Modifying the Economic Social Psychology

[johnbrickner]

That title is a mouthful. I think it time I called them all on it b/c frankly I'm at that point. What point? Let me explain:

First they are arrogant enough to think they have superior wisdom. They tried to increase our expectations towards inflation by printing a ton of money, devaluing the dollar, and bottoming out interest rates. Why? B/c people tend to spend their money faster when they perceive an inflationary economy (and it makes for paying back the debt with cheaper dollars). Remember that spending faster increases the velocity of money which translates into an increase in GDP. No doubt, for many necessary items, food, clothing, energy, health care, education, etc. prices went up.

And while I can't prove it, I'm sure such attempts at modifying our behavior are backed up by the media which has sworn to me since the big recession hit bottom, economic growth has increased as proven by the stock market is up and unemployment is down and the picture painted is just roses. We all now live in the land of milk and honey. In economic social psychology this is called framing. The idea is to "frame" an issue to increase the possibility of a behavioral result. The one they are looking for is increased consumer spending. Some 70% of America's GDP is based on it.

The problem with all this is when the framing (lying) is constantly repeated those with enough awareness disbelieve everything that is reported on the subject of economic growth and decreasing unemployment. If our economic situation is in fact doing well, then with a little lag time the fact will speak for itself and does not need framing. America does appear to be buying more SUVs, pick up trucks, and to a much smaller extent luxury cars so it just goes to show you not to underestimate the power of Macho marketing.

What happened (is happening) with the great recession is people have hunkered down. Yes, there was (is) some spending but mostly for necessities (prepping) such as stocking food, household items, cash, PMs, and the use it up, wear it out, make do or do without frugality attitude. So while initially bumping the spending the result is zero or practically zero velocity of all moneys spent this way. Zero velocity of money = deflation. So the reaction by many was and for many of us still is to assist a deflation. Every penny you take out of circulation, every PM you stack, every dollar you stash in that hidey hole assists to negate that money from nothing, wealth for free attitude of the elite.

The knee jerk reaction to this was to pump up the stock market to give the illusion of wealth, and the slamming of PMs to make them look like a poor place to put FRNs. It isn't working. As others smarter than I point out, physical accumulation continues unabated.

My answer to all this, you may ask? If they do as I suggest they would have to admit being/doing wrongness, so it will never happen. But here goes: A) stop doing what they are doing now completely; b) start with some noticeable government austerity combined with; b) a very slight but noticeable increase in taxes; and d) allow default to occur to show the people the debt burden is being reconciled and bail outs have stopped. These to cause an increase in confidence towards the government to fix what's broken thereby increasing the people's inclination to spend. And there goes another pig flying past my living room window.

Inspired by Currency Wars by James Rickards (2012)

[IdahoCopper]

Q1 2015 is an outlier quarter. Everyone is uncertain just how their IRS refund will be affected by ObamaCare. Nobody knows for sure if their earlier estimate on which their payment/subsidies was correct. Many people are thinking that they may not get a refund to splurge or pay down debts as per usual. Many are concerned they may need to pay more, instead of getting some back. Hence, nobody is spending.

[Morsecode]

John, that's a great post...pm inbound

[68Camaro]

I think I just saw your pig flying by my window...

[Treetop]

"Inspired by Currency Wars by James Rickards (2012)"

If we are indeed in a currency war, what would loosing mean? We sure seem to be, I think russia would insist we are. Both russia and china have threatened us for years over this. Where would our culture be if TPTB failed? Maybe they did already, the dollar seems doomed ot fail, but this could be part of the plan with a new currency ready to replace it after they use the dollar to do something else. To many variables I have no data on, but the potential exists that we are better off dealing with the issues this raises for the individual rather then the issues of an honest currency in the middle of a global currency war.

[johnbrickner]

Hey Zac:

All the right questions to get me to reply. It may take a little time. This post would go under the category of increasing the local economic power in the decentralization scheme of things. You might also want to check out the New World Foundation if you have not already.

I seem to remember one of your posts on the "taking our bats and balls" topic was dealing with grains and possibly the lack of local farmers growing local type grains??? Or something like that. I'm to lazy to look it up and write out exactly what you said but, check this out:

http://hvfarmhub.org/wp-content/uploads ... Valley.pdf

I have not read it, but only just found it and when I saw it was a white paper I knew I had to send it's information your way. Happy reading. I'm sure you'd have an interest.

Brick

"Inspired by Currency Wars by James Rickards (2012)"

If we are indeed in a currency war, what would loosing mean? We sure seem to be, I think russia would insist we are. Both russia and china have threatened us for years over this. Where would our culture be if TPTB failed? Maybe they did already, the dollar seems doomed ot fail, but this could be part of the plan with a new currency ready to replace it after they use the dollar to do something else. To many variables I have no data on, but the potential exists that we are better off dealing with the issues this raises for the individual rather then the issues of an honest currency in the middle of a global currency war.

[Treetop]

http://hvfarmhub.org/wp-content/uploads ... Valley.pdf

very nice, even then there are issues with what inputs are used if we are talking about truly de centralizing, but sounds like that area is heading in a good direction.