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  the world is still getting richer - warren buffet

"For 240 years it's been a terrible mistake to bet against America, and now is no time to start."
—
"Mr. Buffett wrote that since his birth in 1930, real gross domestic product—the standard measure of economic output adjusted for inflation—has grown a "staggering" six times on a per-capita basis. He added that even at the current growth rate of 2%, which has caused concern among some economists, GDP will outpace population growth over the next quarter century and lead to a 34.4% gain, or $19,000 per capita."
—
" "...my investment holding time is....forever. " "
—
"He has a long-range perspective in a short-term world."

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the economics zone

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on economics, by someone who actually understands

Here is someone who does understand 'economics' - Raghuram Rajan, Governor of the Reserve Bank of India.

Highly recommended.

The lecture, about "Rules of the Game in the Global Financial System", starts about 11 minutes in.

1hr 19 mins

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the economics zone.

is this the end of surplus labour?

"Workers of the world are about to get their revenge. Owners of capital will have to make do with a shrinking slice of the cake.

"The powerful social forces that have flooded the global economy with abundant labour for the past four decades years are reversing suddenly, spelling the end of the deflationary super-cycle and the era of zero interest rates."
—
"The working age cohort was 685m in the developed world in 1990. China and eastern Europe added a further 820m, more than doubling the work pool of the globalised market in the blink of an eye.

"It was the biggest 'positive labour shock' the world has ever seen...."

related material
comparing fertility rates and populations in europe and beyond

the 'economics' of the new old labour nutjobs

inflation

Not only will q.e. (quantative easing), more honestly known as inflation, be an increased tax on the poor [see government inflation is merely a hidden tax on the poor and uneducated].

soak the rich

But the mad belief that you can get 20% tax on capital out of the 'rich' is also nutz.

If you sell your house, you can put it on the market at say £200,000. If everyone in the street puts their house on the market to pay some Corbyn tax, and this happens in every street throughout the land, then you'd be very lucky to get £100,000 for your house. This is what would happen if the 'rich' of Britain were obliged to cash their assets to pay the 20%. Even people with modest incomes are unlikely to hold 20% or more of their annual income, let alone their capital, in cash.

With so many trying to sell assets, whether property, businesses or paintings, this would produce fire-sale conditions. Of course, wealthy people and organisations around the world will circle and come into this fishing binge, and British ownership will be sold to Germans and Americans.

And

Jeremy Corbyn will not raise anything like the money his greedy cronies want. This would aggravate the fire-sale further in a downward spiral.

Such a policy would impoverish the country and remove investment capital. The population would all end up renting from forrin moneybags.

So a Corbyn regime would have to build a wall.
That worked well for eastern Europe and the various socialist paradises.

"This year Venezuela may find it impossible to service her foreign currency debts. The country is short of foreign exchange to buy the imports they need in a range of basics for daily life. Venezuela is demonstrating that a combination of controls and overrides of the markets and prices, and printing extra money, leads to a break down in the supply system. The poor suffer as well as everyone else. Far from creating plenty, stimulating the economy and getting people out of poverty, these policies do the exact opposite

"I mention this today, because Mr Corbyn is an admirer of the politics and government of Venezuela. He wrote an article praising it in 2009, and renewed his favourable comments this year...." [Quoted from johnredwoodsdiary.com]

It is essential that people understand that inflation hits the poor and those on fixed incomes much more than others.

It is necessary to understand that the more government takes in taxation to spend as they want, the less money people have to spend as they choose. Corbyn and Co. want to spend more money on their projects. That money is not then available to spend on your preferred projects.

Do not be confused by the constant talk of money in government actions. What it is really always about is how much of your goods and time King John and the Sheriff of Nottingham take from you by main force.

Socialists always have a prime ambition to bring you ever more under their power, until you no longer have any control over your own lives. Each increase in taxation is another step towards limiting your freedoms, while increasing theirs.

Hence the tendency around the world for socialist regimes to eventually reduce populations to poverty, slavery, and then to mass killing.

related material
The mechanics of inflation: the great government swindle and how it works

how the public sector undermines productivity and equity - france

Here we extend and fill in the details of yesterday's report, ten numbers of french government bureaucracy.

To keep within public finance targets, at least 450 million € savings need to be made in the state budget during 2016 and 2017.

In their latest weekly report [150 pages], the Cours des Comptes (France's National Audit Office) did not spare the public sector from criticism.

The public sector is made up of state officials, regional and local officials, and 5.4 million hospital workers. In total, they represent an annual expenditure of 278 billion euros. This is 25% of public expenditure and 13% of national wealth.

From 2004 to 2014, the public wage bill - the staff costs of public employees - on average, increased by 2.4% per year. However, this growth masks contrasting developments. While centrzl government reduced the number of staff between 2008 and 2012 by not replacing one in two retiring officials, local authorities, especially town coucils, increased their staffing annually on average by 1.3% (2009 to 2012). Over the same period, hospital staff increased by 1.2% annually.

Given these rising figures, to achieve substantial savings, the National Audit Office recommends

• not replacing one in four officials retiring,
• a revision of salary scales,
• extending the length of careers (the retirement is usually at 60),
• slower promotions,
• increasing the annual 1594 working hours of civil servants to match the legal maximum (1607 hours),
• constraining the 1.9 million full-time workersi tne départemnts who, in fact work more than 35 hours a week, to keep within that limit (saving over-time payments of time off in lieu),
• reducing in bonuses and allowances indexed to the value of the salary index,
• targeting the residence allowance of officials living in Ile-de-France (this will affect senators and deputies (MPs) owning a primary or secondary residence close to Paris),
• removing the family supplement and routine salary increases for officials in overseas territories.

The state budget for 2015-2017 forecasts a payroll increase of 250 million euros per year, while the total budget growth is estimated at 700 million euros annually.

ten numbers of french government bureaucracy

• 278 billion euros
  This was the cost of French public sector wages in 2014.
  It's equivalent of 13% of France's GDP.
  

• 4.5% is the average increase per year of the public wage bill since 1990. This is for a workforce of nearly six million workers.
  

• 13%
  The average annual wage income is 13% higher for the public sector than for the private sector and public enterprises in 2012.
  In 2012, monthly salaries were 2,465 euros net within central state employment,
  1,848 euros net in local government,
  2,242 euros net in public hospitals
  2,163 euros net in the private sector.
  
  
• 1,500
  The state pays its employees (called 'agents') on the basis of 1500 distinct elements of pay, each of which may be diversely varied according to the ministries involved.
  
  
• 500 million euros
  The savings made each year by freezing the pay index. This pay index is a factor by which wages are multiplied each year to provide an automatic wage increase to allow for inflation and so on. There is an index scale to account for the different grades of 'agents'. The pay index has not changed since 2010.
  
  
• 18.6%
  In 2010, the average salary of overseas officials was estimated to be higher by 18.6% than those employed in mainland France.
  Salaries were higher by 13% in Guyana,
  by 9.7% in Martinique,
  by 8.3% in Guadeloupe and
  by 6.2% in Réunion.
  The total cost of salaries and allowance paid to overseas staff had been estimated at 2.2 billion euros in 2003.
  
  
• 1,594
  The average number of hours worked per annum in the public sector.
  1,684 hours p.a. are worked in the private sector.
  Current French law of a 35 hours per week full-time amounts to 1,607 hours per year.
  
  
• 38
  Because only working 35 hours a week causes considerable scheduling problems for companies previously organised around a 39-hour week, employees in fact often work extra hours.One option to pay for these extra hours is days off in lieu of accumulated hours.
  In the public sector, employees receive 38 such days a year on average,
  in the private sector it's 31 days.
  
  
• 85.7%
  Without any real justification, part-time 'agents' working 80% of the time of a full-time 'agent' receive 85.7% of the full-time 'agent's earnings. The annual cost of this over-compensation is estimated at around 300 million euros.

[Loosely translated from Le Figaro]

end note

1. President François Hollande will not loosen the 35-hour week law, despite France's economy being in considerable problems.
   According to a recent poll, 71% of French workers want to abandon the 35-hour week.

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