Posted Jul 12, 2013 by Martin Armstrong
QUESTION: When the capital flows change direction after 2015.75, . . . .. If the inflows come to the USA after Japan & Europe implode, where does capital go after 2015.75??????
ANSWER: If we see the crisis unfold in Europe and Japan over the next 2 years, we will get the traditional Phase Transition here like Japan got into 1989 and the US received into 1929. Thereafter, capital returns to the place from which is came.
What Marx and socialists do not grasp is that capital concentrates both like this internationally as well as among individuals. This is the key to progress. Andrew Mellon lent the money personally to the inventor of Aluminum and founded ALCOA. The bank could not lend on an idea. Mellon had the money and believed in him.
Communism/Socialism seek out of “fairness” to make everyone equal to eliminate the rich individual. In doing so, they reduce economic growth. When capital concentrates the economy expands because it is investing creating jobs. When you spread it around, the economic growth declines (1) either for hoarding, or (2) a group of people cannot reach a consensus on what to invest in. Look at Congress, you cannot get agreement without a crisis. Human nature is like that. Too many chiefs and no Indians as they say.
Therefore, the disbursement of capital back to where it came from is part of the economic decline. Look at the capital flows for the Great Depression. As they returned, the economy declined. Why? Capital is hoarded and no longer is productive. This is the fatal flaw of Communism/Socialism. It is not a question of what we think should be fair with everyone possessing equal wealth. It is not fair that a pride of lions eat a animal alive. But that is the structure of nature.
We either accept that this is how it works, or we keep screwing everything up by trying to create Utopia that cannot exist. Stop the intervention and accept what we are and like the Bible says – stop coveting thy neighbor’s goods and wealth. As long as they do not act illegally like the investment bankers trying to create the perfect trade, then all is well. Yes we need laws that the New York Club refuse to comply with. They have corrupted politics, the rule of law, and placed at risk all our rights, privileges, and immunities. All so they could rule the world. That is wrong. Trade – if that is what you want to do but with your own damn money and take the losses with the gains. The mere possession of wealth is not evil just like possessing a gun does not automatically make a person mad. For this reason, we need rules and no life-time judges or politicians to ensure the rule of law will remain in full force and a few bureaucrats to be bribed as possible.