Lies

This Week In Doom Feb. 6, 2019


That-Was-The-Week-That-W-That-Was-The-Week-473964gc2smFrom the keyboard of Surly1
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Originally published on the Doomstead Diner on February 3, 2019

What you’re seeing and what you’re reading is not what’s happening.” ― Individual-1  

“The party told you to reject the evidence of your eyes and ears. It was their final, most essential command.”                                   ― George Orwell, 1984


After two years, the constant drumbeat of incessant lying emanating from the White House is taking a toll. Having surpassed 8,000 lies in office, Individual-1 has managed to numb the news-following public into wholesale stupefaction. But it's all part of a conscious plan to control each day's news cycle, sow doubt, and discredit reporters of objective fact, including members of his own administration.

Last week Director of National Intelligence Dan Coats presented a summary of espionage and cyber threats from Russia, China and other foreign actors during congressional testimony. The published Worldwide Threat Assessment report (written in straightforward, accessible prose, and worth reading), outlines the greatest threats to the US for espionage and cyber-attacks. Little surprise that foreign governments will act in their own self interest, and at the expense of the US as when necessary.

CIA Director Gina Haspel, FBI Director Christopher A. Wray and other top officials joined Coats in a discussion that covered a wide array of national security challenges, including cyber attacks that will aim to disrupt the 2020 presidential election and the continued threat posed by the Islamic State and other terrorist groups.

Coats, speaking on behalf of the assembled officials, gave a global tour of national security challenges, focused mainly on Russia, China, Iran and North Korea.

He said that North Korea was “unlikely to completely give up its nuclear weapons and production capabilities,” which the country’s leaders consider “critical to the regime’s survival.”

Putting his assessment at variance with that of Individual-1, and the Tweets subsequently emanating from the Fox News-infused Oval Office and the alternate reality zone in the mind of the occupant. 

Without forgetting for a moment the roles that US intelligence agencies have played in repression at home and regime change abroad, all for the benefit of US corporate interests, the threat assessment is a clear description of the US's primary international rivalries, and nothing in it was surprising if you follow the headlines. None of the officials affirmed a security crisis at the U.S.-Mexico border, where Trump may yet declare a national emergency. 

Cold water was repeatedly thrown on the White House’s more imaginative views, such as the claim that the US and North Korea will achieve a lasting peace and that Kim's regime will ultimately give up its nuclear weapons.

Glossed over by most media, during a week when temps in the midwest and east broke well below freezing, was the mention of how Russia and China are capable of launching cyber-attacks that could disrupt electric grids and gas pipelines in the US.  Even Rachel Maddow noticed and interviewed Rebecca Smith, who covered the story for the Wall Street Journal. Maddow asked,

“What would happen if Russia killed the power in Fargo today? What would you do if you lost heat indefinitely as the act of a foreign power on the same day the temperature in your backyard matched the temperature in Antarctica?”

As to Russia's cyberdiddling, it has been known for some time that Russia has been probing our grid. On March 15, the US government released a report describing a massive Russian hacking campaign to infiltrate America’s “critical infrastructure” — things like power plants, nuclear generators, and water facilities. The Russian incursions reported in March were more for observation than sabotage, but as we've seen, the Trump administration's response to Russian impunity has been to lift sanctions on close friends of Putin.

When the report was released last June, Energy Secretary Rick Perry told lawmakers she that Russian cyber-attacks are “literally happening hundreds of thousands of times a day,” and warned that the Department of Energy needs an “office of cybersecurity and emergency response” in order to be prepared for threats like this in the future.

None of this sat well with Il Douche. For the last two years we've had a president who fundamentally does not believe in democracy, with no loyalty to either the Constitution or the traditions of American governance. This week, he demonstrated a visceral contempt for the work product of the intelligence community, oblivious to the fact that many of the conclusions in the report had already been publicized by his own government.

 

Trump maintains his power via Republican control in the Senate, where any impeachment proceeding would be tried. And no matter what they may say privately, Republican Senators are well aware of the fact that Citrus Caligula runs at 90 per cent approval among Republican voters, who make up 20 percent of the population but 100 per cent of Republican primary voters.

Little by little, the media has been figuring out how to deal with Trump's incessant lying, a different thing from the spinning of any previous administration. Greg Sargent explains:

The key point here is that Trump is not engaged in conventional lying. He’s engaged in spreading disinformation.

According to cable news fact checkers, zero per cent of new wall are being built. Zero. Previous administrations might emphasize favorable facts and cast them in the best possible light, but Trump repeats blatantly false statements, in hopes of wearing down the fact-checkers and creating a wholly new reality for his neo-fascist base. And after two years, that day may have arrived.

And vis a vis his wayward intelligence chiefs, Trump summoned them for a meeting, then reported that they had been misquoted (even though the proceedings were broadcast live.)

When you consider that Trump's grip on power is secured by the 35 percent approval rating he manages to maintain, via his 18 per cent of true-believer Republiconfederate neo-fascists, and a large number of low-information/Fox News-watching voters, you understand the importance of "winning" the daily news cycle. And if that takes making outrageous fact free statements, at least you have them talking about you. It works day in and day out because the media can't resist taking the bait. And never forget that when a thoroughly disgraced Richard Nixon prepared to board the helicopter, he maintained a 28 percent approval rating. And this was before the repeal of the Fairness Doctrine, which consequently enabled Fox News.

Google "Trump" and the phrase "without evidence". Just recently you'd have gotten Trump, without evidence, accuses James Comey of lying to HouseTrump, without evidence, says Arizona 'bracing' for surge of immigrantsPresident Trump Claims Without Evidence That Most Federal Employees Impacted by Shutdown Are DemocratsTrump claims without evidence that new migrant caravan is forming, and so on. Similar phrases will yield similar results: Trump rages at Twitter with baseless claim that it is tampering with his followers because of political bias. When you realize what the agenda is, each baseless lie and fresh outrage seems less an assault on truth and more a part of a consistent strategy to deny the notion of an objective reality made of verifiable facts.

Disinformation is the lure. Don't take the bait.


Surly1 is an administrator and contributing author to Doomstead Diner. He is the author of numerous rants, screeds and spittle-flecked invective here and elsewhere. He lives a quiet domestic existence in Southeastern Virginia with his wife Contrary. Descended from a long line of people to whom one could never tell anything, all opinions are his and his alone, because he paid full retail for everything he has managed to learn.

Tony Blair to George W. Bush: ‘I will be with you, whatever’

gc2smFrom the keyboard of Pepe Escobar
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Originally published in Russia Insider on July 7, 2016

"The report paints what can only be characterized as The Three Stooges school of intelligence."


It’s all here; 12 volumes, 2.6 million words (almost four-and-a-half times as long as War and Peace), seven years in the making, including analyses of 150,000 British government documents.

Chaired by Sir John Chilcot, former Whitehall insider, and officially known as “the Iraq Inquiry”, this Proustian investigation allegedly explores every nook and cranny in the UK’s run-up to the invasion and occupation of Iraq as well as its aftermath.

Let’s cut to the chase. This is not a whitewash by the British establishment; it’s actually much stronger than many analysts expected. Advance leaks had hinted blame would be apportioned to quite a few figures in the UK’s politico/military/intel apparatus – and that’s indeed the case.

The key questions are known to all. Did Tony Blair lie about the need to go to war? Was the war legal? Did the war – as Blair vociferously promised – make Britain “safer”? What did Blair promise George Bush? Did he lie about those non-existent weapons of mass destruction (WMDs)? Was MI6 intelligence compromised? Did the British military fail to stand up to Blair?

It will take days to get through the whole report. But based on Chilcot’s own initial statement, some conclusions are absolutely stark. There was “no need” to go to war in March 2003. All decisions were made “on the basis of flawed intelligence and assessments”.

The British cabinet did not discuss the many possible military options – or their implications. The British government – what Alice in Wonderland dreamworld did they live in? – believed the post-invasion administration would be led by the UN, and not controlled by the Cheney regime neocons.

And then this startling statement; Tony Blair “overestimated his ability”to influence US decisions on Iraq. And yet the now famous Blair memo to Bush on July 2002, transcribed by the report, had made it clear: “I will be with you, whatever”. Blair was a mere follower, not a driver.

The report paints what can only be characterized as The Three Stooges school of intelligence. Especially responsible for the debacle are Sir John Scarlett, chairman of the Joint Intelligence Committee, which relied basically on MI6; and then MI6 chief Sir Richard Dearlove. Not only their intel was faulty; we, as independent journalists, already knew by the Summer of 2002 (I spent one month all over Iraq in the Spring of 2002) that there were no WMDs anywhere to be found. UN inspectors not remote-controlled by the US also knew it.

Make no mistake it was #TonyBlair and George Bush that made the world we live in today. #Chilcot

— Harry Leslie Smith (@Harryslaststand) July 6, 2016

bushnblairSo Blair not only totally bought fake MI6 intel, but exhibited it to the British Parliament with absolute “certainty”. The report blames the entire British intel apparatus for not trying to contain Blair.

And it gets worse. According to the report, the UK government “blamed France for the ‘impasse’ in the UN and claimed that the UK government was acting on behalf of the international community to ‘uphold the authority of the Security Council’. In the absence of a majority in support of military action, we consider that the UK was, in fact, undermining the Security Council’s authority.”

Don’t expect a plot like this to show up in the next installment of the James Bond franchise.

Pledge to kill a million people

None of this is new. All of us who throughout 2002 and early 2003 were following the run-up towards the inevitable war on Iraq knew that Blair was the strategic, special relationship poodle necessary to confer a veneer of legitimacy to the Cheney regime neocons. As for Blair, the Chilcot report now makes it clear he couldn’t care less about his cabinet, the British Parliament or even international law. His only pledge of allegiance (“I will be with you, whatever”) was to George W. Bush.

The result, as we also know, is beyond appalling. The Lancet, in 2006, published its own extensive sample research – based on doctors conducting house-to-house surveys in Iraq – estimating that a staggering 655,000 Iraqis died because of the war.

Even more devastating was the work of the US-based Physicians for Social Responsibility, who in 2105 came to a figure of 1 million (5 percent of the total population), not including deaths among 3 million refugees.

Chilcot was careful to go pre-emptive, stating “we are not a court”, reflecting the fact that he had no lawyers working and drafting the report. But as much as the report does not declare the war illegal, flat out, it does open a few avenues for huge legal problems the Tony Blair way.

By now is more than clear that the internal, attempted Labour coup against Jeremy Corbyn is directly linked to the Chilcot report. Corbyn – an anti-war activist with impeccable CV – said last year that Blair could face trial in The Hague if the Chilcot report found he was guilty of launching an illegal war. As Labour leader, Corbyn would be able to expose Blair with parliamentary immunity, without risking action by Blair’s army of lawyers.

.@LauriLoveX Good question given the #Chilcot report will take someone about 9 days to read. pic.twitter.com/CUutlregp7

— Anonymous (@AnonyOps) July 6, 2016

 

The internal Labour coup – orchestrated by the Blairites – was supposed to climax immediately after Brexit here is how Blair threw Corbyn under the bus. Removed from the leadership, Corbyn would only be able to go after Blair as a backbencher. That’s not strong enough.

Yet by now the window of opportunity to stop Corbyn has passed. And crucially, in his dignified comments in Parliament about the report, Corbyn did suggest that the House of Commons should take action against Blair for misleading it in the run-up towards the war. This means Blair could be impeached.

Whatever Blair says in the aftermath of the report – the Sunni-Shi’ite split in Iraq, one of key drivers of non-stop carnage, was already there before the invasion (false, as I saw for myself in 2002); Iran and al-Qaeda created insecurity in Iraq after the invasion (false on Iran; and al-Qaeda was actually brought to Iraq by the Cheney regime) – these will all be, well, lies.

As it stands, Tony Blair will probably evade a one-way ticket to The Hague to undergo a trial for his war crimes. But countless people all across the world can always dream of ironic/poetic justice; Blair the Brit warmonger tried in an EU court just after Brexit, as the UK’s role of sideshow occupier in Iraq directly connects to scores of people fleeing from jihadis and configuring a refugee crisis in Europe.


PepePepe Escobar  is an independent geopolitical analyst. He writes for RT, Sputnik and TomDispatch, and is a frequent contributor to websites and radio and TV shows ranging from the US to East Asia. He is the former roving correspondent for Asia Times Online. Born in Brazil, he's been a foreign correspondent since 1985, and has lived in London, Paris, Milan, Los Angeles, Washington, Bangkok and Hong Kong. Even before 9/11 he specialized in covering the arc from the Middle East to Central and East Asia, with an emphasis on Big Power geopolitics and energy wars. He is the author of "Globalistan" (2007), "Red Zone Blues" (2007), "Obama does Globalistan" (2009) "Empire of Chaos" (2014),and "2030" (2015), all published by Nimble Books. 

Lies

youtube-Logo-2gc2reddit-logoOff the keyboard of Ugo Bardi

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Published on Cassandra's Legacy on March 20, 2016

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How the greatest technology ever developed backfired on us

 

 

 

 

 

Natural selection was probably the factor that led the Irish Elk to develop oversized antlers: they were a beneficial feature for the males in the sexual competition game. However, the weight of the antlers was also a burden and it has been argued that it was one of the reasons, perhaps the main one, that led to the extinction of this species, around 7,000 years ago. In the case of humans, we may consider language as an evolutionary advantageous feature, but also as something that may turn out to bring negative consequences very much like the elk's antlers: the tsunami of lies we are continuously exposed to.  Image from Wikipedia

 

 

Language is the real break of humans with everything else that walks, crawls, or flies on the earth. No other species (except bees) has a tool that can be used to exchange complex information among individuals in terms, for instance, of where food can be located and in what amounts. It is language that creates the human "ultrasociality," it is language that allows us to get together, plan ahead, get things done. Language can be seen as a technology of communication of incredible power. But, as for all technologies, it has unexpected consequences.

We all know that the sound that we write as "deer" is associated with a specific kind of beast. With this symbol you can create sentences such as "I saw a deer near the river, let's go hunt it!" But, when you create the symbol, in some ways you "create" a deer – a ghostly creature that has some of the characteristics of real deer. You can imagine the deer, even if there is no real deer around. And this symbol has a certain power, maybe you could make a deer appear by pronouncing its name or drawing its symbol on a cave's wall. It is the principle that we call "sympathetic magic", perhaps the oldest and most basic form of magic.

Creating a virtual deer is a useful thing if the correspondence with real deer is not lost. The problem with language is that this is not always the case. The deer you are talking about may not exist, it may be an illusion, a mistake, or, worse, a ruse to entrap and kill an enemy of yours. This is the origin of the concept we call "lie." You can use language not just to collaborate with your neighbors, but to deceive them. We have evidence that our ancestors faced the problem from the earliest written records we have. In some ancient Sumerian tablets that go back to the 3rd millennium BCE (*), we find that among the "me" (the powers) that the Goddess Inanna stole from the God Enki, one is "to utter words of deception".


The question of lying is crucial for human survival. Lying makes communication useless since you cannot trust the persons you are communicating with. The deer your friend told you was near the river disappears into virtual space: you cannot say whether it was real or not. The stupendous technology of language, developed over hundreds of thousands of years, destroys itself with the unintended consequence of lying.

 

 

All technologies have unintended consequences, all are amenable to some kinds of technological fixes. Fighting lies requires evaluating statements and who is uttering them. The simplest way to do it is to base the evaluation on trust. We all know the story of "the boy who cried wolf," probably as ancient as homo sapiens. In its various versions, it says, "if you lie once, you won't be believed again". And it works; it has worked for hundreds of thousands of years and it still works. Think of your current circle of acquaintances; those people you personally know and have known for a certain time. You trust them; you know that they won't lie to you. It is for this reason that you call them "friends," "buddies," "pals" and the like.

But that works as long as you maintain your relationships within a small group and we know that the size of a circle of close relations doesn't normally go beyond some 150 persons (it is called the "Dumbar number"). Within this size, the reputation of each member is known to everyone else and liars are easily identified and contrasted (or even expelled). The problem came when people started living in large cities. Then, most people would interact with a much larger number of people than the comfortable Dumbar number. How can we tell if someone you never met before is to be trusted or not? In this situation, the only defense against swindlers is indirect clues: the way of dressing, the way of speaking, the physical aspect; but none is as effective as the trust in someone you know well.

But that was nothing in comparison to what came along with the age of the mass media. Then, you would read things, hear things, see things in the media, but you really had no clue on where these communications came from, nor you could check whether the virtual reality in front of you corresponded to the real world. As mass media expanded their reach, the people controlling them discovered that lying was easy and that they had very little to lose in lying. At the receiving end, there were people confused and unable to verify the information they received. The media could easily tell them lies that would go undiscovered, at least for a while. Think of the story of the "weapons of mass destruction" that Iraq was supposed to be developing before the invasion of 2003. In this case, the lie became obvious after that no such weapons surfaced in the invaded Iraq, but the liars had obtained what they wanted and they suffered no ill consequences from their action. It was at that time that an aide to Donald Rumsfeld is reported to have said, "now we can create our own reality." A triumph of sympathetic magic, indeed.

Then, the Internet and the social media came and they democratized lying. Now everyone could lie to everyone else simply by sharing a message. Truth didn't come anymore from the trust in the people who were transmitting it, but from the number of "likes" and shares a message received. Truth can't possibly be the same as virality, but it appears to have become exactly that in the general perception: if something is shared by a lot of people, then it has to be true.

So, today, we are lied continuously, consistently, and gleefully by about everyone and just about everything. Half truths, pure inventions, distortions of reality, word games, false flags, skewed statistics, and more are the communications we face every day. The tsunami of lies that's crashing upon us is nearly unimaginable and it has consequences, dire consequences. It is making us unable to trust anything and anyone. We are losing contact with reality, we don't know anymore how to filter the innumerable messages we receive. Trust is a major issue in human life; not for nothing, the devil is said to be "the father of lies" (John 8:44). And, indeed, what the anthropologist Roy Rappaport called "diabolical lies" are those lies that directly tamper with the very fabric of reality. And if you lose track with reality, you are lost yourself. That that may be what's happening to all of us.

Some of us find it easiest simply to believe in what they are told by governments and lobbies; others move into a generalized mistrust of everything; easily falling victim of opposite lies. Diabolical lies are fractal, they hide more lies inside, they are part of bigger lies. Consider an event such as the 9/11 attacks in New York; it is by now hidden behind such a layer of multiple lies of all kinds that what really happened that day is impossible to discern, and perhaps destined to remain such forever.


So, we are back to the "boy who cried wolf" issue. We are the boy, we are not trusting anyone, we are not trusted by anyone, and the wolf is here for real. The wolf takes the shape of global warming, of resource depletion, of ecosystem collapse, and more, but most of us are unable to recognize it, even to imagine that it could exist. But how to fault those people who have been cheated so many times that they decided that they won't believe anything that comes from even a marginally "official" channel? This is a major disaster and it is occurring right now, in front of our eyes. We have become one of those ancient deer destroyed by the weight of their stupendous horns. Language is playing a trick on us, backfiring on us after having been so useful for us.

We often believe that technology is always useful and that new technologies will save us from the disasters befalling on us.  I am starting to think that what we need is not more technology but less. And if language is a technology, it seems to me that we are having too much of it, really. We are hearing too many speeches, too many words, too much noise. Perhaps, we all need a moment of silence. Perhaps Lao Tzu saw this already long ago when he wrote in the Tao Te Ching (**)

Much speech leads inevitably to silence. 
Better to hold fast to the void.
 

 

____________________________________________

(*) From Nin Me Sara, translated by Betty De Shong Meador

(**)  Translated by E. C. Lau

Se also an earlier post of mine "The Empire of Lies"

 

 

 

 

 

 

 

 

 

 

 

 

 

The Empire of Lies

limitsgc2reddit-logoOff the keyboard of Ugo Bardi

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Published on Cassandra's Legacy on February 8, 2016

The Trajan Column was built in order to celebrate the victories of the Roman Armies in the conquest of Dacia, during the 2nd century AD. It shows that the Romans knew and used propaganda, although in forms that for us look primitive. In those times, just as in ours, a dying empire could be kept together for a while by lies, but not forever.  

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At the beginning of the 5th century AD, Augustine, bishop of Hippo, wrote his "De Mendacio" ("On Lying"). Reading it today, we may be surprised at how rigid and strict Augustine was in his conclusions. A Christian, according to him, could not lie in any circumstances whatsoever; not even to save lives or to avoid suffering for someone. The suffering of the material body, said Augustine, is nothing; what's important is one's immortal soul. Later theologians substantially softened these requirements, but there was a logic in Augustine's stance if we consider his times: the last century of the Western Roman Empire.

By the time of Augustine, the Roman Empire had become an Empire of lies. It still pretended to uphold the rule of law, to protect the people from the Barbarian invaders, to maintain the social order. But all that had become a bad joke for the citizens of an empire by then reduced to nothing more than a giant military machine dedicated to oppressing the poor in order to maintain the privilege of the few. The Empire itself had become a lie: that it existed because of the favor of the Gods who rewarded the Romans because of their moral virtues. Nobody could believe in that anymore: it was the breakdown of the very fabric of society; the loss of what the ancient called the auctoritas, the trust that citizens had toward their leaders and the institutions of their state.

Auguistine was reacting to all this. He was trying to rebuild the "auctoritas", not in the form of mere authoritarianism of an oppressive government, but in the form of trust. So, he was appealing to the highest authority of all, God himself. He was also building his argument on the prestige that the Christians had gained at a very high price with their martyrs. And not just that. In his texts, and in particular in his "Confessions" Augustine was opening himself completely to his readers; telling them all of his thoughts and his sins in minute details. It was, again, a way to rebuild trust by showing that one had no hidden motives. And he had to be strict in his conclusions. He couldn't leave any openings that would permit the Empire of Lies to return.

Augustine and other early Christian fathers were engaged, first of all, in an epistemological revolution. Paulus of Tarsus had already understood this point when he had written: "now we see as in a mirror, darkly, then we'll see face to face." It was the problem of truth; how to see it? How to determine it? In the traditional view, truth was reported by a witness who could be trusted. The Christian epistemology started from that, to build up the concept of truth as the result divine revelation. The Christians were calling God himself as witness. It was a spiritual and philosophical vision, but also a very down-to-earth one. Today, we would say that the Christians of late Roman times were engaged in "relocalization", abandoning the expensive and undefendable structures of the old Empire to rebuild a society based on local resources and local governance. The age that followed, the Middle Ages, can be seen as a time of decline but it was, rather, a necessary adaptation to the changed economic conditions of the late Empire. Eventually, all societies must come to terms with Truth. The Western Roman Empires as a political and military structure could not do that, It had to disappear, as it was unavoidable.

Now, let's move forward to our times and we have reached our empire of lies. On the current situation, I don't think I have to tell you anything that you don't already know. During the past few decades, the mountain of lies tossed at us by governments has been perfectly matched by the disastrous loss of trust in our leaders on the part of citizens. When the Soviets launched their first orbiting satellite, the Sputnik, in 1957, nobody doubted that it was for real and the reaction in the West was to launch their own satellites. Today, plenty of people even deny that the US sent men to the moon in the 1960s. They may be ridiculed, they may be branded as conspiracy theorists, sure, but they are there. Perhaps the watershed of this collapse of trust was with the story of the "Weapons of Mass Destruction" that we were told were hidden in Iraq. It was not their first, nor it will be their last, lie. But how can you ever trust an institution that lied to you so brazenly? (and that continue to do so?)

Today, every statement from a government, or from an even remotely "official" source, seems to generate a parallel and opposite statement of denial. Unfortunately, the opposite of a lie is not necessarily the truth, and that has originated baroque castles of lies, counter-lies, and counter-counter lies. Think of the story of the 9/11 attacks in New York. Somewhere, hidden below the mass of legends and myths that have piled up on this story, there has to be the truth; some kind of truth. But how to find it when you can't trust anything you read on the Web? Or think of peak oil. At the simplest level of conspiratorial interpretation, peak oil can be seen as a reaction to the lies of oil companies that hide the depletion of their resources. But you may also see peak oil as a scam created by oil companies that try to hide the fact that their resources are actually abundant – even infinite in the diffuse legend of "abiotic oil". But, for others, the idea that peak oil is a scam created in order to hide abundance may be a higher order scam created in order to hide scarcity. Eve higher order conspiracy theories are possible. It is a fractal universe of lies, where you have no reference point to tell you where you are.

Eventually, it is a problem of epistemology. The same that goes back to Pontius Pilate's statement "what is truth?" Where are we supposed to find truth in our world? Perhaps in science? But science is rapidly becoming a marginal sect of people who mumble of catastrophes to come, People whom nobody believes any longer after they failed to deliver their promises of energy too cheap to meter, space travel, and flying cars. Then, we tend to seek it in such things as "democracy" and to believe that a voting majority somehow defines "truth". But democracy has become a ghost of itself: how can citizens make an informed choice after that we discovered the concept that we call "perception management" (earlier on called "propaganda")?

Going along a trajectory parallel to that of the ancient Romans, we haven't yet arrived at having a semi-divine emperor residing in Washington D.C., considered by law to be the repository of divine truth. And we aren't seeing yet a new religion taking over and expelling the old ones. At present, the reaction against the official lies takes mostly the form of what we call "conspiratorial attitude." Although widely despised, conspirationism is not necessarily wrong; conspiracies do exist and much of the misinformation that spreads over the web must be created by someone who is conspiring against us. The problem is that conspirationism is not a form of epistemology. Once you have decided that everything you read is part of the great conspiracy, then you have locked yourself in an epistemological box and thrown away the key. And, like Pilate, you can only ask "what is truth?", but you will never find it.

Is it possible to think of an "epistemology 2.0" that would allow us to regain trust on the institutions and on our fellow human beings? Possibly, yes but, right now, we are seeing as in a mirror, darkly. Something is surely stirring, out there; but it has not yet taken a recognizable shape. Maybe it will be a new ideal, maybe a revisitation of an old religion, maybe a new religion, maybe a new way of seeing the world. We cannot say which form the new truth will take, but we can say that nothing new can be born without the death of something. And that all births are painful but necessary.

 

 

 

 

 

Shining a Light

call-someone-lies-time_22eb1379786761fbgc2smFrom the keyboard of James Howard Kunstler
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Originally Published on Clusterfuck Nation December 7, 2015
 

The just-released movie Spotlight is about an investigative reporting team circa 2001-02 that uncovered and documented a vast network of child sex abuse by priests in the Catholic Church that had been on-going for decades. More to the point, Spotlight revealed the institutional rot at the very top of the Boston Catholic Church hierarchy, led by then-Cardinal Bernard Law — which marinated church personnel in a code of secret atrocious behavior enabled by systematic lying and deception. In effect, the church gave permission to its foot-soldiers, the parish priests, to engage in whatever sexual antics they wished to, with a tacit promise to shield them from the reach of the courts. The civil authorities of Boston, heavily Catholic due to Boston’s demographics, assisted the church by throwing up every legal obstacle they could to deter the victims and their advocates in the search for justice — and to put an end to the predation of children by priests.

That was the story that Spotlight told, and it did that very economically, without grandstanding. But the movie had another message for me, as someone who has been involved in the media going back more than forty years when I was an investigative newspaper reporter myself. The message was that the institutional support for great journalism that allowed the Globe's Spotlight reporting team to do its job is now gone-baby-gone. All the newspapers in the USA, and even the TV and radio news networks, are running these days on skeleton crews. At least that is true of the old flagship organizations such as the Boston Globe and CNN. They just don’t have the reporters out in the field. The front-page or flatscreen interface that the public sees conceals ghost organizations that barely have the reporting resources and the reach to discover what is actually going on in the world..

The dying newspapers — and they really are on life-support at this point, including the Globe andThe New York Times — can’t pay teams of reporters like the Spotlight crew to work through years-long investigations. But what the movie also ought to remind us is that the hierarchical competence at such an enterprise, the layers of editors who know what they are doing and understand the boundaries and conventions of their own society, is also disastrously AWOL in the new Wowee-Zowie era of instant cell-phone networking, Facebook, and Instagram. In a word, leadership has been made to seem dispensable.

What gets left out of the story, as usual, are the diminishing returns of technology. In the news business — that is, the business of informing society what is actually going on — that blowback is leaving the public not just uninformed or misinformed, but additionally clueless about what they have lost. The result is a society increasingly shaped by delusion and paralysis. For example, The New York Times has gone from being the “newspaper of record” to being the leading dispenser of wishful thinking by a feminized political Left preoccupied with feelings over truth. (This, by the way, helps to account for the remnant media’s hatred of Vladimir Putin, a leader who doesn’t apologize for acting one like one. And, of course, a man.) The Old Gray Lady is also reduced to overt cheerleading for its avatar (Monday’s lead op-ed: HILLARY CLINTON — How I’d Rein In Wall Street Ha!), and making excuses for our grift-and rackets-based polity (Paul Krugman: The Not-So-Bad Economy Ha Ha Ha!).

At the local level, the news situation is simply pathetic. The surviving local newspapers are little more than bulletin boards for news releases from interested parties. They’ve fired all their reporters. Soon the papers will all be gone and the vaunted wondrous Internet will be little more than a grapevine and a rumor mill. The “cloud” that everybody thinks is so marvelous will look more and more like an epochal fog — and we’ll be lost in it. These are the wages of our techno-narcissism, a society now marinating in cluelessness the way the Catholic church, as depicted inSpotlight, marinates in pederasty and deceit. It is frankly hard to see a way out of the cultural predicament. Two things, at least, are necessary to break out of this hall of mirrors: men acting like honorable men, and hierarchies of leadership with the integrity to actually lead. For now, the USA is not interested in those things.

 

James Howard Kunstler is the author of many books including (non-fiction) The Geography of Nowhere, The City in Mind: Notes on the Urban Condition, Home from Nowhere, The Long Emergency, and Too Much Magic: Wishful Thinking, Technology and the Fate of the Nation. His novels include World Made By Hand, The Witch of Hebron, Maggie Darling — A Modern Romance, The Halloween Ball, an Embarrassment of Riches, and many others. He has published three novellas with Water Street Press: Manhattan Gothic, A Christmas Orphan, and The Flight of Mehetabel.

Death Watch in the Oil Patch

 Pumpjack-1024x768  gc2smOff the keyboard of Thomas Lewis

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Pumpjack-1024x768

Oil pumpjacks starting to suck oil instead of money. (You and I know, of course, that grasshopper pumps are not used in fracking, but have become a universal symbol for the oil bidness in the Mainstream Media, so there you go. And here you are.).

Published on The Daily Impact on October 28, 2015


In the same sense that brave individuals are said to “fight” stage four cancer, the American oil industry has spent a harrowing year fighting reality. Since oil prices tanked last summer, the industry has drawn down its strategic reserves of whitewash, pig lipstick, shinola and embalming fluid to keep things looking good even as they were decomposing. They did a pretty good job, but then they’ve had a lot of practice.Their theory, apparently; when you’re kicking the can down the road, a myth is as good as a mile. Consider a brief compendium of the lies, damned lies and statistics the oil guys have sold the country in the past few years.

Myth Sold: The Oil “Revolution.”  Hydraulic fracturing was a technological breakthrough that was going to make America number one in world oil production again, restore American energy independence and guarantee American hegemony for (pretty much) ever.    

Fact: Fracking is an extremely expensive and environmentally destructive way to wring the last few drops of  oil out of source rock. While it temporarily increased US oil production, it never equalled our peak production of 1970, and while it temporarily decreased our oil imports (which are now on their way back up), it never threatened our status as the world’s largest importer of oil.

Myth Sold: Technology Will Save Us. When oil prices cratered, the frackers reassured their investors, lenders and us that they could handle it. They had improved the fracking technology so much they could continue to make a profit producing $50-a-barrel oil.

Fact: The much-hyped changes were just so much tinkering, and profits remained illusory. Virtually every company involved in the fracking patch had negative cash flows from the beginning. Operating profits from the wells were wiped out by the costs of replacing the wells every three or four years, because of their hideous depletion rates. Conventional wells produce for 20 years, five time longer than fracked well.

Myth Sold: Efficiency Will Save Us. Like the old line about balancing the federal budget by eliminating waste and fraud, this sounds reasonable but never happens. The frackers concentrated on the “sweet spots,” the small areas of their holdings with the best returns, and they started placing four drilling rigs, instead of one, on each pad.

Fact: Thus their production actually increased for a few months after the price crash. But, well productivity is flatlining now and with the rig count down by about half, new wells are not being brought on line and production has started to fall sharply.

Myth Sold: Hedging Will Save Us. For the first year or so of depressed prices, frackers benefited from hedges — contracts to sell their product at last year’s prevailing prices. The theory was, prices would be back up before the hedges ran out.

Fact: The hedges have run out. The people who used to take the other side of the hedges are not answering frackers’ phone calls. Maybe because their phones have been disconnected.

Myth Sold: Junk Bonds Will Save Us. And so they did, for a while. Infusions of cash — from, among others, vultures hoping to acquire cheap oil company assets and ride the resurgence to a new, new oil revolution — in the form of junk bonds, leveraged loans, sub-prime loans, covenant-lite loans, etc., kept the bubble inflated.

Fact: What resurgence? Banks and other lenders, reluctant to recognize the mounting losses, continued to pretend that the oil companies whose assets’ worth had been cut in half were still solvent. Nothing wrong here! Why do you ask?

New Fact: Right now, the banks are conducting a mandatory review of the worth of the assets pledged against their fracking loans, that is, the value of the oil the companies still have to extract. This spring, the banks assessed the oil at last year’s prices, and with fingers tightly crossed rolled over the loans.

It was a stretch then; can they do it again, eke out a few more months of myths? On the one hand, maybe so, denial is not just a river in Egypt. On the other hand, good as they have been, the sellers of the myths appear to be sold out.  


Thomas Lewis is a nationally recognized and reviewed author of six books, a broadcaster, public speaker and advocate of sustainable living. He also is Editor of The Daily Impact website, and former artist-in-residence at Frostburg State University. He has written several books about collapse issues, including Brace for Impact and Tribulation. Learn more about them here.

Syriasly

 Vladimir Putin, Bashar Assadgc2smFrom the keyboard of James Howard Kunstler
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Vladimir Putin, Bashar Assad
 
Originally Published on Clusterfuck Nation October 5, 2015
 

Senior administration officials say the new offensive holds promise and may change the dynamics on the ground.
— The New York Times

Whew…. That’s reassuring. Finally, a Middle East policy you can believe in.

It’s apparently based on a joint Kurdish-Arab army that our side (the USA) is pretending to assemble around the ISIS stronghold of Raqqa, near the Turkish border. We’re informed also that American military officials have screened the leaders of the Arab groups to ensure that they meet standards set by Congress when it approved $500 million last year for the Defense Department to train and equip moderate Syrian rebels. Thank God we have a functioning HR department over there.

Is it safe to say that the table is now set for World War Three? King Salman of Saudi Arabia is itching to mix it up. Of course, the moment he sends official KSA ground troops in there, he will be eligible to have his oil terminal at Ras Tanura in the Persian Gulf blown up. Imagine what that would do to the S & P index. The Turks, too, are none too happy with their currency imploding and their economy falling apart, and perhaps view a widened war as politically refreshing. And let’s not forget Iran — having concluded the long, torturous negotiations to make America feel better about their nuke program, Iran is eager to put an end to this barbaric (Sunni-flavored) ISIS nonsense. Oh, did I leave out Israel. Probably a good idea since so many people just want to hate on it if the subject even comes up. But suffice it to say they are in the mix, too, with the ability to turn their adversaries into ashtrays, should it come to that.

As the old song goes: someone left the cake out in the rain.

You had to at least admire the forthrightness of Mr. Putin. His economy of motion is breathtaking. He goes to the UN and says: “The situation in Syria is intolerable and we’re going to do something about it,” and a few days later they did. Russia commenced bombing groups that the US had labeled “the moderate opposition” to Bashar al-Assad. The quandary for the US, of course, as Mr. Putin pointed out at the UN, is that we keep on arming and training “moderate oppositions” to this regime and that regime and abracadabra (to use an old Middle Eastern term-of-art) they break bad on us. They use the Humvee’s we give them to control the landscape and they blow stuff up with the ordnance we give them, and cut off the heads of Americans on video in the rudest and cruelest manner imaginable. So, might we ask ourselves: is there anything to the US’s complaint that Russia is not bombing the right ISIS?

I suspect world opinion is not buying our claim that Bashar al-Assad has to go because he bombed his own citizens and used gas on them. I mean, we say that a lot, but is it actually true? US officials say a lot of things a lot that happen not to be true (e.g. the Federal Reserve’s claim that the US economy is humming.) In fact, we’re in this predicament precisely because we have squandered our credibility. We go into one country after another and destroy the institutions that held these places together, and leave a train of death and chaos behind. Iraq, Libya, Somalia, now Syria.

Maybe we just ought to step aside for a while and see what happens. The Russians could shoot themselves in the foot over there, of course. They did it before in Afghanistan. But that was back in Soviet times, with its clunky leadership. Mr. Putin proved pretty nimble in Georgia. Whatever else you can say about that little war, the region has been stable for years now. They’re not cutting off people’s heads on TV there. Similarly, you don’t hear much about Chechnyans perpetrating terrorist acts anymore.

Ukraine, for all its faults and troubles, was a stable country until the US decided to pull off regime change there. The deposed president Yanukovych was pressed into choosing between NATO and the Russian-backed Eurasian Custom’s Union and he chose wrong. The US pulled a few levers and abracadabra: civil war.

So, Assad still heads a government in Syria. We don’t like him because he is cozy with Iran, and their proxy war machine, Hezbollah. But will eliminating him make the situation any better?

 

James Howard Kunstler is the author of many books including (non-fiction) The Geography of Nowhere, The City in Mind: Notes on the Urban Condition, Home from Nowhere, The Long Emergency, and Too Much Magic: Wishful Thinking, Technology and the Fate of the Nation. His novels include World Made By Hand, The Witch of Hebron, Maggie Darling — A Modern Romance, The Halloween Ball, an Embarrassment of Riches, and many others. He has published three novellas with Water Street Press: Manhattan Gothic, A Christmas Orphan, and The Flight of Mehetabel.

Muskular Magic

From the keyboard of James Howard Kunstler
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elon-musk-tesla
 
 
Originally Published on Clusterfuck Nation May 11, 2015
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Elon Musk, Silicon Valley’s poster-boy genius replacement for the late Steve Jobs, rolled out his PowerWall battery last week with Star Wars style fanfare, doing his bit to promote and support the delusional thinking that grips a nation unable to escape the toils of techno-grandiosity. The main delusion: that we can “solve” the problems of techno-industrial society with more and better technology.

The South African born-and-raised Musk is surely better known for founding Tesla Motors, maker of the snazzy all-electric car. The denizens of Silicon Valley are crazy about the Tesla. There is no greater status trinket in Northern California, where the fog of delusion cloaks the road to the future. They believe, as Musk himself often avers, that Tesla cars “don’t burn hydrocarbons.” That statement is absurd, of course, and Musk, who holds a degree in physics from Penn, must blush when he says that. After all, you have to plug it in and charge somewhere from the US electric grid.

Only 6 percent of US electric power comes from “clean” hydro generation. Another 20 percent is nuclear. The rest is coal (48 percent) and natural gas (21 percent) with the remaining sliver coming from “renewables” and oil. (The quote marks on “renewables” are there to remind you that they probably can’t be manufactured without the support of a fossil fuel economy). Anyway, my point is that the bulk of US electricity comes from burning hydrocarbons, and then there is the nuclear part which is glossed over because the techno-geniuses and politicians of America have no idea how they are going to de-commission our aging plants, and no idea how to safely dispose of the spent fuel rod inventory simply lying around in collection pools. This stuff is capable of poisoning the entire planet and we know it.

The PowerWall roll out highlighted the “affordability” of the sleek lithium battery at $3,500 per unit. The average cluck watching Musk’s TED-like performance on the web was supposed to think he could power his home with it. Musk left out a few things. Such as: you need the rooftop solar array to feed the battery. Figure another $25,000 to $40,000 for that, depending on whether they are made in China (poor quality) or Germany, or in the USA (and installation is both laborious and expensive). Also consider that you need a charge controller and inverter to manage the electric flow and convert direct current (DC) from the sun into usable alternating current (AC) for your house — another $3,500. So, the cost of hanging a solar electric system on your house with all its parts is more like fifty grand.

What happens when the solar panels, battery, etc., reach the end of their useful lives, say 25 years or so, when there is no more fossil fuel (or an industry capable of providing it economically). How will you fabricate the replacement parts? By then the techno-wizards will have supposedly “come up with” a magic energy rescue remedy. Stand by on that, and consider the possibility that you will be disappointed with how it works out.

What gets me about Tesla’s various products and activities is that, when all is said and done, they are meant to extend the fatal rackets of contemporary life, especially car dependency and the suburban development pattern. Car dependency can and probably will fail on the financial basis, not on the question of how you run the car. The main economic problem we face is the end of growth of the kind we’re used to, the kind that generates real capital and enables bank lending. It is already happening and has led to fewer loans for fewer qualified borrowers. It will also lead to the end of government’s ability to pay for fixing the elaborate hierarchy of paved highways, roads, and streets that the cars have to run on. Imagine the psychic pain of the Silicon Valley billionaire driving his $87,000 Tesla P85D down a freeway that the State of California hasn’t been able to repair in five years.


James Howard Kunstler is the author of many books including (non-fiction) The Geography of Nowhere, The City in Mind: Notes on the Urban Condition, Home from Nowhere, The Long Emergency, and Too Much Magic: Wishful Thinking, Technology and the Fate of the Nation. His novels include World Made By Hand, The Witch of Hebron, Maggie Darling — A Modern Romance, The Halloween Ball, an Embarrassment of Riches, and many others. He has published three novellas with Water Street Press: Manhattan Gothic, A Christmas Orphan, and The Flight of Mehetabel.

 

Limits to Hopium

Off the keyboard of Michael Snyder

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Published on The Economic Collapse on April 22, 2015

hope-despair

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Hopium: How Far Can Irrational Optimism Take The U.S. Economy?

Thought Bubble - Public DomainIf enough people truly believe that things will get better, will that actually cause them to get better?  There is certainly something to be said for being positive and thinking that anything is possible.  And as Americans, optimism seems to come naturally for us.  However, no amount of positive thinking is ever going to turn the sun into a block of wood or turn the moon into a block of cheese.  Any good counselor will tell you that one of the first steps toward recovery is to stop being delusional and to come to grips with how bad things really are.  When we deny reality and engage in irrational wishful thinking, we are engaging in something called “hopium”.  This is a difficult term to define, but the favorite definition of hopium that I have come across so far goes like this: “The irrational belief that, despite all evidence to the contrary, things will turn out for the best.”  In hundreds of articles, I have documented how the U.S. economy is mired in a long-term decline which is about to get a lot worse.  But most Americans see things very differently.  In fact, according to a brand new CNN/ORC poll, 52 percent of Americans describe the U.S. economy as “very” or “somewhat good”, and more than two-thirds of all Americans believe that the U.S. economy will be in “good shape” a year from right now.  But if you asked most of those people why they are so optimistic, they would probably mumble something about “Obama” or about how “we’re Americans and we always bounce back” or some other such gibberish.  Well, it’s wonderful that so many people are feeling good and looking forward to the future, but are those beliefs rational?

We witnessed a perfect example of this “hopium” on Wednesday.  Sales at McDonald’s restaurants have been in decline for quite a while, and the numbers for the first quarter of 2015 were just abysmal

The ubiquitous burger-and-fries chain said US sales, the largest share of global income, fell 2.6 percent from a year ago for comparable outlets.

Sales in the Asia-Pacific and Middle East region dropped 8.3 percent, helping bring overall global sales down 2.3 percent, “reflecting negative guest traffic in all segments,” the company said.

Total revenue sank 11 percent to $5.96 billion in the quarter to March 31, and net income plunged 32.6 percent to $812 million, or 84 cents a share (-31 percent).

So you would think that the stock price would have tanked on Wednesday, right?

Wrong.

Thanks to news that a “turnaround plan” would be announced on May 4th, McDonald’s stock actually skyrocketed

McDonald’s closed up 3.13 percent after spiking more than 4.5 percent in early trade as investors cheered a turnaround plan expected on May 4. However, the fast food chain’s earnings missed on both the top and bottom lines.

This is pure hopium.  Why don’t McDonald’s executives just tell us what the plan is now?  But instead, the mystery of a “secret turnaround plan” gives people just enough hope to keep the stock from tumbling – at least for the moment.

And of course there are all sorts of other stocks that are being massively inflated by hopium right now.

Many years ago, when I was an undergraduate, I was taught that a price to earnings ratio of more than 20 was really, really high.

But these days that is the norm on Wall Street, and at the moment there are quite a few stocks that actually have price to earnings ratios that are greater than 100

There are 10 stocks in the Standard & Poor’s 500, including industrial giant General Electric, video-streamer Netflix and oil and gas explorer Cabot Oil & Gas that are trading for 100 times their diluted earnings the past 12 months excluding extraordinary items, according to a USA TODAY analysis of data from S&P Capital IQ.

And if you can believe it, General Electric has a PE on its training earnings of more than 200

Take General Electric, the industrial giant that’s swiftly selling off banking assets so it can return to its manufacturing roots. GE sports a PE on its trailing earnings of 227, says S&P Capital IQ.

This is completely and totally irrational.  General Electric is a giant mess and is being very badly mismanaged.  But investors continue to pay a massive premium for GE stock because they hope that things will turn around eventually.

Look, hope will get you a lot of things in life, but it won’t put money in your pockets or dinner on the table.

Our politicians and the mainstream media continue to sell us hard on the idea that things are getting better in America, but meanwhile our economic infrastructure continues to decay.  Just check out what is happening in the steel industry

United States Steel Corporation issued layoff notices to 1,404 workers in the latest sign of struggle for the American steel industry. The missives went out in recent days to workers producing pipe and tube products that are used in the oil and gas sector. Job cuts could come as early as June for 17 to 579 employees at a plant in Lone Star, Texas, 166 at a factory in Houston, 255 at a mill in Pine Bluff, Arkansas, and 404 managers across the company’s tubular operations nationwide.

Since last June, the company has informed 7,800 employees of potential job cuts, a tally from Pittsburgh Business Times indicated. U.S. Steel spokeswoman Sarah Cassella said the ongoing layoffs are the result of “challenging market conditions and global influences in the market including a high level of imports, reduced prices for oil and natural gas and reduced steel prices.”

A little over a month ago, I published an article entitled “10 Charts Which Show We Are Much Worse Off Than Just Before The Last Economic Crisis” in which I demonstrated that we are in far worse economic shape than we were just prior to the last recession, and now another great economic crisis is at our door.

Unfortunately, most Americans have no idea what is going on out there.  Most of them get their news from the giant propaganda matrix that very tightly controls the flow of ideas and information in this country.  This is something that I explain on my new DVD.  Six colossal corporations control over 90 percent of the news, information and entertainment that Americans consume, and that gives them an awesome amount of power.

And right now that propaganda matrix is assuring the American people that everything is going to be just fine.

Well, they better be right.  Because if not, they are going to have millions of people extremely angry with them when things really start falling to pieces.

She’s Back!

From the keyboard of James Howard Kunstler
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Hillerator-739076
Originally Published on Clusterfuck Nation April 13, 2015


And so, from the dormant volcano that is American politics, out comes Hillary, like Rodan the Flying Reptile pretending to be Granny Goose. Now that she is officially flapping around the electorate, the excitable mainstream press reports the initial caw-caw-cawing of her campaign: it will be “based on diversity, discipline and humbleness.” These are endearing qualities in any giant flying reptile, and reassuring to voters who might otherwise fear something a bit darker on the wing.

The Elmer Fudd in the piece at the moment, former Maryland Governor Martin O’Malley, did get off a clever first shot at the flying behemoth when he cracked that “the presidency of the United States is not some crown to be passed between two families,” but it seems to have only provoked a deeper show of humility from the target. She’ll be starting a “listening campaign” to detect rustles of discontent as she banks over the cornfields of Iowa cawing platitudes across the sky, e.g. “Americans have fought their way back from tough economic times.”

Point of fact: no they haven’t. They are still strewn over the landscape with the economic equivalent of sucking chest wounds, but perhaps a few of them have noticed with vicarious satisfaction the astounding rise of the S & P stock index as they lie in a roadside ditch scanning the skies. It must give them some comfort as their lights go out. Just maybe, their children will also have the chance to become Goldman Sachs employees as history marches on. The flying reptile wants to be their champion! She wants to earn their votes — the old fashioned way, by purchasing as much TV air-time as possible to put across the illusion of sincerity. On such campaigns is the decline of empire propelled.

More to the point, what does the flight of Hillary say about party politics in this land? That a more corrupt and sclerotic dominion has hardly been glimpsed since the last Bourbons cavorted in the halls of Versailles? Hence, my view that America will witness a very peculiar spectacle leading up to and perhaps beyond the 2016 election: the disintegration of seeming normality against a background of mounting disorder and insurrection. Hillary will go on caw-cawing platitudes about togetherness, diversity, and recovery while the economy sinks to new extremes of unravelment, and the anger of a swindled people finally boils over.

Neither party shows even minimal competence for understanding the actual crises facing this land, and indeed the project of techno-industrial civilization itself. If the people don’t overthrow them, and grind their pretenses underfoot, then events surely will. In the trying months leading up to the presidential election of 2016, Americans will witness the death of their “energy independence” fantasy — actually a meme concocted by professional propagandists. The shale oil “miracle” will go up in a vapor of defaulting junk bonds. Violence will escalate through North Africa and the Middle East, threatening the world oil supply more generally. I would give a low-percentage chance of survival to King Salman of Saudi Arabia, and to the Saud part of Arabia more particularly as civil war among the rival clans breaks out there, with an overlay of Islamic State mischief seeding even greater chaos, and the very likely prospect of sabotage to the gigantic oil terminal at Ras Tanura on the Persian Gulf. In comparison, the fiasco of Benghazi will look like a mere Three Stooges episode.

If a third party were to arise in all this turmoil, it might not be savior brigade, either. In 1856 the Republicans welled up as the Whigs expired in sheer purposelessness and the Democrats romanced slavery. The nation had to endure the greatest convulsion in its lifetime to get to the other side of that. This time, I’m not at all sure we’ll get to the other side in one piece.

 


James Howard Kunstler is the author of many books including (non-fiction) The Geography of Nowhere, The City in Mind: Notes on the Urban Condition, Home from Nowhere, The Long Emergency, and Too Much Magic: Wishful Thinking, Technology and the Fate of the Nation. His novels include World Made By Hand, The Witch of Hebron, Maggie Darling — A Modern Romance, The Halloween Ball, an Embarrassment of Riches, and many others. He has published three novellas with Water Street Press: Manhattan Gothic, A Christmas Orphan, and The Flight of Mehetabel.

Putin Eats Babies

Off the keyboard of Ugo Bardi

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Published on Resource Crisis on March 12, 2015

propaganda

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Lies, damned lies, and psyops

Google Ngram’s results for “propaganda”. The term seems to have been most popular in a period that went from the 1940 to the 1970s, gradually losing interest in the following years. Of course, however, propaganda didn’t disappear – it just went undercover.

I distinctly remember one day when I was – maybe – twelve; when my father saw me reading something that was lavishly illustrated with red flags and with hammers and sickles. He looked at that, very worried, then he relaxed. “Oh…, ” he said, “that’s fine: it is our propaganda.” At that time, in the 1960s, my father was active in politics and the house was full of pamphlets of the Christian Democratic party.

What I was reading was one of those pamphlets, full of vivid images of the deformed faces of Soviet communists crushing women and children under their booted feet. Those papers have disappeared from the house long ago, but examples of that old propaganda are easy to find on the Internet. You can see one on the right; it is an image that goes back to 1944, but the style and the message are the same of the time when the cold war was in full swing. Note how the caption says “Dad, save me!” echoing the well known slogan that “communists eat children”.

Of course, also the other side, that of the communists, was using the same kind of naive propaganda methods and neither side seemed to think there was something wrong with that. My father, for instance, found natural and legitimate that his political side would openly engage in propaganda. It was “our” propaganda, fighting for us in the political struggle, just as “our” artillery was fighting for us in war. In a war, nobody would claim that the guns on their side were shooting flowers at the enemy.

It was only in later times that propaganda changed its face. The term never disappeared from usage, but it slowly fell out of fashion, at least in the sense that it became politically incorrect to say that one’s faction was using propaganda. It was only something used by “them,” not by us. “Our” side would never debase itself by using propaganda.

In part, the term “propaganda” was replaced by more neutral terms, such as “consensus building” and “public relations.” In large part, however, in the West, propaganda went undercover; fully exploiting Baudelaire’s observation that “the finest trick of the devil is to persuade you that he does not exist.” It became refined, unobtrusive, subtle. And it was incredibly successful in convincing Westerners that it didn’t exist – maybe for a while it even disappeared for real! Perhaps it wasn’t needed any more during the period of Fukuyama’s “End of History,” when everybody got genuinely convinced that the collapse of the “evil empire”, the Soviet Union, had shown the superiority of economic liberism At that time, everyone knew that we just needed to sit down and relax to enjoy the goods that free markets would bring to us. There was no need any more to be told over and over that our enemies were dangerous, baby-eating monsters.

But, in recent times, something has changed. Propaganda is back with a vengeance. Here is just an example:

You see? No matter how you see the recent crisis in Ukraine, you have to admit that, in terms of propaganda, we are back to the methods of the 1950s and the 1960s, just a bit more sophisticated in graphical terms, but still based on the same simple theme: our enemies are baby-killing evil monsters. It is an accusation that has been fashionable and effective from the times when the Romans accused their Cartaginese enemies to sacrifice children to their god, Baal. Note how, in the image, they have managed to put the image of a child close to the title, “Putin’s killed my son,” even though they are completely unrelated stories (that shows, incidentally, the contempt they feel for their readers.)


We are not yet arrived to accusing Vladimir Putin of eating babies, but – as things stand – we may not be far away from that. Look at the image, here, titledBloodymir;” where Putin is shown with blood on his mouth, as if he had just finished his breakfast of child meat. And these are just a few examples of the new wave of propaganda that is invading the Western media. It is amazing how these simple tricks worked in the 1950s and 1960s and still seem to work today. And it seems that they are being used to take us straight to a new war. A lot of people, indeed, seem to be reasoning today just in the same way people reasoned in the 1950s: it is “our” propaganda, hence it must be good.

We can see propaganda as one of the several failed technologies of the 20th century, just like nuclear powered cars and weekend trips to the Moon for the whole family. Propaganda never promised to take us to the Moon, but, at the beginning it, was touted as a way to build informed consensus in a democratic society. That was the theme, at least, of Edward Bernays’ 1928 book, titled “Propaganda,” where he stated that that propaganda is not just good, but essential for democracy: “The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society.

Evidently, something went wrong with these ideas. In its commercial version, propaganda became an instrument to convince us to buy things we don’t need, while, as a political tool, it turned itself into the evil form we call today “psyops,” the deliberate dissemination of lies to cast an enemy in a bad light. It is a form of black magic; powerful but extremely limited and often backfiring. Psyops can only create enemies, not friends. In the end, the effect is the opposite of what it was supposed to do in Bernay’s times: by casting an external or internal opponent as “evil”, consensus is destroyed, not created.

Nevertheless, Bernays had a good point: we need consensus. Of course, we don’t need the forced uniformity that can be achieved by a dictatorship, but, without consensus on some basic points, it would not be possible to keep a democratic society going. The rule of the law, the need of due process, people’s basic rights, are all part of this consensus. And there never was a moment as today in which we are so badly in need of consensus on such vital subjects as climate change and resource depletion which threaten the very existence of human civilization. But we are not achieving a significant consensus on these critical issues; what passes for “debate,” today, is a sterile clash of absolutes were psyops have been used with great effect to destroy the credibility of a whole generation of climate scientists.

So, we are stuck: we need to manage a planet, but we don’t know how to do it. Will we ever be able to find an agreement on something important that doesn’t involve hating or bombing someone? Maybe there are ways, but we haven’t found them, yet.

_________________________________________________________

(*) Maybe you are curious to know what was the effect of a massive exposure to right-wing propaganda on a teenager (me) in the 1960s. Well, it is a long story, but I can tell you that too many and too blatant lies can badly backfire. The story of my very wavering juvenile political positions is not so interesting, but I can say that one of the reasons that led me to become a scientist was to search for an unbiased truth, somewhere, perhaps the result of the overexposure to propaganda I experienced in my youth. Over the years, I found that even science is not without biases, but, at least, in scientific debates we don’t accuse our colleagues of eating babies. 

Masters of Parallel Universes

From the keyboard of Dmitry Orlov
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Published at Club Orlov on February 10, 2015

 

Much as we may dislike the fact, the results from quantum physics are unequivocal: parallel universes do exist. Schrödinger’s cat is both alive and dead, at the same time, while it exists as a probability distribution, which is resolved into either a live cat or a dead one by the act of opening the box and observing it. But until the observation is made, both parallel universes can be said to exist, and there is no way for us to know which one of them we inhabit.

Quantum effects dominate in the micro realm of subatomic particles. For instance, the laptop on which I am typing this contains millions of transistors which are created by implanting ions into silicon substrates to create patches with built-in electric fields and interconnecting these patches with etched aluminum wiring. Each transistor relies on the phenomenon of quantum tunneling: while in normal physics it is impossible for an electron to find itself on the wrong side of a built-in electric field, in quantum physics the electron is a probability distribution, not a particle, and quantum tunneling works reliably enough to support the entire electronics industry. But if you scale your circuit up, the chance of a pickup truck successfully “tunneling” through a brick wall becomes too minuscule to be of practical interest. It is still possible, but it would take anywhere between right now and several lifetimes of the universe hence to observe that result.

Oddly enough, such quantum effects are quite normal to observe within the political space. Here the physical objects involved are far too large to give rise to the parallel universes of quantum physics, but the narratives they give rise to are not. This is because the narratives are a matter of perception, and there can be historical periods, such as the present one, when the peephole through which the political establishment and the mainstream media allow us to see the world becomes so tiny that it becomes a toss-up as to whether or not any given photon will manage to find its way through it.

Here, reality becomes fractured into parallel universes as soon as we make the realization that we are being lied to. Were there weapons of mass destruction in Iraq? No, and the vial of white powder which Colin Powell menacingly held up at the UN was fake. The Iraqi mobile biological weapons factories did not exist. Was Al Qaeda active in Iraq prior to the US invasion? No, we know that it wasn’t. These lies are now known to be factual—uncontested, commonplace knowledge. Next: do we make the arbitrary leap of judgment and declare that that’s all the lies we will have ever been told, or do we admit the possibility that this is only the tip of an iceberg of lies, that lying is a modus operandi for the operatives behind them? If we do, then, to be conservative, for every official narrative we must construct one or more unofficial but also plausible (and perhaps much more plausible) narratives. Each of them constitutes a parallel universe, and we can’t know which of them we inhabit until some happy accident—a leak, an investigation, a damning bit of physical evidence, or an outright admission of complicity or guilt—collapses the probability waveform, destroying all the parallel universes but the real one.

Many people have been conditioned to think that this is the realm of “conspiracy theory.” Unfortunately, the term doesn’t apply. First, the existence of a conspiracy has to be accepted as a given: nobody ever perpetrates a heinous act of murder, mayhem and destruction by telegraphing their intentions ahead of time. If they do, the event usually doesn’t go off as planned, and in such cases it is usually announced that a conspiracy has been uncovered and a plot thwarted. Thus, the use of the term “conspiracy” is gratuitous; it goes without saying that there always is one. Secondly, the term “theory” is gratuitous as well: a theory is a mental construct designed to account for a given set of observations. But what if all you do is point out the observations (which are in the public domain, there for all to see) and make no effort whatsoever to account for them?

However, there is one theory that accounts for a very large class of such observations, and it is so simple that it is often overlooked. It is this: that the government and the official sources of information are normally lying. We already know that they have lied in the past (Iraqi WMD and al Qaeda in Iraq are two particularly well-known examples, but there are many others). The question then becomes, When did they stop lying (if in fact they did)? Was there a conspiracy to stop lying? There would have to have been one, because we certainly haven’t heard any statements made by public officials to the effect that “We will now stop lying.” Or did they spontaneously all stop lying at the same time? The probability of that happening is pretty low; it could, of course happen—any time between right now and several lifetimes of the universe hence. So if you believe that they have indeed stopped lying, then I suppose that makes you a conspiracy theorist par excellence. The conservative assumption is that they are still lying.

There are lots of people who have been working to keep these parallel universes alive in one form or another, by collecting and collating bits of information, by offering partial explanations, by evaluating the official explanations as to their logical consistency. They have been doing this in spite of being ostracized as “conspiracy theorists.” To be fair, they have sometimes been glorified as “truth-seekers” or “truth-tellers” and that must provide an ego boost for some people. But really what they have been doing is generating, and sustaining, alternative narratives and keeping parallel universes alive, so that at some time in the future we will find out which one we have been inhabiting all along.

Some people make the mistake of refusing to listen and to explore these parallel universes, because it makes them ill at ease not to know which one they happen to inhabit. But if you accept the extreme likelihood that the official narrative is a bunch of lies concocted to hide the truth, then there is some comfort to be gained in at least knowing something that might not be a lie. Once the initial hesitation is past, it becomes a fun, if somewhat macabre, hobby, because puzzling evidence jumps out at you just about everywhere you care to look.

An important precondition of being able to interpret the result of Schrödinger’s thought experiment is being able to figure out what a cat looks like. Here is a specific example. Currently, there are two parallel universes. In one, Russian troops have invaded Ukraine. In the other, Russian troops did not invade Ukraine. What makes this difficult is understanding what is meant by Russian troops. There are Russians in eastern Ukraine. There are troops in eastern Ukraine. A lot of the troops in eastern Ukraine are in fact Russian. But there are no Russian troops in eastern Ukraine. Get it? To qualify as actual Russian troops, they would have to have enlisted in the Russian military, and would have to take their orders through the Russian chain of command. And these ones obviously don’t. There is a strong political connection with Russia, but the military one is tenuous. The latest “proof” of Russian invasion, offered by the Ukraine’s president Poroshenko in Munich, consists of some Russian internal passports and military service certificates found in eastern Ukraine. Funny thing is, when you are inducted into the Russian military, you have to surrender those civilian documents. Sometimes a perfectly viable, though quite short-lived parallel universe can be concocted by twisting things in small ways.

But most of the time a parallel universe pops into existence when things get twisted in impressively brazen and shameless ways. A lot of people start with 9/11. The twin towers collapsed because they were hit by jet airliners because, you see, kerosene melts steel. Was it special, magic kerosene, and were the buildings were made of special, magic steel? Maybe that’s why since then skyscrapers can’t be insured against fire any more. Previously it was thought that skyscrapers can’t collapse due to fire because they are made of steel, and a hydrocarbon-based fire isn’t hot enough to melt it. What fools those civil engineers must have been! Turns out, all you need is some kerosene!

Then the two skyscrapers spontaneously collapsed into their own footprints—all on their own—and so the entire industry of demolition experts (whose job is to mine tall buildings with explosive charges and detonate them under computer control to keep the buildings from toppling over) has since been retired. Skyscrapers are now known to pose a huge fire hazard due to the melty steel of which they are made, and they must all be demolished right away. But don’t hire any demolition experts, since we now know that their entire industry was a hoax, because skyscrapers collapse into their own footprints all by themselves. Just take some retired old jets from American Airlines (they have plenty of them) and fly them into the skyscrapers unmanned using remote fly by wire technology.

Another “plane” hit the Pentagon. That plane had no engines, since none were found (but in spite of this it not only flew, but executed a pirouette worthy of a jet fighter). Also, it had no seats (the passengers must have mimed sitting down and buckling up) and no luggage (they must have traveled really light). The perpetrators’ identity was found out thanks to a passport found at the World Trade Center site. It was a magic passport; unlike the steel girders of the twin towers, a kerosene fireball could not even singe it.

Fast-forward to the latest staged atrocity: the Charlie Hebdo massacre in Paris. The perpetrators were clearly well-trained, disciplined commandos, who executed a flawless mission, making it likely that they were special service people of some country or other. But then one of them magically forgot his ID in the getaway car—just like that passport magically found in the wreckage of 9/11. (Do commandos take their civilian IDs with them when they go on a secret mission?) And then the alleged driver of the getaway car surrendered to the police, saying that he has an ironclad alibi. The fact that he surrendered was reported in the media; the reason why he surrendered was not. And then the person charged with conducting the investigation killed himself while working on his report. Did his report agree with the official narrative?

Reminds me of another staged atrocity: the Boston Marathon bombing. The very large number of special ops people milling about the scene before the firecrackers went off has been noted, but clearly they had nothing to do with it—they were just enjoying their day off, all dressed the same. The two patsies who were blamed for it—the Tsarnaev brothers—were well-known to the FBI. After the firecrackers went off, a crew of specialists immediately descended on the scene, with actors posing as victims and fake blood being tossed about. Video evidence shows them taking a long time to stage photo-ops of the supposed atrocity.

The ensuing media campaign with “Boston Strong” stickers was identical to the “Je suis Charlie” campaign following the Charlie Hebdo event. And as with the Charlie Hebdo event, there was a concerted effort to kill the alleged perpetrators before they could answer any questions in ways that might contradict the official story. In the case of the Tsarnaev brothers, the attempt to kill the younger one failed. The boat in which he was hiding, scared and unarmed, was riddled with bullets, and after he surrendered an unexplained emergency tracheotomy was performed on him, but he is still alive, and defiant of the efforts to frame him.

But the most interesting part came after the event, when Boston was placed under military occupation, with residents forced to stay inside their houses for fear of being machine-gunned down by troops rumbling down the streets in APCs, supposedly in pursuit of a couple of kids. The real rationale for the event was to impose martial law on Boston (the cradle of the American Revolution) on Patriot’s Day (which commemorates a signal event that started it). If you read into these events just a little bit, you just might come to the conclusion that the US is no longer a constitutional democracy but a military dictatorship and a police state ruled by an oligarchy that likes to stage gruesome special events to show just how far above the law it really is.

Or take the Malaysian Airlines MH-17 shoot-down over Eastern Ukraine last year. Again, the media campaign was clearly set up before the event. The clairvoyant western observers know who to blame: it was the “Russian-backed rebels” and they used a weapons system provided by Russia. This was repeated endlessly, using a technique used in advertising: “proof by repetition.” Never mind that the rebels had no ability to shoot down that airliner. But the truth has been slowly dribbling out. Flight MH-17 was shot down by a Ukrainian jet fighter from Dnepropetrovsk using an air-to-air missile. (The rebels had no aircraft; why was it armed with one?) The name of the pilot is now known. The person who identified him is in Russia, in witness protection. Russian investigators are pursuing leads, and there is a good chance that we will eventually find out who issued the criminal orders.

I could keep going in this vein for a really long time, piling bits of puzzling evidence upon other bits of puzzling evidence. But the whole point of this exercise is to try to get across to you of one very simple, basic point: if you insist on ignoring all the obvious lies you’ve been told for years and years and dismiss everything but the official narrative as a “conspiracy theory,” then that makes you something of a mind control victim. And I don’t want you to be a victim.

One last thing: if you find yourself living in a Schrödinger box, do what you can to avoid ending up dead. I’ll leave it up to you to work out out the details of that, but the hint is simple: your likelihood of ending up dead is higher if you believe in lies. Don’t be a dead cat.

 

 

Dmitry Orlov is a Russian-American engineer and a writer on subjects related to “potential economic, ecological and political decline and collapse in the United States,” something he has called “permanent crisis”. He  has written The Five Stages of Collapse and Reinventing Collapse, continues to write regularly on his “Club Orlov” blog and at EnergyBulletin.Net.

Parade of Lies

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Aired on the Doomstead Diner on February 4, 2015

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Big-Lie…In a recent rant I titled “Twilight in Amerika”, I covered the non stop LIES spit out by POTUS Telepromptus Obama-sama in his SOTU speech, the annual Big Lie pitched at the population to keep them happy for another year while they are further impoverished and otherwise reamed by the Politicians and Banksters that run Da Goobermint here.

The main lies covered in that Rant were the economic ones, that the Amerikan Economy is Recovering, we are GROWING and we are doing even better than Morning in Amerika of the Ronald Rayguns years, now it’s a fucking Sunny Afternoon in Amerika, we are on the cusp of Energy Independence and the bullshit numbers produced by the Bureau of Lies & Statistics and the Energy Disinformation Agency can be believed!

I covered a few of the Geopolitical false narratives also, like the nonsense that we have had any success whatsoever with the War on Terror, that the trillions of dollars we’ve pitched down the toilet in Afghanistan and Iraq have done a goddamn thing to fix up that clusterfuck, and that anybody in the State Department or Military has a fucking clue how to dig us out of the hole dug here over the last few decades…

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Twilight in Amerika

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Aired on the Doomstead Diner on January 22, 2015

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10pm…If it was Morning in Amerika during the Ronald Rayguns years, now it is a Sunny Afternoon in Amerika under Obama-sama. Things are fucking GREAT out there! Gas Prices are at Low, Low Prices Every Day! The Stock market is at Record Highs!

You gotta ask yourself how much CRACK Obama’s speechwriters have to smoke to be able to spit out this bullshit. Somehow, these bozos manage to miss the fact that 20% of the citizens are on Food Stamps, the FSoA Labor Force has fewer people working than at any time since Bonzo himself was in office, the Federal Deficit has ballooned from $9T at the end of the Bush era to $18T now, college students are in debt up to their eyeballs before they ever graduate, at which time about the best jobs they can find are dishing out Frappuchinos as a Starbucks Barrista! They also managed to miss the fact that Halliburton laid off 9000 workers in the last couple of weeks and Baker Hughes another 7000.

Sunny Afternoon in Amerika MY ASS! It’s NOT afternoon in America, it is TWILIGHT IN AMERICA, and spinning complete bullshit for consumption by the Sheeple doesn’t change that. It’s 10 PM, do YOU know where your Country is?…

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Global Econo-Fiscal Crisis…

Off the keyboard of John Ward

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Published on The Slog on January 18, 2015

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The fiscal surrealism and economic mendacity of supranational globalism has abolished the right decision

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…If nobody knows the truth, then nobody knows what to do. Now it’s your turn to have a go

I thought we might have a change this bright and sunny, freezing-cold windy Winter’s morning here in agrarian France. You see here – down among the agricultural equipment dealers, maize farmers and fruit orchards – most people are busy at the really important tasks in life: bringing up kids, feeding the soil, pruning trees, having a jolly good drink-up at the salle des fêtes, and evading tax. They don’t do derivatives, currency wars, open-market squeezing, spin, gold manipulation and Libor rates: they chop, they mow, they grow, they sow and they crop. It’s dead simple: plant, water, prune and collect.

The downside of all that is the failure of most conversations to move beyond rainfall, the Meteo, shooting things, and the price of tractor oil. But you do not need an IQ in four figures to work out why one decision is almost certainly better than another. The biggest, most life-changing drama they’ve had down here since the Second World War was the collapse in the tobacco market, and consequent switch from causing cancer to easing constipation. From the highest in the medical profession via the Mayor to the smallest orchard keeper, that was a bit of a no-brainer.

Compare and contrast this fundamentally boring but at times idyllic life with that of the benefit dependent, lab-rat, securities trader, marketing director, retired adman, politician, commodities consultant and business journalist archetypes out there trying to work out what to do “for the best” – given that even the best feels increasingly like the least appalling Hell on offer. Various of them could buy a house, sell a house, take money out of the bank, take it out of the markets and put it in the bank, buy gold, hold gold, pile into Bear notes, see eurozone QE as another bull to ride, get rid of the mortgage, extend the mortgage, take a casual job, take in a lodger, poison grandma, vote UKip, vote Tea Party, vote Pub Landlord, sell Sterling, sell euros, sell the Dollar, buy the Rouble, prepare for hyperinflation by hoarding tinned peas, or prepare for corrosive deflation by opening a market stall and selling tinned peas previously hoarded.

The vast majority of people do nothing, because both life and time are too short to decide whether one should be long in assets, or collecting cash ready for the big rates hike. When the Swiss Central Bank decoupled the CHF last week, something in excess of 40-50 million European citizens, businesses and bourse traders were caught out. All those Poles with Swissy mortgages, for instance, discovered overnight that they were going to fork out an awful lot more szlotys than previously advertised.

So the question I raise in order to ruin your digestion this morning is not to salute or fire at predictions on my part. Rather it is to present two things for real people around the world to propose and/or think about:

1. Do you know WTF is going on – and answers must be databased not insanely assertive.

2. Is this reality of permanently confused uncertainty a good or bad thing for greatest contentment of the greatest number?

I shall eschew the route of “pay attention – this is the real story”. The cacophony of crisis that follows is merely a guide to the stimulation of discussion and generation of serious interpretation.

1.THE SWISSY & THE EURO

While a big  me buys into the idea that Draghi, once he had the ECJ judgement firmly in his pocket (as opposed to up his sleeve) then contacted the Zurich Gnomes and told them to do “whatever it takes” (yawn) in order to leave his little bit of euro-printing for the easing of liquidity in the ezone – rather than for the fiscal-cleansing of those euros into CHFs.

But there are two bits I can’t get my brain around. First, investors don’t just go for income – they also follow rising valuations. The Swissy may well now be offering negative interest, but has already surged 35% since decoupling from the zero: I doubt very much if it has, as yet, dun surgin’. And second, I don’t accept Frances Coppola’s argument that the Swiss are massively outgunned here.

Hint: two rules in life. (a) never cross the Swiss, you’ll regret it; and (b) I cannot believe that such a ridiculously damaging CHF value (in export terms) will be tolerated for long inside the mountain cantons. Philanthropy is not a word in the normal lexicon of Swiss motives. My ex-wife is no doubt stockpiling Britain’s supplies of pre-surge Toblerone bars, but I can’t see this ‘deal’ holding.

Right now, Salvador Draghi looks like a very desperate man indeed. In short order, he has given the Bundesbank a bloody nose, and turned Swiss pockets upside down. Does he need to be more careful in his choice of enemies? Or does one take the view that Draghi wants a seat at the top table in a post-euro world: that he is, in fact, working for Wall Street’s Dollar – not the Frankfurt euro?

Discuss. Use both sides of the paper.

2. THE DOLLAR AND THE ANTIDOTE, GOLD AND ENERGY IN A GLOBAL SLUMP

Here’s a very simple double-axis of important things I constructed yesterday while not feeling terribly well:

DOLLARAXIS

It is, as I promised, very simple. The tricky bit is trying to work out what will happen to the relationships between them, given that (a) the Rublenimbi doesn’t exist yet, (b) gold is rising but so is the Dollar (c) oil should continue to fall because demand is falling but (d) if the Saudis decide to call it a day and Putin presses on with his pressure on EU gas supplies, it could rally and start to go up again and (e) the central banks still need gold to be cheap, so surely they’ll pile in/doctor the trackers to stop it rising away to infinity while (f) if the Rublenimbi gets born, the Dollar should fall and gold rise as a safe haven but (g) as China holds huge mountains of Dollar debt, she wouldn’t want the Dollar to be damaged by the Rublenimbi.

I left the Swissy out because if you include its decoupling in this diagram, it requires one to have a 3D-printer for a brain.

3. THE INDEFLATION THANG

Again, just simple thoughts:

The following are deflationary forces:

Rising currency valuation….depresses exports

Cheaper transport and heating costs

Sovereign debt bonds….bigger Sovereign debt begets bigger borrowing costs begets austerity

Cheaper borrowing costs ONCE DEFLATION HAS STARTED….because very quickly, people decide to hold off purchasing stuff – as next year, it’ll be cheaper. Reduced borrowing costs actually reduce borrowing in that context, because they further highlight worsening deflation – reducing consumer confidence. So once the slump gets a grip, people reduce all outgoings: a debt at even 2% is still a capital/interest sum to be paid each month.

Reduced workplace security….see above.

Reduced welfare…because that reduces demand at the lower end.

Poor export performance….because you need taxes to pay off deficits, and…

Higher taxation….because that too reduces demand across the board…which…

…stimulates buying of cheap imports (cf retail/elec growth foreign/chinese brands)

The UK coalition is doing all these things at the moment, yet claims to be keen on avoiding deflation. Um…

The following are inflationary forces:

Money printing

Falling  currency valuation….increases real import costs….especially when the Sovereign has a sizeable trade deficit and imports most of its food.

Government spending/investment increases based on money-printing (but not borrowing)

Wage rises

Rising interest rates (buy it now at a fixed rate)

Inflation itself – buy it now because next year it’ll cost more

Tax cuts at the lower end of the social scale….increases mass demand

The UK Coalition is adamant that it’s being jolly clever by avoiding all of these things. But there is an obvious argument here for doing the exact opposite. And bright sparks everywhere will have spotted that, in order to keep society vaguely glued together, reduce the time it takes to get to Manchester, and keep up the QE/OMT, the Government is being forced to borrow more and more….which, despite Giddy Frogspawn’s idiotic denials, is why the UK national debt continues to rise.

It has struck me several times over many months now that pretty much all of this last collection of Midas in Reverse is going on because there is a fundamental disconnect between what citizens need and bankers want. What does everyone else think?

4. THE RISE &  RISE OF THE CRAP OPPOSITION

It’s a funny thing missus, but whatever their political hue, very few Opposition Parties around the ‘democratic’ world really have any new answers to the confusion at all.

Why, for example, is Labour not saying, “F**k what the neoliberal pointy-heads say, this entire system is bollocks, and a combo of experience and instinct suggest Britain needs two things: massive investment in high-margin export manufacturing, and wholescale reflation. That is going to cost money, and so what we’re going to do is soak the rich, cut all taxes on the poor, and print the stuff willy-nilly without borrowing anything at all….which debt will be worth nothing at all by the time we’ve finished”?

Just forget 1923 for a minute and think: why not? Answers on a comment thread at this address.

Why in the US is the Republican Party not saying, “F**k this global policeman crap, let’s get back to entrepreurial isolation, farming subsidies and balancing the books: we don’t need anyone else if we can sell to ourselves, feed ourselves, and profitably export the excess”?

I’m not a Republican, but I’d vote for that. What about you?

Why in Japan is the anti-Abe axis not saying, “F**k the BoJ buying Buckingham Palace garden party bonds and Gruyere window shares, let’s give our consumers tax relief for buying more than 2000 yen of non-food stuff a week, and out-develop the US where they’re lazy: cars and really useful hitech”?

It sounds dangerous….but it is what made them winners in the first place.

Yours in continuing confusion and hapless search of the answers

Monsieur Le Slogfrog x

 

The Trigger

From the keyboard of James Howard Kunstler
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Originally Published on Clusterfuck Nation December 29, 2014

The futility of politics in America these days has driven the public into exactly the dream-state of zombie blood-lust depicted in so many popular video fantasies, a nightmare of decay, powerlessness, and degeneracy matching the actual condition of a disintegrating polity that has lost collective consciousness and seeks only to infect the dwindling numbers of the still-sentient. Almost nobody in this country believes we can manage our affairs anymore.

Well, can we? One of the hallmarks of an imploding culture is that people lose a sense of consequence. Things just seem to happen and unhappen, and nobody really cares about chains of decision and event. Anything goes and nothing matters.

One reason this is happening to us is that we allowed reality to be divorced from truth. Karl Rove wasn’t kidding back in the Bush-2 days when he quipped that “we create our own reality.” The part old Karl left out is that there’s a price for doing that. In the short run, it allows you to pretend that you have superpowers and can act in defiance of the way things really are. In the longer run, your view of the world comports so poorly with the facts of the world that things stop working.

The tragedy of Barack Obama is that he continued the basic Karl Rove doctrine only without bragging about it. I don’t know whether Mr. Obama was a hostage, an empty suit, or a fool, but he broadened and deepened the acquiescence to lying about just about everything. Did criminal misconduct run rampant in banking for years? Oh, nevermind. Is the US economy actually contracting instead of recovering? We’ll just make up better numbers. Did US officials act like Nazi war criminals in torturing prisoners? Well, yeah, but so what? Did the State Department and the CIA scuttle the elected Ukrainian government in order to start an unnecessary new conflict with Russia? Maybe so, but who cares? Was the Affordable Care Act a swindle in the service of insurance and pharmaceutical racketeering? Oh, we’ll read the bill after we pass it. Shale oil will make us “energy independent.” (Not.)

Has anyone noticed the way these incongruities percolate into the public attention and then get dismissed, like daydreams, with no resolution. I’ve harped on this one before because it was, to my mind, Obama’s greatest failure: When the Supreme Court decided in the Citizens United case that corporations were entitled to express their political convictions by buying off politicians, why didn’t the President join with his then-Democratic majority congress to propose legislation, or a constitutional amendment, more clearly redefining the difference between corporate “personhood” and the condition of citizenship? How could this constitutional lawyer miss the reality that corporations legally and explicitly do not have obligations, duties, and responsibilities to the public interest but only to their shareholders? How was this not obvious? And why was there not a rush to correct it?

Of course, this only begs the question: where are the opponents to the ethos that anything goes and nothing matters? Where are the political figures who can sustain a complaint long enough, and loudly enough, to keep it in the public consciousness clearly enough to make a difference? The more conspiracy-minded might say that the security apparatus (the NSA and its servelings) or Wall Street actually run the country and somehow suppress opposition. I don’t believe that. I do believe that cultures go through tragic periods when they lose their bearings and the will to be truthful to themselves.

The latest news is that Mr. Jeb Bush is way ahead among his Republican rivals for the presidential nomination, leading to a beautiful setup for the battle of the dynasties: Bush versus Clinton in 2016. I believe that insulting prospect would be the wake-up call that will hit the American people upside the head and wake them out of their zombie rapture. A third party will arise. It may be a good one or a bad one, but it will blow the existing order of things apart, as it should.

 

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James Howard Kunstler is the author of many books including (non-fiction) The Geography of Nowhere, The City in Mind: Notes on the Urban Condition, Home from Nowhere, The Long Emergency, and Too Much Magic: Wishful Thinking, Technology and the Fate of the Nation. His novels include World Made By Hand, The Witch of Hebron, Maggie Darling — A Modern Romance, The Halloween Ball, an Embarrassment of Riches, and many others. He has published three novellas with Water Street Press: Manhattan Gothic, A Christmas Orphan, and The Flight of Mehetabel.

The Era of Bad Feeling

From the keyboard of James Howard Kunstler
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stupidtattooartist14
Originally Published on Clusterfuck Nation  September 15, 2014

There are times when events are in charge, not personalities. The unseen forces that hold the affairs of nations and economies in equilibrium dissolve, particles fly out of the many centers, and things heat up toward criticality.

Glance in the rear-view mirror and say goodbye to the Era of Wishful Thinking. This was the time when the USA was inspired by its Master Wish: to be able to keep driving to Wal-Mart forever. Looked at closely, the contemporary idea of Utopia was always a shabby package. On one side, all the pointless driving. For most Americans it was nothing like the TV advertising fantasy of a lone luxury car plying a coastal highway in low, golden light. More like being stuck near the junction of I-55 and I-90 in Chicago at rush hour in July in an overheating Dodge Grand Caravan with three screaming ADD kids whose smart phone batteries just died — plus your fiercely over-filled bladder and no empty Snapple bottle to resort to.

On the other side, there’s the Wal-Mart part: the unbelievable cornucopia of insanely cheap plastic goodies, like, somewhere in the 1990s America became one giant loading dock for nearly free stuff. Wasn’t that fun? Now, everybody has got the full rig, from the flatscreen to the salad shooter, but we’re tired of seeing Kim Kardashian’s booty, and nobody really liked salad, even when you could shoot the stuff into a bowl. The thrill is gone, and so is the paycheck that was your ticket to the orgy. It’s especially gloomy over in the food department, where the boxes of Lucky Charms are suddenly half the weight and twice the price. And that was going to be the family dinner! Must be Nature’s way of telling you it’s time for a new tattoo.

In this weird liminal time since the so-called Crash of 2008 leadership has depended on lies and subterfuges to prop up the illusion of resilience. One biggie is the shale oil revolution, kind of a national parlor trick to wow the multitudes for a long enough moment to convince them that their troubles with the national energy supply are over. Even people paid to think were hosed on this one. Wait until they discover that the shale oil producers have never made a buck producing shale oil, only on the sale of leases and real estate to “greater fools” and creaming off the froth of the complex junk financing deals behind their exertions. Expect that mirage to dissipate in the next 24 months, perhaps sooner if the price of oil keeps sinking toward the sub $90-a-barrel level, where there’s no economically rational reason to bother drilling and fracking.

The lies, frauds, and cons run between the axis of Wall Street and Washington had two fatal consequences with still-lagging effects. 1) They destroyed the capacity for markets to establish the real price of anything — rendering markets useless. 2). They disabled capital formation to the degree that we might not have the money to rebuild an economy to replace the “financialized” matrix of rackets that currently pretends to function. A lot of observers like myself have been waiting for the moment when the fog of pretense lifts and exposes all the broken machinery within. We may be so close now that you can smell it.

Change is in the air, literally, as we wake this still-summer morning with the thermometer so low you wish the furnace was prepped and ready to run. Much is in the air, too, where the news of events near and far provoke swirls of transformation in the disposition of people, nations, and affairs. Who would have guessed a few years ago how nervous Scotland would make the whole Western world? The sharpies at the Pentagon, and the White House, and the CIA may be waiting with indigestion and palpitations for the next ISIS decapitation video, but maybe you have to wonder instead which of five thousand shopping malls across this land will be visited by black-flagged desperados armed with automatic rifles and RPG’s.

Finally, there are the people themselves of this sclerotic polity: too dumb and distracted to help themselves, full of inchoate grievance and resentment, tending ever deeper into darkness. Welcome to the season of the witch in the Era of Bad Feeling. Somewhere “out there” there is a light of virtue waiting for us, but we are a long way from finding our way to it.

 

 

***

James Howard Kunstler is the author of many books including (non-fiction) The Geography of Nowhere, The City in Mind: Notes on the Urban Condition, Home from Nowhere, The Long Emergency, and Too Much Magic: Wishful Thinking, Technology and the Fate of the Nation. His novels include World Made By Hand, The Witch of Hebron, Maggie Darling — A Modern Romance, The Halloween Ball, an Embarrassment of Riches, and many others. He has published three novellas with Water Street Press: Manhattan Gothic, A Christmas Orphan, and The Flight of Mehetabel.

The Death Rattle of Retail

Off the keyboard of Jim Quinn

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Published on The Burning Platform on September 13, 2014

Death-Rattle

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KOHL’S & THE REST OF THE RETAILERS ARE IN DEEP DOO DOO

“Facts are stubborn things, but statistics are pliable.”

― Mark Twain

I never believe government manufactured numbers. They will always be adjusted, massaged, and manipulated to achieve a happy ending for the propagandists attempting to control and fleece the sheep. Yesterday, the government produced retail sales numbers for August that were weak and the corporate MSM propaganda machine immediately threw up bold headlines declaring how strong these numbers were. Positive stories were published on the interwebs and Wall Street hack economists were rolled out on CNBC, where the bubble headed bimbos and prostitutes for the status quo like Jim Cramer and Steve Liesman declared the recovery gaining strength. Woo Hoo.

If everyone else is whipping out that credit card, why aren’t you? Credit card debt has reached a new post recession high. They tell me consumer confidence is soaring. Forget about the 92 million working age Americans supposedly not in the labor force. Forget about real household income hovering at 1999 levels. Forget about median household net worth still 30% lower than 2007. Forget about what you see with your own two eyes in malls, strip centers and office parks as you motor around our suburban sprawl empire of debt. Those Store Closing, Space Available, and For Lease signs mean nothing.

I didn’t get a chance to peruse the commerce department drivel until this morning. They put out unadjusted data and adjusted data. Shockingly, the adjusted data is always rosier than the unadjusted data. I wonder why? I can understand the rationale for adjusting month to month data due to holidays and calendar events. But I still don’t trust the adjustments. There should not be a major difference when comparing year over year data. The adjusted data should reflect the same relationship to the unadjusted data on a year over year basis. Well guess what? It appears our friendly government drones may be pumping the current data to give the appearance of recovery. Here are my observations after taking a look at the government propaganda report:

  •  The unadjusted retail sales were only 3.2% higher than last August. Considering government reported inflation of 2%, that is a pretty shitty result. But have no fear. The “ADJUSTED” retail sales for August were 5.0% higher than last August. WTF? Guess which number gets reported to the sheep?
  • Hysterically, your government drones consider lending deadbeats $40,000 for seven years with no money down to drive away with a GM deathtrap SUV as a retail sale. The billions in subprime auto loans led to an 8.8% YoY surge in “ADJUSTED” auto sales. It seems the unadjusted number only went up 5.3%.
  • When you back out the Federal Reserve/Wall Street pumped auto sales, which will ultimately result in billions of written off bad debt (you’ll pick up the tab), unadjusted retail sales were only 2.7% higher than last August. With real inflation of 5% or more, real retail sales are negative on a year over year basis.
  • Despite financing deals of 4 years with no interest, furniture and electronics retail sales were flat versus last August. If there really is a housing recovery and 2.1 million more Americans are employed versus last August how could these discretionary sales be flat, and negative on an inflation adjusted basis?
  • Grocery store sales were up only 2.1% over last year. Even the government is reporting 2.7% food inflation in the last year. We all know it is closer to 10%, so people are actually reducing the amount of food they are buying. That is a sure sign of an economic recovery.
  • Clothing store sales were flat and department store sales were negative versus last August. So much for the back to school storyline. I do believe August is back to school time. The Sears and JC Penney Bataan Death March trudges toward bankruptcy.
  • What did surge was sales at restaurants and bars. They soared by 6.8% versus last August. We already know Darden, Yum Brands and McDonalds have reported dreadful results, so either the government is lying, soaring food prices are being passed on to customers, or people are so depressed by this awesome economic recovery they are drinking themselves into a stupor.

As a side note on the accuracy of this government data, in a previous role at IKEA, when I was a much younger man, I was responsible for filling out the monthly government retail surveys for the Census Bureau. The government drones collecting this data do not check it. They do not require proof that it is right. It is self reported by retailers across the country. Filling out this crap for the government was about as low on my priority list as whale shit. If I was really busy, I’d make the numbers up, scribble them on the form and put it in the mail. The numbers the government are accumulating are crap. And then they massage the crap. And then they publish the crap as if it means something. It’s nothing but crap.

When you see the headlines touting strong retail sales, you need to consider what you are actually seeing in the real world. RadioShack will be filing for bankruptcy within months. Wet Seal will follow. Sears is about two years from a bankruptcy filing. JC Penney’s turnaround is a sham. They continue to lose hundreds of millions every quarter and will be filing for bankruptcy within the next couple years. Target and Wal-Mart continue to post awful sales results and have stopped expanding. And as you drive around in your leased BMW, you see more Space Available signs than operating outlets in every strip center in America.

My anecdotal proof of this relentless slow motion retail trainwreck is twofold. We received our second 30% off discount coupon from Kohl’s in the last three weeks. We are so indifferent to these constant offers that we didn’t even use the first one. I have to wear dress clothes to work every day, so I went over to Kohl’s this morning when they opened at 8:00 am to get some dress shirts and pants.

The parking lot was an oasis of empty spots and there were maybe 5 customers in the entire store. I went to the mens’ section and was shocked to see about two dozen 60% to 80% off racks. There are usually two or three racks. The store was overflowing with summer merchandise. Summer is over. The store should have been overflowing with Fall merchandise. They are clearly in the midst of an inventory disaster. I found excellent dress shirts on the 70% off rack. Everything I bought was at least 50% off, even before my 30% coupon and another $10 menswear coupon.

I live in a relatively upscale suburban area and still this Kohl’s is an absolute disaster. Their gross margin is going to be hammered. Profits are going to implode. Kohl’s has always been a favorite retailer of the middle class. Decent quality at reasonable prices. Their comp store sales were between positive 5% and 15% for years, until the 2008 financial collapse. Their struggles since then coincide with the decline of middle class incomes and the fake jobs recovery. The fact that they are spiraling downward flies in the face of the propaganda being spewed by the government and media.There is no recovery for the average American.

My second data point happened on Thursday. An accident on the Turnpike forced me to take Lincoln Drive and Germantown Pike home from work (1 hour and 55 minutes of agony). I hadn’t taken this route in about six months. Germantown Pike winds through the Chestnut Hill section of Philly. This is an artsy fartsy area with boutique retail, chic outlets, and fancy restaurants. The upper middle class frequents the area. The retail stores were always open, occupied and busy.

Not anymore. I saw dozens of empty storefronts, Space Available, and For Lease signs. The open stores had no customers. The trendy eating establishments had few patrons. Even the yuppie latte drinking areas are beginning to crumble. Every office park I passed had Space Available signs in front. The amount of vacant retail and office space in this country is too vast to comprehend and is being under-reported by the real estate whores whose job it is to rent space. Ignoring the facts and the truth doesn’t change the facts and the truth.

Do you believe the government and the corporate media, or do you believe your own two eyes?

You can ignore the government reported happy talk. When retailers and restaurants report their actual sales and profits, the truth shall be revealed. It will set you free.

Wall Street has Always Been Corrupt…

Off the keyboard of Jim Quinn

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Published on The Burning Platform on May 14, 2014

…or about to be corrupted

Discuss this article at the Market Flambe table inside the Diner

“It is difficult to get a man to understand something, when his salary depends on his not understanding it.”

Upton Sinclair – I, Candidate for Governor: And How I Got Licked

“The U.S. financial markets had always been either corrupt or about to be corrupted.” Michael Lewis, Flash Boys

I finished reading Michael Lewis’ Flash Boys take-down of Wall Street banks, hedge funds, government regulators and high frequency traders last week when I had spare time created by a weeklong denial of service attack on my website. It appears to me technology is being utilized more frequently as a mechanism for malevolence rather than a mechanism for good. The smartest guys in the room are figuring out ways to steal you blind in the financial markets, pilfer your personal information, spy on your electronic communications, and censor your right to free speech by taking away your ability to communicate freely on the internet. After reading Lewis’ maddening tome and experiencing the frustration of an attack that reached 50 million hits per day on my website, I’m reminded of two quotes from the brilliant dystopian visionary Aldous Huxley.

“Technological progress has merely provided us with more efficient means for going backwards.” ― Aldous Huxley – Ends and Means

“You shall know the truth and the truth shall make you mad.” Aldous Huxley

Technology has been pushed on the masses like a drug by the mega-corporation and mega-media dealers. Just walk down any city street and observe the technologically entranced zombies shuffling along the sidewalks staring blankly at a tiny screen, tapping away on an itsy bitsy keypad as if whatever they are conveying is of vital importance to the future of mankind. # Give me a break. God forbid if we had to go out in public without our iGadget attached to an appendage. We might actually have to use our brain to think. We might be able to look someone in the eye and smile. We might be able to say hello to a stranger. We might have to act like a human being.

Being connected electronically 24 hours per day is not progress. The technology being peddled to the masses by mega-corporations is designed to keep people amused, apathetic, distracted and uninterested in thinking critically. Our society has devolved into a technologically narcissistic, ego driven, submissive, trivial culture, asphyxiating in a sea of irrelevance and driven by greed and need to fulfill our every desire, rather than a technologically proficient, selfless, humble, critical thinking, civil minded society of self-reliant human beings who take responsibility for their own lives and refuse to saddle future generations with the financial consequences of living beyond their means. Our willful ignorance, misuse of technology, and inability to control our impulses and desires will be the ruin of our perverted civilization.

If the masses were capable of critical thinking and questioned the existing paradigm, they would conclude a small cadre of evil men has colluded to hijack the financial, political, and social systems in order to syphon off the nation’s wealth, while controlling the serfs through propaganda and luring them into debt servitude. Those who haven’t been brainwashed by media propaganda or amused to death by technology, are kept in check by thousands of laws, statutes, and regulations, enforced by millions of government bureaucrats and police state thugs. Technology is used by the state as a means of control, surveillance, censorship, and bilking the populace of their wealth. And if you don’t like it, the IRS, DHS, FBI, CIA, BLM, HHS, or some other three letter government agency will harass, arrest, fine, or kill you for not “cooperating”. And while the government is keeping you under their thumb, Wall Street shysters are stealing you blind.

The Truth Shall Make You Mad

“As soon as you realize that you are not able to execute your orders because someone else is able to identify what you are trying to do and race ahead of you to the other exchanges, it’s over. It really just pissed me off that people set out this way to make money from everyone else’s retirement account. I knew who was being screwed, people like my mom and pop, and I became hell-bent on figuring out who was doing the screwing.” – John Schwall – Flash Boys

As I continued reading Flash Boys I got progressively madder as more truth was revealed about the inner workings of Wall Street, the wasting of human intelligence on technological schemes to defraud the public, and the utter level of corruptness in the government agencies supposed to protect the public from the vultures in the financial industry feasting on the carcasses of dupes who still believe the “stocks for the long run” drivel regurgitated incessantly by the bimbos and slime balls on CNBC. The concepts of right and wrong, moral and immoral, honesty and dishonesty, and truth and lies are all purposefully blurred in shades of grey by those in power, in a blatant attempt to maintain and expand their vast wealth, immense power and complete governing control.

Michael Lewis focuses on our warped, rigged financial system, but his insights apply across the board to our entire society. Our economic, financial, political, regulatory, and judicial systems are all rigged. This serves the interests of the Deep State, Invisible Government, Oligarchs, Owners, or whatever other term you choose to describe the obscenely wealthy minority controlling this country. The existing establishment will never willingly change the system because it serves their myopic gluttonous interests.

“The deep problem with the system was a kind of moral inertia. So long as it served the narrow self-interests of everyone inside it, no one on the inside would ever seek to change it, no matter how corrupt or sinister it became.” Michael Lewis – Flash Boys

Flash Boys is the fourth Michael Lewis book I’ve read. I had previously read Liar’s Poker, The Big Short, and Boomerang. He is a masterful storyteller. He has the ability to humanize complicated financial concepts and cut through the purposeful complexity built into the financial system to reveal the corruption, criminality and moral degradation of Wall Street bankers and Washington DC politicians. He slices through all the spin, misinformation, and mistruths flogged by Wall Street and their paid-off media mouthpieces to reveal everyone on Wall Street to be in on the action when it comes to fleecing their customers (muppets). The stench emanating from the bowels of Wall Street banks, hedge funds, and high frequency trading bucket shops hangs like toxic smog over our bloated fetid crony capitalist corpse of a country. This cast of despicable felonious characters, scalps investors day after day, with the insiders pretending all is well and the man on the street is being protected.

“The reason is that everyone is a bad actor. There’s an ecosystem that has risen up around a broken pipe on Wall Street. You have high-frequency traders who are scalping the market. They pay exchanges for the tools they need to scalp investors; the exchanges pay banks to essentially mishandle the stock orders so high-frequency traders can maximize the take. It’s a system designed to extract taxes from investors.” – Michael Lewis –Wired

The average person believes the stock market is run on free market principles, with willing buyers and sellers paying and receiving the most efficient price with regards to their transactions. The American people have put their trust in gargantuan bureaucratic government agencies, funded with their tax dollars, to protect their interests and fight for their rights in the financial marketplace. They innocently believe a private bank – The Federal Reserve – owned and controlled by the Too Big To Trust Wall Street Mega-Banks, is actually enforcing regulations and looking out for the best interest of the small investor. They evidently haven’t been paying attention for the last fourteen years, as the Federal Reserve has purposefully created bubble after bubble with ridiculously low interest rates, money printing on an epic scale, encouraging complete deregulation of banks, inciting speculation, and ignoring criminal behavior by their Wall Street owners.

After reading Lewis’ exposes about these Wall Street scumbags, you realize Scorsese’s seemingly over the top portrayal of these people in Wolves of Wall Street is accurate. Nothing has changed since Lewis worked at Salomon Brothers in the 1980’s. The people inhabiting that culture are unscrupulous, greedy, obtuse, ignorant, and intent upon preying on the weaknesses of their “clients”, who they hold in contempt. They are the wolves and you are sheep. The comforting picture of a stock broker representing your interests on a small commission basis has been replaced by stock exchanges colluding with Wall Street banks, hedge funds and high frequency traders to fleece mom and pop out of hundreds of billions on an annual basis using their super-fast computers located within the stock exchanges. The people who know the truth have no interest in drawing the new picture because their massive paychecks depend upon not drawing the picture.

You can tell how accurate a portrayal is by the reaction of those being portrayed. Flash Boys and the subsequent interview of Lewis by 60 Minutes resulted in a broad based assault by Wall Street bankers, HFT dirt bags, corrupt stock exchange CEOs, SEC lackeys, Federal Reserve Chairwomen, bought off politicians, faux financial journalists, sellouts like Buffett, and of course the mouthpieces of Wall Street on CNBC. The oligarchs benefitting immensely from the HFT scams, Dark Pool schemes, and Stock Exchange pay to play swindles, attempted to ambush the good guys (Brad Katsuyama and Michael Lewis) on CNBC, the captured media pawn of the Wall Street ruling elite.

CNBC stacked the deck against the good guys with the President of the BATS exchange, William O’Brien, given the task of shouting the loudest in an attempt to discredit the factual assertions made in the book. The BATS exchange was founded by high frequency traders and designed to foster the predatory schemes of high frequency trading firms who paid the exchange for the privilege of swindling investors. He went berserk on-air, accusing Brad Katsuyama of lying and denying that his firm purposefully allowed high frequency traders to front run slower orders from regular investors. I guess he thought rage, fury, screaming and false accusations would convince the hoi polloi of his innocence. He was wrong. The traders on the NYSE and in trading firms across Wall Street stopped trading to watch the contest on their screens. They would cheer every time Brad Katsuyama calmly responded with truth based facts.

Michael Lewis described the encounter shortly thereafter in an interview:

“The substantial shocker from this encounter is that Katsuyama tried to get O’Brien to admit that the BATS Exchange uses one very slow data feed to give investors the prices in the market, while selling, for vast sums of money, a faster feed to high-frequency traders, the effect being that the high-frequency trader knows the prices in the exchange before your order. So he has the privilege of trading against you at an old price if he wants to. And O’Brien says no that’s not true. He lied, on national television, about a central fact about his business.” Michael Lewis –Wired

Under threat of prosecution, the BATS exchange had to admit its esteemed President blatantly lied on national TV. That seems par for the course when it comes to Wall Street executives. Deceitfulness, duplicity, and evasiveness are crucial requirements for the psychopaths occupying the corner offices in this warped world of high finance. The Wall Street Journal reluctantly revealed the truth:

BATS Global Markets Inc., under pressure from the New York Attorney General’s office, corrected statements made by a senior executive during a televised interview this week about how its exchanges work.

BATS President William O’Brien, during a CNBC interview Tuesday, said BATS’s Direct Edge exchanges use high-speed data feeds to price stock trades. Thursday, the exchange operator said two of its exchanges, EDGA and EGX, use a slower feed, known as the Securities Information Processor, to price trades.

 The distinction matters because high-speed traders can use powerful computers and superfast links between markets to outpace traders and trading venues that rely on slower market data, such as the SIP.

Would the BATS Exchange have revealed the truth if they had not been pressured by the New York Attorney General to do so? Not bloody likely. Wall Street never admits guilt for any of its crimes, wrongdoings, misconduct, deceit or deceptions. They pay $1 billion in fines to their government co-conspirators as a public relations ploy, without admitting guilt and after reaping $10 billion of criminally generated profits. Not a bad ROI. The principles of right versus wrong, moral versus immoral, honesty versus dishonesty, and clarity versus opacity are willfully evaded by the titans of Wall Street and create no dilemmas for these greed driven psychopaths. Money and power are their drugs and the Federal Reserve is their dealer.

Michael Lewis books strike a chord with the public because he chooses a good guy hero his audience can empathize with. He played the sympathetic character in Liar’sPoker. Michael Burry, the brilliant Asperger’s Syndrome suffering investment genius, plays the role in The Big Short. And Brad Katsuyama, the mild mannered good hearted hobbit-like Canadian, takes on the evil forces of Mordor in Flash Boys. These characters all have something in common. They don’t fit in. They question the existing paradigm. They refuse to give in to the depraved culture permeating Wall Street. They exhibit an inner moral strength that enables them to resist the temptation of ill-gotten riches. And they don’t surrender their principles for a buck. This passage gives you a glimpse into the soul of Brad Katsuyama:

“In America, even the homeless were profligate. Back in Toronto, after a big bank dinner, Brad would gather the leftovers into covered tin trays and carry them out to a homeless guy he saw every day on his way to work. The guy was always appreciative. When the bank moved him to New York, he saw more homeless people in a day than he saw back home in a year. When no one was watching, he’d pack up the king’s banquet of untouched leftovers after the NY lunches and walk it down to the people on the streets. “They just looked at me like, ‘What the fuck is this guy doing?’” he said. “I stopped doing it because it didn’t feel like anyone gave a shit.” –  Michael Lewis – Flash Boys

The apologists for the corrupt establishment attempted to trash Lewis and Katsuyama by contending the market has always been rigged and manipulated, therefore, the HFT embezzlement is just business as usual. Warren Buffett, king of oligarchs and apologist for the Wall Street billionaire club, assures the peasants the financial markets are fairer than ever. If Uncle Warren says it’s so to his girl Becky Quick on CNBC, how can anyone doubt him? It’s as if the supposedly mathematical genius billionaire forgot everything he learned in business school.

There is $21 trillion worth of U.S. stocks traded every year. Based upon Katsuyama’s analysis of how much high frequency traders, Wall Street dark pools, and the stock exchanges selling access were skimming on virtually every transaction, he estimated at least $160 million per day was being stolen from stock investors. That comes to a cool $40 billion per year, at a minimum. High frequency trading accounted for 25% of all stock trades in 2005. By 2008 high frequency traders accounted for 65% of all trades. They now account for in excess of 80% of all trading. The Ivy League educated Wall Street elite insist this extreme level of computer generated trading provides liquidity and efficiency for the markets. In reality, the actual trading results of the HFT firms, hedge funds and Wall Street TBTF banks prove the game is rigged. JP Morgan experienced ZERO trading loss days in 2013. Goldman Sachs, Morgan Stanley and most of the mega-banks have had virtually perfect daily trading results since 2010. If they are all winning, who is losing? Guess. Lewis provides further evidence of “investing” perfection:

“In early 2013, one of the largest high-frequency traders, Virtu Financial, publicly boasted that in five and a half years of trading it had experienced just one day when it hadn’t made money, and that the loss was caused by “human error.” In 2008, Dave Cummings, the CEO of a high-frequency trading firm called Tradebot, told university students that his firm had gone four years without a single day of trading losses. This sort of performance is possible only if you have a huge informational advantage.” – Michael Lewis – Flash Boys

Buffett, the financial “journalists” on CNBC, and all of the defenders of the Wall Street criminal cabal must have been asleep during their Stat class in college. The statistical probability of going four years or even four weeks without a losing trading day is as close to zero as you can get, unless the game is rigged and you are cheating. These results were not accomplished due to the brilliance of Wall Street big hanging dicks and their oversized brains. They were accomplished by front running stock market orders, bribing stock exchanges for first access, gaming the system with more powerful computers, ripping off clients in shadowy dark pools, and keeping the SEC at bay with promises of jobs and riches if they look the other way. This was all done under the veil of hyper-complexity designed to obscure, confuse, and cover-up the truth from unsuspecting investors.

And it is all done “legally” under the auspices of Regulation NMS, established by the SEC in 2007, to foster both competition among individual markets and competition among individual orders, in order to promote efficient and fair price formation across securities markets. As with almost every government regulation, law, or diktat, the new method of “protecting” the sheeple created fresh ways to fleece the sheeple by those who wrote the regulation. See Dodd-Frank and the Affordable Care Act. I don’t need a law or regulation to tell me the difference between right and wrong.

When obnoxiously wealthy pricks with the ability to bribe stock exchanges to place their trading computers on the floor of the exchange and financially induce the Wall Street banks to funnel trades through their dark pools in order to know what is happening a nanosecond before everyone else, and use this information to front run unknowing investors to generate risk free profits, it’s wrong. It really is black and white. I don’t care that it is supposedly “legal”.  By complying with Regulation NMS the smart order routers of institutional investor firms like Vanguard, Fidelity and Schwab simply funneled naïve investors into various snares laid for them by the unscrupulous high frequency traders. The bad guys always win and the good guys always lose on Wall Street. And no one does anything because they are all on the take. Lewis puts it in terms the average person can understand.

“It was riskless, larcenous, and legal – made so by Reg NMS. The way Brad had described it, it was as if only one gambler were permitted to know the scores of last week’s NFL games, with no one else aware of his knowledge. He places bets in the casino on every game and waits for other gamblers to take the other side of those bets. There’s no guarantee that anyone will do so; but if they do, he’s certain to win.” – Michael Lewis – Flash Boys

If you aren’t mad yet, you will be after I go into the details of the regulatory capture, obscure deep pools within the bowels of the Too Big To Trust Banks, misuse of technology to defraud the public, and purposeful complexity built into the financial system to confuse and mislead the investing populace. I’ll tackle that in Part Two of this article.

The Fourteen Year Recession

Off the keyboard of Jim Quinn

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Published on The Burning Platform on March 24, 2014

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“When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes. Money has no motherland; financiers are without patriotism and without decency; their sole object is gain.”Napoleon Bonaparte

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“A great industrial nation is controlled by its system of credit. Our system of credit is privately concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men … [W]e have come to be one of the worst ruled, one of the most completely controlled and dominated, governments in the civilized world—no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and the duress of small groups of dominant men.”Woodrow Wilson

When you ponder the implications of allowing a small group of powerful wealthy unaccountable men to control the currency of a nation over the last one hundred years, you understand why our public education system sucks. You understand why the government created Common Core curriculum teaches children that 3 x 4 = 13, as long as you feel good about your answer. George Carlin was right. The owners of this country (bankers, billionaires, corporate titans, politicians) want more for themselves and less for everyone else. They want an educational system that creates ignorant, obedient, vacuous, obese dullards who question nothing, consume mass quantities of corporate processed fast food, gaze at iGadgets, are easily susceptible to media propaganda and compliant to government regulations and directives. They don’t want highly educated, critical thinking, civil minded, well informed, questioning citizens understanding how badly they have been screwed over the last century. I’m sorry to say, your owners are winning in a landslide.

The government controlled public education system has flourished beyond all expectations of your owners. We’ve become a nation of techno-narcissistic, math challenged, reality TV distracted, welfare entitled, materialistic, gluttonous, indebted consumers of Chinese slave labor produced crap. There are more Americans who know the name of Kanye West and Kim Kardashian’s bastard child (North West) than know the name of our Secretary of State (Ketchup Kerry). Americans can generate a text or tweet with blinding speed but couldn’t give you change from a dollar bill if their life depended upon it. They are whizzes at buying crap on Amazon or Ebay with a credit card, but have never balanced their checkbook or figured out the concept of deferred gratification and saving for the future. While the ignorant masses are worked into a frenzy by the media propaganda machine over gay marriage, diversity, abortion, climate change, and never ending wars on poverty, drugs and terror, our owners use their complete capture of the financial, regulatory, political, judicial and economic systems to pillage the remaining national wealth they haven’t already extracted.

The financial illiteracy of the uneducated lower classes and the willful ignorance of the supposedly highly educated classes has never been more evident than when examining the concept of Federal Reserve created currency debasement – also known as inflation. The insidious central banker created monetary inflation is the cause of all the ills in our warped, deformed, rigged financialized economic system. The outright manipulation and falsity of government reported economic data is designed to obscure the truth and keep the populace unaware of the deception being executed by the owners of this country. They have utilized deceit, falsification, propaganda and outright lies to mislead the public about the true picture of the disastrous financial condition in this country. Since most people are already trapped in the mental state of normalcy bias, it is easy for those in control to reinforce that normalcy bias by manipulating economic data to appear normal and using their media mouthpieces to perpetuate the false storyline of recovery and a return to normalcy.

This is how feckless politicians and government apparatchiks are able to add $2.8 billion per day to the national debt; a central bank owned by Too Big To Trust Wall Street banks has been able to create $3.3 trillion out of thin air and pump it into the veins of its owners; and government controlled agencies report a declining unemployment rate, no inflation and a growing economy, without creating an iota of dissent or skepticism from the public. Americans want to be lied to because it allows them to continue living lives of delusion, where spending more than you make, consuming rather than saving, and believing stock market speculation and home price appreciation will make them rich are viable life strategies. Even though 90% of the population owns virtually no stocks, they are convinced record stock market highs are somehow beneficial to their lives. They actually believe Bernanke/Yellen when they bloviate about the dangers of deflation. Who would want to pay less for gasoline, food, rent, or tuition?

Unless you are beholden to the oligarchs, that sense of stress, discomfort, feeling that all in not well, and disturbing everyday visual observations is part of the cognitive dissonance engulfing the nation. Anyone who opens their eyes and honestly assesses their own financial condition, along with the obvious deterioration of our suburban sprawl retail paradise infrastructure, is confronted with information that is inconsistent with what they hear from their bought off politician leaders, highly compensated Ivy League trained economists, and millionaire talking heads in the corporate legacy media. Most people resolve this inconsistency by ignoring the facts, rejecting the obvious and refusing to use their common sense. To acknowledge the truth would require confronting your own part in this Ponzi debt charade disguised as an economic system. It is easier to believe a big lie than think critically and face up to decades of irrational behavior and reckless conduct.

What’s In Your GDP                          

“The Gross Domestic Product (GDP) is one of the broader measures of economic activity and is the most widely followed business indicator reported by the U.S. government. Upward growth biases built into GDP modeling since the early 1980s, however, have rendered this important series nearly worthless as an indicator of economic activity.  The popularly followed number in each release is the seasonally adjusted, annualized quarterly growth rate of real (inflation-adjusted) GDP, where the current-dollar number is deflated by the BEA’s estimates of appropriate price changes. It is important to keep in mind that the lower the inflation rate used in the deflation process, the higher will be the resulting inflation-adjusted GDP growth.”John Williams – Shadowstats

GDP is the economic statistic bankers, politicians and media pundits use to convince the masses the economy is growing and their lives are improving. Therefore, it is the statistic most likely to be manipulated, twisted and engineered in order to portray the storyline required by the oligarchs. Two consecutive quarters of negative GDP growth usually marks a recession. Those in power do not like to report recessions, so data “massaging” has been required over the last few decades to generate the required result. Prior to 1991 the government reported the broader GNP, which includes the GDP plus the balance of international flows of interest and dividend payments. Once we became a debtor nation, with massive interest payments to foreigners, reporting GNP became inconvenient. It is not reported because it is approximately $900 billion lower than GDP. The creativity of our keepers knows no bounds. In July of 2013 the government decided they had found a more “accurate” method for measuring GDP and simply retroactively increased GDP by $500 billion out of thin air. It’s amazing how every “more accurate” accounting adjustment improves the reported data. The economic growth didn’t change, but GDP was boosted by 3%. These adjustments pale in comparison to the decades long under-reporting of inflation baked into the GDP calculation.

As John Williams pointed out, GDP is adjusted for inflation. The higher inflation factored into the calculation, the lower reported GDP. The deflator used by the BEA in their GDP calculation is even lower than the already bastardized CPI. According to the BEA, there has only been 32% inflation since the year 2000. They have only found 1.4% inflation in the last year and only 7.1% in the last five years. You’d have to be a zombie from the Walking Dead or an Ivy League economist to believe those lies. Anyone living in the real world knows their cost of living has risen at a far greater rate. According to the government, and unquestioningly reported by the compliant co-conspirators in the the corporate media, GDP has grown from $10 trillion in 2000 to $17 trillion today. Even using the ridiculously low inflation BEA adjustment yields an increase from $12.4 trillion to only $15.9 trillion in real terms. That pitiful 28% growth over the last fourteen years is dramatically overstated, as revealed in the graph below. Using a true rate of inflation exposes the grand fraud being committed by those in power. The country has been in a never ending recession since 2000.

Your normalcy bias is telling you this is impossible. Your government tells you we have only experienced a recession from the third quarter of 2008 through the third quarter of 2009. So despite experiencing two stock market crashes, the greatest housing crash in history, and a worldwide financial system implosion the authorities insist  we’ve had a growing economy 93% of the time over the last fourteen years. That mental anguish you are feeling is the cognitive dissonance of wanting to believe your government, but knowing they are lying. It is a known fact the government, in conspiracy with Greenspan, Congress and academia, have systematically reduced the reported CPI based upon hedonistic quality adjustments, geometric weighting alterations, substitution modifications, and the creation of incomprehensible owner’s equivalent rent calculations. Since the 1700s consumer inflation had been estimated by measuring price changes in a fixed-weight basket of goods, effectively measuring the cost of maintaining a constant standard of living. This began to change in the early 1980s with the Greenspan Commission to “save” Social Security and came to a head with the Boskin Commission in 1995.

Simply stated, the Greenspan/Boskin Commissions’ task was to reduce future Social Security payments to senior citizens by deceitfully reducing CPI and allowing politicians the easy way out. Politicians would lose votes if they ever had to directly address the unsustainability of Social Security. Therefore, they allowed academics to work their magic by understating the CPI and stealing $700 billion from retirees in the ten years ending in 2006. With 10,000 baby boomers per day turning 65 for the next eighteen years, understating CPI will rob them of trillions in payments. This is a cowardly dishonest method of extending the life of Social Security.

If CPI was calculated exactly as it was computed prior to 1983, it would have averaged between 5% and 10% over the last fourteen years. Even computing it based on the 1990 calculation prior to the Boskin Commission adjustments, would have produced annual inflation of 4% to 7%. A glance at an inflation chart from 1872 through today reveals the complete and utter failure of the Federal Reserve in achieving their stated mandate of price stability. They have managed to reduce the purchasing power of your dollar by 95% over the last 100 years. You may also notice the net deflation from 1872 until 1913, when the American economy was growing rapidly. It is almost as if the Federal Reserve’s true mandate has been to create inflation, finance wars, perpetuate the proliferation of debt, artificially create booms and busts, enrich their Wall Street owners, and impoverish the masses. Happy Birthday Federal Reserve!!!

Click to View

When you connect the dots you realize the under-reporting of inflation benefits the corporate fascist surveillance state. If the government was reporting the true rate of inflation, mega-corporations would be forced to pay their workers higher wages, reducing profits, reducing corporate bonuses, and sticking a pin in their stock prices. The toady economists at the Federal Reserve would be unable to sustain their ludicrous ZIRP and absurd QEfinity stock market levitation policies. Reporting a true rate of inflation would force long-term interest rates higher. These higher rates, along with higher COLA increases to government entitlements, would blow a hole in the deficit and force our spineless politicians to address our unsustainable economic system. There would be no stock market or debt bubble. If the clueless dupes watching CNBC bimbos and shills on a daily basis were told the economy has been in fourteen year downturn, they might just wake up and demand accountability from their leaders and an overhaul of this corrupt system.

Mother Should I Trust the Government?

We know the BEA has deflated GDP by only 32% since 2000. We know the BLS reports the CPI has only risen by 37% since 2000. Should I trust the government or trust the facts and my own eyes? The data is available to see if the government figures pass the smell test. If you are reading this, you can remember your life in 2000. Americans know what it cost for food, energy, shelter, healthcare, transportation and entertainment in 2000, but they unquestioningly accept the falsified inflation figures produced by the propaganda machine known as our government. The chart below is a fairly comprehensive list of items most people might need to live in this world. A critical thinking individual might wonder how the government can proclaim inflation of 32% to 37% over the last fourteen years, when the true cost of living has grown by 50% to 100% for most daily living expenses. The huge increases in property taxes, sales taxes, government fees, tolls and income taxes aren’t even factored in the chart. It seems gold has smelled out the currency debasement and the lies of our leaders. This explains the concerted effort by the powers that be to suppress the price of gold by any means necessary.

 

Living Expense

Jan-00

Mar-14

% Increase

Gallon of gas

$1.27

$3.51

176.4%

Barrel of oil

$24.11

$100.00

314.8%

Fuel oil per gallon

$1.19

$4.07

242.0%

Electricity per Kwh

$0.084

$0.134

59.5%

Gas per therm

$0.712

$1.078

51.4%

Dozen eggs

$0.97

$2.00

106.2%

Coffee per lb

$3.40

$5.20

52.9%

Ground Beef per lb.

$1.90

$3.73

96.3%

Postage stamp

$0.33

$0.49

48.5%

Movie ticket

$5.25

$10.25

95.2%

New car

$20,300.00

$31,500.00

55.2%

Annual healthcare spending per capita

$4,550.00

$9,300.00

104.4%

Average private college tuition

$22,000.00

$37,000.00

68.2%

Avg home price (Case Shiller)

$161,000.00

$242,000.00

50.3%

Avg monthly rent (Case Shiller)

$635.00

$890.00

40.2%

Ounce of gold

$279.00

$1,334.00

378.1%

Mother, you should not trust the government. There is no doubt they have systematically under-reported inflation based on any impartial assessment of the facts. The reality that we remain stuck in a fourteen year recession is borne out by the continued decline in vehicle miles driven (at 1995 levels) due to declining commercial activity, the millions of shuttered small businesses, and the proliferation of Space Available signs in strip malls and office parks across the land. The fact there are only 8 million more people employed today than were employed in 2000, despite the working age population growing by 35 million, might be a clue that we remain in recession. If that isn’t enough proof for you, than maybe a glimpse at real median household income, retail sales and housing will put the final nail in the coffin of your cognitive dissonance.

The government and their media mouthpieces expect the ignorant masses to believe they have advanced their standard of living, with median household income growing from $40,800 to $52,500 since 2000. But, even using the badly flawed CPI to adjust these figures into real terms reveals real median household income to be 7.3% below the level of 2000. Using a true inflation figure would cause a CNBC talking head to have an epileptic seizure.

Click to View

The picture is even bleaker when broken down into the age of households, with younger households suffering devastating real declines in household income since 2000. I guess all those retail clerk, cashier, waitress, waiter, food prep, and housekeeper jobs created over the last few years aren’t cutting the mustard. Maybe that explains the 30 million increase (175% increase) in food stamp recipients since 2000, encompassing 19% of all households in the U.S. Luckily the banking oligarchs were able to convince the pliable masses to increase their credit card, auto and student loan debt from $1.5 trillion to $3.1 trillion over the fourteen year descent into delusion.

When you get your head around this unprecedented decline in household income over the last fourteen years, along with the 50% to 100% rise in costs to live in the real world, as opposed to the theoretical world of the Federal Reserve and BLS, you will understand the long term decline in retail sales reflected in the following chart. When you adjust monthly retail sales for gasoline (an additional tax), inflation (understated), and population growth, you understand why retailers are closing thousands of stores and hurdling towards inevitable bankruptcy. Retail sales are 6.9% below the June 2005 peak and 4% below levels reached in 2000. And this is with millions of retail square feet added over this time frame. We know the dramatic surge from the 2009 lows was not prompted by an increase in household income. So how did the 11% proliferation of spending happen?

Click to View

The up swell in retail spending began to accelerate in late 2010. Considering credit card debt outstanding is at exactly where it was in October 2010, it seems consumers playing with their own money turned off the spigot of speculation. It has been non-revolving debt that has skyrocketed from $1.63 trillion in February 2010 to $2.26 trillion today. This unprecedented 39% rise in four years has been engineered by the government, using your tax dollars and the tax dollars of unborn generations. The Federal government has complete control of the student loan market and with their 85% ownership of Ally Financial, the largest auto financing company, a dominant position in the auto loan market. The peddling of $400 billion of subprime student loan debt and $200 billion of subprime auto loan debt has created the illusion of a retail recovery. The student loan debt has been utilized by University of Phoenix MBA wannabes  to buy iGadgets, the latest PS3 version of Grand Theft Auto and the latest glazed donut breakfast sandwich on the market. It’s nothing but another debt financed bubble that will end in tears for the American taxpayer, as hundreds of billions will be written off.

The fake retail recovery pales in comparison to the wolves of Wall Street produced housing recovery sham. They deserve an Academy Award for best fantasy production. The Federal Reserve fed Wall Street hedge fund purchase of millions of foreclosed shanties across the nation has produced media proclaimed home price increases of 10% to 30% in cities across the country. Withholding foreclosures from the market and creating artificial demand with free money provided by the Federal Reserve has temporarily added $4 trillion of housing net worth and reduced the number of underwater mortgages on the books of the Too Big To Trust Wall Street banks. The percentage of investor purchases and cash purchases is at all-time highs, while the percentage of first time buyers is at all-time lows. Anyone with an ounce of common sense can look at the long-term chart of mortgage applications and realize we are still in a recession. Applications are 35% below levels at the depths of the 2008/2009 recession. Applications are 65% below levels at the housing market peak in 2005. They are even 35% below 2000 levels. There is no real housing recovery, despite the propaganda peddled by the NAR, CNBC, and Wall Street. It’s a fraud.

It is the pinnacle of arrogance and hubris that a few Ivy League educated economists sitting in the Marriner Eccles Building in the swamps of Washington D.C., who have never worked a day in their lives at a real job, think they can create wealth and pull the levers of money creation to control the American and global financial systems. All they have done is perfect the art of bubble finance in order to enrich their owners at the expense of the rest of us. Their policies have induced unwarranted hope and speculation on a grand scale. Greenspan and Bernanke have provoked multiple bouts of extreme speculation in stocks and housing over the last 15 years, with the subsequent inevitable collapses. Fed encouraged gambling does not create wealth it just redistributes it from the peasants to the aristocracy. The Fed has again produced an epic bubble in stock and bond valuations which will result in another collapse. Normalcy bias keeps the majority from seeing the cliff straight ahead. Federal Reserve monetary policies have distorted financial markets, created extreme imbalances, encouraged excessive risk taking, and ruined the lives of working class people. Take a long hard look at the chart below and answer one question. Was QE designed to benefit Main Street or Wall Street?

The average American has experienced a fourteen year recession caused by the monetary policies of the Federal Reserve. Our leaders could have learned the lesson of two Fed induced collapses in the space of eight years and voluntarily abandoned the policies of reckless credit expansion, instead embracing policies encouraging saving, capital investment and balanced budgets. They have chosen the same cure as the disease, which will lead to crisis, catastrophe and collapse.

“There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.” – Ludwig von Mises

 

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The creation of realistic gridded precipitation fields improves our understanding of the observed cl [...]

A recent article reviewed data on Great Salt Lake (Utah) and concluded falsely that climate changes, [...]

Stretching along the border of North Dakota and Minnesota, The Red River Valley (RRV) of the North h [...]