{"id":22899,"date":"2008-11-14T00:01:00","date_gmt":"2008-11-14T00:01:00","guid":{"rendered":"https:\/\/clusterfamilyoffice.com\/blog\/?p=440"},"modified":"2008-11-14T00:01:00","modified_gmt":"2008-11-14T00:01:00","slug":"boquerones-fritos","status":"publish","type":"post","link":"https:\/\/clusterfamilyoffice.com\/en\/boquerones-fritos\/","title":{"rendered":"Fried anchovies."},"content":{"rendered":"
As we promised last Monday in a comment, we are now going to publish another comment we received in response to our article in the form of a post: <\/span>\u00abInvesting During a Recession and Depression\u00bb<\/a>.<\/span> We\u2019re not doing this because we agree 100% with its content \u2013 that\u2019s not the case; in fact, I disagree on several points. But what I find worth highlighting is that someone has written a text anonymously to such a high standard of quality and ethics. I find this to be an extraordinary act of generosity, as we all tend to take centre stage \u2013 even if under a pseudonym \u2013 whenever we produce a piece of writing that reaches the standard of a well-reasoned opinion piece. But not in this case. The author chose not to sign it, despite its length and quality.<\/div>\n
I have no idea whether the anonymous author will see fit to send us more high-quality articles, or whether, on the contrary, we shall never hear from him (or her) again, or perhaps he or she will reveal their identity shortly. I\u2019ve no idea. But the fact that they\u2019re contributing and sharing articles that far exceed the minimum standard required \u2013 and doing so anonymously \u2013 strikes me as highly commendable, regardless of whether or not we agree with them. I\u2019ll leave you now with the text, to which I\u2019ve taken the liberty of adding a few photos:<\/p>\n

\"\"<\/a>\u00abThe effects of the White House Bailout Plan approved in Washington last October are having no impact whatsoever on the financial markets or the real economy. This was to be expected. But the worst thing is not this, but rather that the model is being copied in Europe without the slightest hesitation, since the US is the world power that holds \u201cthe truth\u201d in its hands and, naturally, as if it were a DVD of the latest American film, we Europeans are \u201cswallowing it hook, line and sinker\u201d.<\/span> The approval of 700 trillion dollars to address the chaos within financial institutions is nothing more than a botched stopgap measure, since what they are trying to save is precisely the inefficiency of a manipulative and corrupt financial system, rather than focusing their efforts on saving the \u201creal economy\u201d. The latter seems to be of no interest to either the political class or the bankers currently in power.<\/span> For some time now, financial institutions have been expanding their range of investment and asset-based products, financing the purchase of all manner of goods for consumers eager to have better homes, better cars, better services and better holidays spent lounging in a hammock in the sun. \u201cThe secret\u2019s in the dough,\u201d as a pizza maker once said. It\u2019s quite simple: if I give you money for a house with a jacuzzi and automatic blinds and finance it over 50 years, you\u2019ll be paying interest and the principal until your teeth fall out. If one day you can\u2019t pay me back, it doesn\u2019t matter; I\u2019ll keep your \u201cdoll\u2019s house\u201d because, as business is booming, I\u2019ll make some extra capital gains from it and, as ABBA said, \u201cthe winner takes it all\u201d (\u2018el ganador se lo lleva todo\u2019 for those who\u2019ve always thought Teruel exists too).
<\/span> \"\"<\/a>Everything\u2019s changed, hasn\u2019t it? Banks now face major strategic challenges. Saving their own skins and their profit and loss accounts, reducing bad debts, increasing the range of deposit products (those little savings \u2013 bring them over here and I\u2019ll even give you a car or a motorbike), raising the price of assets (I\u2019m going to charge you more interest on whatever I lend you) and raising fees (that passbook maintenance fee I\u2019ve never understood, because it practically maintains itself).<\/span> The worst thing is that this capital injection from the Bailout Plan does nothing to improve the real economy. Consumer and investor confidence has hit rock bottom; there is no capacity to save (and there will be even less next year), interest rates keep rising (to attract savers who are unemployed and have no capacity to save) and unemployment figures keep climbing (will the banks give us a measly job as a cashier with this government cash injection?). It\u2019s a world turned upside down, and yet there are still people who are delighted by the \u201cnifty intervention\u201d of the saviours of the world.<\/span> I\u2019m going to propose another bailout plan that shows a bit of common sense. Just for one day, I\u2019m going to put myself in the shoes of Obama, Bush, Zapatero or Father Christmas.<\/span> I believe that state intervention in crisis situations is necessary to boost aggregate demand \u2013 that is, consumption and investment. Paying off banks and financial institutions is like going to see a doctor who is ill with the very same symptoms as you. In a climate such as the current one, governments must invest in the productive economy rather than in the speculative activities of financial institutions. There is still a great deal of room for improvement when it comes to our countries\u2019 roads; we need better transport infrastructure (just ask Britain and its industrial revolution), we need access to better services for the elderly, we must ensure that everyone has access to new technologies in a more balanced way and without having to pay a premium, we must improve our children\u2019s education (precisely so they do not fall into the same mistakes as their elders), to promote cultural diversity, to provide a more balanced and equitable healthcare system, to carry out research into cures for new diseases\u2026 so many, many things\u2026 but then again, most of them are regarded as cost centres rather than profit centres.<\/span> That\u2019s where the real problem lies. They mistakenly believe that if the State bails out the financial institutions, then it will be possible to delay mortgage repayments for end consumers by six months and that\u2019s it \u2013 everything\u2019s sorted. Sometimes I think political and economic leaders have fried anchovies in their heads. Yes, yes, fried anchovies instead of brain cells.<\/span> If the State were to invest those 700 trillion dollars in creating jobs rather than in funding the chaos caused by the financial institutions\u2019 own mismanagement \u2013 backed up by a cut in interest rates \u2013 this would lead to an increase in both consumption and investment, in short, an increase in aggregate demand.<\/span> So, if I have a job, I have a monthly income that allows me to spend and pay my mortgage instalments\u2026 there\u2019s no need for the bank in question to grant me a six-month payment holiday, which, at the end of the day, is just a half-baked stopgap measure that will actually generate more revenue for them in the long run\u2026No, no \u2013 if I have a job, I have the money to pay them; neither the bank nor the global financial system should doubt that for a moment. What\u2019s more, I\u2019ll be able to eat every day and even go to restaurants at the weekends. The restaurant in question will be grateful to me because it won\u2019t have to close down or sack its three long-serving waiters. <\/span> But, let me think\u2026 if interest rates go down, the savings rate drops (obviously, for the few pennies I\u2019ve got, it\u2019s not such a good deal to put them in the bank anymore)\u2026 blimey, I\u2019m only just realising now that the banks are the ones most keen for rates to go up, so they can boost their liquidity and finance more of their own \u201cshady deals\u201d\u2026 brilliant! that way they\u2019ll use my money to do whatever takes the fancy of whichever banker is in charge.<\/span>\"\"<\/a> I much prefer the idea of financing the real economy. Lower interest rates, increased consumption and investment, increased imports and purchasing power\u2026 and, of course, job creation\u2026 in times of crisis, recession or systemic risk, this is a solution that satisfies me far more than simply bailing out the international financial system. I would say to governments and banks: don\u2019t just give me the fish (the six-month repayment holiday); give me the rod and teach me to fish (give me a job, and then I\u2019ll be able to pay you back without any problem). The thing is, this latter option isn\u2019t appealing; it makes more sense, and the truth is that it would mean a redistribution of wealth that the banks simply don\u2019t understand.<\/span> And to those who think that these solutions might lead to higher inflation, I would say that they may well be right, but there is no need to get too worked up about it. Is it better to have an economy with full employment or one with a high inflation rate?<\/span> Full employment is a utopia, but governments must invest precisely in this. With the NAIRU, or natural rate of unemployment, there is no link between inflation and unemployment.<\/span> In the past, full employment was achieved by manufacturing more weapons. This is a scourge from every point of view; we have several examples before us. We must work towards full employment by creating a coherent system of banking supervision, boosting the confidence of both consumers and investors, allowing for greater flexibility in exchange rates, and steering clear of protectionism in these times of recession and <\/span> Why are local federal bodies (such as the FDIC) or global organisations (such as the IMF and the World Bank) created, which are supposed to regulate activity in the financial markets but are in fact merely figureheads for the operations carried out by the \u2018sharks\u2019? JP Morgan has just bought the assets of the largest US savings bank, which was forced into bankruptcy, at a bargain price. All in collusion with the FDIC (Federal Deposit Insurance Corporation). JP Morgan has managed to drive down the value of its shares, snapped up the savings bank at a bargain price (1.9 trillion dollars) and is still asking to claim a tax write-off on the transaction amounting to 20 trillion dollars. This smells fishy to me. We are pumping money into the financial institutions, which are the ones that start it all, distribute the spoils and take\u2026 the whole lot for themselves.<\/span> The Bretton Woods agreements must serve as a benchmark now, at the onset of this chaos. It is no good simply protecting the interests of the usual suspects. We must focus on the real economy and ensure that financial institutions can get back on track, with real money, real people and real work. And we must not allow speculation and barbarism to prevail. It seems nobody wants to realise this.<\/span> \u201cPlease, let the financial institutions return \u201dthe cheque\u00bb \u2013 or the extra Christmas bonus \u2013 and let Barack Obama invest in the real economy. In fried anchovies, mind you \u2013 the real sort \u2013 to eat.\u2019 <\/span><\/p>\n

Thank you, Anonymous.<\/div>","protected":false},"excerpt":{"rendered":"

Tal y como prometimos el pasado lunes en un comentario, a continuaci\u00f3n vamos a publicar en forma de post otro comentario que recibimos a colaci\u00f3n de nuestro art\u00edculo: \u00abInvertir en Recesi\u00f3n y Depresi\u00f3n\u00bb. No lo hacemos porque compartamos al 100% su contenido, no es eso, de hecho discrepo en varios puntos. Pero lo que me […]<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[],"class_list":["post-22899","post","type-post","status-publish","format-standard","hentry","category-sin-categorizar"],"_links":{"self":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/posts\/22899","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/comments?post=22899"}],"version-history":[{"count":0,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/posts\/22899\/revisions"}],"wp:attachment":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/media?parent=22899"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/categories?post=22899"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/tags?post=22899"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}