[Part two continues below]

Being of the baby boomer cohort which often seems to get its jollies attending auctions and clapping those purchasers who pay a record, or near record, price for their home, I sometimes feel like a trout swimming upstream, or a Canute telling the waves to recede.

But then I’m reminded of colleagues here and abroad who are fighting the good fight, and of the many X and Y gen they’ve influenced to see the theft the rentier class is employing to enrich itsef at society’s expense.

Clearly, baby boomers do get a warm inner glow as they witness their property prices increase, but they’re oblivious to the vast collateral damage land price bubbles wreak upon the wider community when they burst.

They little realise the real estate market must self-correct from this incredible bubble.

To the question: “If escalating land prices are a natural supply/demand phenomenon, surely future generations of Australians will be priced out of the market?” baby boomers respond that their children will inherit their property assets, so they’ll be OK.  But will they?  Will their kids continue to have jobs as society disintegrates as the financial collapse worsens? Will they continue to carry excessive debt, even with their inheritance-to-be?

Unfortunately, it’s a big ask to get boomers to see the perversity of applauding high real estate auction results.  How to get them to see the economy can’t withstand the ongoing assault of taxation and high land prices?

That’s the $64 trillion dollar question.

Maybe boomers are too far gone, and X and Y gens are the hope of the side?

CANBERRA TIMES 5 April 2012

So, the Reserve Bank of Australia has wrongly left the cash rate on hold – again.

Whilst it still wrestles with the likelihood of inflation, l might remind the RBA’s boffins we’re actually in the deflationary half of a Kondratieff wave. So inflation’s definitely NOT a problem. Yet.

As this site has tried in vain to explain to the RBA, the world is currently tanking into an economic depression as prices decline, and debt—which is far less worrisome in inflationary times—now becomes a super-heavy millstone around peoples’ necks. So, the hyperinflation is a way off yet, Glen Stevens and Co.  This is the debt deflation phase.

The end of the depression will define the period of this particular K-wave which, having its birth at the end of WWII, is a longer one than usual – but that’s for explanation in another post.

BTW, I have a far better record than the RBA on interest rate policy. In THE AGE on 15 June 2005, I believed then RBA governor Ian Macfarlane may have been on the right track:

“In the week ended June 3, Treasurer Peter Costello warned that the Reserve Bank of Australia should not increase interest rates. Early the following week, the RBA seemed to have listened.

However, Costello’s advice may have been redundant in the current deflationary environment, because the next adjustment of Australian interest rates would more properly be down.”

A forlorn hope! The RBA, hopelessly enmeshed in daily minutiae and blind to long term analysis, incredibly ratcheted the cash rate up 1.75% in the two years from May 2006 to March 2008—from 5.5% to 7.25%— before acknowledging its errors and slashing interest rates a massive 4% in the six months to February 2009.

My analysis had been vindicated: over the period, the drop in the cash rate had been 2.25%, from 5.5% to 3.25%. For now, that should remain the direction of the RBA’s overnight rate.

Hey, RBA! I’m available for consultation at a reasonable fee. I know what’s going on, because, unlike your economists, I do understand the wreckage this enormous land price bubble has inflicted upon the Australian economy, and what should be done about it.

ONCE you’ve seen land and natural resource rents are kept purposely invisible by The Powers That Be (TPTB) so they may capture them unto themselves, you’ve pinpointed the greatest corruption of all.

It explains the existence of billionaires and paupers, of want and decadence, of high prices and of poverty-based crime.

Arbitrarily-imposed taxation becomes the natural corollary of the failure to collect the economic rent of land and natural resources to the public purse.

And, of course, TPTB take pains to badmouth land-based revenues:-

“Shocking!  A man’s home is his castle!”

“Taxes on land!  What about the poor widow with no income?”

They’re far less solicitous about all the indirect taxes the poor widow is obliged to bear, or about those taxes fining the earned incomes of labour and capital.

TPTB are the rentier class, you see. Without much success, some of us even try to emulate them.

It’s instructive that whereas the humble English labourer with a family of five in the 15^th century and first quarter of the 16^th century was able to save two-thirds of his wages after food, clothing and shelter, by the 21^st century he had become a debt-slave.

It might be noted that taxes were virtually non-existent and land rents were captured for revenue in the 15^th and first part of the 16^th centuries.

So, we now look to government to solve all the corruptions that flow from not getting revenue from its proper source.

One of many such ‘solutions’ is Australia’s compulsory superannuation.  People are found singing its praises because it hangs well-intentioned additions off our failed tax edifice.

Taxes generate uncompetitive high prices; industries shut down or flee off shore; inadequate public capture of land rent inflates land price bubbles which burst into recession and depression; labour becomes unemployed; crime rates increase …. but TPTB manages to keep all eyes diverted from the inadequate public capture of our land rent.

Silently, this remains the greatest corruption of all.

Says Prosper Australia’s David Collyer today:-

WHAT A PARTY; WHAT A HANGOVER!

The RBA said yesterday assets have fallen by $40,000 per household in the last year.

No wonder everyone is now saving over ten percent of their incomes and slashing mortgage balances with grim determination.

The economy, which usually steers like an oil tanker, has turned on a dime.

We were spending about 103 per cent of incomes, pinching off some of the strong rises in home prices and balancing this with borrowings.

What happened? Falling land prices.

The ABS says house prices are down nationwide by a mere 4.8 per cent (ABS). This is the result.

We all have a personal balance sheet. It might exist only in our heads, but it exists nonetheless. Asset price falls come straight off our personal equity, our savings, while liabilities – mainly the home mortgage – are payable in full with interest from after-tax incomes.

Returning to – overshooting – the long-term average land price is going to be quite an experience for anyone with big borrowings. The impersonal forces that provided ‘Free Deposits’ for housing upgrades are now issuing ‘Underwater Coupons’ to anyone foolish enough to be long and geared into the Australian real estate market. Boomer balance sheets suddenly look quite different, and they simply do not have enough working years left to restore their finances.

The unshakable determination of the MSM and politico-housing complex to maintain citizen ‘confidence’ with deliberately misleading anecdotal narratives has given people false hope. They should be jailed for the tremendous economic damage they have done.

This unfolding financial catastrophe need never have happened. Perhaps it takes a crisis to remind citizens what really matters in a modern and dynamic economy: social justice and economic efficiency. Change the tax system to remove the incentives to speculate and structure it to encourage labor and business enterprise instead. We have the blueprint – the Henry Review. All we need is a government with the political will to carry it out.

IRELAND IS ABOUT TO HAPPEN TO US!

Tim Colebatch’s warning for Australians in today’s AGE “Irish nightmare: Prepare” is timely but, even though he does mention Ireland’s land boom, he and BIS Shrapnel director Frank Gelber are more concerned about what the correction in our mining boom and our terms of trade are going to do to Australia rather than the $805 billion that’s about to disappear when our incredible land price bubble bursts.

It will rival anything the world has seen.

It’s clear that modern economists can’t get their heads around the devastation excessive privatisation of land rent does to economies. They haven’t distinguished land from capital nor assessed surface land rents at 30 per cent of the economy – capable of replacing all forms of destructive taxes.

The very first frame of Prosper Australia’s new documentary Real Estate 4 Ransom should disabuse those who believe that such secondary considerations as governments, money, credit, interest rates or terms of trade are at the root of our problems:

“If you had all the money in the world and I owned all the land, what would I charge you for your first night’s rent?”

We need to get rid of the most fundamental culprits: land ownership, land price, land monopoly and land speculation – and the taxing of labour and capital that perpetuates them.

LEARNING OUR LESSONS?

The public mutinied on Queensland Premier Anna Bligh last Saturday–and how!–just as surely as did his crew on her illustrious forbear, Captain William Bligh.

Many are the reasons, but two are most basic:

1. She sold off the Port of Brisbane and freight division of Queensland Rail for $15 billion and still left Queensland in a financial mess.
2. Queenslanders’ “hip pocket nerve” was feeling the pinch.

Hopefully, Premier Ted Baillieu will learn a lesson and come to see that selling off the family silver is not the way to proceed with Victoria’s financial problems either. The Henry Review has shone a light on the positive potentialities of far greater land value capture and the abolition of damaging taxes.

Secondly, The Barometer of the Economy chart in “Unlocking the Riches of Oz” shows convincingly, I hope, that Australians will throw any government out on its ear once they are feeling financially compromised.

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MELBOURNE FAREWELLS JIM STYNES

You’ll be missed, mate.

OCCUPY LONDON

The Robin Smith Institute

http://gco2e.blogspot.co.uk/2012/03/occupy-london-3-weeks-of-truth.html

How few understand what made St Paul’s a model of how society could really sustain itself.

Even though it was rough and ready, it worked perfectly for 3 weeks.

Then declined… and fell.

In that short time, a majority of Occupiers had put aside their prejudices by giving all people equal space to speak, right or wrong, made it a first duty to help others before themselves, abolished respect for all leaders and experts on camp.

And the result was?

Something we call “Energy”. An almost magic force that just made things work. Some said we were lucky. I say it is because we told the truth and helped each other… from the heart. Not the pocket or the mind.

Occupy London successfully pushed back on, and exposed corruption for all to see, within the most powerful institutions in the land: The City of London, The Church, The Media, The Law. And the people of the country to a large extent saw it all play out. They know it now.

Because we told the simple truth. No bullshit, no experts, no intellect. This “Energy” is strange thing. I often found myself speaking to the camera in a way I had not learned. I was getting “help” from somewhere. Was that the “spirit” of our small social organisation. Or something else? I cannot explain this.

We had shown that if the people get up and make a stand, change can happen. But you have to get up and do it. Yes that’s right, we took our bodies and sent them to the front line.

There is nothing special about an Occupier. I loved every minute of it. I will do it again, happily. We have simply changed our minds and made the free choice all people have, to no longer submit to the corrupt. And told everyone exactly that. How quickly the powerful cave in. That free decision, a commitment to protest, gave me the confidence to overwhelm the dangers, corrupt power, the cold.

The wider result, I think its fair to say, gave all people the confidence that they have the ultimate power too, if they make the free choice to use it. So my view now is not to blame the powerful.

But to ask ourselves the big question: “Do I really mean it?”

Alas, we only had so much “Energy”. I have never burnt the candle more fiercely  than that in my 48 years. In 3 weeks the Energy started to run out. We should not be ashamed of this. We could not keep such a high maintenance, un-grounded, dangerous activity going forever. The authorities knew this but it took them a while before they stopped having a go. In Wall Street, they were not that smart. It seems to me America is a broken society already in decline.

So, even we finally became recaptured by the corrupt regime we were protesting against. Isn’t it ironic?

Occupiers started to get flattered by the camera, became arrogant of the success, saw a future career working for the 1%, got media bribes to say what the press wanted, were given high seats in the church and within legal counsel. We succumbed and let our egos steal back that magic, “The Energy”.

Sound familiar? All things that today’s mainstream society carries out without even knowing it. The people have got used to corruption and no longer know they don’t know. Have the people become corrupt too?

I was guilty too but stayed for another 9 weeks, in denial of the loss of something so special. This takes nothing away from the protest. It simply shows how deep the problem goes. We are all at it, Occupiers are trying hard to stop it but are still a part of society. We cannot live in a vacuum of perfection.

For a grown man I shed a lot of tears at St Paul’s, many times when observing the completely unnecessary depravity society knowingly commits the few to and then leaves them to die. Or how the same utterly hopeless cases immediately found a purpose for life simply after realising they were now part of their own small society once again.

But the most tears came when normal people, maybe a 1000 passers by at my tent, who made special trips from across the nation, to tell their story. They would say:

“All we have done is worked hard, built good businesses, now we are in desperate trouble, we want to get a tent and protest with you, to be Occupiers too, but cannot because we are so afraid of losing our jobs and families if we do so. We have come to say thank you for doing it for us.”

We say, these visitors are as much Occupiers as anyone who chose to share tents with the vulnerable.

The moniker of the Occupy Movement is “The 99% versus the 1%”. I do not believe in this marketing for a moment. It too is inherently corrupt. Divisive rather than uniting.

I believe life, society and this world are about the 100%. Only when the care of others first is written on our hearts can the enormous gift we’ve been offered of abundance, freedom and security be permanently sustained.

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Reward yourself by going to Robin Smith’s original at

http://gco2e.blogspot.co.uk/2012/03/occupy-london-3-weeks-of-truth.html

and clicking on his interview in the video “St Paul’s School of Economics”.

So Fortescue Metals’ “Twiggy” Forrest and WA Premier Barnett want to join forces in a High Court challenge to the Minerals Resource Rent Tax (MRRT)?

Gavin Putland says a much better case can me made against a number of other taxes: he suggests on what grounds right here.  It’s a veritable D-I-Y for individuals and companies who need to claw back some of the taxes they should never have paid without a whimper in the first instance.