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19 Responses to “Another box on fiscal multipliers: ECB December Bulletin”
“The latest data show that the annual rate
of change in real disposable income, which has
been negative for a protracted period, declined
markedly, by 2.1% in the second quarter of 2012.
In an effort to mitigate the effect of this decline
on consumption, households dipped into their
savings. As a result, their saving ratio fell to the
lowest level recorded since the start of the series”
Box 5 is just the fiscal stuff which would be a bit of a bore but for the amount of damage it is doing
Its merely private banks trying to stop the flow so that they can continue with their wealth transfer thingy……….
The fiscal “structural adjustment” of Italy in the late 90s seems to be the model
But bankers like models who take steroids these days.
Nothing much physical which will last was made back then.
It was merely a transfer of tokens within the system.
Very important for the token holders but pretty much pointless in the end.
“The annual growth in compensation per employee further declined to 1.6% in the second quarter of
2012 from rates of above 2% in the second half of 2011. This moderation by and large absorbed the
upward impact of lower productivity growth on unit labour cost growth. Year-on-year unit labour
cost growth stood at 1.4% in the second quarter of this year, compared with 1.6% in the fi rst quarter.
The low productivity growth – in a context of modest economic growth – is expected to continue
exerting upward pressure on unit labour cost growth in the near term.”
Ask yourself why must they squeeze labour value ?
So as to increase the surplus going into non labour costs of production.
This is then expressed in bank credit for capital stuff.
Houses , cars and other crap stuff.
But its not working because the machines are eating the capital base at a faster and faster rate.
Why is the cost of real capital / oil so high ?
The banks wish to bypass labour with their credit machines so as to extract the surplus value of production.
Therefore in a financialised world the BANKS MUST DESTROY REAL CAPITAL TO EXTRACT A PROFIT
This is a mirror image of the credit inflation.
The money deflation phase of this extraction operation is the same phenomenon.
Ireland was destroyed by Labour arbitrage in the high energy sectors of the economy that gave a false price signal to these operations…..
To conceal the real capital destruction they reduced wages……..
Think of low cost airlines , ferries , construction etc…..
They even went so far as shipping in cheap labour from Turkey to build a Cork road.
This is how Europe operates folks.
It will not change until it has destroyed all of the capital base.
Its a straight up criminal operation.
As plain to see as rudolph’s nose.
[Scene: A spacious drawing room in Frankfurt. A patient is strapped to a table. M Drachet in attendance, plus admirers]
M Drachet: Our diagnosis for this fellow is an excess of partying, too much of the punch-bowl, a surfeit of humours, grass corpulence and a palpable debt overhang. Our remedy? Leeches!
[Enter Mr deKrugman, a plain talking Yankee]
Mr deKrugman: Hold your hand, sir! The patient is week. Leeches will only distress his condition further.
M Drachet: Oh that annoying fellow. Even your fellow Americans agree that leeches are the cure.
Mr deKrugman: Not any more they don’t. They’ve changed their minds.
M Drachet: Really? Never mind – bring on the leeches.
Mr deKrugman: Rather than leeches, this fellow needs an infusion of fresh blood to recover.
M Drachet: Are you volunteering?
Mr deKrugman: You, sir, can create all the blood you wish and you know it.
M Drachet: Balderdash.
[A fop whispers in M Drachet's ear]
M Drachet: Well that’s news. But you forget, our medical charter expressly forbids it. And you miss the nicer point, if we were to do so, this fellow would learn nothing from his foolishness and return to his profligate ways.
Mr deKrugman: Are you trying to cure the fellow, or teach him a lesson?
M Drachet: A soupcon of A and a morsel of B. Now, the leeches.
[The leeches are applied, and the patient becomes noticeably paler]
Mr deKrugman: Told you.
M Drachet: You really are the most arrogant fellow.
Mr deKrugman: Says the man with the leeches.
M Drachet: But this is part of the cure! You see he is being purged, in in being purged he will ultimately return stronger.
Mr deKrugman: Or dead like that poor Greek fellow.
M Drachet: And anyway, you quite misunderstand. It is not the leeches that make him pale, but, er, that, that and la bas!
Mr deKrugman: You’re pointing at a bunch of random things.
M Drachet: Not at all, I’m pointing at fetid air! Contagion I tell you. Stop looking at the leeches.
Mr deKrugman. Look, are the leeches to teach a painful lesson or to help the patient get better?
M Drachet: Can they be both?
Mr deKrugman: No.
M Drachet: To be honest monsieur, we do it because we’ve always done it.
But our meticulous research shows that if the patients have, er, died in the past – it wasn’t the leeches fault! It was, um, something else!
Mr deKrugman: I strongly recommend an infusion of fresh blood.
M Drachet: But if we tried something new and it proved better, why our reputation for competence would be in tatters – you laugh sir?
Mr deKrugman: No sir, I weep. I weep.
[They continue to bicker as the bloated leeches suck happily at the patient]
The EU is engaged in the most brutal monetary war against labour since the 1930s which throws people off monetary cliffs when they run out of tokens…..
explain to me these figures
This is real stuff
Not claims on stuff.
Brussels, 16/11/2012 – In November, demand for new cars was down for the fourteenth consecutive month in the EU*, dropping by 10.3% compared with November 2011 which counted on average the same number of working days in the region. In total, 926,486 new cars were registered. From January to November, the EU* recorded 11,255,094 new cars, or 7.6% less than in the same period a year ago.
New car registrations in November were up 11.3% in the UK, while declining in all other significant markets: -3.5% in Germany, -19.2% in France, -20.1% in Italy and -20.3% in Spain. A vast majority of markets contracted, leading to an overall 10.3% downturn in the EU*, which totaled 926,486 new cars.
From January to November, the picture was somewhat similar, with the UK being the only major market to expand (+5.4%) and Germany (-1.7%), Spain (-12.6%), France (-13.8%) and Italy (-19.7%) all contracting. Over eleven months, demand for new cars in the EU* fell by 7.6%, amounting to 11,255,094 units, a historical low since 1993.
French Rail fixed capital stuff coming on line is now almost a weekly thing.
The French elite are obviously milking the non sov euro hinterland of everything not tied down while preparing for a new change in the flow.
Ireland is a sad place.
The middle men are not too bright absentee landlords who get to eat a ration over and above their true capacity while the very dumb general population get their labour surplus value stripped from their back via constant inward migration flows.
I guess we did it to England
What goes around comes around.
Well, the assumption of -0.5 is not supported by Hibernian emperics or the IMF -could be up to three times (or even more) – oh dear gotta shift focus or we are in danger of being deemed incompetent. It’s the long term that matters not the short term and our sophisticated SIMULATION suggests we are right [forget real empirics] to continue with austerity and ordo liberalism. Of course we are wrong but to admit such would deem us incompetent and it is far better to be deemed competent with the wrong policy than to change to a sensible policy and have our record to date deemed incompetent. Our SIMULACRUM IS THE NEW REALITY EVEN IF IT DESTROYS EUROPE, ITS CITIZENRY, AND THE EUROPEAN PROJECT. How we miss Dear Lorenzo.