Fossil industry is the subprime danger of this cycle

[UndercoverElephant]

I am now convinced that the powers that be will keep printing money, not as a serious attempt to solve any long-term problems such as the pensions "black hole" but because that will be the only way to keep the system functioning from one day to the next. We are already there, although there is a systematic attempt to pretend we aren't. Inflation would already be out of control if it weren't for several factors stopping the increasing money supply from turning into increasing monetary velocity.

1) People are scared of losing their jobs, so they are resisting demanding pay rises to match the rising cost of living, and they are accepting jobs at ever-lower real wages.

2) The inflation statistics are being rigged downwards to minimise people's awareness of what is going on.

3) Manufacturers and retailers, aware that most of their customers won't tolerate endless price rises are compensating by reducing the sizes of goods and cutting quality, thus hiding the effects of inflation.

None of the above will apply forever. Logic dictates that the above tactics are financially unsustainable - they do not add up to a long-term monetary strategy. They must eventually lead to the debasement and collapse of the fiat currencies, and what follows that is anybody's guess at this point.

[Lord Beria3]

Agreed UE.

The PTB are not stupid. They are not stupid - they know the risks of hyperinflation down the line but if printing money is the only way to keep the system going, plugging the holes etc, then that's what they will do.

And with respect... yes the sums are massive but the government can print unlimited amounts of money. And it can be done drip drip over many years.

[kenneal - lagger]

Printing money isn't the problem, it's what it's used for. If it's used for current account spending, i.e. pension and wages payments, it is inflationary. If it's used for capital spending it isn't inflationary or it is much less so depending on how the receipts of the income from the capital spending are treated. If the capital spending is paid back in full the printed money isn't inflationary. If partially paid back or not paid back at all it is inflationary.

If the government were to invest printed money in a National Insulation Scheme or a similar housing scheme they would be able to write off the original money but still gain considerably from the increased income and other tax takes from the increased employment.

Not only would this stave off the dreaded day of collapse but it would leave the country in a better position post collapse as the energy requirement would be significantly, up to 80%, less. If, however, the government just lets the rich cream off as much money as they possibly can, which seems to be what's happening now, collapse will come sooner and be far deeper than it would have been. I don't know what the rich think that they can do with bank accounts full of huge sums of money post banking or financial collapse, but they seem to think it's worthwhile carrying on accumulating funds.

I think that TPTB know that collapse is on the way as they are bringing in legislation to allow military type control of the populous and buying the k i t with which to do it, i.e. the Data Protection Bill and Boris's water canon.

[vtsnowedin]

Printing money isn't the problem, it's what it's used for. If it's used for current account spending, i.e. pension and wages payments, it is inflationary. If it's used for capital spending it isn't inflationary or it is much less so depending on how the receipts of the income from the capital spending are treated. If the capital spending is paid back in full the printed money isn't inflationary. If partially paid back or not paid back at all it is inflationary.

If the government were to invest printed money in a National Insulation Scheme or a similar housing scheme they would be able to write off the original money but still gain considerably from the increased income and other tax takes from the increased employment.

You have hit on a point I have tried to make from time to time. It is not the level of government spending that is the problem but what they chose to buy with the money. If you build a bridge properly it serves the taxpayers well for a century or more, but If you spend the same money on landscaping the banks of the river you have very expensive flowers to look at as you drive around the detour. If you wisely spend money on schools you get a well educated work force that is more productive and has more income to tax, but if you waste it on tenured professors that don't teach enough useful classes to earn their keep you get college graduates whose only real skill is rolling a nice tight joint.
Your idea of supper insulating houses is a good one but it needs to be managed by skilled people who will spend the money as to derive the most benefit long term from it. Quite often a mature bureaucracy is so bound up in it's rules and it's history that it can't clearly see which monies are being well spent and what is useless and mindless following the rules.
The idea that you need a revolution every now and then is a risk too far but every government agency could use a complete rewrite of the rules now and then to let it start with a clean sheet of paper. Unfortunately there is no chance of the politicians letting go of their past instructions they have imposed on these bureaus as they see them as victories and never check to see if the desired result was actually obtained.