Pyramid Comment

This journal takes an alternative view on current affairs and other subjects. The approach is likely to be contentious and is arguably speculative. The content of any article is also a reminder of the status of those affairs at that date. All comments have been disabled. Any and all unsolicited or unauthorised links are absolutely disavowed.

Friday, May 11, 2012

Decline Continues To Grow

WW3 is well underway. Instead of conventional bombs and bullets, the invasion is through the financial system. Control the finances and control the nation. Look at Greece.

  • Syria
  • Libya
  • Tunisia
  • Egypt...
It involves Europe, China and the USA. It's global.

House prices increase. Salaries do no rise at the same rate. The two put together influence the rate of any increase. Perhaps house prices decrease. Negative growth. A mortgagee may have negative equity: the value of a property is worth less that the mortgage raised to originally buy that property. The term 'buy' should be used carefully: a purchaser secures a loan with which to pay for a property thereby creating a debt while that property is purchased by the buyer. The 'buyer' does not own the property until the debt (with its amortised interest) is fully paid off. Houses do not sell since potential buyers cannot afford them. The effect is that any 'growth' is pseudo self-regulated.
The economists' mantra of growth, growth, growth cannot work. Nevertheless if 'growth' slows or even stops then a recession is the result. A recession is inevitable since growth cannot continue forever:

Forever increasing

It is a very confused system.

Economists talk of growth, but growth by its nature is completely unsustainable. Feeding continually will produce the unsustainable: greed and the desire for some of just more and more and more and... Everybody gets caught up in others' greed. Not everybody wants more. Simply enough. Enough to maintain a reasonable life-style and get on with living. There's more to life than simply more money and the trappings of wealth. Many want just a home that they can call their own. Rising property price for some is the only reason to 'get out of bed' in the morning. That's it. If you can't make money then there is no point to living. Make more money?

As incredible as that sounds it is the reality. Many are conditioned and controlled by others' greed and want some 'of the action'. The recipe for ultimate failure. Advertising works. It 'convinces' consumers that they need something. Something that costs and it's all about the redistribution of wealth. Take from one and give to another. Winners and Losers. That doesn't create. It just moves. Consumers want more of the products on offer. Many of them simply snake oil.

Trading between countries produces different amounts of potential revenue relative to that country's production. It is the fundamental reason for a nation having its own currency. It is why many European countries move business to the east where it is cheaper in labour costs to manufacture a product more profitably by then selling the low cost product at high prices back in the west. Without the differences there is no point in doing this. But growth has its hopeless demands.

It can hardly be a surprise that within the Eurozone (Europe) the monetary system is failing. And it is failing terribly. Disastrously. Countries that have a different ability to 'create' wealth have a common currency with many other countries. How could that ever work? It must skew everything. Wages and salaries and the cost of living in one area are quite unique to that country. To attempt to level the playing field can never happen.

It can be argued that the design of the system is simply to create an east-west scenario, but within Europe. Consider the fuel price disparity between the UK, Europe and the USA. Manufacture cheap and sell expensive within the same large community: Europe. The inevitable consequence would be easily recognised that a country's economy would collapse unless that country accepted a 'forced loan' that keeps collapse at bay by having a growing debt. Introduce growth by levying a debt on a country that can never repay that loan so forcing yet a further loan to continually stave off inevitable collapse.

Create the problem,
provide the solution

The cynicism of that ethos is monstrous. The parasite ('Brussels') grows at the expense of all its hosts.

Thursday, May 03, 2012

Loan Trap

The trap can be illustrated by considering a salary below the 'official' average wage, yet still firmly within the trap: £26,000.

  • Remember that interest is continually applied every month regardless of any payment. This is an inexorable charge. If the salary creeps above this value then a forced payment is made.

Should I elect to repay?

  • This assumes salary falls below the threshhold of £21,000 (current level as at March 2012)

Student loans


Paying it ALL back


 Your income per yearInterest rate on your loan
 while you're studyingrate of inflation +3%
£21,000 or lessrate of inflation - no repayment made, but interest is added on
£21,000 - £41,000varies between the rate of inflation and the rate of
inflation +3% depending on your income
£41,000 or more rate of inflation +3%. This is the same as before graduation and while STILL studying

Remember too that the higher-rated RPI is used and NOT the CPI

Your monthly payments

You pay 9% of your residual income that exceeds the threshold of £21,000 a year.
This has the 'benefit' (for government - DA) of still attracting the highest yield in interest
when actually making payments.

If your course starts in September 2012 and you finish in June 2015 and in September 2015 
you’re earning £25,000 (£4,000 over the £21,000 threshold), you will be forced to pay 9%
of £4,000 which is £360 (annual charge). This means from April 2016 you pay back £30/month.
  • The £21,000 alluded to is the level as of March 2012. The actual level at April 2016, and
more than 4 years into the future, is completely unknowableDA

 Your income per year  Monthly repayments
 £21,000 and underno repayments (monthly interest is continually applied)
 £25,000  £30
 £30,000  £67.50
 £40,000  £142.50
 £50,000  £217.50
 £60,000 £292.50
Notice how a small increase (£25,000 to £30,000 = 20%) results in over a 100% increase in
repayments (£30 to £67.50)

  • Don't overlook the (VERY BIG) elephant in the room: interest is applied from the 1st day of the 1st year of any loan, which by definition is at least 3 years before graduation. Into a 2nd year of a loan attracts interest on that 1st year. During the 3rd year, interest is applied to the 1st and 2nd parts of the total loan. And any chance of a full-time career to fund the repayment. If such a career can be established.
Nothing up front