G E B W E B

When the FED bought yet more Treasuries yesterday, effectively printing money, the market rejoiced. Karl Denninger documents it well in his latest post (look at the two charts near the bottom). Unfortunately, few such happiness-shots remain: The program to buy Treasuries is capped at $300 billion, and after Monday 9/21, $289 billion has been spent.

I expect two or three more of these infusions before they run out of heroin for the drug addict. This should get us to the beginning of October. Then what?

Here are some things you can do to ease your load on the environment:

1. Drive less
2. Fly less (I’m a sinner on this one, though…)
3. Wear a sweater instead of turning up the heat
4. Use a clothesline instead of a dryer
5. Carry your own shopping bags
6. Avoid bottled water and over packaged products
7. Cancel cable TV (really, it’s complete junk)
8. Change to energy efficient light bulbs and turn off the lights you don’t need
9. Recycle your trash
10. Buy local

Aside from the obvious positive effect this has on the environment, it will make you healthier and save you money. Now, you’ve probably heard these suggestions a million times, so if you’re still reading, you likely care about the environment and wonder if there is something else that you can do. You didn’t think I would write a post with a bunch of old, off-the-shelf actions that you already knew of, did you?

Provided you have money in the bank, which you should have, since you’ve been saving money on the above actions, the most effective thing you can do is simple: Withdraw it.

The money in the bank is not just sitting there. It is continuously fueling someone else’s consumption and causing environmental mischief around the world. The bank takes your deposit and lends it to some schmuck, let’s call him Joe, who wants to buy something, say a car. Joe then takes the money and gives it to the seller of that car. The seller, James, deposits the money in the bank. Both you and James think you own the money in the bank now, but which one is it? The answer: The fastest one of you. Of course, you will have to outrun many others as well, since the bank takes James’ deposit and lends it to Jill, who hands that money over to Jack, who puts it in another bank and so it goes on.

The only thing that limits this monetary game of musical chairs, is the fraction of each deposit the bank is required by law to hold as a reserve. If the reserve requirement is 10%, then the bank can only lend 90% of your money to Joe. The total amount of money that can be created is 0.9 + 0.9^2 + 0.9^3 + … = 1/(1-0.9) - 1 = 9. That is, 9x the original amount. So while you may think you’re saving the environment by your frugal lifestyle, your savings account is hard at work wrecking environmental damage to the tune of 9x the amount you put in there.

Well, 9x is a very conservative measure. In the USA, the reserve requirement for checking accounts is 10%. The reserve requirement for savings accounts is 3%. So if you want to earn some small amount of interest on your money, it is wrecking damage to the tune of thirty-two times the amount you put in there. There are 32 James out there who think they own the same money you put into the bank. There are 32 Joes out there who are buying Hummers, constructing McMansions or are otherwise living beyond their means, courtesy of your nimbleness.

In most of Europe, the reserve requirement is 2% for checking and savings accounts. You get 50x the wasteful spending. If this makes you feel sick, let’s look at this system in another way: It’s a giant amplifier for your voice. By taking your money out of the bank, you also force all the Joes and Jills out there to live within their means and adapt the same frugal ways that the environment so craves. You destroy the wealth of the James and Jacks out there who sell crap that you (and they) can easily live without. The same excessive leverage that fueled this consumerist monster, is also making it extremely vulnerable: If only 1% of deposit holders in Europe did this, half of the credit-based over-consumption would stop.

Where do you store money if not in a bank? Well, you can put it in the bank’s safe deposit boxes. There exists a popular misconception that this is somehow illegal. It is not, as long as you report it on your tax return. The banks, earning most of their money on the crazy money expansion they do, are not particularly happy to store cash in their boxes (conflict of interest, anyone?). They usually have a clause that you may not store cash in the box in the lease agreement. This does not matter, because the bank does not have the private key to the box, and they don’t want to know what is in your box anyways. If you have very large sums, you can get a safe instead.

With the cash safely stored in a vault, enjoy your new fifty times greener conscience. Your hard-earned savings are no longer speeding around cutting down rainforests, enabling fifty Jills to drive gas-guzzlers or buying already filthy-rich CEOs palaces, yachts and learjets.

It’s almost binary. Businesses either have significantly lowered their prices, or they are still charging completely outrageous “bubble-prices”. The local health club is in the latter category…

Så er den her, bankpakke 2. Selvfølgelig sammen med våset om at “bankpakke 1″ har fungert. Det har den ikke, det vil den ikke, og det vil heller ikke bankpakke 2. Den overvåkne leser vil huske at jeg skrev om bankpakke 2 allerede i oktober i fjor. Man trenger ikke være snåsamann for å spå at mer av det samme som skapte krisen, ikke vil løse den.

Krisen er et resultat av usmakelig høyt forbruk finansiert av en kredittflom helt uten sidestykke i historien. Nå er folket og næringslivet belånt til bristepunktet, og kan ikke konsumere hemningsløst som før. Vi har en syk overkapasitet i næringslivet. Våre hjem flommer over av ubrukelig crap som vi trodde ville gjøre oss lykkelige. I stedet må vi løpe raskere og raskere på hamsterhjulet for å få råd til all skiten.

Bankpakke 2 skal hjelpe bankene å få igang utlån igjen. Hvorfor i #*@%# skal vi ha mer kreditt når det var altfor mye kreditt som har lagt grunnen for denne finansielle, økologiske og åndelige katastrofen? Som en gambler som har gått på en smell, vil Kjøpe-Kristin og Jalla-Jens doble innsatsen for å vinne tilbake det tapte. I motsetning til en gambler ved rulletten i Vegas, som har 47% sjanse for å lykkes, har de null håp (*).

Du tenker kanskje: Er dette noe å gnåle over da? 100 milliarder er jo mye mindre enn den første bankpakken. Les denne artikkelen fra Dagens Næringsliv nøye.

Løsningen er todelt, der 100 milliarder skal deles likt i to fond: Statens finansfond og Statens obligasjonsfond. De to fondene blir to selvstendige juridiske enheter. En slik tilførsel gir bankene økte utlånsmuligheter på 500 milliarder kroner.

Den ene halvparten av pengene som skal brukes gjennom banksystemet, 50 milliarder, gir altså bankene mulighet til å låne ut 500 milliarder mer. (Hvis det er et mysterium for deg hvordan 1 krone blir til 10 kr i banken, bør du google etter “Fractional Reserve Banking”) Hvis vi regner med at staten gjør det samme med den andre halvparten av pengene, snakker vi om 1000 milliarder i risiko gjennom denne pakken. Det er halve oljefondet. Den andre halvparten tar krakket i aksjemarkedene seg av.

Så hvis du på noen måte er avhengig av at staten har penger - f.eks ved at du hadde planer om å pensjonere deg en gang eller kunne tenke deg at brannvesen, politi, sykehus, skoler osv. også finnes i framtida - da bør du vurdere om bankpakke 2 er noe for deg. Hvis du vil stanse denne galskapen, send meg en melding under. Hvis ikke kan du gi #*%& i å tigge fra meg når du er arbeidsløs, blakk og trenger en schilling til mat. You had your chance…

(*) Hvilke gode prosjekter er det som ikke får finansiering i dag? Det sies stadig vekk at selv gode prosjekter ikke får låne penger i dagens situasjon. Vis meg prosjektene! De som skriker etter utlån nå, er de samme *&#$%& som har lånt altfor mye allerede, og som trenger mer kreditt for å holde det gående litt lenger. Er det gode prosjekter? Albert Einstein skrev: Insanity: doing the same thing over and over again and expecting different results. Man løser ikke et alkoholproblem med mer vodka, ei heller et gjeldsproblem med mer kreditt. Det eneste vi får ut av dagens redningspakker er at vi holder det gående litt lenger. Og så blir fallet enda høyere senere.