The onslaught to come

As firms make staff redundant (because they were badly managed in the good times). We must realize that instead of keeping a cash balance on hand the managers were on a bonus feeding fury. Draining, raping, pillaging their company, but like all of these people none of them know how to "run" a company. Companies are not above the law, indeed in some cases corporate law is more severe than the regular law-of-the-land.

Back to the theme, as the number of people working declines, the amount of available free spending money declines. Other companies have to lay off staff or close down. Lets take an example. The hair salon/barber. Every shopping area, mall or public place where people pass through (like a railway or subway station), has a variety of barbers and hair salons. In their peak JPY5,000 or USD50.00 would be the norm. They would all be busy all of the time. AS the amount of money being spent decreases stylists are let go, prices come down to 1/5 of the price and salons close. Many people now prefer to wash their hair at home making a 3 monthly visit instead of a monthly visit. It is not a necessity, but a luxury good.

The salons that remain open have fewer customers less frequently and therefore prices must go up for them to stay in business. For the same reason that Microsoft sells its windows product at about USD150 (because it can sell many), a propriety database or accounting system can cost tens of thousands because the developers can only sell it to one or a few customers.

Hence we have initially "inflation" leading to "stagflation" because more people loose their jobs and more businesses close, leaving the few in business looking at raising prices to stay afloat.

What the governments and central banks need to do is "Just print money". So what if we cause hyper inflation and have to revalue the currency every week. Let the citizens print it out on their home PC !!! The only people it would affect is the money hoarding capitalists who have previously "stolen" their wealth from the economy. By stolen, I mean they have not provided goods or services equal to the money they took out of the system. Hence they are net value destroyers whereby the average Joe is a net value creator.

The social system is on the verge of collapse. The world population is more than 5 billion. Ivory towers with walls patrolled by security guards will not be enough to resist the onslaught against capitalism in all of its forms. Capitalism = waste!