques, schools and literature. Paying lip service to its eradication, while feeding it with the wealth and “tools of war” to keep it “operational”  --- other than fearing and / or combating its growth within its own countries where it may endanger its own “regimes.” There is in fact no such thing as “Islamophobia“ a word conjured up perhaps to disguise its feelings of guilt in not combating it physically by “force of arms” together with the rest of the world in ensuring its eradication.

The “West” has no “territorial aspirations” in Afghanistan  --- no desire to “own” its poppy fields that produce 70% to 80% of the world’s heroin. Only a strong desire to help its people survive and prosper. To protect its people from the aspirations and Islamic Terrorism of Muslim extremism by the Taliban. Shedding the blood and the maiming of its soldiers in the process! Spending BILLIONS OF DOLLARS IN THE PROCESS! --- CONSPICUOUS BY IT’S ABSENCE are the MILITARY FORCES OF THE MUSLIM WORLD FOR WHO’S BENEFIT THIS IS BEING DONE!

Africa torn apart by “tribalism” and ethnic violence, while the world looks on with disinterest, disdain or impotence.

THE STENCH OF THE ROTTING CARCASS IS OVERPOWERING!

Pirates  --- possibly no more than 200 to 300 in total --- holding the worlds shipping in captivity under ransom  --- operating with small boats that defy the world’s navies. Where is the nerve, the audacity and the brilliance to mount “AN ENTEBBE RAID’ as did Israel years ago to rescue their citizens held hostage in a foreign country.

THE SHAME OF INACTION TO ALL OF THESE IS PALPABLE!

The Continent of Africa  --- comprising of 55 or 56 “countries” --- ruled by either “Despots” --- “Life Presidents” --- “ War Lords” or “Military Rule”   --- or any combination of these. Democratic rule or the practice of Democracy prevails perhaps in 25% of these countries. Misery, disease, poverty, hunger and premature death prevail in 70% or more of these countries. A common basic factor exists within all these countries, it being “too many children per family.” On average 10 or more children per family is the norm. No country, no matter how prosperous, could cope with this situation. The supply of health care, education and job creation would be unattainable goals. While the rest of the World struggles to assist, there are neither the resources to alleviate or eradicate any of these.

There is an old saying, which says --- “give a man a fish  --- and you feed him for a day. Teach him how to fish --- and you feed him for a lifetime.  Until such time as population growth can be brought down to a “norm” of two or three children per family, no solution will possibly ever be found. Re-forestation of 15% or more of these countries land mass could possibly “bring back the rains” and revitalize the earth so that it be able to sustain agriculture to feed its hungry masses. Dams and reservoirs to contain and conserve whatever water is or becomes available, to the extent perhaps that even sea water be “piped inland” to form artificial lakes, where evaporation and prevailing winds could disperse the moisture to drop as “rain” over parched lands.

What is lacking in the World today --- is A STATESMAN!  Politicians abound by the hundreds of thousands, mouthing words that often lack substance. Looking for reasons, yet lacking solutions. The likes of a Winston Churchill or a Maggie Thatcher is sadly lacking today. Yet for one moment in time another name came to the fore at the UNITED NATIONS several months ago (September or October this year) where he made an electrifying speech in an effort to rally world leaders to contain and combat the economic holocaust, which was engulfing the world’s economies. His name is Nicolas Sarcozy, the president of France. What was basic to his speech was that: FREE MARKETS were to be no more. Strict rules of conduct, stringent oversight and regulation had to be put in place and prevail. Central Banks given more powers, and commercial banks and financial institutions rigidly controlled in the manner in which debt instruments are created and marketed..

Both presidents, ministers of finance ad a bevy of economists, ridiculed these important factors. They evidently all confuse “FREE TRADE” with FREE MARKETS! For it were the unfettered banks and Financial Institutions who created the economic holocaust that has not only engulfed the world, but also demolished the life savings of its citizens, thus crippling the purchasing power of all economies. Debt creation itself had to have a valid relationship to net assets and rules had to apply that this be done. \\

No sooner had he returned to France, than he started to put into effect what he had advocated to the world. The government guarantying the savings of its citizens. Bailing out the banks by guarantying its financial obligation in order to encourage them to rescue the major institutions, which were the lifeblood of the nation. Above all, it was to safeguard both jobs and investor savings. Finally, he rallied the members of the European Union to do likewise!

Which brings us to: -

THE MAD HATTER’S TEA PARTY.

Think of this  --- for one moment in time. ALL LAWS THAT GOVERN NATIONS ARE MADE BY POLITICIANS! Laws that govern the myriad aspects of society, its institutions of health, education, police and justice. Business and banks. Commerce and industry. Law and order taxation and punishment Municipal, State and Federal function. Trade Unions and the rights and obligations of all the professions; Doctors, Nurses Accountants etc. The Constitution and the Charter of Rights of its citizens. They take a pride in all this --- YET WHEN THE SHIT HITS THE FAN ECONOMICALLY  --- the blame for this is always placed elsewhere.

Were politicians to have placed rigid laws and oversight governing all aspects of the economic well being of their respective countries, none of what we are now experiencing would have taken place. The abundance of debt creation would not have taken place, the type and abundance and type of fraudulent debt neither would nor have taken place. Bank regulation would have mitigated the type of fraudulent debt bundling have taken place. Accounting Practices oversight would not have allowed debt to be “dressed up as assets!

Sub prime mortgages would not have been allowed. IN FACT ALL THE MISDEMEANOURS of COMMERCE AND INDUSTRY would not have taken place, were there laws and oversight in place to “police” their fraudulent machinations. So the reality of the situation is POOR GOVERNANCE BY POLITICIANS! And the mantra and reasoning has always been those two words --- FREE MARKETS.

Because laws were not in place to safeguard economies, Citizens and investors have lost either a large portion of their savings ---- IF NOT ALL OF THEIR SAVINGS! The result of all this is a lack of liquidity to keep economies going, This results in a rapid slowdown in consumer spending, resultant in bankruptcy and job loss which in turn again diminishes the spending power of its citizens. Democracy is touted around the world as being the best system of government --- yet it breeds gigantic economic havoc in its pursuit of free speech, free markets --- the Charter of Rights and all else. Free speech that generates ethnic hatred and a charter that is not EQUAL TO ALL. Millions of innocent folk whose rights are abused when Trade Unions strike  --- hospitals close--- people walk to work because there is no public transport or “picketing” keeps lawful people from their workplace or their shopping destination! Garbage never collected for weeks or months. Post and parcels not delivered for a like period of time. So where “The Equal Rights”!

The two great weaknesses of the “democratic system”  --- is that it does not practice democracy. Democracy demands, “All voices shall be heard – that all votes shall be treated as equal. Yet how often is “ a free vote” allowed in the Parliaments of the world?

“Party politics” decides how each member has to vote on 90% or more of legislation, thus depriving the country an individual assessment of the worth of all legislation and all laws that rules individual societies. The second weakness is “two Party” politics where the “government- of- the- day is ruled by one or other major party, depriving society of “ a third opinion” In other words parties are run by hidden powers that decide the fate of the nation, for it is those hidden forces who supply the funds required to be or get elected, who really dictate how the country shall be run. A third party holding 12to 14% of the votes would be an ideal counterbalance to either excess or the lack of required law.

The present situation worldwide seems to be a lack of forceful “governance” by practically all nations floundering in a welter of debt, engulfed in an unfolding “tsunami” of bankruptcies, job loss and stock markets in violent retreat. The lack of liquidity misconstrued or misunderstood. Thus as a result, the wrong tools are applied to overcome the problem. These remarks apply equally to both government and Central Banks.

First of all Central Bankers should have been aware of the economic lack of laws and oversight required to safeguard individual economies and should thus have advised government what was lacking, and what laws needed to be enacted. Secondly, when the lack of liquidity was recognized, the wrong advice was given to government as to how the situation should or could be rectified. The ONE THING YOU NEVER DO --- IS CREATE MORE DEBT  --- when it is the debt that is the cause of the lack of liquidity.

Surely the words “lack of liquidity” means “the lack of money”. If so, then money has to be “replaced.” As a recession unfolds, the savings of citizens are lost due to a myriad of reasons, most if which are beyond their control as well as their responsibility. Banks and financial institutions selling investment products that have little or no worth. Bonds never repaid by companies in bankruptcy. Mortgage foreclosures and shares that diminish in value. These were and are the savings of citizens. These were and are the “consumer wealth” that drove each and every economy. If that wealth is lost – it is gone forever! Every job loss --- is a vital loss to society. It takes YEARS to create jobs --- yet days and weeks to destroy them!

Each and every job requires a variety of skills that has to be taught and learned. Each job, especially in the manufacturing industries, requires the machines and tools to produce these goods, and all of this takes MONEY and TIME to provide and accomplish this. You cannot take bank clerks and turn them into bridge builders, or automotive assemblers into doctors and nurses or policemen or plumbers.

Words and phrases are “cheap” – so perhaps it is time to get down to specifics. All that has been unfolding, started primarily as a result of choices made by the Central Bankers of two countries; they being Japan and the United States. Zero interest rates in Japan and 1% in the USA. Thus was born the “CARRY TRADE” of cheap money. This is not to say that debt creation had already been on its way, but here was “money galore – for “nothing.” And so the invitation was there to exploit this situation. We are not going to repeat the story of sub-prime mortgages, so-called “asset backed commercial paper and all the other fancy bundled schemes concocted by banks, financial institutions etc. but added together it generated a tidal wave of debt in the “many trillions” of “dollars” and other world currencies. As much damage as it has already wrought, we fear that the end of it has not been seen as yet. The sheer volume of it boggles the mind, but the manner in which Central Banks and Governments have opted to stabilize their economies, would be “laughable” --- were it not so tragic. When money is “lost”  -- surely it means that it does not EXIST ANYMORE.  You cannot create new money by creating additional debt.

In a country that has to create say two million jobs a year ---loses two million jobs through recession – while a recession lasts two or more years, could take 6 or more years to recover as 6 million NEW JOBS have to be created during that period of time! This brings is to GLOBALIZATION.

You cannot support an influx of cheap imports into any country that is losing jobs. It becomes a vital necessity to not only protect existing jobs, but also at the same time the required new jobs dictate that they be protected from outside  --- and specifically cheaper goods and services. Thus China, Taiwan, India, South Korea and a host of other south Asian nations will “have to paddle their own canoe” while Europe and the American Continents recover from the recession. We are not advocating an “isolationist policy, merely a temporary drastic diminution of imports from those countries, allowing them to rather bolster their own domestic market while the rest of the world recovers. We offer as an example “NAFTA” the North American Free Trade Association, comprising Canada, the USA and Mexico. This applies especially so to Canada  and the USA. They have been their greatest trading partners for years, generating more combined trade than was imported from all other countries. As well --- and MOST IMPORTANT, the differential in trade balances was miniscule, being in the 5 to 7 Billion Dollar range per year. Thus each supports each other’s output with only minor competitive differentials. By continuing to do so in preference to imports from other sources.

Were this situation to be expanded to encourage Europe to deal primarily with NAFTA and perhaps South America, the resumption of global trade would be hastened. It also gives the required time to realign currencies where discord and anomalies exist. Japan should decide whether it aligned itself with either the Asian sector or the America’s during this time span, but with its high costs of production, one would think that the choice could possibly be with Europe and the American continents.

Now back to how this should have been tackled. The Federal Reserve Bank of the United States approached Congress to pass legislation authorizing that $700 Billion be borrowed to add liquidity to the economy. Congress dithered over this for weeks. During this period companies and institutions were either going bankrupt and/or shedding jobs. Congress and the Federal Reserve seemed to be oblivious to this. About a month later the three major automotive assemblers came to Congress for urgent loans in order to stave off possible bankruptcy. Three million jobs were stated to be at stake, counting all the ancillary companies that were bound to the automotive industry. At this point Congress made the most idiotic statements EVER TO HAVE BEEN STATED BY POLITICIANS anywhere in the world. 

 Quote: Why should we bailout the investors in the automotive industry. They should lose their money”. Unquote!!

Totally forgotten and or ignored is the fact that it is all those investors of the automotive industry and its allied suppliers who supplied the capital to create the largest single type industry in the United States  --- sustaining 3 mullion jobs  --- whose incomes pay the taxes needed by Government --- whose daily expenditures form a large percentage of the consumer power relied upon by the national economy --- and whose savings are lodged within the shares and bonds of untold other companies who in turn sustain other consumers and taxpayers!

Thus so-called “BAILOUTS” are vital to sustain existing jobs. There is no other way—no alternative of saving jobs and individual economies! However, by going to ones own consumers to create more debt in order to have the funds needed for these bailouts, is the ultimate in stupidity. What has been said in at least three other articles in this website is again repeated for hopefully the last time. YOU PRINT THE MONEY AND PURCHASE THE TOXIC DEBT, thus replacing the required liquidity without generating new debt which has eventually to be repaid by one’s own citizens, taxpayers and consumers. The Reserve banks should hold this debt, investigate malfeasance and advise punishment in due course. After a number of years when the economy is back on a growth track, these toxic debts are sold back to their original owners who in turn should be allowed to write these debts off future profits over a number of years.

The idea that Governments should create this debt creation is absurd  --- to say the least! What would happen in that case --- is in reality a gigantic” PONZI SCHEME” where future generations of taxpayers are required to repay all this debt. Where do these taxpayers come from  ---if the jobs do not exist and the savings have been lost? More and more taxpayers and greater and greater taxes would be needed to sustain the scheme; just as all ponzi schemes require an ever-increasing number of “investors” needed to pay out those that entered the scheme before them. Surely the lessons that are being learned by the Pension Funds are a warning that this is not the way to approach the problem.

Originally it was presumed that pension funding was sustainable, because ones own contributions was funding someone about to “go on pension.” In turn --- when it was YOUR TURN to go on pension, other workers contributions would be there to pay for it. As more benefits were paid it soon became apparent that 2 workers were needed to fund pensions--- then 4 --- then 6 etc for each one going on pension. Added to the conundrum, through the machinations of Central Bankers “playing with interest rates, not enough income from investment was coming in to enhance pension fund capital requirement. And finally, succeeding recessions and consequent job losses have made the functioning of pension funds extremely difficult.

SURELY THIS IS AN ABJECT LESSON TO CENTRAL BANKS AND GOVERNMENTS!!

The time for “theoretical economic practice” is long gone. IT IS TIME TO PRACTICE PRACTICAL ECONOMICS.. Things that work! The first thing that Governments should do is dramatically reducing the taxes paid by those who create employment. The companies that CREATE THE JOBS THAT SUSTAIN THE ECONOMY. For public companies that distribute 65% or more of their net (before tax) profit to shareholders, the balance of profits held as capital reserves should be tax-free.  For private companies that employ two or more workers (not family related) – no company tax is paid. These types of figures can be altered or graduated, but it gives one the idea of what should be taking place. By eliminating company tax one creates immediate wealth to create more jobs or to be used in investment that can create more jobs. People in full employment do not need “tax breaks.” As economic activity slows, rather than eliminating jobs, companies should be encouraged to “go on short-time.” Working either a 4 day week or even a 3 day week, or people working shorter shift hours if hourly paid in order to still supply the goods or services needed to sustain the business and the national economy, but still keeping all their staff in employment. Here again either the worker and /or the company can be given some type of tax relief or cash incentive or help “to keep going”. 80% or 60% “of a “loaf of bread” --- is still better than  --- NO BREAD! People can exist on two, meals a day, car pool or use public transport, or find many ways to exist on smaller or lower incomes for a reasonable period of time.

Federal or government workers asked or told to accept a 10 to 15% drop in salary in order to save their possible loss of employment, should willingly accept the opportunity to do so, thus allowing government extra funds or relieving them of having to cut essential services. Companies or people renting office space or buildings, applying to landlords for a temporary drop in rental costs would be a cost saving in overheads. Likewise the owners of buildings approaching insurance companies for temporary relief in lowering insurance costs that would allow them to pass these savings on to renters etc. In other words, there is a myriad ways in which government and citizens can save their economy without incurring more debt in the process. It is called “sharing the load and the pain.”

In times of war, millions are involved in battle at a low wage cost, while those “not on the front lines produce the food and the ammunition required to keep the nation going. It is called “fighting for an ideal and a purpose”. So too should it be when nations are fighting a common economic situation.

One of the obvious factors that has surfaced during this financial meltdown, is that it was not only the fault of government for the lack of laws in place, and Central Banks for their lack of oversight of financial institutions, but that it was found to be that it was the biggest banks and the biggest financial institutions that were the primary perpetrators of this massive toxic debt. As well so too were all the stock market operators in their lack of over sight, and at times turning “a blind eye to what was unfolding.”

Finally one reached a stage where governments were even prepared to collude with the Accounting profession in hiding the truth as to the volume of debt, in order to stave off “a run on the banks” by investors withdrawing their cash from the banks. They were and perhaps still are prepared to allow the accounting profession to “hide losses of assets of banks --- “off balance sheet.” Another amazing declaration was statements by governments worldwide that they undertook to guarantee ALL cash lodged in their respective commercial banks, no matter how large these deposits were! It boggles the mind, if one attempted to evaluate where these astronomical TRILLIONS of these countries currencies were to come from! All of this in order to stop a “run” on the banks.

What is lacking --- is STATESMANSHIP. The lack of one or more statesmen or stateswoman to get up and call for new laws to control all aspects of both domestic and international debt creation. For more stringent rules and over sight common to all countries economies and currencies. In other words a new Bretton Woods!

Failing to PRINT THE MONEY  --- even at this late stage--- now January of 2009 will set the world on a path to a long period of THE ECONOMIC DOLDRUMS. A time span that could last a GENERATION. Ten to twelve years of stagnation and sporadic growth of world economies. The 1929 / 1933 Depression lasted 4 years and was in reality not yet over when and until the outbreak of the Second World War in 1939. Had that war not started, it too could have taken a full 10 to 12 years to see the world’s economies fully recovering from the Depression.

This is the final article that will appear on this website. There is little else that the author has to say. For those that have visited the site over the past 10 / 12 years, we hope that you have found something of interest therein and perhaps a different perspective on subject matter that may have been of interest to you. The site is destined to “implode” in the month of August 2010.