Debt

Financial Illusion

The illusion of increasing wealth is crudely disguised by debt. The earlier poorly off appear to be getting richer. Pure illusion. The rich are simply getting richer and the separation between the two actually widens. The purchasing power of any currency is much worse today than just several years ago. Inflation sees to that based on debt. Without debt, money is not 'made'. A debt-based monetary system relies on interest for its growth. Another illusion: growth means success. Growth is reflected in share price and apparent worth. Meaningless other than for suggesting that success is a reality. The illusion is that without growth the wealth of everybody cannot increase, but inflation increases the price of everything. The sliding door effect. Take your eye off the trailing edge and the leading edge increasingly moves across the wealth divide.

Keynesian Monetary Theory - a 'tricky' and very slippery concept

At the end of life, an individual may have amassed (not 'made' or created) a great deal of wealth, but learned nothing except how to manipulate the redistribution game. A financially not so well off individual may have learned a great deal and is so a lot wealthier (and freer) than the individual held down by his material trappings. Incarcerated within the prison of 'wealth'. It's one interpretation of:

"...it is easier for a camel to go through the

eye of a needle than for

a rich man to enter the kingdom of God"

• Let in the poor, but exclude the rich. They represent competition - DA

Many financial systems work along the same principle. They are all debt based and the illusion of creating money is just that. The principle involves a very simple idea: parting an individual from his money creates a loser in the same way that a winner is created by acquiring that money. No actual monetary change has to occur, just the change of ownership.

Increased Debt

Those who possess great wealth are not so easily influenced by the greed for more money although this is inevitable. Any 'need' for greater wealth demonstrates an insecurity as the fear of having none perpetuates this 'need'.

Southern Electric - Deceit

Southern Electric is a trading name of the Scottish and Southern Energy Group of which SSE Energy Supply Limited is a member

Originally, Southern Electric responded positively to a letter I sent (13th December 2008). However, I have just received a statement proving that the company is deceitful and cannot be trusted.

The company lied to me

• I have received a statement proving the deceit of the company and evidence that there was never any intention of playing fair. No quarterly statement was forthcoming and the level of direct debit was as threatened at £69 and not the 'agreed' figure of £54.

Several other activities have since been uncovered through a detailed analysis of invoices covering the previous 3 years.

The most notable is the varying statement periods year on year. This makes it difficult though not impossible to compare similar times throughout the year. The most blatant action that works against the consumer appears to be the doubling of the standard unit rate. This ensures that a decreased number of units are available for any discounted rate: interpreted as inflated and standard rates rather than standard and discounted.

Analysis

Customer Liaison
Customer Service Centre
Southern Electric
PO Box 7506
PERTH
PH1 3QR
Scotland

Thank you for your letter (received: 01.07.09). The preliminary analysis of all my statements is now complete and I can make several observations and draw some conclusions. I do not regard myself as an isolated instance and I ask myself how many others have received ‘incorrect’ direct debit advice based on mistakes. It is difficult to imagine that such errors would pass unnoticed.

My review has taken a lot longer than I anticipated as obtaining much of the necessary information has required a great deal of 'digging', but does show the maximisation of revenue gain by Southern Electric (aka SSE) and the exploitation of colder and the coldest periods. Using electricity as an illustration the statement period for 10.06.08 -> 06.03.09 is 270 days and is split at 25.08.08 when price increases of 15% (standard) and 22.4% (discounted) were introduced for the remaining 194 days comprising of Autumn + Winter + Spring. Perversely, the discounted rate had the much greater increase. The coldest Winter period, after the increases, is effectively 'hidden' between Autumn and Spring as the two flanking colder periods. Between 10.06.08 -> 24.08.08 was the 76 day Summer period. Notably, a price reduction of just 7.5% and 8.7% (respectively) was introduced on 30.03.09 -> 08.06.09 (71 days) as temperatures began to rise. This illustrates the minimisation of revenue 'loss' (to SSE) through warm periods, also demonstrated in the previous year by the short warmest spell between 10.06.08 to 24.08.08 of just 70 days as the entire Summer period.

There is a fundamental difference between the gas and electricity charging structure. Gas has a single fixed limit [combined standard/discounted] of 1142 kWh regardless of the period duration, but electricity has both standard (225 units) and discounted (residue) revenue repeatedly even if the duration is combined into one statement. This can be illustrated by the electricity statement dated 10.06.08 -> 06.03.09. One statement, but two separate periods each with a standard proportion:

• 10.06.08 -> 24.08.08 Standard = 186 units (70 days)

• 25.08.08 -> 06.03.09 Standard = 477 units (194 days)

663 units and is approx. 3 x 225 units

For illustration, I offer the following:

Increase in unit charge (for entire colder + coldest periods)

• 14.93p -> 17.18p = +15% (standard) 25.08.08 -> 29.03.09
• 10.04p -> 12.29p = +22.4% (discounted) 25.08.08 -> 29.03.09

Decrease in unit charge (when warm period starts)

• 17.18p -> 15.89p = -7.5% (standard) 30.03.09
• 12.29p -> 11.22p = -8.7% (discounted) 30.03.09

The ‘arbitrary’ selection of charging periods may be effective policy, but is in my view managed in a very clumsy fashion. Altering statement periods into varying lengths and times of any year makes comparisons between those years difficult, but not impossible. Examination of all my data over more than 3-years (03.04.06 -> 08.06.09) reveals an apparent overcharge of £12.07 for gas supply during the period defined as between 30.05.08 and 26.11.08, a total of 181 days (the 87 days between 30.05.08 –> 24.08.08 and the 94 days from 25.08.08 –> 26.11.08). I cannot reconcile this as a ‘mistake’, if it is indeed a mistake, but can be revealed as follows:

30.05.08 – 24.08.08

• 714 kWh @ 3.62p £25.84
• 1236 kWh @ 2.56p £31.64

25.08.08 – 26.11.08

• 1570 kWh @ 4.44p £69.71
• 2719.55 kWh @ 3.37p £91.65

£218.84 –6% DD discount, +5% VAT -> £215.99

When corrected, this would become:

30.05.08 – 24.08.08

• 714 kWh @ 3.62p £25.84
• 1236 kWh @ 2.56p £31.64

25.08.08 – 26.11.08

• 428 kWh @ 4.44p £19.00
• 3861.55 kWh @ 3.37p £130.13

£206.61 –6% DD discount, +5% VAT -> £203.92

Alternatively, the same figure can be calculated:

• £69.71 - £19.00 = £50.71
• £130.91 - £91.65 = £38.48

Difference = £12.23

£12.23 -> £11.50 (-6% DD discount) -> £12.07 (+5% VAT)

Note: 714 kWh + 428 kWh = 1142 kWh and 3861.55 kWh = 2719.55 kWh + 1142 kWh.

The origin of the difference between £215.99 and £203.92 is £12.07 and represents a serious ‘error’ that cannot be viewed as an accident.

On the initial gas statement a total standard charge that carries the higher rate of charge was applied to the first 815 kWh, 351 kWh (03.04.06-30.04.06) + 464 kWh (01.05.06 – 06.06.06). Subsequent demands are for either 1142 kWh or 1143 kWh and this represent a 40% volume increase in the standard proportion. My interpretation of this is that the first bill creates a lower charge as an introductory "sweetener". During the latter half of 2008 the "hidden" overcharge is buried halfway through the statement period 30.05.08 - 26.11.08 (fourth quarter) when energy price increases were applied. Standard rate is a 22.65% increase and the discounted rate is a 31.6% increase (25.08.08).

Other price changes have occurred also in the later part of a statement period such as onwards from 01.01.07 resulting in a higher charge being applied during a heavy-usage period. There would appear to be a definite pattern with respect to statement timing and the apparent arbitrary nature of varying statement periods that never benefit the consumer. It also appears that imminent price changes, both up and down, must be known to SSE well in advance.

Unless a satisfactory justification can be made, the apparent overcharge (applied during the 6-month period 30.05.08 - 26.11.08) must be either returned or credited. I make note of the fact that energy consumption has no direct link to price increases or decreases. The one is not dependent on the other and I am currently closely monitoring for accurate comparison with future 3-month statements for a more consistent set of figures. Finally, the reduced direct debit discount of 6% to 5% was unannounced additionally disadvantaging the consumer and benefiting SSE.

These points require answer and I ask you to be accurate, as your response may be enclosed with my communication to my MP and Ofgem.

Yours faithfully,

• Defense: the statement that covers several months also incorporates two invoices onto the one statement. Consequently, the double charge appears to be valid although this is not mentioned or clarified in any way. No attempt at all was made. Another deficit of multiple invoices on one piece of paper (to save the environment) without explanation. This just has the advantage of misleading and hiding the facts.

• The £12.07 was credited on the grounds that an error (mine) had allowed misinterpretation of the figures.

Note: these details are added here to ensure the history is recorded in full.

MP Expenses - Axiom

"Lord, Make me chaste, but not yet"

St. Augustine

This must surely be an MP's or cabinet minister's axiom, since this is perfectly in line with standing down...

at the next election.

And perversely for absolutely no 'wrongdoing'.

• The concept of a 'morally pure' politician is extremely difficult to imagine in 2009.

MP Expenses
MP Expenses - Damage Limitation
MP Expenses - Escalation
MP Expenses - The Future
MP Expenses - Severance
MP Expenses - Further Into The Future
Westminster Trough Of Hypocrisy
 

Size Zero - Sense At Last

Alexandra Shulman, the editor of the influential Vogue magazine, has challenged the fashion industry and size zero. Designers apparently send smaller and smaller clothes for photoshoots and so 'encourage' the use of skinnier models who can actually get into these obscenities masquerading as clothes. It seems that the industry is exercising the attempted control of attitudes. Another view is the active incitement to cause ill-health.

There is no justification for size zero other than

increased

profit by using less garment material for a high unit price

Dreadfully thin women look incredibly ugly (subjective opinion). Nothing but skin covering a skeleton. Anorexia is a psychological condition that leads to true disease. It's reversible, but to encourage this dangerous path is effectively criminal. To a large extent it is the gullibility of women that leads them into the advertising trap with the belief that it is 'fashionable' to look like a skeleton that moves. It does nothing for women other than pathetically attempt to score points over other women and who can...

look the worst

Shulman has resorted to altering the photos of skinny 'models' to fill them out and make them look presentable. This promotes deceit in suggesting the 'models' look other than they actually are. It's promoting a lie and it can only do Vogue harm in the longer term. This is possibly why Shulman feels compelled to speak out.

• Such deceit defeats the entire object of so-called fashion and it becomes the actual joke of what it really is.

The fashion 'designers' display a lethal arrogance to incite the thinner and extremely dangerous lifestyle and this is possibly (hopefully) actionable.

Assisted suicide springs to mind

Growing Decline

Recession Completed The unemployed create nothing though as potential consumers without funds they become an increasing liability. Growing queues of unemployed create only a burden to any system in any country and this is a totally unsustainable ideology. Capitalism.

• The ethos that seems to drive business is the maximisation of profits. Less annual profit than the previous year perversely defines negative growth. The return can still be 'healthy', but compared to the previous year is interpreted as imminent failure rather than simply not quite so much profit as before. A business can still be 'in profit', though it is perceived in business terms to be moving downward. The concept of growth is a total misconception.

• A shareholder profit cannot be returned so the the investment becomes negative and the business is suddenly in decline. Share values are the measures of success or failure. A business may on paper be worth more, though actually unchanged in its true value. The share 'value' can be a dreadful guide to the accurate position.

• Efficiency is equated with profitability however well a business may have grown since the previous year. If growth is not perceived as enough, any actual growth is then regarded as an indicator of a failure to achieve. Targets, however unrealistic, that had been set and not realised demonstrates a failing business even though that business may in reality be successful.

• The other side of the employment coin is the drive to minimise a work force and the consequential reduction in the wage bill. Profits can only move upwards (all things being equal, which they are not) if the wage bill is reduced.

• The maximisation of output and minimisation of input are inevitable partners in any business (marriage) model. The population growth with the reduction in the work force (though more work for each of those in that reducing work force) move in opposite directions.

• Problems for any business model can only escalate as less work becomes available for the incessant growth in population.

• Industries that produce consumer goods that nobody can afford to buy as they have no work or money shows the non-sustainable ethos of the entire system. Growth to sustain growth. There is no 'new' money.

Recession Completed

Growing Decline

It would appear that the recession is over. Or very nearly so. What this means with all its contemptible cynicism is that growth can now begin in earnest. Interest can begin to be 'earned' by the lenders and the goal of the next recession is underway.

In fact, a recession is never over since debt is the fundamental feature that underpins the financial system.

Keynesian Monetary Theory
Nouriel Roubini

The recession is not over (2012...) and probably never will be.