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Thursday, August 30, 2012

Train Wrecked Economies



World Economy Off The Tracks


Train Wrecked Economies

World Famous: “Nauru School of Keynesian Economics”


Comments: Wall Street Journal, The Guardian, The Globe and Mail.

Today it is almost certain that every economist in America and Europe earned their degrees at the world famous “Nauru School of Keynesian Economics”, with further studies in applied research on Easter Island. There they learnt important lessons in physics along with the mathematical concepts of finites and exponentials. They were taught that it was essential that these concepts be absolutely excluded from all economic theories. Otherwise, the contextual logic of the stories they we’re going to tell later just would not make any sense.

Now how much economic thinking does it really take to come up with their two best routine prescriptions: print money and issue more debt? Even today, they cling to these self-destructive remedies, despite estimates by leading pundits – Bill Gross, PIMCO - that the total US federal debt inclusive of future entitlements is calculated at $100 Trillion. Why is this an important number? Simply, because it is nearly the dollar value of the 1.2 trillion barrels in global oil reserves reported in BP’s 2010 World Energy Report. Wow!

It get’s better. First, the OPEC numbers could be substantially lower than reported, by 20% or more. Second, increases in debt, implies that more oil will actually need to be created. Or worded another way, scientists need to start learning how to create new planets. Third, the total debt number does not include other government and personal debts. Lastly, if all the current debts were paid with all the world’s oil reserves immediately, then what the heck do you do? Yikes!

In the last analysis, this is a proverbial train wreck caused by a failure of common sense not to include key principles of mathematics and physics in the foundation of economic theories. However, I guess the only problem with common sense is; it is just not so common. At least, not at the “Nauru School of Keynesian Economics”



T A McNeil

First Financial Insights Inc.
Toronto, ON

@FirstFinInsight



Famed Location Where It Began
"Nauru School of Keynesian Economics"