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Bread, Circuses & Bombs

Off the keyboard of Jim Quinn

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Published on The Burning Platform on September 22, 2014

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BREAD, CIRCUSES & BOMBS – DECLINE OF THE AMERICAN EMPIRE

“Already long ago, from when we sold our vote to no man, the People have abdicated our duties; for the People who once upon a time handed out military command, high civil office, legions — everything, now restrains itself and anxiously hopes for just two things: Bread and Circuses.”

Juvenal – Satire (100 A.D.)

 

Roman satirist and poet Juvenal was displaying contempt for a degraded Roman citizenry that had shunned civic responsibility, shirked their duties of citizenship within a republic, and had chosen to sell their votes to feckless politicians for assurances of bread and circuses. Rather than govern according to noble principles based upon reason, striving for public policies that led to long term sustainability and benefitting the majority of citizens, politicians chose superficial displays and appeasing the masses utilizing the lowest common denominator of “free” food and bountiful spectacles, pageants, and ceremonies in order to retain power.

The Roman Empire’s decline stretched across centuries as the gradual loss of civic virtue among its citizenry allowed demagogues to gain power and barbarians to eventually overrun the weakened empire. While the peasants were distracted with shallow exhibitions of palliative pleasures, those in power were debasing the currency, enriching themselves, and living pampered lives of luxury. The Roman leaders bought public approval and support, not through exemplary public service, but through diversion, distraction, and the satisfaction of base immediate needs and desires of the populace. Satisfying the crude motivations of the ignorant peasants (cheap food and entertainment) is how Roman politicians bought votes and retained power. Free wheat, circus games, and feeding Christians to lions kept the commoners from focusing on politicians pillaging and wasting the empire’s wealth.

History may not repeat exactly because technology, resource discoveries, and political dynamics change the nature of society, but it does rhyme because the human foibles of greed, lust for power, arrogance, and desire for conquest do not vary across the ages. The corruption, arrogance, hubris, currency debasement, materialism, imperialism, and civic decay that led to the ultimate downfall of the Roman Empire is being repeated on an even far greater scale today as the American Empire flames out after only two centuries. The pillars of western society are crumbling under the sustained pressure of an immense mountain of debt, created by crooked bankers and utilized by corrupt politicians to sustain and expand their welfare/warfare state. Recklessness, myopia, greed, willful ignorance, and selfish disregard for unborn generations are the earmarks of decline in this modern day empire of debt, delusion and decay.

“Armaments, universal debt, and planned obsolescence – those are the three pillars of Western prosperity. If war, waste, and moneylenders were abolished, you’d collapse. And while you people are over-consuming the rest of the world sinks more and more deeply into chronic disaster.”Aldous Huxley – Island

Rome was eight and a half centuries old when Juvenal scornfully described the degenerative spiral of the Roman populace. Still, the Western Empire lasted another three centuries before finally succumbing to the Visigoths and Vandals. The far slower pace of history and lack of other equally matched competing nation states allowed Rome to exist for centuries beyond its Pax Romana period of unprecedented political stability and prosperity, which lasted for two centuries. Prior to becoming an empire, the Roman Republic was a network of towns left to rule themselves with varying degrees of independence from the Roman Senate and provinces administered by military commanders. It was ruled, not by Emperors, but by annually elected magistrates known as Roman Consuls. The Roman citizens were a proud people who had a strong sense of civic duty and made government work for the people.

During the 1st century B.C. Rome suffered a long series of internal conflicts, conspiracies and civil wars, while greatly extending their imperial power beyond Italy through military conquest. After the assassination of Julius Caesar and the ascension of Augustus to emperor in 27 BC, after a century of civil wars, Rome experienced an unprecedented period of peace and prosperity. During this era, the solidity of the Empire was furthered by a degree of societal stability and economic prosperity. But it didn’t last. The successors to Augustus contributed to the progressive ruination of the empire. The repugnant reigns of Tiberius, Caligula, Claudius, and Nero reflected the true nature of the Roman people, who had relinquished their sovereignty to government administrators to whom they had granted absolute powers, in return for food and entertainment. It was the beginning of the end.

The American Republic began as a loose confederation of states who ruled themselves, with little or no direction from a central authority. The Articles of Confederation, ratified in 1781 by all 13 States, limited the powers of the central government. The Confederation Congress could make decisions, but lacked enforcement powers. Implementation of most decisions, including modifications to the Articles, required unanimous approval of all thirteen state legislatures. After winning the war for independence from England, the U.S. Constitution, which shifted power to a central authority, was ratified in 1789. The Bill of Rights, the first ten amendments to the Constitution, was passed in 1791 with the purpose of protecting individual liberties and insuring justice for all. Their function was to safeguard the citizens from an authoritarian federal government. These imperfect documents would benefit and protect the rights of the American people only if applied by moral, just, incorruptible, noble, honorable leaders and enforced by an educated, concerned, vigilant citizenry.

As with the Roman Empire, the quality of leadership has rapidly deteriorated over the last two centuries and now wallows at disgustingly low levels. These leaders are a reflection of a people who have abandoned their desire for knowledge, responsibility for their lives, work ethic, belief in freedom and the U.S. Constitution. The Juvenal of our times was H.L. Mencken who aptly and scornfully described the citizenry in 1920 as an ignorant mob who would eventually elect a downright moron to the presidency. He was right.

“The larger the mob, the harder the test. In small areas, before small electorates, a first-rate man occasionally fights his way through, carrying even the mob with him by force of his personality. But when the field is nationwide, and the fight must be waged chiefly at second and third hand, and the force of personality cannot so readily make itself felt, then all the odds are on the man who is, intrinsically, the most devious and mediocre—the man who can most easily adeptly disperse the notion that his mind is a virtual vacuum.

The Presidency tends, year by year, to go to such men. As democracy is perfected, the office represents, more and more closely, the inner soul of the people. We move toward a lofty ideal. On some great and glorious day the plain folks of the land will reach their heart’s desire at last, and the White House will be adorned by a downright moron.” H.L. Mencken

A Republic was formed 225 years ago, as opposed to a monarchy, by men of good intentions. They weren’t perfect, but their goals for the new nation were honorable and decent. Ben Franklin had his doubts regarding whether we could keep a republic. He had good reason to doubt the long-term sustainability of this experiment. Freedom is not something bestowed on us by men of higher caste. We are born into this world free, with the liberty to live our lives as we see fit, the opportunity to educate oneself and the freedom to succeed as far as our capabilities and efforts allow. Only a self-reliant, virtuous, moral, civic minded people are capable of enjoying the fruits of freedom. Once corruption, self-interest, greed, and dependency upon government bureaucrats for sustenance become prevalent, the populace seeks masters who promise safety and security in return for sacrificing essential liberty and basic freedoms.

The country has defeated foreign invaders, withstood financial calamities, endured a bloody civil war, benefitted immensely from the discovery of oil under its soil, became an industrial power, fought on the winning side of two world wars, and since 1946 has become the greatest imperial empire since Rome fell to the barbarians. Over the course of our 225 year journey there has been a gradual relinquishment of the citizens’ sovereignty and autonomy to an ever more overbearing central government. Lincoln’s unprecedented expansion of Federal government authority during the Civil War marked a turning point, as state and local rights became subservient to an all-powerful central authority. Individual liberty has been surrendered and freedoms forfeited over a decades long insidious regression of a once courageous, independent, self-sufficient citizenry into a mob of cowering, willfully ignorant dependents of the deep state.

From the inception of the country there has been a constant battle between the banking interests and the common people. Bankers have used fraudulent fractional reserve banking to speculate for their own benefit, made risky loans, and created every financial crisis in the country’s history. The profits from excessive risk taking are retained by the bankers. The inevitable losses are borne by taxpayers with the excuse that the financial system must be saved and preserved. The storyline never changes. The beginning of the end of the American Empire can be pinpointed to the year 1913, only 124 years after its inception. Private banking interests captured the monetary system of the empire with the secretive creation of the Federal Reserve. The power of the central state was solidified with the implementation of the personal income tax, allowing politicians to bribe their constituents with modern day “bread and circuses”, paid for with money taken at gunpoint from them by the central state. We are now nothing but the hollowed out shell of a once noble Republic.

A century of central banking and heavy taxation of the people by bought off politician puppets has coincided with a century of war, depressions, currency debasement, overconsumption, obscene levels of consumer debt, trillions of excessive debt financed government spending, hundreds of trillions in unfunded entitlement liabilities, and a persistent decline in standard of living for the masses due to Federal Reserve manufactured inflation. We have failed to heed the lessons of history. We have repeated the blunders committed by the Romans.

The American Empire will not be murdered by an external force because it is too busy committing suicide. The moneyed interests, corporate oligarchs and their hand-picked politician front men see themselves as conquering heroes. Their colossal hubris and arrogance is only matched by the ignorance, gullibility, quivering fear of bogeymen, and susceptibility to propaganda of the general populace. The Wall Street bankers and feckless politicians are not gods, they are only men. Death is the great equalizer for emperors and peasants alike. The only thing that remains is your legacy and whether you positively impacted the world. It can be unequivocally stated that those in power today are leaving a legacy of despair, destruction, and debt.

Empires are born and empires die. The American Empire will not be sustained for eight centuries, as the swiftness of modern civilization, nuclear proliferation, religious zealotry, and sociopathic leadership ensures we will flame out in a blaze of glory before reaching our third century. The spirit of independence, idealism, self-reliance, entrepreneurship, knowledge seeking, advancement, and goodwill towards our fellow citizens that marked the height of our fledgling country has succumbed to a malaise of government dependency, cynicism, living on the dole, financial Ponzi schemes, willful ignorance, materialism, delusion, and myopic self-interest. The moral decline of the American populace has been reflected in the deteriorating quality of leaders we have chosen over the last century. Prosperity was taken for granted and no longer earned. We abdicated our civic responsibility to corrupt financiers and power seeking politicians. As time has passed, the ruling elite have grown ever more powerful and wealthy, at the expense of the peasantry. These sociopaths see themselves as god-like emperors, on par with the vilest of the Roman emperors.

Historians will mark 1980 as another turning point, when the nation capitulated to the financiers and ceded control of our destiny to Wall Street bankers, the military industrial complex, and globalist billionaires. The final deformation from a productive society built upon savings, capital investment, and goods production to a borrowing, gambling, and consumption society built upon debt and profiteering by powerful corporate and banking interests had commenced. The peak of this warfare/welfare state insanity was reached in 2000 and the road to decline and decay is now littered with the figurative corpses of a gutted middle class and the literal corpses of men, women and children across the globe, killed during our never ending imperial conquests. The ruling elite sense the futility and foolishness of their folly, but their insatiable appetite for wealth, power, triumph and glory blind them to the destructive consequences of their actions upon the nation and their fellow man. Power and dominion over others is a powerful aphrodisiac for our current day emperors and self-preservation at all costs is their mantra.

While they bask in their perceived triumph and glory, achieved through rigging the financial and political systems in their favor, they should heed the faint whisper in their ear that all glory is fleeting.

“For over a thousand years Roman conquerors returning from the wars enjoyed the honor of triumph, a tumultuous parade. In the procession came trumpeteers, musicians and strange animals from conquered territories, together with carts laden with treasure and captured armaments. The conquerors rode in a triumphal chariot, the dazed prisoners walking in chains before him. Sometimes his children robed in white stood with him in the chariot or rode the trace horses. A slave stood behind the conqueror holding a golden crown and whispering in his ear a warning: that all glory is fleeting.” George S. Patton, Jr.

The decline of the Roman Empire can be attributed to a number of supportable hypotheses, which have been documented by historians over time. They include:

  • Perpetual warfare depleted the treasury and wasted the manhood of the empire. The use of mercenary armies eventually led to the sacking of Rome by the very armies they had employed.
  • Military overexpansion and spending resulted in resources being diverted from technological advancement, maintenance of the civil infrastructure, and worthwhile investments to support economic growth.
  • Excessive welfare spending, oppressive taxation and currency debasement widened the gap between rich and poor, resulting in discontent, mistrust and rebellion.
  • The emergence of an all-powerful centralized authoritarian government ruling by mandate, racked by corruption, and kept in power by bribing its subjects with promises of bread and circuses.
  • Emperors and Senators became oligarchs and their conspicuous consumption provided proof of their corruption and decadence. The widespread corruption and incompetence of its leadership led to a waning in civic pride among the citizens.
  • The decline in productive commercial and agricultural industries due to high taxes on producers, used to support the military empire, contributed to the circumstances that allowed barbarian invasions to succeed.
  • The moral decay of the people was caused by the influx of slave labor from conquered territories, resulting in a decline in middle class work ethic, and the subsequent rise in the level of citizens on the dole. An economy based upon slave labor precluded a middle class with buying power.

In Part Two of this tale of two empires, I’ll document the parallels between mistakes made, eternal human foibles, military misfortunes, financial misconduct, and moral decay, that denote the decline of the Roman and American Empires.

No Way to Run a Railroad…

Off the keyboard of Steve from Virginia

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Published on Economic Undertow on October 15, 2013

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A lot of confusion in the capital of the World’s Greatest Nation, more like what would be expected in Italy: House G.O.P. Backs Off Plan, Leaving Fiscal Talks in Limbo, (NY Times), House GOP scrambles for support on new funding plan, (WaPo), Competing Budget Plans Cloud Talks, (WSJ) … Default Usa, accordo lontano ma si spacca il fronte repubblicano, (La Repubblica).

Cliffhanger, anyone? It should be said that there is still time, the US is not likely to default; the managers are likely to come to some sort of accommodation, first.

Then again, time is running short … for the US government to get its act together and start governing. A few more days and the Treasury will either fail to make payments upon obligations to lenders or fail to make payments to its own dependent citizenry. What comes after that is hard to say; maybe the dreaded ‘taper’ in some (inadvertent) form. Keep in mind, Treasury securities are collateral for every sort of money/credit exchange, they are deemed to be ‘risk-free’, same as cash. The nation’s word is its bond … what if? Should the US default, risk-free must be redefined throughout finance and politics, (Feliz Salmon/Reuters):

If Treasury payments can’t be trusted entirely, then not only do all risk instruments need to be repriced, but so does the most basic counterparty risk of all. The US government, in one form or another, is a counterparty to every single financial player in the world. Its payments have to be certain, or else the whole house of cards risks collapsing — starting with the multi-trillion-dollar interest-rate derivatives market, and moving rapidly from there.

There you have it, the Freudian slip that reveals our greatest human endeavor to date is entertainment for bored children, a distraction. There is something to be said — and gained — from letting the entire mess collapse, if only to end its pointless and destructive wastefulness. At the same time, the card collapse would render much of the world citizens into paupers over a short time, this would be equally wasteful — and over the longer term, extremely dangerous. There are too many of us, we are too angry and filled with fear. The time is now for cooler heads to find the larger perspective … and kick that can one more time!

The US government has defaulted in the past, the effects have been generally beneficial for both business and the citizens. After the Revolution, the young country defaulted on its war debts, during the Civil War the US suspended convertibility and issued what amounted to scrip — which remained in circulation until 1971. In 1934, the government removed specie from circulation and eliminated ‘gold clauses’ in all contracts, in 1971 Richard Nixon famously closed the Treasury ‘gold window’ and ended the convertibility of dollars to gold in trade between nations. In some cases such as 1934, default bailed out the country’s ruined banks and jump-started a moribund economy. The Revolutionary War debts were ultimately paid with interest … after the US had restructured itself and ratified a new (somewhat excellent) Constitution. Both accelerated US trade both domestically and across the Atlantic.

Using scrip — demand notes — allowed the Union to end slavery and industrialize, then become a world economic power, something it could not have hoped to do as a pastoral state. Ironically, the US since 1900 using credit money has de-industrialized to the degree it has been able to shed its manufacturing work force; it has become a financial- or loan shark state, structurally little different today … from the Confederate South.

With the passage of time, US defaults, like everything else, offered diminished returns. Closing the gold window sparked OPEC’s ire leading to the oil embargo which took place two years later. The oil producers were disgruntled about not receiving gold in exchange for their precious petroleum; unlike other US trading partners they were in a position to do something about it. Not forever, the producers were forced to satisfy themselves with empty US promises of ‘prosperity’ because there were no feasible alternatives … only emptier promises by others, or to leave their petroleum in the ground and gain nothing.

In 1979, the US Treasury failed to make coupon payments on $120 million in Treasury Bills. The causes were a debt ceiling debate, much like today’s; a flood of investors seeking securities at the same time and a word-processing failure. Ultimately, the overdue payments were made with interest: the US was always and at all times solvent, it could always pay its bills. The default was expensive, however; there was a narrow increase in risk premium added to bonds over the next ten+ years that added up to billions of dollars. This was an interest penalty paid to banks by ordinary citizens: the taxpayers penalizing themselves.

To some degree, default is already starting to be ‘priced in’ at the short end of the borrowing spectrum. This is the same short end that the Fed has endeavored to suppress since 2008. The danger here is the Fed and other central banks lose control of the policy rate altogether. Even a small rise would amount to a cash loss in credit markets of many trillions of dollars, the cost to business of increased rates would be much higher. Businesses would be unable to afford credit and would fail, this would cause a recession that central banks would be unable to remedy because they could not lower rates. This in turn would eventually trigger deleveraging across finance, (WSJ);

If Congress doesn’t raise the debt limit before Oct. 17, the date when it is expected to reached, and the U.S. government feels it has no choice but to default, it will in effect “debase the currency” of the repo market, says Lou Crandall, an analyst at market research firm Wrightson ICAP LLC. And that will force dramatic changes in how institutions deal with their cash needs.

They’ll have to make costly and cumbersome changes to margin requirements, a process that if it gets out of hand could convert the temporary liquidity problem into a full-blown credit problem. We learned during the great panic of 2008, when repo transactions were also at the epicenter of the crisis, how a mushrooming “bank run” can occur when one lender imposes tougher collateral restrictions on its counterparties, which in turn impose the same on theirs. In this case, increased margins will be applied to a single asset class in a one-off, across-the-board manner. That might mitigate the risk of a “collateral spiral,” but it’s impossible to gauge all the possible spillover effects.

If credit concerns do arise among counterparties then we’re off to the races: fears about bank defaults, about cascading triggers in the credit default market, about money market funds potentially “breaking the buck.”

A big problem is absence of imagination on the part of the managers who are, a) engaged in a mud-fight with each other, b) pursuing their personal agendas at the expense of the citizens, and, c) locked into doctrinaire economic approaches.

What the Treasury cannot gain from tax receipts, ongoing sales and royalties and interest payment on assets it holds it must borrow. Right now, banks and finance offer (ledger) loans to the Treasury at very low rates. These are secured loans, the Treasury IOU is collateral.

The Treasury has borrowed already a very massive amount, this net amount is not required to shrink but it cannot grow, either. The Treasury can roll over existing loans as they mature, but they cannot increase their level of borrowing.

On the largest scale, the economy is divided into two; the private sector and the public sector. Consider both together to make up a national ledger that must zero out: what follows is not economics but simple bookkeeping on the order of balancing a checkbook. The private sector is made up of firms that have no choice but to earn profits (borrow) in order to remain in business. For the private sector to gain those profits some other sector must run a deficit. The private sector obviously cannot run a surplus and a deficit at the same time; business failures would exponentially increase relative to the rest until the entire sector was bankrupt. Instead, the public sector runs a perpetual deficit. By doing so it creates the necessary surplus within the private sector, that is: public sector deficit is private sector wealth.

The real limit to the size of the deficit is the perceived credibility of the system’s managers. There is no limit within a credit-money system to the public sector borrowing capacity. The public sector cannot ‘run out of money’ any more than a football team can run out of touchdowns. The public sector using its own currency can always pay its bills … and will do so until the managers decide they don’t want to anymore … because the bills are unpleasant or there is some illusory ideological- or political advantage to not doing so.

The alternative to this wealth-making process is the exponential private sector bankruptcy. Our current default theater illuminates the hazards associated with the public sector failing to run deficits … and of the foolish managers destroying what remains of their credibility.

This does not mean that the sectors aren’t over-extended. The problem is not the creation of credit as much as what is done with it after it’s created. Finance has generated hundreds of trillions of dollars worth of credit along with pumping a trillion barrels of crude oil out of the ground. What is there to show for this expenditure besides used cars and smog? Anything?

If the managers had any imagination there are many alternatives to default;

Right now, the private sector is eager to lend to the Treasury because doing so = free money. Not much but at the current rate of borrowing the free-money return adds up. The US needs to set up a money laundry.

– Taper, Baby, taper: Treasury ordinarily can issue IOUs at will — that is, borrow — but cannot do so now due to debt ceiling. However, the Fed and primary dealers hold plenty of Treasury paper in their inventories that can be offered as collateral for loans. The Fed can ‘pretend’ to be the Treasury and borrow from finance using some of its Treasuries as collateral. It can then label the proceeds as ‘interest’ and forward them to the Treasury Department. The Fed holds more than two-trillion dollars worth of Treasuries in its inventory that it can offer in a form of ‘inverse QE’ that would fund the government for almost two years.

This ‘inverse QE’ would be spent to the government’s workers, beneficiaries as well as back to the banks — as real interest. The Fed simply has to rename its lending as ‘interest payments to the Treasury’ there is nothing out of the ordinary about making these payments … and nothing Congress can do about it, either. After the crisis is over, the Treasury can issue new IOUs, unwind the trade and repay the Fed … or not. The Fed doesn’t really need the money*.

– Issue More Scrip: When the Congress and president finally decide to raise the debt ceiling, they should agree to allow the Treasury to issue more scrip, that is, create more US notes. The government has always been able to create currency at will to meet any obligation including the repayment of debts and interest. This makes the US government ‘default proof’. United States Notes or greenbacks were in circulation longer than any other kind of US currency; the original idea for ‘demand notes’ was offered by Edmund Dick Taylor as a means to finance Union efforts during the US Civil War, (Wikipedia):

A United States Note, also known as a Legal Tender Note, is a type of paper money that was issued from 1862 to 1971 in the U.S. Having been current for over 100 years, they were issued for longer than any other form of U.S. paper money. They were known popularly as “greenbacks” in their heyday, a name inherited from the Demand Notes that they replaced in 1862. Often called Legal Tender Notes, they were called United States Notes by the First Legal Tender Act, which authorized them as a form of fiat currency. During the 1860s the so-called second obligation on the reverse of the notes stated:

This Note is Legal Tender for All Debts Public and Private Except Duties On Imports And Interest On The Public Debt; And Is Redeemable In Payment Of All Loans Made To The United States.

They were originally issued directly into circulation by the U.S. Treasury to pay expenses incurred by the Union during the American Civil War. Over the next century, the legislation governing these notes was modified many times and numerous versions have been issued by the Treasury.

Congress would authorize the Treasury to issue $2 trillion in US notes, these would be used to extinguish the same amount of debt. Actual currency would not be necessary, only a ledger-entry repayment to retire ledger entry obligations. There would be no inflation or increase in ‘money’ by way of this process. this is because the money increase occurred at the time the original loan to the Treasury was made. Instead, the residue of bad loans carried forward on ledgers year after year would be wiped out.

Bankers would be unhappy with ledger repayments, they hold out for payments in blood in the form of circulating currency. This is the same way OPEC oil ministers complained about not gaining any gold in exchange for their crude. Like gold was after 1972 circulating money is in inadequate supply and unaffordable, the alternative to the banks is outfight repudiation. A ledger-entry repayment is better business for the banks than no repayment at all.

– Issue More Scrip 2.0: Any of the EU countries could do the same thing: the Italian Treasury could ledger into existence EUR 2 trillion and reliquify the entire EU by reducing the burden of bad (ledger) loans festering on Europe’s books.

– Cancel, Baby, cancel: The Treasury could simply cancel all intra-governmental debt, that is obligations between US agencies. Doing so would reduce the US government deficit by at least $2 trillion at zero cost (about half of intragovernmental debt is held by the Federal Reserve).

Of course, none of the above would solve either Europe’s or the United States’ energy shortages and capital-related business constraints. To actually address these issues would require stringent conservation. However, taking the above steps would buy sufficient time to put conservation strategies into effect.

There would be consequences to Fed’s ‘inverse QE’. Cash on the repo market does not fund the Treasury, it funds shadow banking. Without repo there would be an excess of cash but not for long, the demand for cash would grow as it would be the remaining risk-free security. The demand would mushroom, this would unwind overseas- and internal dollar carry trades, then dollar deflation and business contraction.

The carry unwind would shift dollar inflation overseas as dollar funds dry up and local currencies depreciate sharply. Witness India’s currency collapse along with that of the Brazilian real. The inflation was baked into the cake from the beginning of Bernanke’s accomodative policy … so was the carry trade which shuffled it toward assets overseas.

The investment represented by all those dollars occurred in emerging markets … US workers were left on the outside looking in. If those dollars had ‘stayed home’ wage-push stagflation might have indeed taken place here in the US, that in turn would have put an end to the easing program without ‘curing’ the economy; the recession that stares us in the face right now would have occurred already.

There is a panic about the dollar with many believing it will be substantially depreciated; this has been the panic about the other reserve currencies including sterling, the euro and yuan. Like the others, the current panic will end, in a few months the panic will be about another currency and other credit systems. All of this is symptomatic of the greater ills; capital destruction along with the inevitable reversal of the easing process set into motion by Ben Bernanke and other central bankers beginning in 2008. One way of the other this process will be undone … with or without a default.

Another process being undone is the dominion of private sector money over the governing process. The chaos underway in the US capital is the result of pampered tycoons using their political surrogates to advance their now-conflicting aims against each other, conflicted also against reality. The outcome is the management structures falling apart in disgrace. At the end of the day there is nothing to do but start again with a new political regime that excludes the billionaires’ money, one way or the other the money is gone. Doing business as we are now is no way to run a railroad.

* The danger of central banks making unsecured loans is offset by few in the markets recognizing that the central bank has made an unsecured loan.

** Please take the time to read Grant William’s take on this bit of nonsense right HERE!

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Politicians’ Privilege By Cognitive Dissonance     Imagine for a moment you work for a small or medi [...]

Shaking the August Stick By Cognitive Dissonance     Sometime towards the end of the third or fourth [...]

Empire in Decline - Propaganda and the American Myth By Cognitive Dissonance     “Oh, what a tangled [...]

Meanderings By Cognitive Dissonance     Tis the Season Silly season is upon us. And I, for one, welc [...]

The Brainwashing of a Nation by Daniel Greenfield via Sultan Knish blog Image by ElisaRiva from Pixa [...]

Event Update For 2019-11-18http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.html Th [...]

Event Update For 2019-11-17http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.html Th [...]

Event Update For 2019-11-16http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.html Th [...]

Event Update For 2019-11-15http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.html Th [...]

Event Update For 2019-11-14http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.html Th [...]

With fusion energy perpetually 20 years away we now also perpetually have [fill in the blank] years [...]

My mea culpa for having inadvertently neglected FF2F for so long, and an update on the upcoming post [...]

NYC plans to undertake the swindle of the civilisation by suing the companies that have enabled it t [...]

MbS, the personification of the age-old pre-revolutionary scenario in which an expiring regime attem [...]

Daily Doom Photo

man-watching-tv

Sustainability

  • Peak Surfer
  • SUN
  • Transition Voice

Waterboarding Flounder"Serious oxygen loss between 100 and 600-meter depths is expected to cover 59–80% of the ocean [...]

Of Warnings and their Ripple Effects"We need wooden ships, char-crete buildings, bamboo bicycles, moringa furniture, and hemp cloth [...]

"Restoring normal whale activity to the oceans would capture the CO2 equivalent of 2 billion tr [...]

Ukrainian Rhapsody"Our future will be more about artificial intelligence, cybersecurity, and non-state actors tha [...]

LeBron’s Chinese Troll Mobs"In the 36 hours after James’ delete, a troll mob with bot support sent a flame tsunami at the [...]

The folks at Windward have been doing great work at living sustainably for many years now.  Part of [...]

 The Daily SUN☼ Building a Better Tomorrow by Sustaining Universal Needs April 3, 2017 Powering Down [...]

Off the keyboard of Bob Montgomery Follow us on Twitter @doomstead666 Friend us on Facebook Publishe [...]

Visit SUN on Facebook Here [...]

What extinction crisis? Believe it or not, there are still climate science deniers out there. And th [...]

My new book, Abolish Oil Now, will talk about why the climate movement has failed and what we can do [...]

A new climate protest movement out of the UK has taken Europe by storm and made governments sit down [...]

The success of Apollo 11 flipped the American public from skeptics to fans. The climate movement nee [...]

Today's movement to abolish fossil fuels can learn from two different paths that the British an [...]

Top Commentariats

  • Our Finite World
  • Economic Undertow

In fact, pretty much everyone is vulnerable as the world economy shrinks back. I agree that England [...]

And road wear is in proportion to weight raised to power of four. I.e. basically all wear is from he [...]

I have a friend who is British and I had not heard from in a while who contacted me and I told her h [...]

The net effect is to drive backup electricity producers out of business. This is a disaster over the [...]

Thanks for the information. I presume that the data changes, each time a person checks it. For what [...]

Living around 5300' elevation, the only flood we'll likely see is refugees. Although, that [...]

For those safe from the rising seas, the ocean acidification will fcuk you up instead [...]

Here's an article: https://www.reuters.com/article/us-imo-shipping-factbox/factbox-imo-2020-a-m [...]

What is the shift away from bunker fuels? [...]

Yeah, when the water heater goes out the day after you just put new tires on one of the cars, etc... [...]

RE Economics

Going Cashless

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Simplifying the Final Countdown

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Bond Market Collapse and the Banning of Cash

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Do Central Bankers Recognize there is NO GROWTH?

Discuss this article @ the ECONOMICS TABLE inside the...

Singularity of the Dollar

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Kurrency Kollapse: To Print or Not To Print?

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SWISSIE CAPITULATION!

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Of Heat Sinks & Debt Sinks: A Thermodynamic View of Money

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Merry Doomy Christmas

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Peak Customers: The Final Liquidation Sale

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Collapse Fiction

Useful Links

Technical Journals

The effect of urbanization on microclimatic conditions is known as “urban heat islands”. [...]

Forecasting extreme precipitations is one of the main priorities of hydrology in Latin America and t [...]

The objective of this work is the development of an automated and objective identification scheme of [...]