I am now en route to Vienna to do a day long private briefing/discussion with a small number of investors and business owners. This should be very interesting and mutually informative, since it looks like a very plugged-in group.
Because this is a quick turnaround trip, and I need to deal with jet lag (aka sleep), I will either not be posting at all, or will put up only short “hey, here’s a worthy news item” posts.
Antidote du jours, however, have been scheduled to appear each day while I am away. Back to normal programming by Saturday evening.
Cool! Hope you’re allowed to talk afterwards.
I know this might be too much to ask, but do you think that you could make the antidote du jour its only post. I read the blog regularly and love it. And I send the wife the anti dote du jour every day…..it would be a lot easier if there were none of those news stories above it.
Have a good time in Vienna. pastries are awesomeoness there.
Do you fly first class or coach?
Enjoy your trip. We’ll be here when you return.
How long will it take to get to Vienna in your hybrid GMC?
Anon @ 7:28PM
RE: “hybrid GMC” – Are you making inferences of the “plugged-in” reference in the 1st paragraph? I’m quite certain there are no hybrid passenger aircraft under development.
Have a pleasant trip, Yves.
I hope you have a wonderful time in Vienna. It’s a beautiful city.
Somebody, quick find a youtube of Billy Joel singing Vienna Waits For You.
enjoy the trip Yves
Have a safe trip.
I read this blog every day. The
best discourse on economics and
general theories of relativity
I’ve found anywhere on the web.
Thanks for your dedication and
Have a good trip, take it easy:)
If you have the time, I’d like to hear what you have to say about this (and anyone else here too):
Through easily accessible credit, Americans had an illusionary purchasing power. This led to a demand, which led to investments where production could be created to satisfy said demand. That investment was spent mostly in China, where the production pipeline was created and expanded significantly to satisfy the demand of Americans, which was based on illusionary purchasing power.
When the issuer of credit faced the harsh reality of not being paid back for the credit it issued, the illusion dissipated, and the real purchasing power of Americans was revealed as being significantly lower than it had been over the recent years. The system as a whole was based on an illusion, so all businesses were affected by the sudden catastrophe that affected the issuers of credit. Less credit was now available as the issuer of credit faced difficulties.
Due to the massive investments in China, which became rich in the process, production was now surpassing expected demand significantly. This production process could not be altered overnight, and as a result deflation occurred as an over abundance of goods had been produced, in and outside China.
That is where we now stand.
But I think that trying to recapitalize financial institutions is only an attempt at getting financial institutions in a state were they will be able to issue credit as they used to. But this is a RIDICULOUS idea since no one can expect all players to keep playing in a game that is known to ultimately lead to a random winner, if any at all. The previous system CANNOT be resurrected, unless all participants agreed to forget everything they learned, ignore all they had ignored once more, and pretend that the problem will not re-emerge.
So where does that leave us?
What happened in the great depression is actually quite a good example. China is what the US was back then, and the US is what Europe was then. China cannot find a demand for its goods that is equal to what it one was. Its whole economy is based not only on a demand of the kind we’ve had in the recent past, but on growing demand, on expansion, on further investment. This is not only an economical slow down for China. It is a freefall. Its economic system’s foundations no longer exist.
What saved the US’ economic system of mass production was the destruction of production throughout Europe, and the re-emergence of a demand for products that resulted from its destruction.
The US cannot spend money to get out of its current problem unless it transforms its economic system, but transforming the US economic system would lead to an economic boom of vitality since the US economy has been slowing down for years; this change of pace was only hidden by an illusionary purchasing power based on easily granted credit. The US doesn’t have countless cities that rely on mass-production facilities for survival, and hence the US economy would do quite fine in a transformation process as it would only lead to the creation of new jobs. This is akin to feeding an animal daily, and then releasing it in the middle of a forest far from civilization. It will have to take different actions to survive, but in the end it remains the same animal. The US needs nothing new, it just needs to provide for itself in order to allow its population to sustain itself with new jobs. People will need the same services. It can only go up from its bottom.
China’s biggest consumer was consuming beyond its means. China won’t be able to find someone to finance its growth like the US did. And this time around, the likeliness that the world will be destroyed due to war is actually lower than in the past, thanks to mutually-assured destruction.
The only solution for China is to either help the US resurrect its former credit system, for the short time it will last, to give it some time to finance its own transformation (albeit one that will have to occur over an extremely short and inherently dangerous period of time) before the system crashes again, or do an immediate U-Turn, with completely unpredictable yet more than likely fatal results. If we were talking about a different country, a U-Turn would be possible. But in China? Unlikely with such a large population and such a gap in income, and a government that doesn’t have the luxury of being able to deal with being replaced every four or eight years on average.
Have a safe and pleasant journey and return.
“When will you realize — Vienna waits for you…”
China will do what China will do.
“The only solution for China is to either help the US resurrect its former credit system”
The only solution for China is for China to be China.
Why should China consider that, let’s say $5T, of the debt of the United States of (The Federal Republic) of The United States Of America, is important to the future of China?
The fact is that the debt is already irrelevant, and has been written off……
China is and has been buyiny every avaiable resource with the debt of the Citezens of the USA.
China does not have to “help the US resurrect”.
Do you think China is Christ to Lazurus the USA?
China has taken the reserve currency (paper gold) and it intends spending every cent.
For the ride, Bus Week has an article on “The Subprime Wolves Are Back and they’re feeding off the bailout” You might need the air sick bag after this one.
Enjoy your trip
Well the loonies are starting to pop up. This guy is in Parliament over here.
“Somebody, quick find a youtube of Billy Joel singing Vienna Waits For You.”
How ’bout Uncle Billy crooning Tom Waits to you?
Austria, huh. Anyone from Siemens or APK Pensionskasse? Glock? Red Bull?
Smart, plugged-in folks are definitely worth flying halfway round the world to meet—and you’re only going a quarter, hey! I hope when y’all put yer heads together, you come up with at least one (1) policy initiative to Save the World. That will be one more than our President-elect and his crew seem able to locate collectively using both hands.
And by the time you’re back, I’ll have caught up on the bounty of posts I missed while myself away.
Enjoy Vienna. It could be an interesting European perspective of the crisis.
Vienna means one thing GOOD coffee, injoy your cupa Yves. Mabe thats what everyone needs to do, just sit back with a good cupa and think.
You can get to Vienna in a hybrid, or via the Metro for that matter.
I understand it is a nice place.
Melatonin sorts out jetlag pretty well.
1. Bring me back some strudel.
2. Stay away from diminutive, frustrated house painters with goofy facial hair, always talking about “my struggle”.
3. “Austria, huh! Well, ‘throw another shrimp on the barby!'”. :-D
God I love this blog!
Bless you Yves on your journey.
“What is more valuable than gold? Light. What is more precious than light? Conversation. —J.W. von Goethe
There are those who say the essence of the Market is conversation.
Vienna is the city of Mozart and Beethoven and the Ringstrasse and the Stephansdom. In the 19th century it was the capital of the world much like NY, Paris and London today. It is the city of Strauss and his cheerful waltz music. Some of this former greatness is still palpable but you have to look for it. Take a ride with the Fiaker if it is not too cold.
I’m disappointed in you. Any woman who goes to Vienna on a short turn around trip can’t be thinking. Take your time. Enjoy yourself.
Safe travels, Yves.
Yves is a guy’s name — not sure why people think he is a she?
LOL, uh, we’ve seen her on video.
Enjoy your trip and travel safely.
I want to see the Huntervasser’s designed public housing and see how it is holding up. Could you do that for me, please and thank you?
How many are aware the Supreme Court in deciding whether to hear a complaint about the president-elect’s eligibility on Friday?
Isn’t that “antidotes du jour” ?
Remembering vienna I have come across this by by Robert Waldmann