Repost from another part of the Topic For Discussion debate on Economic Undertow, this time trading ideas with Sandor.
I like the platform, however I doubt that more than 5% of Americans will. The culture rejects the notion of ‘limits’ and ‘you can’t do that’. Responsibility may be the root virtue, but our culture misinterprets this concept as ‘guilt’ or ‘lawsuit’ or ‘superiority’. Most Americans eschew the idea of responsibility from the get-go. They want to be irresponsible, to consume 25% of the global energy supply, and face no consequences. Even the Occupy Wall Street crowd doesn’t get it. They seem to think that all deserve $20/hr because they are… American. Never mind the $2/day laborer in India.
There are several third parties in this country already. Why are they marginalized in a ‘free press’ culture? Inertia, herding instinct, the embedded value of money channeled through familiar channels. Most Americans are not idealists or philosophers. They want their goodies. Now they want their jobs back. But not at $5/hr. That’s ‘unfair’. The first step I’ve taken with other Americans is to suggest boycotting all Democrats and Republicans, period, no exceptions. If you do that, then you have to start *thinking* beyond throwing the light switch on or off. If you can get that far, then start talking about the dangerous and seductive lie of perpetual ‘growth’.
I actually think if you can write an entertaining screenplay for a risk-taking, savvy Hollywood producer starring teenagers or superheroes that introduces these concepts and follows the thoughts through, you will have a far greater effect on the political discourse of the future than trying to jumpstart a better Tea Party.
Repost from a debate underway between Steve of Virginia of the Economic Undertow and RE of the Doomstead Diner on the question of whether a 3rd Party presents a Political Solution to our current spin down. The original thread on EU is Topic for Discussion.
Reverse Engineer says:
We do of course have many “3rd Parties”, just none with a snowball’s chance in hell of getting Elected on any kind of scale. Occassionally they do, Bernie Sanders is a Socialist, right?
Creating some kind of monolithic 3rd Party to represent the 99% is pretty tough, because of all those nasty subsidiary issues people get bogged down in, like Gay Marriage, Stem Cell Research, School Prayer yadda yadda.
Then you have your Eurotrash example to deal with, where new Parties pop up like Buboes all the time, the new Syriza party in Greece beign a classic example of this. So you get your Parliamentary structure with 10 different parties seated and brokering to make “coalitions” to form Goobermints and the Lock Up is just about as bad as the Two Party Farce we have.
So, while a 3rd Party is a nice idealized concept, in practicality it would do little to change the general state of Political Seizure we have going all over the world these days. There really is not a good Political Solution to the problems we are confronted with, and no I do not think simply eliminating the Carz would help the situation all that much even if you could pull this off Politically.
In all likelihood, the structure we have in place here cannot be salvaged at all, including the “democratic” institutions of Goobermint which basically just serve as Window Dressing anyhow for very powerful people who work behind the Curtain. the system will have to collapse before anything new can be rebuilt, if there is anything left to rebuild with anyhow.
A 3rd Party here in the FSofA, even if a viable one is formed will not make a difference in the way Da Goobermint is operating. The 3rd Party POTUS if elected would still face gridlock in CONgress, and eliminating all the corruption and lobbyists and Golden Parachute jobs in Banking or Industry for revolving door Congressmen is about impossible. NO financing rules will stop this action from taking place, they’ll just find back doors around it all.
The only solution is a DISSOLUTION of the FSofA Nation State Entity into many Baby Bells, an anti-trust type action. then individual regions will be more free to develop their own local solutions and own local Political Parties.
The FSofA is Too Big to Save.
Reverse Engineer says:
“RE, you are giving the establishment too much credit.”-Steve
I don’t think so. These are the same folks who wrote into existence the credit necessary to build and subsidize the Railroads, the Electrical Grid, the Interstate Highways, Goobermint Motors and of course the Internet. That is a LOL of Credit Steve, by any measure.
Who EVER really had a “choice” here about whether the Railroad would get Right of Way through their Farmhouse? Who ever really had a choice whether a Macondo Well was drilled or not? Sure, we got the EPA and other Window Dressing, but man, if the Money Masters want to Drill ANWR, bet your bottom Dollar (or really theirs) they’ll go right ahead and do that.
Describing the Tea Party as a raging success here is IMHO nonsense, that “Party” is just another piece of Window Dressing, taking money from the Koch Brothers and other monied interests. They aren’t independent in any sense of the word. Besides that, like Syriza in Greece, they buy the same idea that “Growth” can be achieved, when it cannot.
How does anyone form a 3rd party around the idea that Contraction and Shrinkage is what is necessary, when that means in practicality that the Lights will Go Out or at least regular brownouts for a while, everybody has to give up their Carz and all the mobility that allows them and everybody has to give up their Iphones and 24/7 connection to the Internet?
Any 3rd Party which does form is going to make the same tired promises every other party does, then once in office will be subjected to the same pressures resutant from a contracting economy. So then they get dumped out of office or eventually strung up by their Gonads, and the next somewhat more extreme group plops into the power vacuum.
This is the nature of the collapse as it plays out with the Political systems of control. It will of course become exacerbated when the logistical systems also begin to fail, the power grid, the JIT delivery system etc. You cannot fix that by any means, because the thermodynamic energy is not there to do it with. The whole system is built on that, you know that as well as I do.
Trying to fix the problems we have here at the Political level is like trying to fix a Car that is misfiring by replacing the Spark Plugs when the REAL problem is the Gas Tank is about EMPTY. You can drop Shiny New Plugs into the Engine, but its STILL not going anywhere.
- Update 9:30PM 5/29/2012
Reverse Engineer says:
“Meanwhile, your grandparents dealt with hard times without complaint as did mine … although I have to admit that doing so made them kinda crazy. The Depression made ‘prosperity in a can’ an entitlement rather than good luck. That is an attitude rather than a condition.”-Steve
Our GPs dealt with hard times when probably 90% of the population was still agrarian and when there really still was plenty-o-oil left to be extracted into the economy, thence and thereafter to be burned up to run the big engine of Industrialization. Besides that, there were not near so many of them running willy nilly around the planet as there are now.
The “hard times” our GPs faced would come to an end with an explosion of credit first to finance WWII, ours will not. It’s not even clear WWIII can be financed on credit this time before the system implodes. Even if it can be though, the aftermath won’t see a Marshall Plan rebuild of the Eurotrash OR a news Interstate Highways system built here in the FSofA.
Selling on the Political Level that our future is one of an ever increasingly austere lifestyle is not a message most people want to hear, EVER. Even if you predate Fossil Fuels, nobody would have been very popular saying “your kids are going to live an even WORSE life than you do”.
Now, you can make the case that the End Life here is better in the Spiritual Sense, you can hold dear the life of Monet and his paintings or the world the Founding Fathers lived in as an idealized version of reality, but fact is none of that was very sustainable EITHER. For the average J6P of those years, they had at least as many problems as we have with the current paradigm, at least personally. What they did not have was quite the level of ecological damage this paradigm does of course.
Is there a POLITICAL solution to this problem, 3rd Party or otherwise? I put it to you that there is not. It’s a catabolic collapse Steve, and ain’t NUTHIN gonna stop it now. We WILL get 3rd parties, and 4th and 5th ones also as the first 2 parties fail in providing even the most basic of services and Goobermint to the community.
This system cannot be repaired within the confines of it’s current structure, and it will, it MUST collapse before any other system can be dropped in as replacement. 3rd Parties are not the Solution. The Final Solution is the complete destruction of this paradigm and it won’t take revolt for that to occur, though this most certainly will be part of the outcome. The destruction will come organically from internal rot and the necessary obediance to the most fundamental of Natural Laws.
You CANNOT make Something from Nothing.
Update 9:30PM 5/29./2012
Memorial day is a fitting day to reflect upon the exploits and heroism of a long gone and all-but-forgetten American her0, Smedley Darlington Butler (July 30, 1881 – June 21, 1940). Butler was a Major General in the U.S. Marine Corps, an outspoken critic of U.S. military adventurism, and at the time of his death the most decorated Marine in U.S. history.
Comment on this post here.
After his retirement from the Marine Corps, Gen. Butler made a nationwide tour in the early 1930s speaking on the theme, “War is a Racket”. The speech was so well received that he wrote a longer version as a small book with the same title that was published in 1935. In it, he described the workings of the military-industrial complex and, after retiring from service, became a popular speaker at meetings organized by veterans, pacifists and church groups in the 1930s.
I spent 33 years and four months in active military service and during that period I spent most of my time as a high class muscle man for Big Business, for Wall Street and the bankers. In short, I was a racketeer, a gangster for capitalism. I helped make Mexico and especially Tampico safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefit of Wall Street. I helped purify Nicaragua for the International Banking House of Brown Brothers in 1902-1912. I brought light to the Dominican Republic for the American sugar interests in 1916. I helped make Honduras right for the American fruit companies in 1903. In China in 1927 I helped see to it that Standard Oil went on its way unmolested. Looking back on it, I might have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents.
“War is a racket. It always has been. It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives. A racket is best described, I believe, as something that is not what it seems to the majority of the people. Only a small ‘inside’ group knows what it is about. It is conducted for the benefit of the very few, at the expense of the very many. Out of war a few people make huge fortunes.”
Then as now. The forces of fascism approached Butler when they were plotting a coup against FDR and American democracy in in 1934. They had the wrong man. Butler reported the controversy known as the Business Plot to a congressional committee when he told that a group of wealthy industrialists were planning a military coup to overthrow Franklin D. Roosevelt. The purported plot would have had Butler leading a mass of armed veterans in a march on Washington. The individuals identified denied the existence of a plot, and the media ridiculed the allegations. The final report of the committee stated that there was evidence that such a plot existed, but no charges were ever filed. The opinion of most historians is that while planning for a coup was not very advanced, wild schemes were discussed. Clearly, “deniability” has had a long and ignoble history, was not hatched by the operatives of Richard M. Nixon in the Watergate days.
At the end of his book, Butler makes three recommendations, which fell on deaf ears then as now, and the disregardment of which have led us to the economic and moral bankruptcy that is now our inheritance:
1. Making war unprofitable. Butler suggests that the owners of capital should be “conscripted” before other citizens are: “It can be smashed effectively only by taking the profit out of war. The only way to smash this racket is to conscript capital and industry and labour before the nation’s manhood can be conscripted. … Let the officers and the directors and the high-powered executives of our armament factories and our steel companies and our munitions makers and our ship-builders and our airplane builders and the manufacturers of all other things that provide profit in war time as well as the bankers and the speculators, be conscripted — to get $30 a month, the same wage as the lads in the trenches get”
2. Acts of war to be decided by those who fight it. He also suggests a limited plebiscite to determine if the war is to be fought. Eligible to vote would be those who risk death on the front lines.
3. Limitation of militaries to self-defence. For the United States, Butler recommends that the navy be limited, by law, to within 200 miles of the coastline, and the army restricted to the territorial limits of the country, ensuring that war, if fought, can never be one of aggression.
On this Memorial Day, I can think of no greater tribute to the men and women in uniform than to recall the memory of Smedley Darlington Butler. Support the troops: bring them home.
As we watch our society spin down into ever more obvious degradation and corruption every day, there is a certain Nostalgia for the past. A time when people RESPECTED each other, when children played outside with Bat and Ball in the Playground burnig calories instead of sitting eating Doritos in fron of the Wii or X-Box turning the corn chips into lard.
Even I look back in Nostalgia at the Wonder Years of my youth, when although “out there” Bobby Kennedy and MLK had both succumbed to the Assassins’ Bullets I still played and went to schools that sorta did teach something. Mainly though because those schools and programs were tiered up and sieved for academic ability at the time, the vast majority of them were already just Warehouses even back then.
What has CHANGED here today? Has anything REALLY changed at all? At the superficial level, what it is possible to OBSERVE, yes it most certainly has changed now. The Oligarchy in charge no longer hides the theft, it is brazen and in your face all the time now. From Bernie Madoff to John Corzine, from Lloyd Blankfein to Jamie Dimon, from Obama-sama to Catcher’s Mitt Romney, they are ALL on the TAKE, and really only few like poor Bernie get the Perp Walk these days.
The thing is of course, this corruption is systemic and has been present for just about all recorded history, it’s visible in Greek and Roman texts going back at least around 3000 years or so. Through periods of History it seems to Wax and Wane, and mainly I think the “Pax Amerikana” we have experienced since the end of WWII was all financed by the thermodynamic energy of fossil fuels. For those of us who lived inside the societies that were the beneficiary of this resource rape of the Earth, our lives as Slaves was overall pretty pleasant, at least if you managed to hop on the bandwagon in some way and didn’t get left at the station with probably 20% of the population from the get-go, mostly the black population of former explicit slaves.
For decades here since the end of WWII, the low end of the population on the economic scale has been bought off into relative silence, living in Section 8 housing and collecting a subsistence dole payment, which if creatively used could actually buy you a Smart Phone and a Big Screen TV also. The SURPLUS on this end of the trade line was so enormous that even poor folks got all these toys of the Age of Oil to one extent or another here.
So what now is so DIFFERENT here, why does it all now seem so much more corrupt than it ever was? Probably because now as we spin down, the rug is getting pulled from under those who can LEAST afford it FIRST. The preponderance of the PAIN that is necessary in a Cold Turkey exit off the Jones of Oil is being dropped down on the poorest of the poor first, and now moving its way up the economic ladder created from PVC Tubing in the Age of Oil. The Carz are still being produced, and the “New GM” Executives are still pulling in a pretty nice Paycheck, but fewer J6Ps all the time can BUY those Carz, or fill them with GAS.
The corruption we witness about us each day is the result of generally very “typical” people who think they are doing what is “right”, who think they DESERVE the big paychecks they get for being an Executive or a Doctor or Lawyer, but in the end whose big paychecks can only be supported by ever increasing THEFT from J6P.
Every single scheme here created, from Obama-sama’s Health Care Plan to HAMP Mortgage refis is not meant to Save J6P or improve his Health Care, its meant to SAVE the BANKSTERS, to keep the game running just a bit longer here so they can continue to eat Canapes in the Hamptons and stuff the orifices of Ford Models with Cocaine and Tube Steak. Up there at the top, it’s Sodom & Gomorrah all over again, to be sure. An orgy of decadence played out daily here before our eyes, still glorified on the pages of People Magazine and the Tabloid “Newspapers” of Jolly Old England pandered to the public by Rupert Murdoch. Talk about Servants of Satan, if he is not Satan himself, that man surely has a special place in HELL reserved for him when he finally buys his ticket to the Great Beyond.
Were the “Old Days” really any better than this though? You can go back easy to Andy Jackson and his complaints with the Banksters, and to Thomas Jefferson before that as well. when was there ever NOT corruption in Goobermint? When was there ever real EQUITY for the working man? It sure never came for the Irish or the Chinese who worked for Pennies a Day to build the Transcontinental Railroad. It sure never came for the immigrant workers in Saudi Arabia who pumped the Oil while Saudi Sheiks lived High on the Hog. It sure never came for 1B Chiense who slaved in factories making toys for Amerikan Konsumers for lo these last 30 years or so.
Nevertheless, there is in your mind the IMAGE of Walton’s Mountain, of John-Boy and Grandpa plucking their way through the Great Depression in the Mountains of West Virginia. The IMAGE of Laura Ingalls Wilder in the Little House on the Prairie living a meager but fulfilling life on a Farm on the Great Plains of the FSofA.
I do Hope/Believe that in the end Good will Triumph over Evil and Homo Sapiens will survive this great trial, at least a few hopefully anyhow. However, I do not think we will find that Better Tomorrow by looking Nostalgically at the recent past, which generally is a bunch of fictitious propaganda. There has not been a moment in recorded history where J6P hasn’t been REAMED here, and the only difference with our current collapse situation is that many Chickens are coming home to roost here at the SAME time. Those at the Top are making desperate last ditch efforts to Cover and Save their own Asses here, and for the most part the Meek of the Earth are still letting it happen. Not in perpetuity though, no sirree Bob. Because it is WRITTEN, “The Meek Shall Inherit the Earth”.
Right AFTER the Meek get very, VERY Angry.
See You on the Other Side.
More from the The Concepts of Money and Capital thread on TAE.
Quote from Skipbreakfast
I don’t think the Fed has any illusion it can truly replace all the credit currently in existence, should credit actually start evaporating exponentially. In truth, the Fed doesn’t believe it will need to do that–it naively believed it could reverse the tide before such catastrophe. Maybe even the Fed is starting to wonder if things are now out of hand, however.
The deflationists have persuaded me that the trickle of credit destruction soon becomes a torrent and the CBs are simply overwhelmed. They will have to change tact and embrace deflation at some point, by shoring up their own assets, once it suits them to do so.
What we have here is a MOUNTAIN of debt, which although it has been exponentially increasing at an obvious pace over the last decade, has in truth been growing exponentially right from the beginning of this supercycle, best pegged IMHO to the chartering of the Bank of England in 1692.
All through the ensuing years, one economy after another has been subsumed into this ever expanding Ponzi scheme. The whole Bizness isn’t REALLY managed by Da Fed, its managed by the Bank for International Settlements (BIS) in Switzerland. Da Fed is simply the most powerful among many client Central Banks in this schema.
The snow falls over many years on a Mountain, and in fact you can to extent control Avalanches by setting them off on purpose periodically when you see the instability growing. So in fact it is likely that many of the prior depressions which followed events like the bursting of the Tulip Bubble or the failure of Credit Anstaaldt were to an extent “controlled explosions” which briefly brought down the snow and then collection began again.
This iteration is somewhat different, because in each of the prior iterations after the avalanche there was still surplus ENERGY to access, first by the theft of the New World from its original inhabitants, and then progressively moreso first through the Age of Coal which took us from around 1750 through to around 1900, then the Age of Oil which took us from 1900 through to present day.
The monetary pyramid here through this entire time has used as its Capital the ENERGY accessible from the thermodynamic application of fossil fuels, through a whole variety of neat inventions during the time period. So every time a new invention like say Edison’s Light Bulb appeared on the scene, vast amounts of new Credit was issued to build such things as a nationwide electric grid. In reality of course, none of these things could ever pay off, they always only existed through constant credit subsidization. It was possible to do this by seriously underpricing the cost of energy, putting off the Day of Reckoning hopefully long enough to come up with the Holy Grail of something like Fusion Power, with the “promise” of limitless and clean Energy. However, despite all the years of experiments with Superconducting Supercolliders and the like, Fusion Power remains basically a drawing board type idea to this day, though all the time we get reports it is “just around the corner”.
Anyhow, without such a last minute rescue by the Fusion Power Cavalry here, the Credit Mountain of Money built around accessing ever more amounts of energy per capita will come down, and the AVALANCHE is just beginning here. As I wrote in prior posts in this thread, there is little worth buying here anymore, because just about EVERYTHING is based on continuing sources of energy to power it. Even Farms are based on this in the current model. Much of the production off the Great Plains “Breadbasket” of the world depends on irrigation water pumped up from the Ogalala Aquifer. That pumping is mostly done with diesel pumps, and while you might substitute some with Windmills, the depth now that has to be pumped from is probably too great for a Windmill to handle except in a Tornado, in which case the Windmill is destroyed anyhow.
What you have here as a result is a Cascade Failure of IMMENSE PROPORTIONS, a Credit Collapse Avalanche such as the world has never seen in all of recorded history. IMHO, our Iluminati Masters of the Universe are running around now like Chickens with their Heads Cut Off trying to figure out how best to protect their own “Wealth”, when in fact that wealth is ALREADY GONE. It’s floating around up there in the atmosphere as moelcules of CO2. THAT is where all the “Capital” is now, and it’s not terrifically useful Capital in this form.
I suspect the various CBs will continue to print in concert here for a while longer, and the Funny Money will slosh around in Bank Reserves keeping the TBTF from going under immediately. In the end though, they will CAPITULATE to reality, and the reality is that a MOUNTAIN of Snow collected up here since 1692 is ALL going to come down the Mountain at the SAME TIME. You cannot stop this avalanche from coming down, all you can do is to RUN AWAY. RUN AWAY FAST! Run away NOW. Get just as far away as you reasonably can from the center of this collapse, the Big Shities all over the world built upon Credit and the Thermodynamic energy of Fossil Fuels. They are DEATH TRAPS.
Below follows an exchange that davefairtex and I are pursuing in The Concepts of Money and Capital thread on TAE. The debate centers on concepts of Value as it translates to Money and Assets.
In some sense, both sides in this debate are talking about a denouement caused by widespread defaults on unpayable debts.
Reading over some FOFOA posts, it does appear that he acknowledges that defaults lead to deflation. But his claim is that the CBs won’t allow that deflation to stand for very long – moments, minutes, hours, or days, and that they’ll quickly react by exchanging money for all the defaulted assets.
Folks here seem to think that the CB won’t be allowed to do this; the Fed will be prevented from wholesale replacement of bank credit with base money.
Likewise, FOFOA also points out that there is a overabundance of dollars in circulation outside the US especially on CB balance sheets, and a collapse of confidence in the dollar would lead to a hyperinflationary rush out of the many forms of the buck into “real things”, of which gold is favored because it is something that’s had long historical significance as a store of value, and it stores better in vaults than Rembrants or barrels of oil.
Each party tries to put forth evidence to support their concept – newly popular “end the fed” campaigns, reading the tea leaves on various Bernanke speeches trying to assess his willingness to print, fading trade surpluses and falling purchases of treasurys by China, and so on.
But at the end of the day, it all boils down to guessing what the Fed (and/or the ECB) will actually be able to do when the debt default crisis arrives. And that seems to ride on one thing: do the banks still have enough political power to make this happen the way they did in 2008? If they do, then we could well have a confidence collapse in the currency. If not, then we get a deflationary depression. No doubt the Fed would try to thread the needle and print just enough to restore the system, but not so much so as to cause a collapse of confidence.
So which is it? Its an interesting question, and not one I have the answer to. And perhaps the answer changes over time. Perhaps the answer is “no” today, but maybe “yes” next week, depending on how events unfold in the world – Greece, Spain, Italy, Japan, etc. If Greek society ends up exploding on TV after a debt default, the Fed and indeed the ECB might well get permission to do practically anything…
Re: FPC: The Concepts of Money and Capital 23 hours, 30 minutes ago #3184
What the CBs DO, how they react and what is Politically Possible for them to do at any given time varies, but it is still just a part of the equation.
The CBs can provide virtually endless liquidity and also buy assets at par value, regardless of what the actual worth of said asset is. What they cannot do at this point is force the retail banks to make any of the money they create available to the real economy.
If the TBTF Banks who are the recipients of the new Cash for Trash don’t then go ahead and make NEW LOANS into the retail economy, the new Sea of TP just sloshes around in their reserves and/or is “invested” in IPOs like Facepalm where it burns up rapidly. A few new Billionaries are made, but otherwise much more is accumulated on the liability side of this balance sheet.
At some point in the future, the postulate here is that the Trillions created here are going to exit Bankster Reserves and Sovereign holdings and simply flood the market with Dollars. Except, waht will they BUY with these Dollars? More Facepalms? More Copper they can’t sell because new Mcmansions aren’t being built fast enough and don;t need wiring and plumbing? More Gold that will just sit like a big Paperweight in the Basement Safe of the PBoC?
What the CBs cannot do is make the Dollars CIRCULATE in any meaningful fashion. Dumping them makes no sense if there is nothing really worthwhile to BUY anymore if you are Prepped Up. How many more Copper Mines do the Chinese NEED to buy anyhow? They can’t unload the Coper they have stacked up in the Warehouse ALREADY!
Euros are another story entirely. In this case, the Eurotrash already see the Writing on the Wall, the currency is collapsing and they will RUN, but not into Gold for the most part. They will RUN to the Dollar. Why? Because the Dollar is the Currency of the Big Ass Military. The SAFEST guy to bet on here is the guy with the Biggest Gun.
Re: FPC: The Concepts of Money and Capital 15 hours, 35 minutes ago #3187
Perhaps the CBs will monetize sovereign debt, which will be deficit-spent directly into the economy by the government via social security, medicare, medicaid, defense spending, AFDC, SNAP, and the like.
As long as the banks don’t end up going under and presenting FDIC with a massive resolution bill, cash for trash is a success.
Limping along collecting your salary & bonus beats the hell out of a deflationary depression – especially if you’re a banker with a big house in the hamptons.
Re: FPC: The Concepts of Money and Capital 14 hours, 32 minutes ago #3189
Perhaps the CBs will monetize sovereign debt, which will be deficit-spent directly into the economy by the government via social security, medicare, medicaid, defense spending, AFDC, SNAP, and the like.As long as the banks don’t end up going under and presenting FDIC with a massive resolution bill, cash for trash is a success.Limping along collecting your salary & bonus beats the hell out of a deflationary depression – especially if you’re a banker with a big house in the hamptons.
Perhaps they will continue to monetize Sovereign Debt and continue to dribble out money in the form of various social welfare systems like Social Security and the SNAP Cards, but they are not pouring out GUSHERS of money this way to J6P.
I have said many times before that as soon as Da Goobermint starts pushing money out directly to the population, either by Make Work WPA projects or by expanded Social Welfare payments, THEN you WILL get serious inflation, though still probably not HI until all faith is lost in the currency.
At the moment here in the FSofA, public jobs are being cut while the SNAP card program expands. A portion of the population is being forced into a more meager existence this way. It’s stil not a Tidal Wave though here yet, it’s a more gradual process.
There is no indication at the Top that a massive WPA will be undertaken or that massive Free Money such as a National Subsistence Wage will be issued out. J6P is being gradually Squeezed out here in the deflation, and will continue to be squeezed until a breaking point is reached and there is a Revolt.
An HI can only happen here if the flood of liquidity hits the real economy, and this can’t come from J6P, he generally speaking has no savings to unload. It can only come from the notional dollars held by the Chinese and others overseas, but they cannot dump them without screwing their own pooch.
The status quo of a Boiling Frog is what TPTB hope to continue with. Unfortunately, people are not Frogs and there will come a social breaking point. Greece is at it. So will we be soon enough.
Re: FPC: The Concepts of Money and Capital 12 hours, 11 minutes ago #3191
I don’t take what’s happening in Greece as a model. Greece cannot monetize its own debt, and the US can – and did up until last year. State & Local jobs are being cut here, but Federal jobs are expanding. I’d guess net-net it has resulted in job cuts overall, but our monetized deficit spending (10% of GDP each year) has kept the economy above stall speed to date.HI happens when a flood of money hits the real economy, just as you say. There are lots of ways for that to happen – including government dropping actual cash via jobs programs. Whether you think those ways are likely, or unlikely, depends on your own personal assessment.At FOFOA they note there is a wall of USD-denominated bonds sitting offshore on reserve at a bunch of central banks. The number of claims on real wealth vastly outweighs the actual real wealth out there – that’s what I learn from reading Stoneleigh.
So my follow-on to that is, if the US Fed stops deflation from happening by buying up all the trash and pretending there’s nothing wrong, all it takes for HI to take effect is for some subset of paper wealth holders to decide they want to convert their claims into real wealth before its too late, and then the game is up.
Once again, what triggers this move out of paper wealth? What triggers a bank run? Same sort of question – its some straw breaking the back of the camel of confidence. The potential for it is there. The only question is, do the banks (and the Fed, their servant) have the political ability to monetize in order to stave off deflation when push comes to shove? If not, we get a deflationary depression. If they can monetize, then we get moderate inflation (through government deficit spending) until a trigger event is reached and a wall of money hits the real economy.
I believe that the more unrest we seen in europe and the more “austerity” turns into a highly-visible death trap, the more support there will be for Fed money printing as our way out. Whether that’s enough – I don’t know. I think it could go either way.
Re: FPC: The Concepts of Money and Capital 10 hours, 39 minutes ago #3192
See there is the rub here. CONVERTING paper claims into “Real Wealth”.
At the small scale, you can see how this can be done, sorta. For instance, I “own” many USTs. I could liquidate them and buy with the proceeds a decent part of Alaska at current valuations on the land here. However, this purchase is more a liability for me than an asset if I made that trade. I cannot control such a large swath of Real Estate, and I sure would not want to pay the Taxes on it since I only would be using a tiny part of it for myself.
On a much larger scale, the Chinese face much the same problem. They COULD in theory liquidate their holding of USTs not just to buy a piece of Alaska, but the whole fucking STATE. REAL WEALTH there, right? Except problem is, what would they DO with Alaska once they bought it? They can’t organize up and run their own patch of the earth in China all that well, do they really need a Headache of ANOTHER patch of land to run here?
I’ll make the analogy to a small Biz I worked for a few years back. The Biz I worked for had one location, run sorta well, and they bought up a competing Biz run in another part of town. Problem was, it stretched all the anagement out too much, and trying to keep the Sattelite running was a money loser. Closed up the shop after a couple of years.
There is NOTHING the Chinese can spend their dollars on here now, they canot even buy Alaska without incurring more liability, and Alaska is a relatively GOOD purchase here all considered. Certainly better than Facepalm anyhow.
Re: FPC: The Concepts of Money and Capital 8 hours ago #3193
Hmm, ok that’s convincing. You’re probably right about the Chinese, and likely the Japanese as well. Its tough to place a trillion dollars somewhere useful and at the same time relatively low risk.But I’m not so sure about the actions of a bunch of rich people. They are seemingly better placed to individually make semi-smart decisions on buying stuff. They have big stashes of treasuries (like you do) and are wondering where they might put them. I wonder that about my small pile of bank deposits!We are allegedly seeing this in London. Rich Greeks (and perhaps rich other europeans) are taking paper and using it to buy real estate in London. It seems absurd on the surface, but from what I hear, its happening.
I respect what you say when you claim that there’s nothing out there to buy. But try this thought experiment. If I told you that your pile of treasuries would be chopped in actual value by 75% through a default, would you still say “I can’t find anything to buy?” Maybe buying medium-sized chunks of Alaska might look more attractive than a 75% loss.
Would a panic out of bonds usher in a “freegold” world? Who knows. I’m a bit suspicious of claims that something (other than a property of basic physics) is guaranteed to happen. It just reminds me too much of Marx’s assurance that the state would simply wither away. But gold would likely benefit from a flight from paper, likely driven first by default and then by the monetization response – among other things.
Again, if the Fed (and ECB) aren’t allowed to buy up all that bad debt, we get deflationary depression. If they do have enough political capital to both monetize and buy up bad debt, there’s enough excess claims to real wealth floating around out there to really cause a whole bunch of price inflation if even a fraction of it decides it is better off in “real stuff.” Even Alaska properties, Florida condos, little gold bars, or Picasso paintings.
Re: FPC: The Concepts of Money and Capital 0 minutes ago #3199
There are other problems the Chinese have besides the actual worth of whatever they might buy is concerned. If they try to dump treasuries, the value of those treasuries will drop faster than they can find buyers for them. Only Da Fed could buy them by printing, and why would they do that? Force the Chinese to hold them to maturity at low to nonexistent interest rates instead.
Far as non-Sovereign holders of this debt is concerned, like me the question is what is a better bet here? The Greeks buying London flats is the Real Estate equivalent of buying Facepalm Stock. That RE has nowhere to go but down, WAY DOWN.
Up at the top, games are being played with comparative currency devaluations, I wrote about that over on the Diner. Overall, the Dollar is the best looking Dog in the Kennel for the next couple of years anyhow I think. Somewhere along the line we may reach a Tipping Point and hit a Sudden Stop event, or the Boiling Frog effect may continue through to the end of my lifespan, but either way there still really is not anything worthwhile for me to buy, I am as Prepped as anybody reasonably can be IMHO. You cannot truly “own” anything you cannot carry with you or anything you cannot Protect and Defend. You cannot count on the “Law” to protect you, as evidenced by today’s article from Surly on the Diner.
It remains to be seen what the Big Boys do as far as shifting assets go to try to protect and defend their own “Wealth” is concerned. I am reasonably certain though at this point that the final Battlefield for this will not be on the Economic Front. War is coming now, to be sure. Whether this will be an International War or Civil Wars on a Global Scale occuring simultaneously I do not know for sure, but one way or the other, a lot of BLOOD will be spilled to try to wash away this debt, that truly can never be repaid at all. Mother Earth herself has been scarred badly, and we all will pay the price for that.
Comment on this article here.
A recent quote from Diner Karpatok get me thinking the other day about the nature of our post- industrial society, and several thoughts and issues began to intersect. And then I came across the story of Norman Rousseau, below.
Deep within the bowels of the diner, the original exchange, part of a longer thread:
“To really feel the pain of the prisoners, the pain of the raped children, the pain of the animals. Martin Buber wrote of the recognition of the reality of the Other. He called it I and Thou. I and Thou together is the full reality of consciousness. To the extent that one cannot embrace the reality of the Thou, one is not fully human... To the extent that one does not let oneself feel that pain, one also cannot experience joy. We are not solipsists living in isolation and doubting the reality of the forest, we are not autistic unable to respond to others; if we are we are very sick.”
To lapse serious for a moment, this is indeed the nut of the matter. And it is the illness at the heart of who we are, our addiction to the paradigm of unlimited growth, and in our “devil take the hindmost” politics. We used to believe, or at least proclaim, “E Pluribus Unum;” there was a time when we even taught it. There was a time where our institutions weren’t corrupt with moral rot. There was a time when people believed that a “rising tide would life all boats.” Indeed, there was a time when we cared about our neighbor, when we would not pull a crust of bread out of a hungry child’s mouth to give it to a war profiteer or a Wall Street bankster. There was a time, or so we believed, when our churches were not full of pederasts and thieves, when we actually held with what was taught from the pulpit and lived accordingly, or semi-accordingly, according to our lights.
If, as is written in Matthew, “By their fruits shall ye know them,” then we are well and truly fucked. Because by our actions we invert every single thing that Jesus is reported to have said, and which every great teacher and moral leader teaches. By our actions, we clearly worship Mammon. When a vulture capitalist destroys a workforce, dumps pension obligations off on taxpayers, and pockets handsome sums for his trouble; when a company lays off thousands in the name of “efficiency,” leaving the remaining workforce stressed and gasping– and fearful of the next wave; when we balance the budgets on the backs of the poor; when we steal people’s houses through corrupt application of refinancing rules (thinking Wells Fargo here): we do the work of Mammon.
Several years ago I read an article in The Atlantic about the Muslim Brotherhood, and why the originator came to hate the United States. One of the reasons was that he came to hate the manicured, watered lawns in Kansas as an obscenity, when there is so much hunger, privation and suffering across the globe. There is a good reason the rest of the world hates us, and at the root is our wasteful, cannibal culture, that chews up everything in sight, as well as our utterly debased materialism with no organizing set of beliefs aside from profit.
I feel like Jeremiah today, but from here it is crystal clear that we are doomed. Which is, of course, part of what led me to this collective, to RE’s notion of “save as many as you can, ” and to thoughts of “what do we do next?”
It may not matter, but it is incumbent upon us to live and work as if it does.
Karpatok also added:
“Why did I shudder and flinch when my foreman lover said about construction hires at the 7Eleven, “Tu est Patrona, tu dau lucru si ei manunc.” That is ,” You are their patron, you give them work and they can eat.” Who the hell was I to have that power over them to grant life and life to the children on the dirt floor far away? But to do it without acknowledging them, without asking their names,how did they get here,[they walked a thousand miles under the burning sun el norte,el norte] how many children did they have, where were they from exactly? So in a tiny way we touched each other while they carried with their small bodies the huge stones to build the patios, the same stones with which they had built their pyramids before the Conquistadores had arrived. And now the huge houses for which the patios were built in Prince Georges county are all foreclosed and abandoned. Who are we all, passing in this conflagration?”
Who indeed? How we exercise the power that we have over one another, as we pull the levers and grease the gears of the virtual machines that increasingly govern our life says much about who we are– and who we have become.
Mammon remains hungry, and the story of his (our) endless lust for human flesh is best illustrated by the following story, well told by Mandelman on the blog “Mandelman Matters” (http://mandelman.ml-implode.com/2012/05/husbands-suicide-yesterday-wells-fargo-to-evict-wife-tomorrow-anyway/#.T7HDX8Iw28Y.twitter). This story goes on at some length, but the length is necessary to place this tragedy in its appropriate context:
Wells Fargo claimed that Norman and Oriane Rousseau had missed a mortgage payment. But the payment HAD been made in person at a Wells Fargo branch by Cashier’s Check, and Mrs. Rousseau has the receipt for the transaction.
The Rousseaus file a dispute with Wells Fargo over the supposed missing payment. Wells Fargo “investigates” and comes back saying that the Rousseaus had stopped payment on the check. They stopped payment on a Cashier’s Check? Seriously?
The teller’s receipt establishes that the cashier’s check was in the custody and control of Wachovia on April 1, 2009, and the research by the Cashiering Department should have concluded that Wachovia screwed up by not applying the cash-equivalent funds to the Rousseau’s account. After delivery and acceptance to the branch office, it was Wachovia’s responsibility to safeguard the instrument; Wachovia itself effectively stopped payment on the cashier’s check
Concerned that they could not resolve the payment dispute but told they should apply for a loan modification, the Rousseaus hired a law firm and submitted a loan modification application. After that it was standard operating procedure at Wells Fargo… we lost this, and we lost that, resend this, and resend that… for almost a year.
Wells Fargo then of course told the Rousseau family not to make their payments, that they were being considered for a loan modification and that making their payments would immediately disqualify them.
So, they saved their payments just in case Wells decided to deny them a modification. Saved every single one just in case the bank decided to act like… well, Wells Fargo Bank.
Then Wells sent them a Notice of Default, but when they called to say they wanted to reinstate their loan, Wells said what they always say… IGNORE IT… don’t worry about it, everything’s fine, it’s just an automated sort of thing… why, you’re being considered for a loan modification.
Then Wells filed a Notice of Sale on October 28, 2010. Their home would be sold on November 22, 2010. And still Wells said… IGNORE IT… it’s just another automated sort of thing… your loan modification is still pending… and please re-submit some documents.
It was November 10, 2010… just 12 days before their home was to be sold… when the Wells Fargo representative told the Rousseau’s that their loan modification had been denied. The reason: Insufficient income.
Yeah, but you know the funny thing about that is that their income hadn’t changed a nickel since they applied for the loan modification. So, what’s the deal? Did it take Wells Fargo a year to figure out the Rousseau’s income was insufficient? That same day the Rousseaus found a lawyer and discovered they had a RIGHT TO REINSTATE their loan. (Nice of Wells not to tell them that, by the way.) They contacted Wells and requested a reinstatement quote… TWO DAYS LATER Wells finally gave them the phone number for RCS, the trustee.
But, RSC said that reinstatement would take two weeks and trustee sale was going off as planned in 8 days. Wells got them their reinstatement quote too… it was dated November 15, but received via email on November 17, 2010.
And it expired in two days and had to be received in Texas by November 19, 2010.
The Rousseaus had more than enough in savings to reinstate their loan, they told Wells Fargo that… but now they couldn’t get the money from their IRA in time for the 2-day deadline and Wells refused to postpone the sale.
So, the Rousseau’s home sold at the trustee sale on November 22, 2010.
Next the Rousseaus go through a series of lawyers. Finally, they get a good one and in July of 2011, the court grants an injunction contingent on them making a monthly payment of $1800.
But, by December of 2011, Wells finally wore the Rousseaus down and they just couldn’t make December’s payment. They used up all their money fighting Wells Fargo, and Norm had been unemployed since the foreclosure. He was taking odd jobs as a handy man to make ends meet.
Wells Fargo immediately goes to court… gets the injunction dissolved… then proceeds with the Unlawful Detainer… the lockout is set for May 15th, 2012… at 6:00 AM.
THAT’S TOMORROW MORNING… AT 6:00 AM.
Over this past weekend, Norm Rousseau talked with their attorney who is working pro bono by the way. Basically, his lawyer tells him…
“Look… let’s face the facts here. We’ll proceed with the lawsuit. We’ll fight like hell to get you back in the home, but you have to be ready with some sort of plan so you’re not left homeless and on the streets.”
Norm found someone who has a 27-foot motorhome he can use, but after he gets it home on Saturday… it stops running… it won’t start. But, Norm Rousseau is a man in his 50s with mad skills. He goes to work around the clock taking apart the engine, doing everything he can to get it running so that on Tuesday morning he will have somewhere to house his family. He’s up all night Saturday night, but still can’t get it running. It’s too big to tow with a car.
His mind must have been wandering late on Saturday night. What must a man, a father, a provider be thinking when he knows that everything in life has somehow gone terribly wrong and there’s nothing left to do? He must have been imagining the sheriff pulling up to evict his family on Tuesday morning… just two days away, as the motorhome’s engine lay in pieces in his driveway.
I can only imagine what must have been going through his mind as he worked tirelessly, without sleep, on that engine and electrical system… as the clock ticked away the hours, I’m sure going faster and faster as time was running out. Damn, it’s already 11:00 PM… then it’s 3:00 AM… and then 5:00 AM… and then before he knew it… a most unwelcome sun was shining… 9:00 AM…
I can almost hear him thinking: “Damn it, what am I going to do? How could this have happened?” I can hear him swearing under his breath as he fights with the old parts trying to get them to work together again… I can see him staring at the engine as the will to go on was leaving his soul…
Norman and Oriane Rousseau had bought their home in Ventura, California in 2000, putting nearly 30 percent down, which was their life savings. In 2006, every time they went into the World Savings branch they’d get pitched on refinancing into one of World’s infamous Option ARM loans… that are now illegal, I believe. After a couple of years of being pitched, they finally bought into World Saving’s lies.
They had told World Saving’s loan officer, ERIC COOPER, that they were only interested in obtaining a conventional 30-year, fixed-rate loan. They wanted consistent payments over the life of the loan.
But COOPER assured them that they could significantly reduce their monthly payments… by more than $600 per month, with a lower interest refinanced loan. COOPER said that the new Pick-A-Payment loan product was better suited to their situation.
He described the Payment Option ARM as the new industry standard. He pointed out that the lower interest rate and payment flexibility were valuable advantages that were not available with other loan products. And he said that even more importantly, unlike the previous WORLD loans, the interest rate was tied to an index with historically low rates that were continuing to decrease.
According to COOPER, industry experts projected the interest rates to continue to fall, and so their monthly payments would be EVEN LOWER than their initial payments.
Even under the worst case scenario, COOPER assured them, the historical data for the index indicated that changes in the interest rate would only be slight, and if an increase should occur it would have a negligible effect on their monthly payments… no more than a few dollars.
And besides, COOPER explained, the loan would only be around for a couple years, as they should expect to refinance within the next two years to take advantage of even more favorable interest rates and as the steadily rising housing values would surely increase the amount of their equity in the property.
Then COOPER went for the close…
On the condition that the Rousseaus apply for the new loan that very day, he would agree to waive their pre-payment penalty, stating that there would be virtually no costs to refinance beyond a $35.00 application fee.
COOPER also convinced the Rousseaus that it was in their best financial interests to consolidate approximately $25,000 in unsecured debt in the refinance transaction, citing the benefits of the lower interest rate and the convenience of having only one payment.
The Rousseaus provided COOPER with accurate and truthful information regarding their income and assets, and COOPER was such a nice guy that he offered to complete the Quick Qualifying Loan Application on their behalf.
It was right around November 1, 2007, that WACHOVIA arranged for a notary to complete the closing at the Rousseau’s home. The notary discouraged their review of the documents and directed them straight to the signature lines, but the Rousseaus noticed that a pre-payment penalty in excess of $4000.00 was included in the closing costs… the fee that COOPER had promised to waive if they applied that same day. They called COOPER and he apologized for the oversight, but tried to get them to sign anyway, because it would only add a couple of bucks to their payment.
They said… no… they’d reschedule the appointment and wait for the four grand to be taken off their bill, thank you very much.
Two weeks later, the notary returned and they signed the paperwork for their new $368,000 state of the art loan.
Now, the Rousseaus didn’t know it at the time, but COOPER was a lying sack of garbage that had misrepresented just about everything having to do with their new loan.
The 7.2% interest rate of the new loan was actually higher than their old loan and higher than the 6.8% quoted by COOPER. The “significant reduction in monthly payments” was an illusion accomplished by comparing the fully amortized payment of the 2006 loan with the negative amortizing minimum payment due under the new loan.
The new loan, at annual change dates, added deferred interest to principal and the loan amortized, with payment increases capped at 7.5% for ten years. Then, the new loan recast when negative amortization reached 125%.
The Rousseaus were never told about the new loan’s fully amortizing payment of $2,497.94 per month, in fact their payment amount was intentionally misrepresented by COOPER. And the new monthly payment could never decrease because it represented the minimum payment possible… the negatively amortizing option that meant payments would increase at each change date.
But that wasn’t enough for our boy COOPER. The Rousseaus were charged $2,640.00 in origination fees for the “low cost” refinance, which made a tidy profit for World/Wachovia/Wells/Whatever bank.
And best of all, an undisclosed Yield Spread Premium (“YSP”) of $4,195 was charged for placing them in a loan with an interest rate .50% higher than they qualified for, and that YSP increased their monthly payments by $123.32, or $44,395.20 over the life of the loan.
The truth is that the Rousseaus were a heck of a long way from being considered well qualified for their new loan. Their fully amortized payment represented a total debt-to-income ratio of 27.91%, but that percentage was based on income figures that were grossly overstated by guess who? That’s right… COOPER.
The Rousseaus told COOPER their total gross annual income was, $76,000, but somehow it got listed as $136,800 on the application. You know… the application that good old COOPER was nice enough to fill out for the Rousseaus.
So, it was Sunday… yesterday… around 10:00 AM… and Norm couldn’t get the motorhome running. He must have realized that he couldn’t handle the shame of seeing his wife and stepson evicted with nowhere to go… living on the street. I don’t know how anyone could face that reality. I don’t think I could.
How could it be that just 12 years before they had put their life savings down on their first and likely last home? They had done everything right, but nothing was right anymore, and I’m sure to Norm Rousseau, nothing would ever be right again.
Their church had offered to help them, maybe find them somewhere to stay temporarily, and that would be fine for his wife and her son… but not for him. I’m sure he wept as he looked at the engine parts laying there, realizing that it was over.
Norm Rousseau called me a couple of months ago. He wasn’t asking me to help him, in fact, he never even told me about what he was going through with Wells Fargo. No, Norm was concerned about someone else who was losing a home. A really good person who’s done so much for so many others, was how he described her. It wasn’t right what the banks were doing he said. He was hoping that I could do something to help someone he knew, because she was someone who had helped others… but he didn’t say a word about himself.
Norman Rousseau gave up over that engine that sits in pieces in his driveway today, the sun shining down making the metal parts hot to the touch. Maybe it was the frustration of having nowhere to turn for justice, maybe it was the shame he felt that somehow he had let his family down… even though that was not the case at all.
Sometime mid-morning on Sunday Norm Rousseau ended his own life. He went into his bedroom, covered his head with a blanket so as to contain the mess… and shot himself. At one point he could have reinstated his loan, that’s what he had planned to do, but Wells Fargo had made that impossible… they stripped him of everything he had.
And now, his wife and stepson are to be evicted at 6:00 AM tomorrow morning. They have nowhere to go, they have no money, they are still in shock over the loss of Norm.
And I don’t know what to do really. I’m going to call the sheriff’s office in Ventura… see if I can persuade them to drag their feet for a week before locking them out. Their lawyer is trying to file something with the courts, but maybe you can think of something too.
Maybe you can forward this article to people in the media. Tell them what’s going on… maybe someone will care enough to do something. It’s 11:21 AM and I’ve been up all night again, I can’t really keep this up much longer… but somehow I felt like telling Norm’s story was the very least I could do.
Since Wells Fargo had already done the very least they could do.
Rest in peace, Norm Rousseau.
The psychopaths in charge of Wells Fargo have already killed another American. Wells Fargo, Mammon’s agent on earth, now has Norman Roussseau’s blood on its hands. And these are people who never missed a house payment. Given that Wells’ only responsibility is to generate profits for shareholders, and devil take the hindmost, perhaps Cooper’s behavior, described above, is to be expected. And thus the wages of “corporate personhood:” if we knew a person willing to do whatever it takes to generate a profit, lie, cheat, steal, kill, wouldn’t we call that person a psychopath? Instead, executives get fat bonuses, banks build giant buildings as monuments to themselves, or as temples of Mammon, and we whistle down the street knowing that the business of America is business. And this is why Occupy has sprung from the streets and alleys, and resistance is beginning to form. And why the state maintains such an overweening interest in squelching nonviolent protest.
How we the sheeple can sleep through this slow-motion Kafkaesque nightmare without getting our ample butts off the couch and into the streets is simply beyond me.
In the blog, “The New Inquiry (http://thenewinquiry.com/essays/how-bad-is-it/),” George Scialabbla answers the question, “How Bad Is It?” with precision, and by invoking the writer whose work whose works are highly instructive in these times, the man I call the arch-prophet of Doom, Morris Berman:
“Here is a sample of factlets from surveys and studies conducted in the past twenty years. Seventy percent of Americans believe in the existence of angels. Fifty percent believe that the earth has been visited by UFOs; in another poll, 70 percent believed that the U.S. government is covering up the presence of space aliens on earth. Forty percent did not know whom the U.S. fought in World War II. Forty percent could not locate Japan on a world map. Fifteen percent could not locate the United States on a world map. Sixty percent of Americans have not read a book since leaving school. Only 6 percent now read even one book a year. According to a very familiar statistic that nonetheless cannot be repeated too often, the average American’s day includes six minutes playing sports, five minutes reading books, one minute making music, 30 seconds attending a play or concert, 25 seconds making or viewing art, and four hours watching television.
Among high-school seniors surveyed in the late 1990s, 50 percent had not heard of the Cold War. Sixty percent could not say how the United States came into existence. Fifty percent did not know in which century the Civil War occurred. Sixty percent could name each of the Three Stooges but not the three branches of the U.S. government. Sixty percent could not comprehend an editorial in a national or local newspaper.”
This all sounds very much like Kunstler territory, as that stylist regularly decries the burgeoning illiteracy of the neck tattoo crowd, the NASCAR crazies, and the vulture capitalists. Citing Robert Putnam in bowling alone, he notes that “all forms of social capital fell off precipitously.” We stick our noses and computers and on social networking sites, and leave behind having friends to dinner, card parties, making new friends face-to-face, trusting one another, joining volunteer organizations, and otherwise being vitally involved in our respective communities.
And while we members of the “precariat” toil for our bread, the quality of life in the world’s richest nation continues to spiral down to Third World levels. Recently summarized by James Speth and Orion magazine, you’ve heard it all before. The US has the highest poverty rate for both adults and children, lowest rated social mid-ability, lowest score on you and indexes of child welfare and gender inequality and of course, remarkable levels of economic inequality. Thus the legacy of trickle-down economics.
Scialabba goes on to invoke Morris Berman. For those not familiar with his work, Berman is a cultural and intellectual historian, so his portrait of American civilization is anecdotal and atmospheric as well as statistical. Scialabba puts it well:
“He (Berman) is eloquent about harder-to-quantify trends: the transformation of higher (even primary/secondary) education into marketing arenas for predatory corporations; the new form of educational merchandising known as “distance learning”; the colonization of civic and cultural spaces by corporate logos; the centrality of malls and shopping to our social life; the “systematic suppression of silence” and the fact that “there is barely an empty space in our culture not already carrying commercial messages.” Idiot deans, rancid rappers, endlessly chattering sports commentators, an avalanche of half-inch-deep self-help manuals; a plague of gadgets, a deluge of stimuli, an epidemic of rudeness, a desert of mutual indifference: the upshot is our daily immersion in a suffocating stream of kitsch, blather, stress, and sentimental banality. Berman colorfully and convincingly renders the relentless coarsening and dumbing down of everyday life in late (dare we hope?) American capitalism.
In Spenglerian fashion, Berman seeks the source of our civilization’s decline in its innermost principle, its animating Geist. What he finds at the bottom of our culture’s soul is … hustling; or, to use its respectable academic sobriquet, possessive individualism. Expansion, accumulation, economic growth: this is the ground bass of American history, like the hum of a dynamo in the basement beneath the polite twitterings on the upper stories about “liberty” and “a light unto the nations.” Berman scarcely mentions Marx or historical materialism; instead he offers a nonspecialist and accessible but deeply informed and amply documented review of American history, period by period, war by war, arguing persuasively that whatever the ideological superstructure, the driving energy behind policy and popular aspiration has been a ceaseless, soulless acquisitiveness.” Not surprisingly, Berman finds parallels to the fall of Rome in our current state. By the end of that empire, Berman noted that economic inequality steeply rising, the legitimacy of the state was waiting, popular culture utterly the based, and civic virtue among the elites had disappeared. This made the effectiveness of the state and the projection of military power unsustainable. Scialabba points out this is 21st century America in a nutshell. Our foreign policy for the past 50 years has brought us to the turn where, in the period of time after 9/11 we have flailed about looking outside ourselves for the solutions to vague and undefined threats, ramping up internal Stasi-style security apparatus to bend, fold, spindle and mutilate the citizenry. “Our response to 9/11 is been utterly hysterical, and our inability to make an effort to understand the long festering consequences of our Imperial predations portended is clearly as anything could the demise of American bloat global supremacy.”
Scialabba adds, “What will become of us? After Rome’s fall, wolves wandered through the cities and Europe largely went to sleep for six centuries. That will not happen again; too many transitions — demographic, ecological, technological, cybernetic — have intervened. The planet’s metabolism has altered. The new Dark Ages will be socially, politically, and spiritually dark, but the economic Moloch — mass production and consumption, destructive growth, instrumental rationality — will not disappear. Few Americans want it to. We are hollow, Berman concludes. It is a devastatingly plausible conclusion.”
Jesus is quoted in Matthew as having said, “By their fruits shall ye know them.” By our fruits, or deeds, we clearly worship Mammon, and Norman Rousseau was a blood sacrifice. For all of that and more, as Berman notes, we are doomed, if for no other reason than the Lords of Karma will see to it. After all, Nature bats last. And, as to how we treat one another, Karpatok reminds us of Martin Buber’s I and Thou: “To the extent that one cannot embrace the reality of the Thou, one is not fully human..”
What are we? What have we become? Ray Kurzweil whispers of the Singularity, as we dispense with one another with all the empathy of machines.
It is thus on my heart on a Sunday morning, with the soft breezes of her Virginia spring whispering through the trees. . . a holiday weekend, where the sun is bright, the birds chirping in trees bursting with bright green, my neighbors bustling about readying themselves for church. Yet Mammon lurks, hungrily.
Re: FPC: The Dollar-Oil Nexus 4 hours, 48 minutes ago #3186
First of all, Fisher implies the (offhand) reflation strategy without going further. Leijonhufvud doesn’t offer any strategies at all! (Why should he?) However, (Free)gold folks’ awareness of nuanced (sensible) economic arguments never seems to emerge from their arguments. It seems to me that the monetary gold arguments were all made — and settled — by Wicksell and Bagehot a hundred and ten or so years ago.
Part of the problem is the absence of conventional ‘solutions’. Our dilemma lies within the inter-temporal balance sheet beyond the reach of monetary policy.
Almost no (as in zero) conventional economist makes reference to energy or resource inputs. Herman Daly equates money capital with resources (and Charlie Hall and Robert Costanza) but equilibrium economics is built around unlimited substitution. This is a dead end.
A conceptual problem is that we are at the beginning of post-industrialism. Nobody can figure out what ‘Post Industrial Society’ is going to look like or how it will function. Some think virtual reality (Kurzweil), others think ‘hunter-gatherer’ (J. Hansen) and still others a steam-punk version of modern Detroit (Greer). Human extinction is not out of the question: how does modern industrial economics factor all of these different possibilities and others beside?
Brand X economist: “Don’t blame me!”
In this context, the gold-money argument presumes a specific post-modern industrial economic society that functions/trades a specific way … a society that has conveniently forgotten Bagehot (and have never bothered to look up Wicksell). This is argument in a vacuum: not a real argument at all.
What does come next? Hard to say but the constant will be ‘less.
Re: FPC: The Dollar-Oil Nexus 1 hour, 28 minutes ago #3188
Well stated Steve.
Overall, it is a conceptual problem. The tendency is to accept axiomatically that even though the Fiat will crash, Homo Sapiens will continue to hold the same things valued and pursue “trade” in more or less the same manner.
On the assumption (hope) it is not DEOWS, where will we go from here? What happens once we reach the end of this road?
Personally, I think there will be a “Scavenger” period during which the flotsam and jetsam of the Age of Oil gets repurposed to keep stuff like the Railroads still operational for a while. I don’t see a great future for money during this period, though if Goobermints of some sort hold together you may have some for a while. You definitely cannot have functioning “Money” without functioning Goobermint. After that it’s just barter, even Gold Coins are just Barter Items. To make them “Money”, you need a Stamped Value placed on them so they are always worth the same thing inside a given trading system.
Money requires a SHARED AGREEMENT system between all in the society on the relative values of things. When that breaks down, when some people no longer value a McMansion at all and others place preposterous Numerical Values on them, you have Mark to Make Believe which no longer makes any sense at all. That really is the problem here now, relative valuations based on the monetary system are not reflecting reality. In fact, McMansions are WORTHLESS, and so are the Carz. Helicopter Ben cannot MAKE a McMansion worth anything, he can only print Bills. Even if he gave you a Billion of those Bills, there still would be no reason to trade them for the McMansion.
Our Value System is changing, MUST change because the Oil which powered this value system just isn’t there in quantity enough to keep the engine running, not on a Global basis anyhow. Now we have to figure out how to value everything we still do have in the ABSENCE of Oil. That is quite a challenge.
Occasssionally unexpected items turn up in your mailbox, or in my case left on a Table inside the Diner. Crazy Horse left a few musings on the Table I thought I would share with all of you.
I just returned from my afternoon walk and found this email message open on my computer. I have no idea how it got there— perhaps Google is having heart palpitations after hearing the rumor that Microsoft and Facebook are going to merge
Anyway with all the confusion about the ability of our financial system is able to manage the economy, I thought it would be a useful contribution to public knowledge.
“Mr. B, here is the final draft for your dinner speech next week.” K
Good Evening Ladies and Gentlemen;
My name is Jamie and I’d like to help you understand how Universal Bank arrives at the risk management decisions that have generated over two billion dollars a month profit over the past two years in spite of challenging economic times. As you may know we operate in a broad spectrum of the banking business, from small credit card and student loan origination to guaranteeing the finances of entire governments through our derivatives divisions.
Since transparency and honesty are our guiding principles, let me describe in detail how we recently helped a small country regain its national pride and rise to a position of respect in the world scene. Mademoiselle Cochon, Grand Exalted Supreme Leader of the Democratic Republic of Piggistan, contacted us for assistance in securing a development loan. You see, PIGGS, as the citizens of the Republic are called, have been subjected to centuries of derision and discrimination because the entire world believes they are too fat to fly. So quite logically M. Piggy believes that if only PIGGS could be taught to fly, the nation would regain its sense of self-worth and undergo a renaissance of growth as the citizen’s intelligence and creativity are put to use. For such a visionary undertaking, a trillion dollar investment seemed to us to be well worthy of consideration.
Universal Bank employs fifty risk analysts in our New York office alone to enable us to have a rock solid scientific basis for all of our decisions. They are all required to have a Masters or PHD in mathematical statistics from MIT and a minimum IQ of 150. Every one of them dreams of having an office of their own and eventually rising to a position where their bonuses exceed their salaries. For female employees there are alternative methods of advancement, but that can only get them so far.
When we presented the Piggistan proposal to the Working Group, they returned a 400 page majority report documented by calculations performed on the Bank’s Cray supercomputer that concluded that there was only a .0000000000000001 percent chance that pigs could actually fly, and therefore the program would be a failure. However a young man named Lloyd submitted a minority report that blew them out of the water and earned him his private office. By researching historical records he proved that Piggs actually had flown! There on the passenger manifest of the Hindenburg was one Vincent Pigg and his wife Gloria. Even more to the point, Lloyd suggested that if we just sell them F-18’s, animals with more intelligence than the average human from the lower 99% income group would have no problem flying a fighter jet. It is so rewarding to discover a subordinate who understands what is necessary to do God’s Work! So, with young Lloyd’s analysis to support us, we began work to structure as loan for Pigistan.
Universal Bank was the guarantor through a three tiered derivatives offering handled out of our London and Caymans branches for which we only charged 6% of the face amount of the loan. Funding came from USAID, World Bank, IBCS, BSPS, BBBS, and a private equity fund based in Singapore headed by the angel investor that made Facebook possible.
For only $50,000 per citizen, Halliburton supplied a complete educational package, including mobile container classrooms purchased from the US army in Iraq for $1 each, textbooks, pencils, and specially designed hats perfectly matched to the citizen’s skull shape with cut-outs for the ears and carbon fiber propellers on top. Of course M. Piggy demanded her half of the profits in order to increase her world-renowned shoe collection, but this is what you call a win-win situation. Halliburton remains a profitable company as it plans for the next large scale war, the stone killer thugs employed by Blackwater to guard the schoolrooms are kept off the streets in America, and Universal Bank acquired more capital to use to outbid its arch enemy Goldman Sachs in the derivatives market.
“By the way, Dick, that was so thoughtful of you to personally deliver that small Van Gough, (the one rumored to have been lost to the Germans in WWII) to my private gallery at my compound in Mallorca) I’m sure there is something else I can do to repay your kindness. Good to see you are still active behind the scenes of your old company.”
Fortunately there just happened to be 100 F-18’s sitting out in the Arizona desert that my nephew the airplane collector owned. Lockheed has done a great job converting the cockpits of ten of them to the porcine anatomy, and we’ll soon discover whether the amazing performance of the PIGG students in the simulator heralds to a new wave of top gun pilots. So already the program has been a success. PIGGS can fly, M. Piggy has her new shoes, Universal Bank continues its sterling record of performance, and my annual bonus is on its way to topping last years’ record.
But what about risk analysis, you ask? That’s the beauty of doing God’s Work. There is no risk! What are the possible outcomes of the Pigistan deal we structured? M. Piggy now has the weapons to scare the shit out of anyone who opposes her divine leadership, and just might take over the oil wells in Yakastan next door with a little help from NSA ‘s guided missile drones. She could then pay the loan off with normal skimming operations. That loan was made from funds created by a few keystrokes down at the FED anyway. If Piggistan should default and the creditors try to collect on our CDO’s, we’ll have the lawyers throw sand in the gears for ten years or so and then pay with valueless dollars after inflation has done its work. Worst case is that the bank will ask the Fed to hit a few more key strokes and transfer more funds into our account at zero interest rate to cover any liability. Meanwhile my bonus paid to have the Special Opps team that procured my Van Gough rubbed out, and the new yacht is stunning in front of the villa in St. Barts. Universal Bank has an extra few billion on the books ready for the next play. Not that there aren’t costs of doing business, but buying a President or a Dept. of Justice only requires chump change. Risk? What possibly could go wrong? The only risk is that those devious bastards over at Goldman will outbid us and turn the hand of Justice against us.
Crazy Horse on Money and Gold
Amazing how the mention of the word “money” pushes all the irrational buttons in the modern psyche. Let me point out a few obvious facts:
Gold is an essentially worthless metal, good only for pounding into shiny trinkets because it is so soft. The fact that humans have assigned great value to it for a brief portion of their history as a species doesn’t alter the fact of its use value. I live in one of the few places left where I can supply my family with a year’s supply of meat with three or four bullets. Once commerce grinds to a halt, try to do that with a 100# bar of shiny metal. And I damn well won’t trade my bullets for your gold.
Paper currency actually has more use value than gold: at least you can use it to start a fire and roast your venison.
Currencies, whether they consist of shiny metal, paper, or giant stone discs only have value to the extent that people accept them in exchange for something that they want or need. Gold only differs from paper money in its inherent scarcity and longer history of illusory assigned value. The US dollar or the Euro can become the Argentinean Peso, or the Reichmark of the future under the right circumstances, and those events are no longer unthinkable.
Which brings us from the past and possible future to the present fractional reserve banking system. The most basic fact that few people seem to be able to grasp is this: In a fractional reserve banking system, MONEY does not exist until it is loaned into existence. Until that point it is merely an accounting notation in the central bank’s ledgers. When a retail bank makes the decision to lend money to build a house, fund business operations, or loan money to a drug cartel, the central bank credits the retail bank’s account to fund the loan and the money enters the money supply (i.e. becomes MONEY in circulation rather than virtual money) paying the salaries of carpenters, office workers, or the guy selling nickel bags of dope on the corner. Loans are not made because the retail bank has accumulated deposits as myth would have it: they are made because the bank has located a willing, “qualified” borrower. The Treasury can print all the paper and coins it wants, but short of dropping them from a helicopter or adding people to the federal payroll, in a fractional reserve banking system the currency doesn’t enter the money supply until it is loaned out. As the newly created MONEY circulates through the real economy it creates additional jobs and economic activity. That was called the multiplier effect back in Econ 101. It could also be called debt slavery with complete accuracy.
Interest is not the “free market” cost of money, but rather the price of allowing banks to administer the system, construct fancy buildings, gamble in the derivatives market, and pay their executives multi-million dollar bonuses. It also is the mechanism by which the FED tries (ineffectively) to manage the economy and control the rate of inflation/deflation through the discount rate. Unfortunately Bernanke, Geitner, Obama, and the howling pack of crazies that populate the Republican Party could care less about stimulating activity in the real economy as long as their benefactors can receive huge executive bonuses and fund their re-election campaigns. Why else would politicians pour trillions into the pockets of their bankster overlords, enabling them to continue to sit at the world financial system casino tables? They can’t be dumb enough to not know where the money goes and how little stimulus effect QE2 and the Bush Billionaire tax cuts really have.
The clamor for austerity turns rational policy exactly on its head unless the goal is for Europe and the US to become the new third world and undercut Chinese wage rates. Rational policy would do just the opposite of austerity: Eliminate fraudulent asset valuation on bank books, nationalize the bankrupt institutions, return to progressive income tax levels of the 1950′s and distribute the nation’s wealth in a fair manner, institute a national single payer medical system, eliminate predatory private health insurance companies, change prescription drug research and development to funding through universities and research institutes and abort the big Pharma drug pushers, legalize all recreational drugs, put the cartels and the CIA out of the street drug business and clean out the prisons, and last and most important, change the Department of War to the Department of Defense by closing all overseas bases and cutting the Pentagon budget in half initially and then halve it once again. We need employment and a 21st century infrastructure, not austerity and an imperial army.
Revenue shortage? Hardly. There is plenty of money in the richest country on earth to put people back to work and begin preparing the country for the next century. The money not spent lining the pockets of the bankster and military cabal could fund a 6 million man/woman WPA to build the energy and transportation systems of the future (like China is starting to do), provide free education like Cuba does instead of saddling college graduates with debt slavery, wean ourselves away from unsustainable petroleum based agriculture, rehab our housing stock to cut energy use in half,—– there is no shortage of things we could be doing if we had a vision of the future and the collective will to seize political power back from the ruling class that has stolen it and American democracy from the people.
One of the first Economic/Monetary threads begun when we openned the Doomstead Diner for Bizness a few months ago was a Hyperinflation vs Deflation thread. As often as this debate has been engaged in all across the internet, it still remains one of the most vehemently argued topics from both sides, and no clear “Winner” in this has emerged as of yet.
The arguments surrounding HI & DF crossover into arguments about the worth of Precious Metals and their possible value in resolving the monetary crisis we have confronting us now. Particularly lively arguments come off the keyboard of a Blogger who goes by the Nom de Plume of FOFOA, or “Friend of a Friend of Another”. Apparently, all Austrian School Gold Bugs are very Friendly people, at least with each other. LOL.
Anyhow, I got into discussing the HI vs DF questions with Ashvin Pandurangi of The Automatic Earth a while after trolling and plugging the new DD Blog and Forum on TAE. Ashvin has now decided to resurrect his analysis of FOFOA’s “Freegold” Theory, and is also soliciting other critiques, so I’ll pitch in my 2 Gold Eagles on this subject now. I’ve been over the fallacies in the thought process of what conventional economists of both the Austrian and Keynesian variety come up with many times already, but I haven’t really addressed specifically the work of FOFOA. So I will do that here and now.
Like Ashvin, I will also make my disclaimer. I don’t profess a complete knowledge of WTF the Freegold advocates are talking about, and frankly I have a whole lot of issues as far as wading through the stilted prose style FOFOA writes. I am just going to look at some underlying assumptions made in this most recent justification for Freegold and for a likely Hyperinflation of the Dollar in the near term, though FOFOA refuses to make any real timeline predictions.
Let us begin here first with a major fallacy underpinning FOFOA’s entire Worldview as far as Money is concerned:
The answer is the concept of money. This is the ability, unique to humans, to use numbers, mental constructs, to relatively value the goods and services of barter in a way that enables economic activity and commerce. It is the enabler of economic activity and commerce. It is a primeval instinct.
Emphasis there is mine of course. Primeval? It seems FOFOA believes that Homo Sapiens dropped down out of the trees with the innate ability to create and use money, and the subtext is that it goes back in ALL cultures into the great myst of Prehistory. He is cock sure that money in some form is an essential ingredient to the primeval Homo Sapiens mindset, but this is so untrue as to be completely laughable. It’s pretty clear that money only evolved around the time Agriculture did, and that is only around maybe 10,000 years old. This does not qualify as “Primeval” by any stretch of the imagination. There is a good 60,000 years here between the time Toba erupted and the beginnings of Ag and Money, and Homo Sapiens appears to have been quite successful through that whole period.
Moreover, its not some mythical Xanadu or Utopia in which large cultures flourished without the use of money, really only once the Europeans arrived on the West Coast of the Amerikas was any Money introduced to a very large culture of First Nations people who used a Potlatch or “Gift” Economy. FOFOA sweeps all that stuff under the rug, because it doesn’t fit the construct he wants to make regarding Money, and then more specifically Gold as Money.
Here you get into a real problem with the “Primeval” argument, since metal working, even in Gold and Silver which is a bit easier than Iron working is a VERY late coming technology here overall, and again doesn’t fit the description of “Primeval”.
Now, FOFOA does get some of the early history right in the use of PMs in barter, but he never does cover the Coinage issue here. Metals in early tech worked very well to form difficult to counterfeit Tokens to represent stored wealth in a Warehouse. Because of their scarcity, a token could be made with an ascribed VALUE to it representing a certain amount of grain held in a warehouse. The Coin doesn’t have INTRINSIC value, the value gets Stamped on the coin by Da Goobermint.
Using Gold and Silver worked OK for a while, but suffered problems all along the way. First off, Hoarding is a problem, Savers will hoard the metals and take them out of circulation. This runs you into Money Supply problems for commerce purposes. Worse still, in periods of famine either nature caused or induced by Human Greed, the actual amount of Food or other necessities can decrease, and then when saved Gold comes back out to buy now scarce items, there isn’t enough of the stuff to go round to redeem with the Gold. So the Gold value isn’t really Steady, its only relatively steady during periods of surplus.
The next problem is Increasing Population size. If the amount of Gold is relatively fixed, but the Population is growing rapidly, in each generation there is less Gold to go round per capita than the last generation. Today, with 7B people on the Earth, there is less than 1 ounce of the stuff for each person walking the Earth at any given time. If Gold is the ONLY money around, then as the population grows larger the Gold becomes increasingly more scarce and valuable, so its value is NOT steady. Its ALWAYS going to increase in value in this situation. Increased productivity can keep prices more or less stable, but at the point at which real productivity does not match the population increase, a fixed quantity money supply will skyrocket upward in value. It doesn’t work the same way as fiat, but it is still not truly a stable form of currency when you have a fixed supply working against a population that is growing rapidly.
We still have not worked our way into the biggest problem with PMs though, which is that of consolidation over millenia. FOFOA himself describes the “Big Players”, long term consolidators of the Gold resource who have sequestered away MOST of the Gold ever mined up here.
Modern bullion banking is a carryover from this past. When Nixon abruptly took the dollar off the gold standard in 1971, the billions of ounces in private ownership didn’t just disappear. They weren’t cast into the streets in disgust. And these giants with 100,000 ounces or more didn’t take those tonnes home to the basement. No, they stayed right there in the bank vaults and literally JUMPED in value.
FOFOA goes on to register his complaints with the Gold ETF market (“Paper Gold”), and the fact that there is fractional lending of this through the Bullion banks just as there is Fractional Lending of Fiat (and no doubt a good deal of Rehypothecation going on with that asset as well!)
MANY claimants to this Gold now, but who REALLY gts to claim it in the end? Generally speaking it is whoever owns the Keys to the Bank Vault. The LAST person in the line responsible for making exchanges keeps the Asset, like MF Global whisking away depositors accounts into their own account, which then gets shifted to JP Morgan accounts. How does Gold as a currency backer stop this from happening? It doesn’t, and in fact probably makes it easier to accomplish.
Anyhow, with so much of what is admittedly already a pretty limited supply of Gold for 7B people on the Earth already sequestered, its pretty clear that only a very small subset of that population has sufficiently high claim and control to actually take possession of it at some point. The amount leftover from this for people to actually do some commerce with is exceedingly small, far less than the sub 1 oz in theory available to each person based on what has been mined throughout history. How do you De-consolidate Gold already Owned and Sequestered away by powerful people and families and then use it once again as a currency medium? You can’t do it, and so you are left with the creation of Notes or Digibits created to represent Gold, but not Gold which ever is really available for most people to redeem.
In reality, the best arguments for how money works come from the world of Thermodynamics and Heat Flow across gradients. In order for any Work to be done Heat has to flow from a Hot reserve to a Cold one.
PMs in their Consolidation phase measured the amount of work being done as the PMs were mined and collected up. The energy was used to reverse the Entropy process of dispersal and consolidate the piles of metal. During this time, the metals flowed through the economy and could be used as money. They represented the work being done. However, all along the way there was a lot of waste Heat expended, and you are not going to get the same amount of work done by taking the piles of Gold and sending them back the other way.
This brings us to FOFOA’s arguments regarding what “Capital” is.
I’m not going to go into great detail on the concept of capital, other than to give you a mental exercise. Because the term “capital” can be quite confusing in our modern paper/electronic world, I want you to imagine a much simpler human civilization. Imagine an ancient Greek city. All the buildings made of stone and mud, the horse carts and agricultural tools, the linens and skins worn as clothing, the knowledge base passed down through generations; all these creations of man’s intellect were the capital of the time.
Now imagine the destruction of capital. Imagine an earthquake or volcano that destroys the fruits of many generations. Or a plague or war, perhaps, that destroys the knowledge base. That’s the loss of real wealth you are imagining. And it is this cycle of capital creation and destruction that tells the story of mankind throughout many civilizations.
The modern analogy to FOFOA’s Stone and Mud Huts and Horse Carts in the Ancient World are today’s McMansions and Carz. In his version of Capital destruction it takes an Earthquake or Volcano to destroy this “Capital”, but he doesn’t address the fact that Capital of this kind can become worthless even if it is still standing. The McMansions and the Carz are losing Value because the Energy is no longer there to use them. The “Capital” that was expended to build said infrastructure was the Oil burned, which now exists only as molecules of CO2 in the atmosphere. What “Capital Destruction” has been going on for the Age of Oil came in the form of the burning of that Oil. The OIL was the Capital here, not the stuff that was built with it.
Finally, WRT arguments about Hyperinflation and the relative worth of Gold in a monetary system collapse such as the one we are undergoing now is concerned, most of the perceived value of the Industrial Era has been “accounted” for by using the Dollar as a measure of the relative worth of goods and services through the era. In order to try and keep nominal values from collapsing even though the real value of assets is decreasing, more dollar liquidity is being pushed into the center of the system at the TBTF Bank level. However, said liquidity is not escaping into the real economy as of yet, and until there are some signficant Policy shifts, it is not likely to escape either, except into the pockets of a few well connected thieves.
Shifting onto Gold at this point in the Game would be outrageously Deflationary, which I think the Austrians overall view as a Good Thing as the Credit Cycle gets a Reboot that way, but in practical terms it would pretty much halt all trade since most of the Gold in the world is sequestered in the vaults of only a few people and Sovereign holdings, to which there is also likely Private Claim on. Such a shift to Gold WOULD of course be Hyperinflationary for the Dollar, so for Gold Bugs that is a self-fulfilling prophesy. In essence, the constant propaganda being written by Gold Bug websites for people to take their Dollars and convert to Gold is meant to increase the perceived value of Gold and in turn force a hyperinflation of the Dollar. This is proving a bit harder to accomplish IRL than in the mind of the Gold Bug.
Because the Fiat structure is so large and complex, the value system of all assets including the PMs are being subjected to tidal forces as it implodes on itself, resultant from the fact the Capital underpinnning of Oil is becoming more scarce. Oil however isn’t disappearing overnight, and the overall game is being balanced out some by Demand Destruction. The Dollar’s preemminence as World Reserve Currency isn’t yet being challenged effectively, despite Chinese claims that Renminby will soon be the World Reserve Currency, or Gold Bugs claims that it will soon be Gold. This is not to say the Dollar will not eventually collapse in its value, it most certainly will. However, many more parts of the peripheral economies and other currencies will get hit on here first, and during that period the Dollar is likely to remain perceived as the Safest Haven in a War Zone.
In the deleveraging that must occur by any economic argument, all asset classes are going to come under pressure, that includes Gold and it includes Oil too. The CBs may work in concert to try and maintain nominal values, but this will simply turn their own balance sheets into TOAST as well. The Market in turn will react to that, and eventually you do get your currency collapse of the Dollar as well. Whether Gold is turned to as an alternate Currency Medium in this phase remains an Open Question. I do not think so based on my thermodynamic arguments or in sheer practicality terms, but I wouldn’t rule it out.
Far as FOFOA, FOA and A are concerend, they are all just shills for a very old concept of money, and who all also likely have skin in the game for making their prophesies come true. Anyone who does hold a lot of Gold in the Basement safe clearly would be ecstatic if it rocketed up in value to $10K/oz or more. I will be very surprised if that occurs, I think the whole trading system would collapse if PMs took on those kind of valuations, but only time will tell on that one. In the medium term here though, an HI of the Dollar seems unlikely to begin inside the next couple of years anyhow. The Euro definitely has to collapse first, and that will take some time yet to play out.
As we come to the close of the Age of Oil and the automobile, the Older Technology of the Railroads is often held up as a possible solution, at least in the medium term. Jimmy Kuntsler in particular is a fan of this idea. In this article, I’m going to look at the many variables involved with a conversion back to Rail technology as an intermediate level solution to the more general collapse of other Transport Technologies more recently evolved, namely Air and Truck.
Today I took a trip with my students on the Alaska Railroad which runs a right of way from Seward all the way up to Fairbanks. We just did a small part of the trip, from Wasilla to Talkeetna. This right of way was carved out beginning in 1903, and has gone through a succession of Bankruptcies, and currently is Goobermint Owned by the State of Alaska, which bought it fromDa Federal Goobermint in 1985, which bought it out of Private ownership in 1967, after the 1964 Earthquake basically trashed the Anchorage Hub.
In 1903 a company called the Alaska Central Railroad began to build a rail line beginning at Seward, near the southern tip of the Kenai Peninsula in Alaska, northward. The company built 51 miles (82 km) of track by 1909 and went into receivership. This route carried passengers, freight and mail to the upper Turnagain Arm. From there, goods were taken by boat at high tide, and by dog team or pack train to Eklutna and the Matanuska-Susitna Valley. In 1909, another company, the Alaska Northern Railroad Company, bought the rail line and extended it another 21 miles (34 km) northward. From the new end, goods were floated down the Turnagain Arm in small boats. The Alaska Northern Railroad went into receivership in 1914.
About this time, the United States government was planning a railroad route from Seward to the interior town of Fairbanks. President Taft authorized a commission to survey a route in 1912. The line would be more than 470 miles long and provide an all-weather route to the interior. In 1914, the government bought the Alaska Northern Railroad and moved its headquarters to “Ship Creek,” later called Anchorage. The government began to extend the rail line northward.
In 1917, the Tanana Valley Railroad in Fairbanks was heading into bankruptcy. It owned a small 45-mile (72 km) 3 ft (914 mm) (narrow-gauge) line that serviced the towns of Fairbanks and the mining communities in the area as well as the boat docks on the Tanana River near Fairbanks.
The government bought the Tanana Valley Railroad, principally for its terminal facilities. The government extended the south portion of the track to Nenana and later converted the extension to standard gauge.
In 1923 they built the 700-foot (213 m) Mears Memorial Bridge across the Tanana River at Nenana. This was the final link in the Alaska Railroad and at the time, was the second longest single-span steel railroad bridge in the country. U. S. President Warren G. Harding drove the golden spike that completed the railroad on July 15, 1923, on the north side of the bridge. The railroad was part of the US Department of the Interior.
The railroad was greatly affected by the Good Friday Earthquake which struck southern Alaska in 1964. The yard and trackage around Seward buckled and the trackage along Turnagain Arm was damaged by floodwaters and landslides. It took several months to restore full service along the line.
In 1967, the railroad was transferred to the Federal Railroad Administration, an agency within the newly created US Department of Transportation.
In 1985, the state of Alaska bought the railroad from the U.S. government for $22.3 million, based on a valuation determined by the US Railway Association. The state immediately invested over $70 million on improvements and repairs that made up for years of deferred maintenance. The purchase agreement prohibits the Alaska Railroad from paying dividends or otherwise returning capital to the state of Alaska (unlike the other Alaska quasi-entities: Alaska Permanent Fund Corporation, Alaska Housing Finance Corporation (AHFC), and Alaska Industrial Development and Export Authority (AIDEA)).
If you look at the Map of the AK Railroad and what part of the State it actually covers, it is quite small really. It just goes around 470 miles in a REALLY big patch of land. Despite the great WEALTH of minerals in Alaska which even this short track of rail can transport, it STILL is not a really profitable venture overall, and less profitable all the time as the Energy to run it becomes ever more expensive. Maintenance costs each year are horrendous, because the freeze-thaw cycle plays havoc with the tracks, and really the whole railroad track itself can only be used for maybe 6 months of the year.
Nevertheless, despite the fact it isn’t really Profitable and never has been, it is still LESS energy and materials consumptive than the road system is, as limited ALSO as this is up here in Alaska. Laying right of way for even a 2 Lane road is quadruple what a Rail Track takes, and then it all has to be graded and paved over. A Rail Track only takes Gravel, some wood ties, thin metal rails and spikes to hold them in place. It is way simpler to build and less energy consumptive than Roadways are to build.
On the trip up, the conductor who has been riding this Railway for some 40 years pitched out stories along the way over the Intercom. He throws out Newspapers along the way to people who have cabins and even McMansions along the route that are pretty much inaccessible by roads. A bit of an anachronism now since just about for the whole route I was able to access 4G Wireless Internet so all those cabins also can access the net this way.
Anyhow, for the most part even in the fairly populated stretch between Wasilla and Talkeetna, this railroad line is the ONLY tie to “civilization” these folks have on a daily basis, and only for about half the year. Rest of the time, they are pretty much cut off, and most of them will bring in their Supplies during the summer months by a variety of Oil powered means, 4 wheelers and Float Planes mostly since there are lakes all over the place to land a float plane on. Once the fuel is no longer available for that transport, it seems unlikely to me that just the Railroad can supply these folks, though maybe it can with some adjustments.
What the railroad is mainly operating on now is the Tourist Trade, of which we were a small local part. For each of us, it cost $70 to take the railroad all of about 50 miles of its total route, a 1.5 hour trip overall roughly. Basically not a whole lot different length of travel than you would take on the LIRR Commuter Train if you live middle of Long Island. That was for a ONE WAY trip, we took a Schoolbus back.
Obviously, without the Tourist Trade and people paying these exorbitant prices for the chance to look out the windows at the great beauty of the Last Great Frontier, making this Railroad run at a profit is probably impossible, at least under current Global monetary parameters anyhow.
I do suspect the Alaska Railroad will last longer than the Road system will though. It can still be powered by Coal and Steam, in fact there is a plan in the works I believe to bring a Steam Powered Engine back on the tracks to pull a Tourist Train on this line. Right now though, all the Trains both for Tourists and for Coal from the Healy Mine are pulled by Diesel-Electric Locomotives. Impressive Machines they are also. It may be possible to keep these behemoths running for a while since there still is some Oil left on the Slope and perhaps some more also in ANWR, though without a huge infrastructure project to build pipelines into ANWR, even if the Oil is there getting it OUT will be close to impossible. If the Oil can be retrieved, there is also a small Refinery around Fairbanks which can supply the rairoad with Diesel. But of course also, there are all the Maintenance issues with these Locomotives, and I am not sure the local Foundries and metal shops are capable of doing a lot more than superficial repairs right now.
The isues with the climate and so forth are not as extreme with the rail system down in the Lower 48, but the system is of course also much larger. Trying to maintain all this track and all the cars to pull MOSTLY bulk commodities will be extremely difficult, and getting either Diesel or Coal even to these trains will also become increasingly more expensive and difficult. It may last longer than the Carz and Trucks, but it still always is and was a system that was subsidized by Cheap Energy, and in fact NEVER made a REAL Profit at anytime in its existence, even right at the beginning. Building this system created a HUGE overhang of Debt, and Railroad Companies have been going Bust perpetually since the first Transcontinetal Railroad was built. In the end, the remaining Railroad system that exists on a Passenger Level is Goobermint Owned pretty much exclusively now. Private Entrepreneurs don’t buy passenger railroads. Even buying Commodity Shipping Railroads is a dicey proposition, ask Warren Buffet about that one with Burlington-Northern.
Regardless of ABSOLUTE profitability in Railroads though, on a Societal level with so many people in so many places we still do need some means to move goods to them, and Railroads can do this way better than Trucks and Planes can, to be sure. Fact is, that like large Ships, Locomotives can be designed to run on Bunker Fuel, which is basically Unrefined Oil. Cars and Trucks and Planes can never run on Bunker Fuel. Because of the SCALE of a Lcoomotive, it can burn virtually anything, and in fact could even be Nuke Powered. Not that I support that idea, I am just saying it is way more flexible in it’s energy sourcing than the later transport schemes are.
As I walked around Talkeetna, it was very pleasant. Even had its own Brewery! For the exceedingly small population that lives in Talkeetna (even less than where I live in the lower Mat-Su Valley), I think they prbably can be self sufficient in most things and need little from the outside world to be delivered to them by train, even if the train only came through once a month or so during the summer months. There IS plenty of energy to run trains along this 470 mile track for a long time to come, if you use Bunker fuel and the Coal in the Healy Mines to run Steam driven turbines instead of Diesel-Electric. It won’t last FOREVER, but it can provie a transtitionary mechanism for moving the comodities and trade goods as necessary between comunities. NOT a People Mover. Like the Carz, trains are a big waste of energy to move Peoples around, and peoples do not NEED to move around so much over such great distances. perhaps it should be as it once was, a Once in Lifetime thing to make a Great Journey out beyond your Little Town, and that which only a few Adventurous Souls would undertake at all to begin with. WHY do you realy need to leave the Little Town of Talkeetna anyhow? Or the Little Town of Anatevka for that matter either?
Unfortunately of course, the Little Town of Talkeetna will suffer here quite soon as the Tourist Trade drops off the Map, and while overall I think it could be Self-Sufficient, MOST of the people currently living there are not READY for such a life yet. So what is most likely to occur is that Talkeetna will in fact DEPOPULATE,and the Railroad if it manages to continue onward will stop there No More. Many Cabins are going Empty now as the economics spin downward.
Talkeetna and places like it though, while they will not be comfortable or all that pleasant once this spin down really gets rolling are WAY better places to be than the Big Shities. Truly, this is the LAST GREAT FRONTIER. In my heart, I believe that anyone who wil make it through the Zero Point will be living in places like this, at the far edge of industrial civilization bordering on the full primitive. I am GLAD I am here now, I am GLAD the course of my life brought me to this wonderful place where there remains some semblance of the purity that once existed on this Planet. So much is GONE now, and it will not be repaired in even the lifetimes of our Grandchildren in the places Industrialization and Capitalism have already destroyed it. Not gone here though, not completely, not YET on the LAST GREAT FRONTIER.
More from inside the Diner on the Hyperinflation/Inflation/Deflation Question. Click here to read the full debate ETERNALLY in progress.
Ashvin Pandurangi of TAE wrote:
I recommend everyone here to take a look at FOFOA’s latest (behemoth of a) post – Hyperinflation or Deflation?
The most interesting thing for me is that I agree with 99% of what he writes in that post, and I think he provides A LOT of genuine insights (such as the importance of comparing marginal [i]flow[/i] of dollars in the “physical plane” – US public deficit vs. trade deficit), but I still strongly disagree with his theoretical foundations, general worldview (including his very benign view of the monetary system – i.e. no malicious intent) and many of his conclusions.
However, I DO agree that dollar HI is a) very likely in the medium to long-term (let’s say 8-20 years) and b) much more likely than a prolonged period of regular old inflation. With regards to a), FOFOA doesn’t think that sort of timing is very important, but I most certainly do.
Anyway, it is a great post, even though it is very difficult to get through in one sitting.
I read through some of this eruption of prose from the keyboard of FOFOA, and will finish eventually but after skimming what I didn’t read in detail, the main problem here is the fact FOFOA refuses to make any kind of timing bet, which is rather critical in all of this.
Even deflationistas like myself will grant that the denoument of currency collapse can come in the form of a hyperinflation. I maintain however that an HI cannot be supported until and unless Da Goobermint or the Banks which control it start handing out free money to the end consumers. The “Free Money” could comein the form of Goobermint “Make Work” projects like the WPA or a straight Dole, or from the Banksters it could come in the form of massive new loans made to EVERYBODY, from corporations to municipal Goobermints to keep paying their workers.
At the moment, neither of these outcomes is on the horizon for the FSofA, and for 99% of the people out there, Dollars are a SCARCE commodity and hard to come by. HTF can you get an HI out of something so scarce? If you take the definition of an HI as 6% monthly inflation, you’ll double prices in about a year. If that occurs with gas here now, gas sales will PLUMMET because people don’t have the money to buy gas even at current prices.
Contrast this with the situation in Greece if/when they reissue Drachma. The Greeks will issue this TP to pay all their pensioners and Civil Service workers to keep them employed. Any beginning devaluation against the Euro of say 50% will rapidly further devalue. There is no tie to actual productivity in a Drachma reissue. There is no tie to Drachma and Oil to run the economy. The Drachma is meaningless.
The Dollar remains meaningful as long as its tie to Oil remains in place, and as long as dollars are scarce in the real econmy. Though I did not read all the way through FOFOA’s post, I don’t see where he ties together the proxy status of the Dollar as representative of a given quantity of Oil. Long as Saudi’s will take Dollars for Oil and the dollars are scarce to end consumers of said oil, you just can’t support an HI in the Dollar.
The MOMENT the Saudis will NOT take dollars for Oil is the moment it can HI. Then they become as worthless as New Drachma. Everybody who has any Dollars in the Bank of Sealy will try to dump them all at the same time, and whatever is left on the shelves of Walmart will FLY off those shelves at rapidly increasing prices. Then you’ll get your HI until all the warehouses and distribution centers are cleared of goods. Of course, Da Goobermint will likely step in here with Ration Coupons and so forth to stop that scenario from occurring.
At the moment though, there is little danger the Saudis will stop taking Dollars for Oil, because the House of Saud has a Gun duct taped to the side of its collective Sheik Heads. The Gun is the Big Ass Military,and without it the House of Saud is TOAST. The Sheiks will be LITERALLY eaten alive by the population surrounding them. This is the POLITICAL side of the equation that FOFOA never seems to deal with, all his arguments are economic ones.
In any event, for most people it is the TIMING that is most critical here. That the currency will collapse at some point is inevitable, but when do you divest and what do you do in the meantime? My “solution” here is to reamin as liquid as possible so I can divest rapidly for hard goods when the final collapse comes. To be able to do that, I forgo investments that in the interim might provide an increasing pile of funny money if I choose correctly.
Finally, on the Gold issue, the deal with Gold is that even assuming it holds some value that Fiat does not, by the time you work your way down to trading in Gold, there will just be nothing around worth buying for it. The whole JIT system will collapse, all trade with China will collapse, there just will not be anything to buy once Gold is all there is anyone “trusts” anymore. No Letters of Credit, no Bankster will be trusted for anything. You can’t move a Global Economy shipping Gold Bars from one place to another, its even probably impossible to do it moving piles of Gold from one holding cell to another in the Basement Safe of the NY Fed.
Meanwhile, until Da Goobermint starts handing out Free Money to J6P the way it does to the TBTF Banksters, I don’t think we will see HI in the Dollar. For sure, it has to wait until after both the Euro and Yen collapse also. Not on the immediate horizon, IMHO.
As the spin down proceeds along here, the circular nature of Money Creation and Destruction becomes ever more apparent, even I think to the Casual Observer now. Reason it is becoming much more obvious now than in the past is that BOTH Money Creation and Destruction are occurring exponentially more rapidly these days than just a few years ago.
We have all been Witness to TARP, QE1 & QE2, and the EFSF Slush Fund, which in combination add up to TRILLIONS of some Fiat created over the last 4 years since the 2008 Financial Crisis. This non-stop creation of credit to maintain liquidity has provided an enormous amount of Fodder for the arguments of Hyperinflationistas and Gold Bugs alike. According to BOTH John Williams and Speedy Gonzalo Lira, all this Printing SHOULD have resulted in HI of the Dollar in around 2011 at the LATEST, if you read their arguments in 2009-10 anyhow. Here we are in 2012 though, and it still does not take a wheelbarrow to buy a Loaf of Bread, though Bread IS more prcey today than in 2009.
Why has HI not occurred as of yet in the Dollar? A few reasons for this. First of all, the Dollar is just a COMPARATIVELY valued currency, valued against the worth of other currencies in operation. It’s not a good currency, but compared to the other main currencies it is valued against, it is positively Sterling! Bad as FSofA debt is, it is better debt than that owed by the various PIIGS nations. Its better than Glow inthe Dark Yen.
The ABSOLUTE Truth of course is that ALL Fiat is diminishing in it’s relative worth against Oil, which in this industrial cuture provides the underpinning for the value of all Fiat. PMs play a tangetial role in this, their worth depends on valuation against both the Oil resource and the perceived Safety of PMs while Fiat loses its value. Overall though, Gold is a minor player in a much bigger game, and Gold cannot abosrb the lost value in Industrial Equities. Put it this way, if you took all your Monsanto,IBM,GE etc Stock and tried to convert it to Gold, at current valuations for Gold there is not enough around to place all that value. Gold would have to raise in value by orders of magnitude to take on the current valuations, and that is not going to happen. Why? Because the current valuations of equities are entirely WRONG to begin with! You cannot transmute false valuations in equities (or real estate or derivatives etc) into “real”valuations in Gold anymore than you can transmute Lead into Gold. The shit simply isn’t WORTH what the “market”says it is worth, because the “market” marks to MAKE BELIEVE now, not any real valuation.
Anyhow,it is the recent IPO of Facepalm that leads me to write this analysis, because inside the Diner the case was made by GO that $100B worth of fiat was created in this IPO, which is for the most part true. At this point, Morgan Stanlety who underwrote the IPO is going to have to Borrow money to buy the stock itself and keep the price propped up at anywhere near its IPO price. MS can only do this for so long though, even with an open spigot from Helicopter Ben. The rest of the competitors to MS will see this weakness and keep dumping stock forcing MS into a deeper hole to prop it up. The OTHER sharks in the water will eat MS ALIVE if they persist in propping it up.
So,the $100B or so created to purchase this stockrather quickly goes up in flames here without EVER making it out into the Main Street Economy to Hyperinflate anything. Rinse and repeat said process with all the recent IPOs from Poopon to Zinger to the “new”GM.They are ALL losing their value, all the money created to buy them is going right up in SMOKE here.
Forget HI, even just keeping regular Inflation going is a daily job for Helicopter Ben that overall he is losing. None of the Funny Money being created makes it any further out to the Real Economy than the Bonuses paid to the Banksters for making these deals and setting up a new paper construct, in this case Facepalm. Facepalm has no real good revenue model here, it is a fucking FAD. In the end, social networking and Tweeting the details of your daily life is just BORING. Really, even the Tweets of Bill Gross are BORING,and he is worth BILLIONS.
Facepalm is a fabulous example for what is going on in the Grand Schema here, which is to try to keep this monetary system running blowing ever more and newer Bubbles,but the latest Bubbles are so full of HOLES they capture no Air whatsoever, not even for a MOMENT after they are offered up for consumption.Railroads,Carz, they captured some air for a while when the Black Gold came a-bubblin’up from Jed Clampett’s farm, but these things at leasthad some SUBSTANCE to them. Virtual Creations on the internet HAVE NO SUBSTANCE. In REALITY,they are quite worthless things. Facepalm is a MIRAGE of wealth,though to be sure Suckerbug cashed out himslf on this mirage. For everyone ELSE who invested in it, you are the Suckerbug’s Sucker holding the bag.
A recent thread inside the Diner brought up a very old problem many of us, including myself, have to deal with on just about a daily basis. The problem is one of HYPOCRISY. Bloggers and Commenters alike, most of us who have access to the internet LIVE inside Industrial Cultures, and while we decry the consequences of Carz or Iphones, we still “Live the Life”.
Just about a year ago on TBP while I was writing on that Blog as a Guest Author, I got taken to task for MY Hypocrisy. Following below is my response to being tagged as a Hypcocrite who enojoys the Benefits of the Age of Oil and living inside the FSofA, while at the same time decrying it all as usustainable and immoral. I am no less the Hypocrite today I was when I wrote this post last year. The parameters haven’t changed that much…YET.
However, you do not need to be a Weatherman to know which way the Wind Blows.
Punblished originally on TBP in March of 2011
My sometimes Friend and sometimes Enemy here on TBP StuckInNJ has an Ace in the Hole he periodically likes to pull on me, the Hypocrisy Card. Stuck is also a pretty funny guy and a good writer, and recently in one of LLPOH’s threads I was Trolling to make a nuisance of myself he wrote a pretty hilarious critique of the Hypocrisy he sees in my writing when you juxtapose it against my real life actions as a participant in the Industrial/Capitalist economy. This came about after I sarcastically recommended to Jmarz that he go back and read every goddamn post I ever wrote because he is “confused” by how I can be such a vehement enemy of Capitalism while at the same time being a beneficiary of this system. I replied to Jmarz that he probably MISSED the CRITICAL PARAGRAPH I wrote somewhere in the 10s of thousands of words I drop down here on a weekly basis that would tie it all together for him. At the rate I write, its not entirely impossible that I have already dropped a HALF MILLION words on these pages. I have no idea really though. In any event, looking for such a paragraph would be an exercise in utter & complete futility. LOL.
Of course there really IS no single paragraph in there that could do this, in reality you have to understand many different things I have written here over the last couple of years, going back to TBP1 and Raging Debate. Even more, you would have to be familiar with everything I wrote on the Peak Oil board during my time there. However, Stuck BRILLIANTLY took this as a jumping off point to write this paragraph for me as a Parody of my stuff:
“The one thing you all fail to realize is that I don’t believe half the shit I write. I mean for Chrissakes I was Pigman Semi-truck owner! And now I teach dumb fucking Alaskan Eskimoo kids … for MONEY! Are you fucking kidding me? I have a stash of money for a BugOut machine, gold buried near my cabin, guns, seeds, and case of blowup dolls. Guess what? That takes ….. MONEY!! I blow smoke up your asses day and night and you turd-fuckers fall for it everytime. Looks like my Ivy League education paid off. And yeah, that cost a shitload of money too. See you all in the Great Beyond …. and I’ll have a shitload of loot there too –RE!”
What makes this paragraph so funny is that so much of it is TRUE! LOL. The best parodies always have a layer of truth that underlies the parody, and this one most certainly does. I was an independent contractor with my Freightliner, I did make decent money doing that. I did go to an Ivy League school and spent a decent amount of money to do that also, though not nearly what it costs these days. When I attended Columbia, my Tuition was around $3500. Imagine that. Total costs including Books and Dorm and Food was less than $10K/year.
Nowadays, I DO have a Stash of Cash I saved up by virtue of being a penurious sort of fellow for the last 20 years, and I even have some GOLD as well I panned up over the last few years since moving up here. I have my Bugout Machine, which I purchased for $5K on the used market. I rent a lovely Cabin on the Last Great Frontier and have a nice middle class salary coming in running a Private Education paradigm with a friend of mine, essentially sieving a living off the children of Big Oil and the FSofA Military. LOL.
Since I sure live a whole lot better than the poor folks getting bombed back to the stone age in MENA, just how is it that I can go ahead and “bite the hand that feeds me” and lambaste the whole fucking Capitalist system as being utterly immoral and beneath my contempt as a way to organize up human society?
Rather than writing a whole PARAGRAPH on it, back in the thread where Stuck wrote his parody, I dropped down a single SENTENCE to tie it all together for the Confused among you. Its not original, but it explains this very well:
It doesn’t take a Weatherman to know which way the Wind Blows.
Imagine yourself for moment as a young boy in a Native American community overrun by the Manifest Destiny of the FSofA. You get dropped into a School run by the Missionaries. You don’t really like this, but this is what happened to your community and your father sent you to the school. You want to RUN AWAY, but you cannot. You are trapped in this paradigm by powers much greater than yourself.
Turns out you are a pretty smart little Native Boy and you rocket your way through the system and get sent to an Ivy League College. You become a Doctor, you are held up as an EXAMPLE of success, but you watch as your people are decimated by the culture that overran them. YOU succeeded, but most others of your community did not succeed.
That is not MY story, not exactly anyhow. It’s the story of Charles Eastman, a Lakota who became a Doctor in the years of the Robber Barons and the Railroads. He was absorbed into the culture that became dominant, and he succeeded in it because he was a pretty smart little Indian. But he became VERY unhappy seeing the results of the conquest of his community, and for what remained of his life he did what he could to help them. You can watch a movie made of his life if you like, “Bury My Heart at Wounded Knee”.
I have been immersed in the Capitalist Nightmare from birth. I am the Son of a Bankster. Circumstances of Divorce in my family life took me out of the Class for my formative years through my teens. That was the time of the Cultural Rebellion in the late 60s and early 70s. I identified with the disenfranchised because of that. But of course, I still was a smart little Indian. Smart enough to still get educated in the Ivy League, on scholarships and by working as a research assistant in developing Radioimmunoassays. I still had contacts from the Bankster world from Dad the Pigman, so on Graduation I was able to use my math gifts to go to work on Wall Street and make Big Bucks. But of course, I was a Fish Out of Water, and the whole thing just made me sick. So I quit on one cool September day, stopped playing numbers games in my head and went to WORK, for most of the next decade in various roles in Hospitals, Clinical Chemistry, Respiratory Therapy, Radiation Safety etc. Union Work mostly. For most of you, this is probably what makes you think I am”Crazier than a Junkyard Dog” as Muckabout puts it. What kind of psycho quits a 6 figure job barely out of his teens because he finds it morally repulsive? Only somebody who is thoroughly off the scale as an iconoclast would do such a thing. That is who I am, who I have been for these 30 years since.
Anyhow, I am not going to review every choice I made here along the way, most of them were not conscious choices anyhow. I most certainly HAVE benefited from my position in society, where I was born and when I was born and to whom I was born. But all along the way, ever so gradually I felt the Wind Blowing, and the direction it is blowing is NOT toward a continuation of the Industrial/Capitalist paradigm. It will not perpetuate itself, it is not sustainable.
So here I am today, and most certainly I still depend on Money, and I still make Money. Hopefully I will continue to do so as long as money still works to buy anything. I still consume Oil and drive a 1989 Mazda MPV also to get to work most of the time. This is the culture, and it will be what it will be until it is NOT. For me to try to reject it would be plain stupid, you cannot reject the dominant culture of your society. This is what the Whole Earth Catalogue, back to the Land Hippies of the 60s tried to do, and they failed at it miserably. Not even the few remaining Communes like The Farm in TN succeeded as independent self sustaining communities, really they became a Tourist Destination.
At this stage of my life, particularly considering Health issues I have, there is no WAY I can take myself out into the Yukon Territory and try to escape all this stuff. I do know however which way the Wind Blows, even though I am not a Weatherman. The Model here of industrial society is on its Deathbed. So I take the pennies I have saved here and I attempt to secure myself as best I can. I am NOT a rich man, though of course compared to the impoverished even here in the FSofA I still do pretty well, and compared to Egyptians living on $2/day, I am George Fucking Soros.
Is it truly ACCURATE then when Stuck writes the Parody of RE, a HYPOCRITE who lives well under the Capitalist Sytem but reviles it at the same time? No, it is not accurate, although it certainly is funny and certainly serves to undermine what I m trying to communicate as well. I am TRAPPED, as all of you are also TRAPPED. You have to live within your society as it is constructed, until such time as it falls apart. So if you were a Hebrew Slave in Ancient Egypt, you lived and accepted your circumstance as a Slave until that society fell apart, with the Plagues and all the rest that hit upon them. Only THEN do you go running off with Moses into the Desert seeking Freedom.
If you SEE IT COMING though, you can PREPARE yourself for when the society falls apart. I try to pass on some of the ways I am preparing for this, because I GUARANTEE IT, it is Coming Soon to a Theatre Near You.
You don’t have to be a Weatherman to KNOW which way the Wind Blows.
So I will join my friend, as he “prays for a pony” (for complete healing). My pastor friend goes on to encourage us to pray for ponies in your own lives.
So why not a pony?
We also have a guerilla garden action planned to help beautify a neglected area nearby that ODU students walk through everyday & will also be beneficial for the wildlife. We’ll also be shooting a video that will be seen by many in our effort to inspire them to help us in this struggle for positive change. I hope you will come and lend your energy & friendship in the work for Peace, Beauty and renewal in Highland Park.”
(Edit: Preface this with an apology to the Slogger. He did in fact cross post the Theory of Everything Part II on The Slog. I just missed it in the vast volume of stuff he writes himself every day. Otherwise, most of the observations made here about the difficulty of getting cross communication between blogs still remain true. IMHO.)
One of the biggest complaints I have with the Collapse Blogosphere is the vast number of Redundant Blogs out there with NUMEROUS pundits spinning the collapse, but for the most part interacting very little with each OTHER. Besides the fact the Blogger/Admins of these various sites do not much chat with each other, neither does the Commentariat who follows a particular Blog and becomes an Active Participant.
Many reasons for this from the POV of the Commentariat, NUMERO UNO is one of TIME. Since I spent MOST of my early years as a member of the Commentariat rather than Blogging myself, I can speak from Experience here on this problem.
When I first became engaged on the PeakOil.com Forum, it was an EYE OPENER for me. I became engaged in conversation and debate with many people more knowledgable than me on Collapse issues at the time. At the time, the Peak Oil forum was VERY active, on any given night when I returned home from work there were a Dozen new threads started, with sometimes hundreds of comments in them each. Just to comment on those threads and then respond to other comments made to what I wrote took ALL my writing time. Participating in the commentariat of any other Forum or Blog at that time was impossible for me. In my Fantasy Understanding of the Collapse Blogosphere of the time, it seemed to me that Peak Oil had THOUSANDS of readers, and just participating on that board would be a good way to get the Message Out I wanted to send to enough people, who would then bring still MORE poeople onto the Peak Oil Board, and we could expand coverage this way.
Sadly of course, I eventually got my ass booted off Peak Oil after getting into innumerable Conflicts with the Mods of that board, and then Sequentially moved my way through a few other boards and blogs, notably during this period Ticker Forum where I met Peter; Raging Debate/TBP where I met Surly, and eventually Economic Undertow as well where I met Ross and Jb among others who are now also Diners.
My involvement with TBP was by far the most time consuming for me, besides getting into innumerable Napalm Contests with the rest of the commentariat there, I also wrote the Frosbite Falls Daily Rant during the time Jimbo Quinn gave me Author Priveledges on his Blog. No way during that period did I have ANY excess writing time to get involved in the commentariat of other Blogs and Forums. I did still READ other ones of course, Zero Hedge of course is a daily read for me still, and TAE as well during this period though I never commented there during that time.
When I finally got my ass booted off TBP, I decided the whole Bizness of Commenting on OPBs was just a big waste of my time, even though very occassionally I would find a Peter or a Surly to chat with on those boards. So, I retreated then to the Yahoo Group I created of Reverse Engineering as a place to continue to write my thoughts, and get some feedback from the friends I had found during my travels around the Commentariat of a few different Collapse Blogs and Forums.
After about a year or so over on Reverse Engineering, due to some Censorship Issues emebedded in the yahoo software running the groups, Peter convinced me it was time to set up the DD Blog, and foolishly volunteered his skills and abilities to put up the platform. He said he could create a good platform, so I said sure, let’s GO FOR IT!
So, we Launch the Diner here, with a good group in the Mod Squad, a fabulous Platform for Blog Authors and the Commentariat also, and of course my own ability to write enough each day to keep the Blog fresh with new material all the time. A good initial Recipe IMHO for a succesful Blog and Forum, which has overall proved so far to be pretty true. Spiders notwithsdanding as the likely primary reason page hits have increased exponentially, the Diner is clearly growing and operating pretty well these days.
At the same time though, I never wanted the Diner to be “All RE all the Time”, I always have seen this project as a place for Bloggers and Commenters to congregate and hash out issues of Collapse. With that philosphy in mind, I reached out to a few of my favorite Bloggers to come Dine here, repost their articles and discuss them here in the Diner as well as on their OWN Blogs. A few of the Bloggers I have invited in here in such a manner would be Steve from Economic Undertow, Gail from Our Finite World, Brandon from Alt-net and most recently John Ward from The Slog. I did NOT invite Ashvin or Ilargi and Stoneleigh from TAE in thsi manner, it was actually Ashvin who suggested Cross Posting between TAE and DD, and Ashvin also who has joined int he commentariat here, as I comment regualrly on TAE as well now. This IMHO is a very good and healthy relationship for both Blogs which can benefit both.
With the EXCEPTION of Ashvin who I did not myself invite in, so far my entreaties to the other Bloggers to join in Diner discussions have been a Magnificent FAILURE. Far as Steve, Gail and Brandon are concerned, all were quite OK with reposting their articles on DD as long as I attribute Authorship correctly and provide Linkbacks to their blogs, which I always do when I post up material others wrote. None of these fine authors though participate in Diner discussions, and I am not even sure if they read the Diner either. Probably not in most cases.
The most recent attempt at Collaboration with The Slog is what is causing me to write this post though. In this case, rather than simply asking John Ward for Permission to repost his articles in the Diner Blog, I suggested to him we Cross Post articles from both Blogs, so that both readerships would have the chance to see and read the articles from both places regardless of which one they originate on. I gave him Authorship priviledges on the Diner, and he posted up his “A world terrified by impotent ghosts from the past” article, which is just marvelous. Sadly however, he WELSHED on his end of the bargain, and never posted up anything from DD on The Slog! I attribute this mainly in all likelihood to the fact I am so Over-the-Top in much of what I write plus the fact the Diners here engage in so much “Tinfoil” speculation he doesn’t want his Slog to be contaminated by such nonsense. LOL. Just a WAG on my part though on the reasons for his renege on the agreement.
The deeper problem here that this FAILURE demonstrates though is that bringing together Bloggers and Commentariat from many websites all discussing the same issues is pretty close to impossible. Each of the individual Authors/Admins of these websites all have their own Spins, and both EGO and MONEY get in the way of collaboration. Nobody wants to Join with somebody ELSE’s Website and make it Bigger and Better, they want others to join THEIR website and make it Bigger and Better. You have a few “Compilation” sites like Seeking Alpha and Financial Sense and Zero Hedge which attract some Bloggers, but mainly they post there as a means to hopefully generate traffic for their OWN Blogs/Newsletters etc. You NEVER, ANYWHERE get say Karl Denninger, Stoneleigh, Chris Martenson et all all together on one website not just Posting their Articles, but actually DEBATING the issues with each other on a regular basis.
OCCASIONALLY, you get your “Battle of the Titans” debates, such as the famed Stoneleigh vs “Speedy” Gonzalo Lira debte of Hyperinflation vs. Deflation, but overall the “Famous” bloggers do not confront each other regularly anywhere, they all just write their own perspectives independently on their onw Blogs, with their own Commentariat who for the most part tend to agreee with their spin, that is why those fols are Members and Commenters on those Blogs.
IMHO, overall this is just a LOSING Game, a very poor way to communicate and analyze the problems we have before us. It is too diffuse, and all these Bloggers are making their arguments in ISOLATION, confronted only by their OWN Commentariat that basically engages in Group Think and agrees with them.
I don’t knw how to solve this problem, I only will say here that I hand a HUGE THUMBS UP to Ashvin Pandurangi of TAE as being the ONLY Blogger so far I have had contact with who will both do cross posting AND respond/comment on other boards. OK, Steve does it some also, just not here on DD where he seems to think it is too much like having Dinner at Ted Nugent’s house. LOL.
Anyhow, if all this Net discussion of collapse variables is ever to have anythign MEANINGFUL result from it, all the people who think on these subjects and postulate solutions cannot keep writing in isolation. It is just spinning wheels and gets us nowhere. Selfishly, I would like the diner to become a place where everyone cna come to hash out these issues, but really I don’t care where it is or who runs it either. We UST bring it all TOGETHER though, a bazillion websites all discussing the same shit a bazillion times over just does not WORK, it does not Cut the Mustard.
Here we go again, for Round 12 or so of the 15 Round Thrilla in Athens & Brussels, as the Greeks will now rev up for yet ANOTHER round of “elections”. See, they were too fractured to form a Goobermint that could agree on anything, so a NEW round of elections which likely will see entirely NEW parties emerge outta NOWHERE should be better, right?
Now, probably at this point most Greek Spiros Retsinas all oppose the “Memorandum” and further “austerity”, but no Political Party really has Clue 1 on a “Solution” to the GSR’s problems here. This for the fairly OBVIOUS reason that there IS no solution that won’t leave Pensioners, Widows and Oprhans starving in the streets of Athens. Who wants to be part of a Goobermint “responsible” for THAT?
So in this round, you probably will get still MORE “radical” Left Wingers and Nazis winning some Parliament Seats, and even LESS chance in the next Go Round of this farce that various “parties” winning 10-20% of the vote will be able to join in any type of “unity” Goobermint. So what happens after the NEXT round when 9 days after the election nobody can agree on forming a Goobermint? Do they schedule ANOTHER election for ANOTHER Month Later here? Maybe they do that, meanwhile you get thes so-called “Caretaker” Goobermints. While said Cartakers flail around tying to figure out how to pay da bills with no money coming in, Kind and Generous Fat Asses from Brussels offer to send in a Team of “Technocrats” to help them out. Sort of like Kindly Kraut Officers during the Nazi Occupation who would “help” the 12 year old daughter of the mother they so kindly “helped” also. That from a highly respected Historical source, the film “Von Ryan’s Express” with Frank Sinatra in the role of Von Ryan.
In this case, as least so far the Greeks have demurred from being “Helped” by the Technocrats. However, eventually here this “Democratic” process will break down and some Strongman from the the Right or Left will get enough internal support from the Greek Military and Police forces to take control, regardless of what is happening in “Parliament”. Looks possible the neo-Nazis will fill this role, since apparently more than half the Greek Police Force voted for the Nazis in the last go round of elections.
Sadly for Greek Nazis, they are not German Nazis. They don’t have the industrial infrastructure in place the Krauts did prior to WWII, and the idea that the Greeks could set up a 5th Reich here and take over the world is pretty ludicrous.
Also sorta ludicrous though is the idea NATO might roll Tanks into Greece to bring this all under control, like the Krauts did with the Sudetanland. Does NATO really NEED control of a lot of Olives and Goats? What do the Greeks have that NATO wants? NOTHING!
NATO Commandants are VERY busy beavers down in MENA where the peons there ARE sitting on stuff NATO really wants, namely BLACK GOLD, Texas Tea, OIL THAT IS! So why go into Greece to fight for anything? Let them Twist in the Wind here and solve their own problems!
Main problem of course remains all that nasty EXPOSURE Eurotrash Banks have to Greek Debt, not to mention all those nasty Derivatives set to EXPLODE as soon as Greece finally does miss a Bond Payment. So regardless of the fact Widows and Orphans might be starving in Greece, the ECB or IMF or ESM or some other cockamamie vehicle will pay off on Bonds FOR the Greek “People”, to “Help” them. No Euros will cross the Greek Border, but plenty will cross into the Vaults of JPMC, Goldman and Deutche Bank!
Anyhow, the nonsensical idea that the Euro problems or even the Greek MINISCULE ones were solved at any point in this long charade of Extend & Pretend is OFFICIALLY squashed here now, NO MEETING of Von Rumplestiltsking, Kukla, Fran and Ollie Rehn, Francoise Hollandaise Sauce or any other newly elected Eurotrash Pol is going to convince ANYBODY that ANY problems have been solved. They are SOL on Political and Economic Cards to play here now. The Clown Show has run its course here, so unfortunately the NEW Clowns will be sent in. The next bunch of Clowns are unlikely to be quite so funny as this last bunch.
Send in the Clowns.
Caretaker government will take Greece to risky repeat vote
Greece to hold new election, jolts euro markets Tue, May 15 2012
By Ingrid Melander
ATHENS | Wed May 16, 2012 1:22am EDT (Reuters) – Greek political leaders meet on Wednesday to form a caretaker government that will lead the country into its second election in just over a month, with Greece’s euro membership at stake in a mounting crisis rocking world markets. Parties deeply divided over an unpopular EU-IMF rescue plan threw in the towel on Tuesday after nine days of failed attempts to put together a coalition, hitting heavyweight financial stocks as investors worried at the prospect that the euro zone weakling would remain in limbo for at least another month.
Opinion polls show that voters enraged with five years of recession, record unemployment and steep wage cuts are likely to elect a parliament as fragmented as the one they chose on May 6. But the vote, probably in mid-June, may well tip the balance of power toward leftist parties opposed to the bailout conditions.
Policymakers from European Union states and at the European Central Bank have warned that they would stop sending debt-choked Athens the cash it needs to stay afloat if a new government tears up the bailout and backs out of commitments to cut the public debt which are blamed by many Greeks for misery.
But many cash-strapped Greek voters shrug off the threat and see no contradiction between their deep-rooted wish to stay in the euro and their opposition to conditions imposed to obtain the bailouts that have staved off bankruptcy but have dragged the nation into its deepest economic crisis since World War Two.
“There is a bit of schizophrenia in our society right now. People want to stay in Europe – have the cake – but they also want to eat it – by attacking the creditors,” said Theodore Couloumbis at Athens-based think-tank ELIAMEP.
“Much depends on whether the Greek people in this repeat election are going to vote with anger and passion or if they will cool off, reflect and see in effect what the real choices are. The choice is between bad and worse.”
Party leaders will meet President Karolos Papoulias at 1 p.m. (6.00 a.m. EDT) to put together a caretaker government. It was not clear on Tuesday who would be part of that emergency cabinet, whose main task would be to organize the repeat election – the third in Greece in as many years.
“DOESN’T LOOK GOOD”
Many in Greece pin their hopes on newly elected French President Francois Hollande, who campaigned on a pro-growth platform. Socialist Hollande offered some hope for more flexibility towards Greece on Tuesday, saying after his first meeting with German Chancellor Angela Merkel:
“I hope that we can say to the Greeks that Europe is ready to add measures to help growth and support economic activity so that there is a return to growth in Greece.”
But despite encouraging comments from the conservative German leader about wanting to see growth, differences remain over how far austerity programs might be relaxed.
IMF chief Christine Lagarde had earlier in the day joined a string of EU policymakers who have over the past days lifted the taboo of the possibility of an exit of Greece from the euro zone. She said it was important to be technically prepared for that possibility and warned that an exit would be “quite messy”.
European shares fell to their lowest closing level since the start of 2012 after attempts to form a government collapsed. Traders said markets could slump further in the coming days, with fears of a contagion to other crisis-hit EU states including Spain and Italy sending the euro below $1.28.
Patience is also wearing thin among a number of EU policymakers exasperated by the fact that a country which accounts for barely two percent of the euro zone’s economy should drag the bloc back into a deep crisis yet again after over two years of roller-coaster crisis.
“The 16 other governments in the euro zone really are at the end of their patience with Greece. There isn’t room or any willingness to move,” said one official involved in talks over Greece at the European Commission. “The decisions are really in Athens’ hands. But it doesn’t look good.”
The lack of a deal after the May 6 election has also angered many Greeks, making widely discredited politicians even more unpopular.
“They should go to hell,” said Giouli Thomopoulou, 59, an unemployed office clerk. “Only God knows what’s waiting for us now. I’m very scared about the future.
“I don’t think elections will solve anything because in a month we’ll be in the same situation.”
Alexis Tsipras, the untested ex-Communist youth leader whose Left Coalition party (SYRIZA) wants to tear up the bailout deal, is now leading in opinion polls but analysts said this election, possibly on June 17, is as unpredictable as the May 6 one.
“Public opinion is in total flux, in my 30 years of polling experience I have never seen anything like that before,” said political analyst John Loulis. “Everything can change until the last minute. On the May 6 election, the mood swung towards SYRIZA in the last 24 hours before the vote”.
(Additional reporting by Harry Papachristou and Karolina Tagaris in Athens and Luke Baker in Brussels; Editing by Alastair Macdonald)
Posted originally by Ashvin Pandurangi on The Automatic Earth on May 14, 2012
Warning: This commentary is not for the faint of heart.
I thought I’d start this particular Monday morning, May the 14th, with a little rant. Sometimes it helps to ditch the uber-rational, cool-headed analysis and remind people just how screwed up things are on this third toxic landfill from the Sun.
F.U.B.A.R. is a military acronym from WWII – it stands for, “FUCKED UP BEYOND ALL RECOGNITION/ANY REPAIR/ALL REASON”.
I can already hear the critics and naysayers chirping – “But, but, we’ve heard all of this before. You all have been talking about financial meltdown for years now, and it never happens. We just keep on chugging along like the little engine that could”.
Bullshit! It has happened; it is happening. Every day for the past year has been one in which the Eurozone could erupt in flames, figuratively AND literally, and financial contagion could sweep through the global banking system. That is the definition of systemic meltdown – the critical point past which a system is constantly exposed to the risk of CRISIS.
We all know the story in Europe. The peripheral EZ economies are in freefall as private/public credit evaporates and unemployment soars, while the backlash against blatant wealth extraction, a.k.a. “austerity”, has reached epic proportions. Greece is closer than ever to saying “SHOVE IT” and leaving the Union. So what happens after that??
Europe will be F.U.B.A.R., that’s what. Capital exodus, financial contagion, hyperinflation, social unrest, civil war – you name it – it’s all on the table. What if Greece manages to stay in and none of this happens? Does that mean everything is all better and the crisis point has been averted? Go ahead – sit back, relax and give it a few more weeks or months, but just remember that you will NEVER know when it will hit you like a MACK truck – only that it most certainly will.
And while you’re waiting for Europe to implode, maybe you can do some research on China. Google the definition of “a rock and a hard place”, and you will see a picture of China with billions of little dots flashing across your screen. Here is an export economy that is watching its biggest export markets collapse, and a financial economy that barely got a few years of illusory wealth out of its speculative mal-investment. An industrial economy that wrecked its environment in record time and left its population with toxic shit for water. Google India while you’re at it.
Then there’s that other country which boasts the third-largest economy in the world – Japan. Let’s face it – if there is any one country for whom the bell tolls, then it is Japan. Between its zombie banking system, weakening export sectors, rapidly shifting demographics, lack of domestic energy resources and nuclear catastrophe that never ends, and can always get worse, the country has become a veritable disaster zone. Stick a fork in it.
Australia, Canada – the countries that miracously escaped the housing bubble and banking metldown. Or not. These comically complacent commodity countries can only muddle through by the skin of their knuckles for so long before the recent past catches up with them. WHEN the price of gas or gold or copper or… plummets with foreign demand, so do their financial sectors. Sorry guys, you almost made it, but not really.
Last and certainly least on my list of countries to rant against is the United States. This place is an amalgamation of the worst aspects of every other country. It’s a financially-fragile, energy-dependent, consumerist-minded, generationally-entitled, politically-fractured, demographically-fucked imperial police state. We may make it to November elections in relative peace just because our crony political establishment and media spin machines will pull out every trick play in their playbooks to keep the mind-numbingly ignorant population with blinders on until then. After that, all bets are off.
I have really only been ranting about economic issues so far – haven’t even bothered to mention systemic environmental degradation, energy scarcity, climate change, growing police states, escalating risks of slavery/genocide, never-ending wars, rising geopolitical tensions, and a whole host of other scary things that go bump in the night, EVERY night without fail. If you still recognize this world as the one from ten years ago, then you just aren’t looking at it hard enough.
And, with that, I will end this rant and wish you all a pleasant Monday morning (or whatever time/day it is, wherever the hell you happen to be).