Taxes

Going Cashless

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Published on The Doomstead Diner on December 22, 2016

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One of the hottest topics in Collapse Economics these days is the prospect of the "Cashless" society.  Denmark is flirting with being the first country to go completely cashless, along with the other Scandinavian countries of Sweden and Norway.

In debates about the future of cash money, Denmark is often cited as the possible World’s first cashless society. Is that true? An investigation on the current state of cash in Denmark. 

Cash is dirty.
Cash is expensive to print.
Cash is for criminals.

Opponents of paper money, such as established economists Bofinger and Haldane, have declared the war on cash. In 2016, this is more apparent than ever before. The European Commission for instance currently assesses a potential ban of the 500 Euro banknote, as “these notes are in high demand among criminal groups.”

More so the finger is often pointed to Scandinavia, to show how some countries are already on the move to become ‘cashless societies’ – to eliminate cash whatsoever. And Denmark could be the World’s first. Hold up – is that true?

http://www.matoska.com/catgraph/3005-001b.jpg Money is symbology for a credit system that allocates the resources available in a society. It can be just about anything, as long as what you choose as the physical symbol is hard to counterfeit.  In Africa for a long time, Cowrie Shells were used as money.  They were relatively rare and about impossible to counterfeit.  Similarly, Gold and Silver have been used as the symbol, the metals themselves are elements and can't be counterfeited.  However, they can be alloyed with other metals, thus debasing the coinage made with them.  This was what the Romans did as their civilization collapsed.  They weren't able to keep bringing in enough gold and silver to keep coining up to have enough money in circulation.

The metals are in relatively short supply for a growing population, and they tend to be hoarded as well taking them out of circulation.  So in the modern era, paper money which was hard to counterfeit was developed as the currency and means of exchange.  The way paper money is traditionally made hard to counterfeit is through fine engraving and special paper and ink.  However, modern scanners made the engraving easy to duplicate, and if you have enough scientific expertiese and a big enough budget, the paper and ink can be duplicated as well.

http://www.accountingformanagement.org/wp-content/uploads/2016/01/balance-sheet.png Money originates in the banking system as credits and debits on a balance sheet.  Then the bills get printed up, and each one has a Serial Number on it.  At the origin point when it first gets handed out over the counter with fresh bills, the bank has a record of the serial numbers and the person that money was handed to.  After that though, there is no keeping track of where those bills go or to who.  In theory you could track it if in every transaction the serial numbers were recorded, but in practice that is never done, it's too cumbersome.

Because it can't be tracked, cash is very useful in the Black Economy, for things like drug deals and making bribes to politicians.  Its also useful to hide your transactions from the Tax Man.  If you begin to believe your banking system is untrustworthy or unsafe (they always are, but sometimes more than others), people start taking their money out of the banks and stuffing it in mattresses instead.  This can make a bank insolvent, because it needs deposits as part of its capital.  When you deposit your money in the bank, it becomes an unsecured loan to the bank, which they will then use as the basis for making other loans.  Making loans and originating money is how banks MAKE MONEY.

So, as far as Da Goobermint and the Banksters are concerned, paper money is not very good.  Da Goobermint wants to be able to track all transactions so they can be taxed and the Banksters want your money in the bank as much of the time as possible so they can use it for more lending. How can we solve these problems, they wonder?

https://historyinlivingcolor.files.wordpress.com/2013/11/westernunion803kanawhastreetcharkanawhablv_edited-1.jpg?w=670 Well, until the advent of the modern computer and the internet, it was basically an insoluble problem.  However, once the communications systems were in place and enough places where transactions take place were wired into it, the possibility of being all electronic balance sheet transfers became possible.  It goes back as far as the Telegraph and Western Union and the ability to "Wire Money".  It further expanded with the Telephone, which made Credit Cards possible.  If you remember back to the early days of American Express, if you used your card at a restaraunt they would call AMEX to get a verification, and once verified the transaction was cashless, going from your credit line over to the restaraunt's bank account.

At first, these credit cards were available only to the very rich, and few people used them.  The verifications were done manually and when the restaraunt called for verification, there was a live person on the other end of the line who did the verification of your account, on a big old clunky IBM Mainframe at the Amex Headquarters.  However, as the computer systems and communications systems improved and you could put Point of Sale (POS) terminals in stores, it became possible to issue Credit Cards to many more people.  Thus Master Card and Visa were born, and banks began issuing out Debit cards as well.

http://blog.couponrani.com/wp-content/uploads/2013/12/creditcard.jpg This brings us up to today, where at least in the FSoA pretty much everybody has Plastic of some kind, and over 90% of all transactions are done this way, so cash has become unecessary, at least as far as the Banks & Goobermint are concerned anyhow.  They would like to see cash eliminated entirely, because this is good for them.  Not so good for the average J6P though who is worried his money isn't safe in the bank and one day it will just be…GONE!  Also not good if he currently runs some type of cash bizness and wants to hide some of the income from the tax man.

What's the PROBLEM with taking cash out of the system entirely then?  Well, as long as you have complete faith that your computer systems will be up and running 100% of the time, communications up 100% of the time in 100% of locations and the system won't be hacked, there is no problem.  Unfortunately, none of those conditions are true even in the 1st World countries, and definitely not true in 3rd World countries.

http://www.telegraph.co.uk/content/dam/news/2016/11/13/113589873RupeesNEWS-small.jpg In places like India, vast areas of the country aren't even wired for electricity, much less have full internet coverage available 24/7.  Many in the population don't even have bank accounts or ID.  The only way they function in the society is with cash.  They get paid in cash, they buy their groceries with cash, they pay their rent with cash.  When India recently took its two largest denomination bills out of circulation, it created instant HAVOC, and is still causing havoc.  They may very well never recover from this poorly planned and executed monetary experiment.  It's already created a massive deflation in their housing market, as people simply don't have working money to pay the rent with.  Getting replacement bills out into circulation also has been a clusterfuck and goods are becoming hard to come by whether you have working money or not, because the supply chains are breaking down.

Now, in a place like Denmark where just about every square inch of the country is wired up, you wouldn't have this same kind of problem if you went cashless, although even in Denmark there are people who live off the official economy and depend on Cash to work.  Besides that though, you run into all sorts of problems on occassions where you have a power outage or communications outage or the computers with all the account information go down, even for short periods of time.  All of a sudden, everyone in the checkout line at the grocery store can't pay for their food.  Everyone commuting home from work can't pay the fare on the light rail.  Everyone whose gas gauge is on empty can't fill up on gas at the pump.  etc, etc, etc.  Anyplace that does go 100% cashless is going to run into these problems, and I think TPTB have to know this.

Even though I use Plastic almost all the time myself, I always do carry enough cash to buy groceries or buy gas if the debit card doesn't work.  At my local grocery store this has occurred twice due to the system being down itself, and then a couple of other times because my account at the bank was "frozen" due to suspicious charges being dropped on the card number.

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/02/09/500%20euro_0.jpg What is more likely than 100% cashless is that just the large bills will be taken out of circulation, but how large is large?  In Europe, they have a €500 note, that one is just about certain to go the way of the Dinosaur.  Here in the FSoA, the largest note is a $100 Ben Franklin.  This would be harder to get rid of, because even just for buying groceries a family can spend $300 in the checkout line, I see that all the time with overflowing baskets of food.  You would need 15 Andrew Jackson's or Harriet Tubman $20s to cover this, which makes your wallet uncomfortably thick.

What you may have noticed however is that recently, in about the last year a new $100 note on new paper with more "security" devices has been substituted for the old $100 note.  My suspicion is these notes can be run through a reader and their serial numbers tracked.  All stores will be required to have the readers, which will probably be part of the POS terminal, and anytime you use such a bill, it will be recorded in the transaction.  You'll need your Goobermint ID to spend the bill.  So, similar to plastic transactions, the bill can be traced back to you.

http://www.usagold.com/images/coinstack.gif In the Black economy what may occur to circumvent this problem is a system of Barter may arise, and for this purpose such as large Drug Deals, Gold WOULD be very useful.  After the large exchange is done this way, then the street level exchanges are all done with the small bills still in circulation.  However, then when the drug dealer spends his money, he has to account for where he got it.  If he can't account for it, it's a criminal offense.

Because Gold and to a lesser extent Silver could be used in the black economy and to try and store wealth outside the Banking system, it will either be made illegal and confiscated, or any official transactions done with it heavily taxed.  So if you went to the Coin Dealer to exchange it for some of the paper currency, there might be a 50% tax on that transaction.  In the case of the Great Depression, Gold ownership was made illegal and the Gold confiscated and then revalued.  No reason to believe that would not occur again here as things further spin down in the Bankstering system.

http://www.knology.net/~bilrum/goldverbot-4128.jpg What you have to remember here is that "your money" doesn't belong to you, it's part of a very large and complex system of credit that has been evolving in this iteration since the Medici Banking era.  That system gradually spread its tentacles around the entire globe, and now most of the 1st World countries at least are fully wired up with the communication system necessary for all electronic transactions, fully recorded with everything bought and sold and by who to who.  It's the ultimate means of control over everything that goes on in the society, and as long as these systems are up and running, TPTB that run the system are going to use every means possible to maintain this control.  Even if a 100% Cashless society is not achieved, in the 1st World countries it will reach close to that goal before the system crashes in it's entirety.

The reasons it will crash in its entirety are many.  First of all, whether the money being moved around here is cash or digibit, the entire system is horrifically insolvent, and even if ovenight 100% of all depositors money was confiscated to recapitalize the banks, it still would be insolvent.  There's more debt out there than there are credits to balance it, because of the interest charges on all the loans.  On top of that you have trillions to quadrillions in derivative bets which can't be paid off.  Then you have the problem that either cash or digibit, money is not flowing through the system to the end consumer to buy the products of industrialization. Some still have access to the credit, but fewer all the time as people drop out of the work force.  Finally, what the money actually REPRESENTS, the resources available to the society are depleting, especially measured against the increasing global population size.  So you can't make it work long term no matter what you use for money.

What the conversion to (mostly) cashless can do is stretch out the Extend & Pretend a while longer, so it's likely to be undertaken in 1st World countries, at least if the monetary system doesn't reach critical mass and crash before a further changeover can be implemented.  The possibility such a system could be implemented in India or other 3rd World countries is exceedingly small, thus the reason they attempted to exchange one paper bill for another, and in the process took themselves one step closer to complete collapse.

The mostly unanswerable question is just how long the the Extend & Pretend game can be extended out here?  All you can say for sure is that it will crash at some point in the future, but pegging a date to it is quite difficult, if not impossible.  You have another variable in the equation, which is the political instability that arises as more people lose more purchasing power, whatever the money is that is being used.  You also have the geopolitical instability as different countries jockey for position trying to control what is left of global resources, mainly China, Russia and the FSoA there.  There are inumerable possible Trigger Events that could set off a cascade failure at any time, so any kind of mathematical prediction is useless because of a discontinuity in the function.  WAG though, it's hard to see how it holds together more than another 5 years, but it's just a guess.

So, even if the Banksters and Da Goobermint get their wish and convert to all digimoney, don't sweat it too much because it won't last all that long.  When it does crash, you'll have much bigger problems than trying to hide income from the Tax Man or keep your wealth safe from thieving Banksters.

http://playgrad.ru/uploads/posts/2012-07/1342419304_zombie_wallpapers-39.jpg

Privatising Air

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Published on FEASTA on February 26, 2016

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We seem to have entered an era of ‘reductio ad absurdum’ capitalism. Many of life’s fundamentals such as land, water and energy have been or are being enclosed and privatised. As capitalism runs out of convenient colonies to parasitise, it has begun to work on societies within its traditional hosts in the developed world through austerity. In parallel the realm of  privatisation extends into areas previously considered as public goods available as of right. Is there any ‘natural’ limit to this process? Could air be privatised?

We should perhaps envy Marx for his somewhat detached historical perspective on the development of capitalism. All things must pass. The problem, perhaps felt more acutely if you have children and grandchildren, in that by the time capitalism has eaten itself there will be nothing left for our descendants to sustain themselves with.

If you had asked a member of one of the 170 native American nations before 1880 who owned the land they would not have understood the question [1]. Fast forward 140 years and the idea that land is just a special type of property, and that its resources and use-value can be reserved to the owner is embedded in law and in the general unchallenged narrative about ‘how things work’. Very little land is now held in common, and the only current activist initiative pissing into the prevailing wind is that of Land Value Taxation – a proposition which, while welcome, does appear to accept that land has been irreversibly enclosed, and restricts itself to demanding a land rental back to the exchequer in the form of a tax.

In Ireland a series of #right2water marches have attracted tens of thousands protesting at the Irish government’s plans to privatise water via the creation of a new semi-state (a public-private hybrid) Irish Water and the imposition of water charges. Elsewhere, in Flint, Michigan, following a series of commercial disputes over water supply, a state of emergency was declared as the extent of lead pollution became clear. In neither of these cases are we in an area of water shortage or stress. The common factor seems to be the introduction of public/ private partnerships to move the costs of water supply off of the national (or state) accounts.

In parallel the development of the bottled water market has burgeoned, seemingly unaffected by the inconvenient ‘market externality’ of trillions of plastic bottles going to landfill, and by Coca Cola (via their Dasani brand) and others bottling treated tap water [2] – based on an idea by DelBoy [3].

The creativity of the market, which at its best is a joy to behold and a source of life-enhancing innovation is a curate’s egg. And the parts that are bad are fouling the world. Markets have no inbuilt ethics. And we have yet to demonstrate any governance capability that can detoxify them.

As a thought experiment, (and since we are in reductio ad absurdum territory) consider the potential privatisation of the air that we breathe. That air is a basic necessity of life is of itself no protection. There is no apparent ethical barrier – other necessities such as land, shelter, energy and water have been enclosed by elites and rented back to citizens. So there is no ‘in principle’ difficulty.

The difficulties are practical.

For example there is rather too much clean air to make for the globalised opportunity which would be ideal. However this does not need to be a major barrier provided we sculpt the narrative properly. In the U.S. 92% of tap water is of the highest potable quality [2] but this has not interfered with the growth of bottled water sales. Creative (occasionally mendacious) advertising plus mainstream media focussing on any convenient tap water scare stories have done the trick.

The prime difficulty is in the physical enclosure of a separated-air-space and supply. A controlled-quality-air environment can be envisioned at the personal, dwelling, community, municipality or planet level. So there are product development opportunities for personal breathing devices, masks and filters, passive house variations with recirculated air and domes. As pollution increases, helpful stories about diesel particulates or Beijing air quality will progressively sensitise consumers to the need for interventions. Our inability to leave fossil fuels in the ground will help this narrative get established – an interesting variation on the theme that every market failure provides an opportunity for a new market. At the community level we should see a natural extension of the gated community service proposition to include guaranteed air quality inside large scale geodesic domes. Some municipalities – particularly scenic locations – may banish sources of pollution, buoyed by extra-high local rates acceptable to wealthy residents. Depending on local micro-climates such Canute-propositions may persist for a few years until higher pollution levels waft in from neighbouring areas. At a planetary level geoengineering solutions will develop to pump pollution back into less prosperous sink areas.

So it’s just a matter of being creative. Technology plus entrepreneurship can enable the enclosure of any public good. Absent effective sustainability-minded governance that is.

Endnotes

1]: “My reason teaches me that land cannot be sold. The Great Spirit gave it to his children to live upon. So long as they occupy and cultivate it, they have a right to the soil. Nothing can be sold but such things as can be carried away” –Black Hawk quoted in Lewis and Clark: The Unheard Voices http://archive.adl.org/education/curriculum_connections/in_this_issue_fall_2004.html

2]: Bottled Water is a Scam: March 2015 http://www.salon.com/2015/03/14/bottled_water_is_a_scam_pepsico_coca_cola_and_the_beverage_industrys_greatest_con_partner/

3]: The renowned Peckham Spring brand featured in Only Fools & Horses episode Mother Nature’s Son http://www.imdb.com/title/tt0666564/

Featured image: barbed wire. Source: http://www.freeimages.com/photo/barbed-wire-1221152.

 

 

 

 

 

 

 

 

The War on Cash 1

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Published on the Doomstead Diner on February 4, 2016

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What are the benefits to TPTB for getting rid of cash? They are many, but let me read from a recent Op-Ed featured on Bloomberg Newz, home base for tentative 3rd Party POTUS candidate Michael Bloomberg:

Much depends on the details, of course. But this is a welcome trend. In theory, digital legal tender could combine the inventiveness of private virtual currencies with the stability of a government mint.

Most obviously, such a system would make moving money easier. Properly designed, a digital fiat currency could move seamlessly across otherwise incompatible payment networks, making transactions faster and cheaper. It would be of particular use to the poor, who could pay bills or accept payments online without need of a bank account, or make remittances without getting gouged.

For governments and their taxpayers, potential advantages abound. Issuing digital currency would be cheaper than printing bills and minting coins. It could improve statistical indicators, such as inflation and gross domestic product. Traceable transactions could help inhibit terrorist financing, money laundering, fraud, tax evasion and corruption.

Don't you just LOVE how this is going to be of “particular use to the poor”? See, the guys pitching this bullshit are REALLY CONCERNED about the plight of poor people, and this will HELP them!     hahahahahahaha

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All Your Money Are Belongz to US!

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Published on the Doomstead Diner on October 30, 2015

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All over the Collapse Blogosphere, and even in the MSM, the latest greast paranoia is the disappearance of CASH to STASH in the Bank of Sealy.  Tom Lewis on The Daily Impact wrote a post on this last week which I am cross posting today here on the Diner.

Over in the MSM on Biz Insider, they also had a nice FEAR INDUCING article on NEGATIVE INTEREST RATES coming down the pipe for retail banking customers.  In this case, instead of the bank paying you some interest for the priviledge of gambling with your money, you pay the bank so they can risk your life savings on some dogshit IPO like Poop-On or Alipoopoo.

Quite obviously, the Banksters and their Political Puppets have reached the end of their rope here, not to mention having lost their sanity in trying to keep their monetary system from imploding.  In today's rant, we look at why this fucking nonsense cannot possibly work and is the last gasp of a dying monetary system.

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…This week in Doom, I do have a specific topic of interest getting a lot of play not just in the Collapse Blogs but in the MSM as well. This is the rampant FEAR that TPTB running the TBTF Banks and their Marionettes running Da Goobermint are going eliminate CASH, aka Paper Notes in favor of an all digibit monetary system. There is a certain amount of irony to this, since the people most upset and outraged are the same people who hate Paper Fiat Notes to begin with! LoL. Just in this case, they hate the digibit money even more, except for Bitcoin which some folks think is a new and more secure form of money itself.

Now first of all, paper money is already only a small fraction of the total pool of notional money currently being pushed around by supercomputers sporting HFT algorithms, a maximum of 10% of the money supply and that is not counting all the notional money wrapped up in derivatives contracts, which nobody knows the actual amount of, just that it is probably more than a quadrillion dollars…

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WHAT THE FED HAS WROUGHT

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Published on The Burning Platform on November 16, 2014

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The chart below might be the most powerful indictment of the Federal Reserve and our corporate fascist empire of debt ever created. Some people don’t get charts. Charts tell a story. This chart tells the story of elitist bankers supporting the agenda of a corporate fascist state, resulting in the gutting of the middle class. Anyone who views this chart in a positive manner is either a Federal Reserve banker or their paycheck is dependent upon the continuation of the pillaging of the working class. Corporate profits are at all-time highs. Profit margins have always reverted to the mean throughout modern history. If they remain at all-time highs then something is terribly wrong.

“Profit margins are probably the most mean-reverting series in finance, and if profit margins do not mean-revert, then something has gone badly wrong with capitalism. If high profits do not attract competition, there is something wrong with the system and it is not functioning properly.” – Jeremy Grantham, Barron’s

Here is the story I see in that chart. Corporate profits as a percentage of GNP have averaged 6.5% over the last 67 years. As you can see, it is a volatile figure. Corporate profits rise during expansions and fall during recessions. That has been a given over time. The reason corporate profits have always reverted to the mean was due to the basic tenets of free market capitalism. When a company is generating outsized profits, that industry will then attract new competitors, resulting in price competition and lower profits. From 1950 through 1971, corporate profits as a percentage of GNP fluctuated in a narrow range between 5% and 7%. This was a reflection of a market driven by competition, a non-interventionist Federal Reserve, and a government not captured by corporate interests.

It is no coincidence since Nixon closed the gold window in 1971 and unleashed greedy bankers, feckless politicians, and self serving corporate executives to utilize easy money and prodigious amounts of debt to financialize our economic system and deform capitalism. The Fed created booms and busts are clearly evident on the chart. Nixon toady Arthur Burns created an inflationary boom in corporate profits to 8% of GNP in the late 70’s followed by the collapse to 3% caused by Volcker having to raise rates to extreme levels to crush the Burns created runaway inflation.

You can see exactly when the Maestro assumed command at the Fed and proceeded to introduce the Greenspan Put, encouraging speculation, borrowing and mal-investment. His easy money boom led to the dot com bubble that doubled corporate profits from their 1987 low. Of course the profits vaporized in an instant and plunged to 4% of GNP in 2001. Greenspan and then Bernanke  proceeded to drive interest rates to record lows creating a prodigious housing bubble resulting in the greatest level of mal-investment and financial fraud in world history. Corporate profits as a percentage of GNP skyrocketed from 4% to 10% in the space of six years. The banking cabal had captured the system.

The Fed orchestra kept the music playing and Wall Street kept dancing the rumba with their corporate CEO dates. The Keynesian acolytes were ecstatic. The Austrians warned of the impending bust. No one listened. The collapse of the worldwide financial system was portrayed by the corporate mainstream media, bankers like Dimon, corporate CEOs like Immelt, billionaires like Buffet, captured government bureaucrats like Paulson, and politicians like McCain and Obama, as a systematic risk that required a taxpayer rescue of criminals.

The $800 billion gift to bankers and mega-corporations by the Washington DC Party of captured politicians was chicken feed compared to the $3.5 trillion of newly printed fiat handed to Wall Street and corporate America by Bernanke and Yellen. Five years of 0% interest rates have impoverished senior citizens and savers, but they have done wonders for Wall Street and mega-corporation profits, along with executive bonuses. Corporate profits soared from 4.5% of GNP to an all-time high of 10.5% in the space of three years and have remained at this elevated level.

Who Needs Wage Earners Anyway?

Is it a coincidence that corporate profits as a percentage of GNP are at record highs while employee compensation as a percentage of GNP is at record lows? Is it a coincidence that employee compensation as a percentage of GNP peaked at 51% in 1971? That year certainly seems to be a turning point in U.S. economic history. Gold’s purpose as a check on statists, Keynesians, politicians, bankers, and the military industrial complex couldn’t be any clearer. The decline has multiple causes, but the storyline about technology being the major cause is patently false. My observations are as follows:

  • From the end of World War II until the mid-1970s employee compensation as a percentage of GNP was consistently between 49% and 51%. The middle class saw their standard of living rise as wages outpaced inflation, savings rates were high and led to capital investment, debt was used for long term purchases like a home or automobile, and bankers accepted deposits and made safe loans. Technological progress over the thirty years was constant, but did not result in declining wages.
  • From the moment Nixon closed the gold window, employee compensation as percentage of GNP relentlessly declined for the next quarter of a century from 51% to 44%. Over this time frame our economy deformed from a goods producing system driven by savings and capital investment into a service/financial economy built upon consumer debt, conspicuous consumption and market gambling. Our iconic mega-corporations fired Americans and hired Chinese slave laborers, lobbied for tax breaks, invested in their own stock, kept wage increases below the level of true inflation, and paid extravagant compensation packages to their Harvard MBA executives.
  • The brief upturn created by Greenspan’s irrational exuberance 90’s boom was short lived. The relentless decline resumed after the dot com collapse, even as Greenspan and Bernanke blew their epic bubble. Their financial engineering machinations on behalf of Wall Street did nothing for the average worker on Main Street. Employee compensation as a percentage of GNP declined from 47% to 44% BEFORE the financial collapse.
  • Unequivocal proof that Bernanke’s sole purpose of QE and ZIRP was to benefit his Wall Street owners can be seen in the continued decline from 44% to 42% since 2008. There has been no recovery for the average American. Wall Street is rolling in dough. Corporate America is rolling in dough. Politicians are rolling in dough. The average American worker is rolling in dog shit.

The mouthpieces for the Deep State insist corporate profits have reached a permanently high plateau. It’s another new paradigm. Just like 1929, 1999, and 2007. Jeremy Grantham is right. The system is broken. The inmates are running the asylum. But financial engineering will not work permanently.  Baijnath Ramraika and Prashant Trivedi in their outstanding article Why Jeremy Grantham is Right about Corporate Profit Margins prove that corporate gross margins have not grown, technological advancement has not been a major factor, innovation and capital investment are non-existent, and corporate CEOs have utilized one time schemes to boost profits.

There are a few major reasons for record corporate profits. The Fed’s gift to banks and mega-corporations of zero interest rates have allowed S&P 500 corporations to refinance their existing debt and take on new debt at below market interest rates. The average interest rate paid by S&P 500 companies is now at all-time lows. Any normalization of interest rates would crush corporate profits.

Even though you hear constant propaganda from the corporate MSM, corporate CEOs, and captured politicians about the dreadful level of corporate taxes, the truth is that mega-corporations are paying record low levels of actual taxes. When profits are at record highs and tax payments at record lows you know they have captured the system. “Creative” tax avoidance and the FASB allowing banks to mark their assets to fantasy have played an enormous role in record profits.

The short term oriented casino mentality of corporate CEOs can be plainly seen in the fact depreciation expense as a percentage of revenue is at 25 year lows, resulting in short term profits but long-term decline. Instead of investing in capital to increase efficiency or expand their business, greedy myopic CEOs have chosen to buy back their own stock at all-time high prices. They did the same thing in 2005 – 2007. Driving up quarterly earnings per share to boost their own stock option compensation is how it rolls in corporate America today. Investing in their workers through higher wages isn’t even a consideration. They don’t teach that in Ivy League MBA programs. SG&A expenses as a percentage of revenue have been driven to all time lows, as outsourcing, downsizing, and working people to death have done wonders for corporate profits.

Ramraika and Trivedi reach damning conclusions of corporate America, based on their detailed unbiased research:

As the world moved increasingly towards the idea of shareholder-value maximization, time horizons for management and the shareholders have shortened. As Montier shows, the average lifespan of a company in the S&P 500 in the 1970s was about 27 years and is down to about 15 years now. In tandem, the average tenure of CEOs is down from about 10 years in the 1970s to about 6 years now. Combine this with the incentive systems prevalent today (think stock options), and it is only logical that a CEO who is going to be around for as few as six years and is going to get a large chunk of her rewards in stock options will want to see higher stock prices.

Cutting SGA expenses and postponing capital investments — actions that carry positive short-term earnings impact at the expense of a business’ competitiveness in the long-term — look promising to managers whose payoffs depend on stock prices in the short-term. Not surprisingly, the renters (there are hardly any owners any more) clamor for just such actions. The problem with this thinking is that the long-term eventually shows up. And when it does, profit margins will have no choice but to remember their long forgotten tendency to revert to mean.

Are interest rates going to be driven lower for corporations? Are taxes going to be driven lower? How many more people can corporations fire? Have economic downturns been eliminated by the Federal Reserve? Will record profits not result in increased competition and price wars? Can wages be driven even lower?

The financial, economic and political system has been captured by corporate fascist psychopaths. The Federal Reserve has aided and abetted this takeover. Their monetary manipulations have resulted in this deformity. Psychopaths always go too far. The American middle class has been murdered. Decades of declining real wages have left them virtually penniless, in debt up to their eyeballs, angry, frustrated, and unable to jump start our moribund economy by buying more Chinese produced crap. Yellen, her Wall Street puppeteers, and the corporate titans should enjoy those record profits and record stock market highs. It won’t last. Short-term profits will be wiped out, as long-term consequences always arrive when you least expect it. The artificial boom will lead to a real depression. Luckily for the oligarchs, most middle class Americans are already experiencing a depression and won’t notice the difference.

“True, governments can reduce the rate of interest in the short run. They can issue additional paper money. They can open the way to credit expansion by the banks. They can thus create an artificial boom and the appearance of prosperity. But such a boom is bound to collapse soon or late and to bring about a depression.” – Ludwig von Mises

BREAD, CIRCUSES & BOMBS – DECLINE OF THE AMERICAN EMPIRE – PART TWO

Off the keyboard of Jim Quinn

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Published on The Burning Platform on November 9, 2014

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In Part One of this article I discussed the similarities between the Roman Empire and the American Empire at a high level. In this article I’ll delve into some specific similarities and rhymes between the fall of the Roman Empire and our modern day empire of debt, decay and decline. I’ll address our expansive level of bread and circuses and how defects in our human nature lead to people willingly sacrificing their liberty for promises of safety and security. All empires decline due to the same human failings and ours is no exception. If anything, ours will be far more spectacular and rapid due to our extreme level of hubris, arrogance, willful ignorance and warlike preference for dealing with foreign powers.

It seems there were a few visionary thinkers in the late 1950s who foresaw the dire course our former Republic was setting. Their writings were a prophecy and a warning. There was still time to change course and avoid the pitfalls that led to the Roman Empire collapse. In Brave New World Revisited, Aldous Huxley warned against allowing a few amoral men using propaganda, scientific advancements, technology, brainwashing, and economics to control and manipulate a willfully ignorant populace into a dystopian dictatorship. The Soviet and Chinese dictatorships of the late 1950s are long gone, but Huxley foresaw how modern propaganda techniques would be used by the state to drown the masses in a sea of triviality, irrelevance, and consumerism.

“In their propaganda today’s dictators rely for the most part on repetition, suppression and rationaliza­tion — the repetition of catchwords which they wish to be accepted as true, the suppression of facts which they wish to be ignored, the arousal and rationaliza­tion of passions which may be used in the interests of the Party or the State. As the art and science of manip­ulation come to be better understood, the dictators of the future will doubtless learn to combine these tech­niques with the non-stop distractions which, in the West, are now threatening to drown in a sea of irrele­vance the rational propaganda essential to the mainten­ance of individual liberty and the survival of demo­cratic institutions.”

Another man of vision was President Dwight D. Eisenhower. As someone who understood the military industrial complex and the world of politics and power, he knew the danger of allowing the arms industry to dictate the foreign policy of the country. Maintaining a military empire bankrupted Rome and it is bankrupting the American empire. Eisenhower’s warning was unheeded.

“We have been compelled to create a permanent armaments industry of vast proportions. Added to this, three and a half million men and women are directly engaged in the defense establishment. We annually spend on military security more than the net income of all United States corporations. This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence — economic, political, even spiritual — is felt in every city, every State house, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society.

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. The prospect of domination of the nation’s scholars by Federal employment, project allocations, and the power of money is ever present and is gravely to be regarded.”

When I was researching the similarities between the fall of the Roman Empire and our American Empire fall in progress, I stumbled across an essay written in 1956 by Ben Moreell called Of Bread and Circuses  

Toxic Bread, iGadgets, Circuses, & Zoloft

“The evil was not in bread and circuses, per se, but in the willingness of the people to sell their rights as free men for full bellies and the excitement of the games which would serve to distract them from the other human hungers which bread and circuses can never appease. The moral decay of the people was not caused by the doles and the games. These merely provided a measure of their degradation. Things that were originally good had become perverted and, as Shakespeare reminds us, ‘Lilies that fester smell far worse than weeds.’”Ben Moreell – 1956 – Of Bread and Circuses

There is nothing inherently evil about food, iPhones, professional sports, television, computers, music or medicine. Human beings need food to sustain them, entertainment to provide relaxation and diversion from their daily labors, and medicine to alleviate illness and prolong their lives. Only when the people allow themselves to be lured into servitude by malevolent purveyors of bread and circuses does the perversion of seemingly harmless things begin to fester and overwhelm a nation with the fetid stench of decay and decadence. The moral degeneration of the American populace, like the Roman people before them, happened slowly over time as they sold their liberty, freedom, and self-respect for full bellies, an endless array of modern day distractions, and promises from their highly educated rulers they would be taken care of and protected from all threats to their well-being, whether foreign, domestic, physical, mental, or social.

It did not happen all at once. It happened gradually over time. We allowed the weaker facets of our human nature to succumb to the pleasurable promises of a minority of power seeking manipulative men who always attempt to control and influence the majority because they believe they are wiser and deserving of riches, glory and supremacy. The greediest, most arrogant, ambitious and well educated amongst us tend to rise to the top in all societies. As Ben Franklin stated, only a virtuous people can keep sociopaths from gaining control of our political, economic and financial systems and perverting a republic built upon a foundation of free markets, liberty, and self-sufficiency.

“Only a virtuous people are capable of freedom. As nations become more corrupt and vicious, they have more need of masters.”Benjamin Franklin

Historian Tacitus noted, as Rome became more and more corrupt, the number of laws grew rapidly. The Roman aristocracy, through corruption and thievery achieved lofty status in Roman society. Senators and wealthy knights engaged in extensive practices of conspicuous consumption, creating palatial town houses and monumental “art villas” to demonstrate their high rank in society. The peasants sank into poverty, while being satiated with bread and circuses. And it was all done legally, just as it is being done legally today by our beloved aristocracy and their minions.

“The more corrupt the state, the more numerous the laws.” – Tacitus – The Annals of Imperial Rome

Has the proliferation of laws, rules, and regulations over the last century made us freer, safer and less corrupt?

The virtue of the American people has dissipated rapidly over the last century through their willful ignorance, laziness, apathy, vanity, greed and covetousness, while the true ruling power has consciously and intelligently manipulated the masses without them being aware they were being molded, controlled, dominated and influenced by Ivy League educated men of no conscious, empathy, or sense of decency. The paragraph below, written in 1928 by Edward Bernays, reveals the true nature of our “democracy” and our real masters:

“The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. …We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of. This is a logical result of the way in which our democratic society is organized. Vast numbers of human beings must cooperate in this manner if they are to live together as a smoothly functioning society. …In almost every act of our daily lives, whether in the sphere of politics or business, in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons…who understand the mental processes and social patterns of the masses. It is they who pull the wires which control the public mind.” – Edward Bernays – Propaganda

Bernays and his disciples believed the American citizenry nothing more than a herd of irrational animals that needed to be led by enlightened despots like him and other highly educated wealthy men who knew what was best in a democratic society. The term propaganda developed negative connotations after some Germans used it so effectively during the 1930s, so modern American despots changed the term to public relations. It’s all about the message. As media tools have become more technologically advanced and the study of human psychology perfected, the members of the invisible government have achieved their goal of governing, molding, and pulling the wires that control the public mind in a way that enriches them and their benefactors while satisfying the base needs of the masses and keeping them distracted with trivialities, technological wonders, and a myriad of bogeyman threats. These men have contempt for the common man. They have contempt for the U.S. Constitution. They have contempt for free markets. And they have control of our country.

Needs, Wants & Desires

The concept of bread and circuses ties closely to Maslow’s Hierarchy of Needs theory. The ruling class realizes the masses must be kept fed, clothed and housed or revolution would ensue. The human needs documented by Maslow were satisfied or not satisfied by humans prior to the 20th century. Once the ruling class gained control of the monetary system through their jurisdiction over the Federal Reserve and the fiscal system through their manipulation of taxes and spending, they were able to bribe the masses with their own money. The rise of the welfare state has not reduced poverty or boosted the standard of living of the poor. It has enslaved tens of millions at the basic human needs level. Once those in power had successfully bribed the masses with bread (SNAP), shelter (subsidized housing), subsistence (unemployment compensation & welfare), security (Social Security) and safety (Medicare, Medicaid), it was only necessary to keep them distracted with circuses to efficiently teach them to love their servitude.

“A really efficient totalitarian state would be one in which the all-powerful executive of political bosses and their army of managers control a population of slaves who do not have to be coerced, because they love their servitude.” – Aldous Huxley – Brave New World

abraham-maslows-hierarchy-of-needs1.preview.jpg

The invisible governing authorities don’t want the masses to actually satisfy their psychological and self-fulfillment needs. The last thing they want is an educated, aware, critical thinking, independent, courageous, self-reliant, civic minded populace questioning the motivations of their keepers. This is where the corporate fascists who control the mass media propaganda machine and the sickcare industrial complex have combined forces to create a painless concentration camp of prisoners enjoying their servitude and happy to sacrifice their liberty for perceived safety. An uneducated, obese, sickly, depressed, overly-medicated populace is not a threat to the ruling class. They have been conditioned and pharmacologically sedated to such an extent the governing class feels indestructible, displaying arrogance and hubris in dangerous doses.

“There will be in the next generation or so a pharmacological method of making people love their servitude and producing dictatorship without tears, so to speak, producing a kind of painless concentration camp for entire societies so that people will in fact have their liberties taken away from them but will rather enjoy it.” – Aldous Huxley

The concept of voluntary servitude has been a constant theme across the ages as most people want to be led, told what to do, and will not question or contest those in authority. Liberty and freedom require effort, sacrifice, honor and a people with a strong moral character. The Roman people succumbed to tyranny by abandoning their liberty to despots for a full belly and grand spectacles. The American people have succumbed to modern day banker, billionaire and politician oligarchs for a belly full of toxic corporate processed food, cable HDTV with 600 stations, iGadgets, a never ending supply of cheap Chinese produced crap at big box retail stores, Facebook, Twitter, 24 hour drive thru Dunkin Donuts joints, and an endless array of professional sporting events, all paid for with an infinite supply of cheap consumer debt from the Wall Street fraud machine. We live in a warfare/welfare surveillance state built on a foundation of debt, consumerism, and delusion, with no tears. We’ve learned to love our servitude.

French philosopher Etienne de La Boetie captured the degradation of the once noble Roman people five centuries ago, and his words ring true today as the American people have foolishly relinquished their liberty to a corporate aristocracy that has bankrupted the nation, debased the currency, pillaged the middle class and set in motion an irreversible decline of the empire.

“Plays, farces, spectacles, gladiators, strange beasts, medals, pictures, and other such opiates, these were for ancient peoples the bait toward slavery, the price of their liberty, the instruments of tyranny. By these practices and enticements the ancient dictators so successfully lulled their subjects under the yoke, that the stupefied peoples, fascinated by the pastimes and vain pleasures flashed before their eyes, learned subservience as naively, but not so creditably, as little children learn to read by looking at bright picture books. Roman tyrants invented a further refinement. They often provided the city wards with feasts to cajole the rabble, always more readily tempted by the pleasure of eating than by anything else.

The most intelligent and understanding amongst them would not have quit his soup bowl to recover the liberty of the Republic of Plato. Tyrants would distribute largess, a bushel of wheat, a gallon of wine, and a sesterce: and then everybody would shamelessly cry, ‘Long live the King!’ The fools did not realize that they were merely recovering a portion of their own property, and that their ruler could not have given them what they were receiving without having first taken it from them.” – Etienne de La Boétie – Discourse on Voluntary Servitude – 1548

We are fools to not realize the governing authorities who benevolently distribute bread and entitlements to the masses have already taken the money at gunpoint from the people, while syphoning off their cut, favoring their courtesans and taking away our liberties and freedoms. H.L. Mencken, who could match de La Boetie in contempt for the ignorant masses and corrupt politicians, understood our democracy was destined for the trash heap of history.

Democracy is a pathetic belief in the collective wisdom of individual ignorance. No one in this world, so far as I know—and I have researched the records for years, and employed agents to help me—has ever lost money by underestimating the intelligence of the great masses of the plain people. Nor has anyone ever lost public office thereby.” – H.L. Mencken – Notes on Democracy

In Part Three of this article I will address how the creation of the Federal Reserve has led to a century of currency debasement, mindless consumption and endless warfare, while impoverishing the masses and setting in motion the dynamics of empire collapse.

The Fourteen Year Recession

Off the keyboard of Jim Quinn

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Published on The Burning Platform on March 24, 2014

recession-2

Discuss this article at the Economics Table inside the Diner

“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!!!

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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.

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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

 

BLOG-A-THON: Save Eustace Conway & Turtle Island

Off the keyboard of RE

Published on the Doomstead Diner May 12, 2013

Discuss this article at the Doomsteading Table inside the Diner

Every day on the Internet these days you get treated to something VERY WRONG in our society, but rarely is it possible to do much about it.  I am not certain even in this case of complete TRAVESTY and STUPIDITY much can be done to put a stop to it, but in this case it is so ABHORRENT, so RIDICULOUS, and at least for Diners so UTTERLY against all our principles that every means must be undertaken to at least TRY to STOP it.  So with this article, I begin a Week Long Blog-a-thon to raise awareness and assist someone who truly has lived a life by principles of living in Harmony with Nature

Out there in the Boonies of North Carolina in the Appalachian Mountains there is a man named Eustace Conway who built a life for himself as a Modern Day Mountain Man, on the Model of Jeremiah Johnson.  Jeremiah was a Fictional Character, Eustace Conway is not, he is a VERY REAL Person, and what he built and what he stands for is now under attack by the megalithic State that defines our lives in the Age of Oil.

Pretty much from nothing at the age of 17 Eustace Conway walked out in the Appalachian Mountains and taught himself how to live off the land as a modern day Hunter-Gatherer.  That this was even possible at all without running afoul of the Law before this is remarkable in itself, but not only did Eustace survive this way for the last 40 odd years or so, he actually earned a living in the Monetary sense at the same time, as a Teacher of Primitive Living skills.

He didn’t just earn it and spend it either, since he lived mainly off the land, he spent about none of the money he earned, and so some years ago was able to buy a patch of land of 1000 Acres he dubbed “Turtle Island”.  On this land he build numerous structures, Barns, Cabins etc and created a School for Primitive Living Skills.

North Carolina Building Codes Council: Alter NC building codes to exempt structures at Turtle Island Preserve.

What’s the PROBLEM with this?  The problem is said structures are not “Up to Code”, he doesn’t have flushing toilets and so forth and Sprinkler Systems for Fire Prevention aren’t installed, yadda yadda.  Anybody who has ever worked in the Building industry or run any kind of Commercial enterprise knows how much money it takes to bring everything “Up to Code”.

So the local Goobermint Apparatchiks wanna shut down Turtle Island.  Given the state of the world, there is probably no more important example of how to get off the Oil Economy and become self-sufficient as Turtle Island.  Besides that, it is ludicrous to say these buildings are “unsafe”, since prior to around 1900 or so just about everybody lived in such buildings without toilets and sprinkler systems.

Here on the Diner, besides myself we publish the work of numerous Bloggers all concerned in their own ways with the collapsing Oil Economy and Industrial Civilization.  On almost every one of our Blogs in the Commentary you will find many MORE people concerned with the problems we face, along with the constant Search for Solutions.  Here is a man, Eustace Conway who provides a very REAL and SUCCESSFUL model who now faces seeing his Life’s Work be destroyed by an ever more invasive and omnipresent Fascist Goobermint.

To all my Blogger Friends and Cross Posters here on the Diner, I say we CANNOT LET THIS STAND. We need to use our Bully Pulpit here on the Internet to do the best we can to PUT A STOP to this.  So with this article, I am kicking off a Week Long BLOG-A-THON to Raise Awareness and lend support to Eustace Conway and Turtle Island in the best way we can, with what we do as Bloggers.  This week I ask all my Blogger friends to contribute an article to support Eustace Conway, to Sign the Petition yourselves as I have done and to ask all your readers to do the same.  Together, we all get 100s Thousands of Page Hits/Day.  The Petition only needs another 8000 or so Signatures to meet the 25,000 requirement.  If we muster up all our readers, I am certain we can meet this number of Signatories.

Below I am publishing the Petition written by Dan Tingen, Chairman of the Turtle Island Community published on Change.org.  Please go to that website and sign it, and contribute what you can to keep the Turtle Island Preserve functioning and growing and providing a great example for our Nation and ALL PEOPLE on how to move off the Oil Economy and Reverse Engineer back to a more sustainable way of life more in harmony with the only home we have, Mother Earth.

RE

North Carolina Building Codes Council: Alter NC building codes to exempt structures at Turtle Island Preserve.

Dear Friends of Turtle Island Preserve,

Turtle Island Preserve is in danger. Please read this letter, and, if you feel moved to do so, carefully follow the suggestions for support provided at the end.  

Recently, local county government authorities have targeted Turtle Island Preserve, attacking our way of life, and forcing our educational camp to close to visitors.

On the morning of September 19th, eleven county officials (being paid by tax payers) barged into our living room unannounced, uninvited, and unwelcome. A large caravan of county vehicles blocked our private road, miles away from any public area. The men (some armed) presented a search warrant two and half miles into the interior of our private land, a most intimate zone of refuge where we do not even take visitors, and then spent the next half of the day violating our privacy and photographing our buildings and personal homes. The unwanted invasion team came prepared with topographic maps, aerial photographs, GPS equipment to discern coordinates, laptops, pages of highlighted photographs of unknown origins, and even a county 4-wheeler to more easily get around the property. Much time and tax-payer money had clearly been spent preparing for this deployment against our 501c3 non-profit education center.

The primary focus of this action centers on our buildings and construction methods. The American heritage buildings that we keep alive and teach about are “unacceptable” in today’s modern world. The very building techniques and materials that all of our ancestors thrived with are now being deemed unacceptable and targeted as illegal because they don’t fit into the cookie-cutter code status that is so extremely far from what we are about. The buildings and lifestyle of our working farm and education center teach about true American freedom. The invasive attack was a surreal wake-up call to the illusion of the American myth: “Land of the free.”

Those of you who have visited Turtle Island Preserve know that our structures are unique in that they are built with materials harvested here on the farm and adhere to natural and historical methods. Our buildings are unquestionably structurally sound, but do not fit the wording or application of modern building codes, as the methods used to build them predate the conception of modern building codes.  The veteran, licensed engineer we hired to assess the structural concerns expressed by the county stated that our buildings are “Better than code.” If modern, cookie-cutter buildings fit our purposes or needs, we would have built them. But they certainly do not.

To comply with current, modern building codes and regulations, with no variance or allowance for natural, traditional, historical, cultural or educational models, is at the very least a compromise to our integrity, our mission, and our value to the community and the world.  If we were forced to function like every other public facility, the values, ethics, and practical knowledge we teach would be lost. Trying to force a modern framework around a facility that is specifically designed to be primitive does not make sense. The methods we teach go back tens of thousands of years. The modern building codes go back only 40-50 years.

For the past twenty-six years, Turtle Island Preserve has been a functioning farm and education center for primitive skills, cultural heritage, and traditional/natural living. We are run by volunteer laborers and administrators, good citizens who believe in the worth of volunteering their time to share natural traditional living in hopes of making life for people more meaningful and our impact on the earth a gentler footprint. Our non-profit education center has brought thousands of people from all over the world, of all ages, faiths, and socio-economic backgrounds and enabled them to develop a personal relationship with the natural world.  In many cases, these are people (usually children) who would not have the opportunity to gain that experience elsewhere.  What they get here, they keep forever.

Eustace Conway, full-time volunteer director of Turtle Island Preserve for the past 26 years, now faces the threat of criminal charges. That’s right, for dedicating his life to celebrating and preserving American cultural heritage, his American government is condemning his interest in exercising what he believes is an inalienable human right to build and live in the traditions of our ancestors. He said, “If this was a joke or something out of a science fiction novel about corrupt government control, maybe I could laugh about it… but it is very, unbelievably, maliciously true… and I can only cry about it, and ask for the voice of friends to support me and citizens that care about the ‘American Dream’ of freedom to speak up for their rights and interests now.”

Our recent studies show us that there may be no variance for any private, state, or federal interpretation sites that exhibit natural/primitive historic structures or practices. The recent attack on our home and lifeways makes us question the confines of our state building and county codes on our most fundamental freedoms of American heritage, Appalachian regional culture, and a three million year precedent of inalienable human rights concerning structures and living.

We are working with legal counsel and structural engineers to present a clear and thorough assessment of our structures, practices, and mission to authorities who are not personally familiar with Turtle Island Preserve. We have drawn up a petition and begun a letter writing campaign, all of which we’ll present to the North Carolina Building Codes Council on December 10, 2012 in the hopes of educating the council about the unique importance of Turtle Island Preserve and securing a variance for our continued operation without sacrificing our integrity and commitment to historic structures and natural lifestyle.

We need your help in raising a voice. This matter will not be resolved positively without your support. Please help support Turtle Island Preserve by taking the following steps:

1.      Sign the petition at www.change.org.

2.      Join the letter writing campaign! Write your own letter in support of Turtle Island Preserve, or use the attached letter – just print, sign, and send to the Chairman of the North Carolina Building Codes Council.  Either way, be sure to send us a copy of your letter, too.  

It is impossible to overstate how important your swift support is to the future of Turtle Island Preserve.  With the North Carolina Building Codes Council meeting just three weeks away, we need all the voices we can get, and as quickly as possible. Please set aside a few minutes to sign the petition, send a letter, and stand with us as we work to save Turtle Island Preserve.

Keep checking Facebook for updates, and for more information on the Building Codes Council meeting or if you have any questions at all, please email mail@turtleislandpreserve.com or call our office at 828-265-2267.

In appreciation,

The Staff and Community Members of Turtle Island Preserve

Addresses:

NC Building Codes Council

Dan Tingen, Chairman

322 Chapanoke Dr.

Raleigh, NC 27603

 

Turtle Island Preserve

2683 Little Laurel Road

Boone, NC 28607

History & Future of Coinage & Money

Off the keyboard of RE

Published on Reverse Engineering June 2009

http://thebelovedcity.files.wordpress.com/2012/11/poussin-the-adoration-of-the-golden-calf.jpg

Discuss this article at the Money Table inside the Diner

Note from RE:  Monsta and I have both been engaged lately in taking a deeper look at how Money works, particularly in the aftermath of the Gold Smackdown that went down in the paper/digital markets a short while back.

This is not a new topic of course, it’s an old one in the collapse blogosphere, particularly as it relates to the effects of Deflation & Hyperinflation, and I’ve hit on the topic numerous times in the past.  In the course of putting together the most recent series on Money, Monsta turned up the following articles originally published on Reverse Engineering.  Since they relate to my last Future of Money article, I’m republishing them now here on the Doomstead Diner.

RE

We all love to hate Fiat Money. I certainly write plenty of metaphors about “Printing” and “Burning Up the paper we use for currency (though less these days than the Digibits in your account, accessed with your Plastic Card and Password). As the digibits and the paper dissolve and burn up here however, recidivists of the PM variety pine longingly for the days of a Precious Metal Standard. Gold Sovereigns, the Pound Sterling, that sort of thing. I think many fantasize about their own little cask of Louis d’Or Gold coins buried in their backyard, and some may even have the equivalent of that in Gold Eagles or Kruggerands.

http://fc08.deviantart.net/fs71/i/2010/291/f/c/pieces_of_eight_by_werden-d311zw2.pngWhat I would like to discuss here is the limitations of PM Coins as a Currency, and why they in fact are much easier to counterfeit and debase than the paper stuff is.
First off, as you hopefully know, the total amount of gold and silver available for coinage is pretty limited. For Gold, it amounts to about .7 oz for each person on the earth. So, even if you made tiny gold goins of .1 oz each, distributing them out across the world each person could only have an average of 7 coins. One a day, that actually works out nice 🙂 Small though that number is, you still could imagine such a system working if in addition to the 7 Gold Coins you might earn each week, you also could exchange them for say 70 silver coins to use in actual commerce. You give say 20 Pieces of Eight to your landlord for rent, 30 pieces of eight to buy groceries, 10 pieces of eight to buy fuel to heat your house and cook your food, 5 pieces of eight to save for a Rainy Day and 5 pieces of eight paid in TAXES.

Seems like a fair system right? Now, I am not even going to get into how easy it is to counterfeit and debase PM coinage, but I am nevertheless going to demonstrate to you why even fairly applied; this currency system fails over time.

You always have some people who save, and some who spend. In a situation where nobody is ALLOWED to borrow or lend, nobody can spend more than they actually earn, and similarly nobody who earns more than they spend can make any money in interest payments. However, even in the absence of THAT, the system still fails, and the reason is the Savers or Hoarders if you prefer.

Say you start out your system with 100 people, 7 Gold coins to a person for 700 total Gold Coins in your community. To augment that, you have 7000 Pieces of Eight you use for daily commerce. Your entire economy is defined by 7000 POEs and 700 GCs.

Start out, Week 1. J6P Saver gets through the week saving his 5 POEs. So does another J6P Saver. Joe Spender cannot spend more than he earns, because he isn’t allowed to borrow. What happens in Week 2? Well, in Week 2, if you assume half the J6Ps are savers and half spenders, 50 of them will be hoarding 250 POEs. That means after that week, 3 POEs are out of circulation and in the Piggy Banks. In said scenario, with half the people saving about 8% of earnings and half spending and no borrowing or lending, it would only take about 28 weeks before ALL the POEs were out of circulation and sitting in Piggy Banks! You could exchange them all for the 70 GCs you have and get another 28 weeks out of it, but at the end all the money left is in the hands of the 50% of Savers, the other half of your Tribe has NOTHING. What do you DO with that half of the Tribe? Put them in Prison? They didn’t even go into DEBT! They just did not save while others did.

Well, we added on to this idea with interest and lending, and even more exotic financial instruments like CDS contracts, but the principle remained the same over the ages, and more and more of the money got centralized over time. The ONLY thing that ever really redistributed wealth of the monetary kind was war or revolution; Savers generally are not predisposed to GIVE their money away to spenders.

It’s not just Borrowing and Lending that wreak havoc on a monetary system; it’s the whole concept of SAVING. As soon as you have some Squirrels in a society who harbor a fixed amount of nuts, eventually the nuts run out for all the other squirrels. It doesn’t even matter if they did it fairly or by insidious theft (the latter being the leading cause since about 1600AD), you STILL get the effect of half your society as Haves and half as Have Not’s. Even THAT isn’t the real problem though, you could always just Exile the Have Not’s. The real problem is you dried up the liquidity in the money supply, which is fixed because it’s based on PMs. It gradually comes out of circulation as people save, or in more common circumstances as Goobermints tax it all away from you. Like a Vacuum Cleaner, eventually all the money ends up in ONE bank. Long as you accept what is IN that bank as money, there can be no more commerce past barter. That is the Restart that has happened over and over again through history. Monetary system crashes, Barter replaces it, monetary system reintroduced by hoarders of Gold.

Gold Bugs actually are the BIGGEST cause of Fiat Money. Because they accept Gold as Wealth, they lay the seeds for a Fiat Money system to follow it. What I am trying to drive home here is that a monetary system based on Precious Metals CANNOT work. It’s just a precursor to the Fiat system, which ALSO cannot work. The whole CONCEPT of Money is wrong. That is what is so hard to make people understand.

RE

http://heritageofjapan.files.wordpress.com/2008/09/nihonnoruutsu-yayoi-rice.jpg

Far as a sustainable Banking System, I have written about this a few times, and its my hypothesis we need a system based on Food Energy, the Calorie of the food kind which is related to the kilocalorie of the Joule kind which represents thermodynamic energy.

The closest historical model I am aware of is from Feudal Japan, where a “Koku” of Rice represented Wealth. However, as with all the other monetary systems this one also was open to abuse, as more Koku Notes were issued than rice actually existed, especially in times of famine.

The BIG problem you always have in a monetary system, whether it is Paper Money or PM Coins is making the Money Supply MATCH the absolute output of the society in terms of its food supply. Fossil Fuels THOROUGHLY disguised this problem with the Green Revolution, food became EXCEEDINGLY cheap, to the point it had to be GIVEN away in the form of Food Aid, which of course just exacerbated the Overshoot Problem we face now.

Retreating here now, REVERSE ENGINEERING our way back off this problem requires to things primarily. First it requires tying the currency we use to the ABSOLUTE amount of food produced in any year worldwide. Then it requires honest accounting to withdraw or add currency to circulation as the total amount of food calories rise or fall in a given year. ALMOST impossible to do of course, but not completely IMPOSSIBLE either.

http://images4.wikia.nocookie.net/__cb20130206182109/l5r/images/7/7a/One_Koku.jpgEssentially, you have to issue NEW Currency each year based on the total Harvest, and this also prevents you from SAVING any “money” from year to year. The only thing you could actually save is the REAL commodity it’s based on, if it was Koku its RICE. If in ADDITION to the Harvest, you ALSO had 5 Bushels of Rice in your Doomstead Larder, Koku Currency could be issued on that as well.

Max SAVINGS for any individual with such a system? Perhaps around 7 Years, the max you might keep bushels of rice stored in your grain cellar without it going bad or eaten by mice. Do I hear JOSEPH here? Do I hear the BIBLE? Hello, that shit was written with 5000 years of human experience gone before it, all that stuff about “Never a Borrower or Lender Be” and 7 years of Famine were written for a REASON. Why do you think they wrote all that shit about the Golden Calf? The Gold thing left them impoverished OVER AND OVER again! So eventually a bunch of them said to HELL with that, and made a new set of rules, which of course nobody really followed.

Economic systems and savings is all about consolidation of POWER. They became increasingly complex with time, but the fundamentals remain true. Because some peoples save and others spend, wealth consolidates over time as long as you define some object as the repository of wealth. That object historically was PMs, lately it has be US Treasuries, but in NEITHER case did these objects represent REAL wealth in absolute terms, they only represent it for so long as a particular monetary system holds up, which traditionally is no more than around 50 years. Thus the reason for that other tradition in Judaism, the Jubilee Year, were all debts are Forgiven.

I am not in favor of Jubilee Monetary system. I advocate for a yearly system based on the absolute number of food calories produced in that year. Clear Accounting of the production, and then a clear issuance of currency to match what was produced plus what was saved from prior years. That is correct accounting of the wealth, and trade can proceed from there in a Mark to Market fashion, NOT mark to Make Believe. There still will be winners and losers, there still will be savers and spenders. However, outrageous accumulations of wealth will not be possible, not past the 7 year lifespan of most food. I am OK with somebody being 7 times wealthier than me because they are a good saver. I am NOT OK with somebody being 7000 times wealthier than me because their ancestors took control of our monetary system. That is patently unfair, and needs to end here.  End it will, by default in both senses of the word.  A contracting economy can’t support a monetary system based on growth, and in the absence of copious amounts of Energy, our economy is destined for contraction for the forseeable future.

Bayman Beachfront Blues

Off the keyboard of RE

Discuss this article at the Frankenstorm Table inside the Diner

 

As most people are aware by now,  most of the damage caused by Sandy came along the shoreline due to an impressive Storm Surge over a very long stretch of coast, one of the most densely populated coastlines on any continent.

Numerous iconographic Beachfronts were hit, the Boardwalk in Atlantic City basically destroyed and I suspect the newly renovated Coney Island Amusement Park did not fare much better.  The beach in the Rockaways where I made Sand Castles as a kid was hit hard, and many homes and biznesses in this aging beachfront community were simply washed out to sea.

Sandy didn’t just hit the poor and the middle class though, she was equally destructive of the multi-million dollar Mansions in the Hamptons where the Masters of the Universe go to play each weekend, sutffing themselves with Canapes and 500 year old bottles of Pinot Noir while they stuff the noses of Ford Models with coke prior to doing Channel Stuffing they practice on the Stock Market during the week.

Although there is no Beach on the Southern Tip of Manhattan Island, it’s not much more above sea level than the typical Beach is and also went under water for several hours, long enough to fill some Subway Stations and Tunnels with seawater, along with the basement Safes of some Securities firms holding $trillions$ in Stock Certificates in them, with some estimates putting the value of this Toilet Paper in the $36T range.

Hindsight is always 20-20 Vision of course, and after the fact here all the talk is about how to Build it Bigger and Better for Next Time, robust enough to fend off the worst that Mother Nature can throw out.

In terms of Large Public Works Projects, some impressive ones are being bandied about.  One is to build a huge underwater Seawall around lower Manhattan and the Port of NY/NJ that would deflect most of the energy of a storm surge.  Said Seawall would have some breaks in it that Tanker Ships could pass through.

This of course is similar to the Dykes built around the Netherlands holding back the Sea there, and overall on the engineering level this is some pretty impressive stuff for sure.  In the Dutch case though, the Dykes were built up over many Centuries of time and the marshy areas which were reclaimed were not very deep.  Although I am sure with modern heavy equipment, lots of Fuel and GOBS of Money the Army Corps of Bozos probably could build something like this it sure would not happen overnight, even if they do Print new Debt Money to do it.  The estimate on cost I read for this brainstorm is around $6B, but I am sure that estimate is made with the assumption Oil stays at $100/barrel for the decade it would take to complete it.

Thing is here, while this might prevent the worst Storm Surge from overrunning Wall Street, the deflected water is going to go somewhere, likely the Jersey shore to the left and the Brooklyn shore to the right.  So they will end up WORSE off after it gets built.

Another somewhat more reasonable Infrastructure Improvement I read about was to put Storm Doors on all the vulnerable Subway entrances and Air Vents and create “plugs” or “corks” to stuff in the ends of tunnels which exit into low lying areas.  Apparently Bangkok has such a system in place which allowed their subway system to keep running even during the regular and heavy flooding events they have been subject to the last few years.

Again though, nobody really explains where all the MONEY is going to come from to make all these improvements or how it would ever be paid off if you issue Debt to do it.  In the case of the Subway improvements, how high do you have to hike the Fare the Straphangers pay to actually pay this stuff off and then maintain it?  The subway system is ALREADY subsidized heavily, by you guessed it BROKE Goobermint.  The reason the system never gets Upgrades is BECAUSE it doesn’t pay for itself already.

Although little Newz is trickling out from the devastated Beachfront communities along the Jersey Shore and Long island, the pictures alone tell you that the rebuild costs are Unimaginable, and Goobernator Chris Christie has already said it will be “a long time” before these communities get their lights back on.  He should have added, “if ever”.

So, SHOULD people actually be LIVING so close to the shore in such vulnerable spots to the destructive Power of Mother Nature?  On the surface Common Sense says no, but there are many reasons why MOST of the population of Homo Sapiens does in fact live close to the shore.

First off, going right back to Ancient Civilizations which first used Boats for fishing and then trade, a large portion of the population has always made its living from the Sea.  So you naturally get towns and cities forming up at locations where boats can port up in relative safety, and in fact the Port of NY/NJ is one of the best protected harbors in the whole world on a geographic level.  That is WHY the Dutch dropped the settlement in New Amsterdam at the bottom of Manhattan Island.

Prior to the Railroads, once you got interior to a land mass to any great degree, any trade goods from other places became quite scarce and expensive.  Evne once you HAVE Railroads though, you need to have substantial numbers of people at the terminal end near the Seaport.  Still, you probably could organize it so only a Skeleton Crew of people are at the shoreline, and most of the people are far enough inland that they won’t get nailed with a Storm Surge.

The problem here is that people LIKE the Ocean.  they like swimming in it, surfing on it, tanning on the beach and Ogling the Girls in their Bikinis also.  Recreation is BIG BIZNESS, and there are Seaside Resorts in just about every Country and Island in the WORLD, and Seaside Communities that grow up around them to service the Tourist trade.  For some places like Hawaii, this Recreational tourist Trade is pretty much the only real economic driver they have, you just don’t earn all that much FOREX growing Pineapples and Macadamia Nuts.

Even for pitiful and aging Seaside Communities like Atlantic City, the Boardwalk and the Beaches are what set it apart from the Indian Reservation Casinos and Las Vegas.  In terms of Tax Revenue, it was a main source for New Jersey and that revenue is not coming back anytime too soon, and not until NJ spends a small fortune to do a rebuild.  Can they ever recoup what the spend in Taxation of a refurbished Atlantic City?  Highly unlikely of course.

Probably the most important econonomic driver for our Industrial Societies centered along the coastlines are all the Refineries and offload points for Tankers carrying the Crude from underneath the Desert Sands of Saudi Arabia and off the shore of Brazil and Venezuela.  The VLCC Super Tankers require specialized deepwater ports like the LOOP to function, and moving heavy unrefined crude through pipelines from them is costly on EROEI.  The closer you can make the Refinery to the offload point for the crude, the more profitable it is.   So you have many FSofA refineries near the shores of Lousiana and Texas, and on the Jersey shore also.  You need workers for those refineries who live nearby them, and again communities sprout up in vulnerable locations.

Trying to move all this infrastructure away from the shorelines is an impossibility as long as you want to maintain this sort of Industrialized culture, and overall most people who live inside such societies want them to continue onward as they have known them.  They want Lights On in their McMansions, they want Running Water in their Toilets.  They want the I-pads, Plasma TVs and SUVs too, but they at LEAST EXPECT that they can live in a heated home with running water.

While it does appear that the NY Shity Subway System has been brought back online for the most part, underplayed in NEWz Reports to date is just how much OTHER infrastructure has not been brought back yet.  As the Major Financial Hub of the Empire, Wall Street is the first one to consider on the Economic Loss level here.  Even though CONedison has brought Power back to Lower Manhattan, MANY Coomercial and Residential Skyscrapers can’t accept that power.  Why?  Because their basements were not hardenned against such a massive Flooding even tlike the Subways are, and most of their Electrics and Heating mechanisms are housed in their BASEMENTS, which in many if not most cases WERE Flooded Floor to Ceiling.  These include buildings like 125 Maiden Land &  55 Water Street, which houses offices for companies like S&P and services like UNICEF and Planned Parenthood:

At 125 Maiden Lane in Lower Manhattan, a 17-story building not far from the East River, a disaster recovery company official involved with work on the building said that it would be months before it could reopen. Like many other buildings in the vicinity, he said, it was flooded and would need new transformers, boilers and other equipment.

Tenants include the United States Fund for UNICEF and the International Planned Parenthood Federation.

 

At 55 Water Street, where Standard & Poor’s has offices, the “restricted use” sign listed “severe flooding in basement, no fire alarm, no power, damaged face brick at loading dock.”

On Sunday night, water gushed from hoses that snaked inside the shuttered towers. Workers scrubbed and mopped lobbies.

Brookfield Office Properties, which operates One New York Plaza near Battery Park, where Morgan Stanley is a tenant, estimated that it would be three to six weeks before the building reopens.

These towers are not all strictly Bizness either, some are residential, often housing Eledrly people:

Many of the residential buildings in Lower Manhattan without heat house significant populations of elderly people, including Smith/Vladeck Houses and Southbridge Towers, a Mitchell-Lama building, according to Julie Menin, former chairwoman of Community Board 1.

A rapid Cleanup for many of these buildings is unlikely, because besides the damage to the electrical and heating systems, they also  have been contaminated with Oil and Gas Seepage from Sunken Carz:

Because cars and other vehicles were submerged, gasoline, oil and other chemicals poisoned the waters that entered the buildings. As a result, the buildings themselves will have to undergo special cleanups before people are allowed in. These cleanups could take weeks.

Precisely where the Management Companies for these buildings is getting the MONEY to do this Cleanup remains unclear.  Also unclear is whether Commercial or Residential Tenants inthese buildings will continue to pay Rent/Mortgages on spaces they can’t Work or Live in.

Larger companies in NY Shity have Multiple Office Spaces distributed through many Towers, so these companies are no doubt shuffling people around to some other spaces they have “doubling up”.  For the smaller companies though, they have to quickly find alternate locations to workout of, or else go Outta Biz.

So beginning with Wall Street on the Economic Level, you have huge hits here in 3 areas, Clean Up cost,  Insurance Liability and Payout and Lost Tax Revenue.  Those spaces don;t come cheap, and there are a lot of them “underwater” here now, around 400 large buildings in this Nabe “Yellow Tagged” by the Department of Buildings as Unsafe.

While Individually  not as costly, the AGGREGATE cost of all the Residential and Comercial Real Estate that went Underwater on Long Island and the Jersey Shore, along with the Brooklyn, Queens and Staten Island Real Estate is likely much GREATER than even the cost of Out-of-Service Wall Street buildings.  An important factor to consider is how many people will continue to Pay Mortgages on housing and commercial structures which either no longer EXIST, or have been declared so Unsafe as to be Uninhabitable now.  Would YOU keep paying your mortgage on a McMansion so damaged you cannot live in it anymore?  Many if not most of these folks will eventually here walk away from these Properties.

Calculating the precise total here of lost revenue, lost taxes and cleanup costs is basically impossible at this point, and true Numbers as they come in will certainly never be reported.  The $50B “estimate” for damage here is a crock of shit, it is WAY higher than that, even NOT taking into account the possibility of $Trillions$ in Securities being “lost” in some Basement Safes.

One thing you can be certain of as the Money to Rebuild is distributed out, it will NOT be distributed out to the Individual Homeowners and Small Bizmen who lost their homes and livelihoods here.  The Money will be distributed out to Well Connected Corporations, Big Bizmen & Contractors with good Political Connections who get Cleanup work.  A bit of this will Trickle Down to J6P Construciton Worker who has been UE for a while and now will have Cleanup work for a few months, but once done those jobs will disappear as fast as they appeared here.  Those New Jobs are more than balanced out by the many people who LOSE their jobs here because their workplaces no longer EXIST at all, or the companies they work for are not on the Gravy Train to get the Big Loans to “rebuild”.

What many people on the Jersey Shore and Long Island just found out is that you CAN’T expect that Electric Power and Heat for your Biz or Domicile will remain in place, just as a whole bunch of people found that out when NOLA got hit by Katrina.  If you are not Well Connected enough to get the Big Money Handouts from Da Federal Goobermint to “rebuild” you are basically SOL here.  I am quite SURE S&P will be floated a $100M or $1B Loan from Helicopter Ben to repair THEIR Building, I seriously DOUBT  Emilio or Mohammed gets a $100K loan to repair his Bodega.

So across the board here, we at the very LEAST are looking at a version of Jimmy Kunstler’s Long Emergency, and incremental Spin Down of the quality of life for MANY formerly Middle Class people in the NY Shity Nabe.  Staten Island is QUINTESSENTIAL “Middle Class” Working Man territory in NY Shity, probably half the NYPD, Sanitation Department and NYs Bravest Firefighters live on Staten Island.  These are not “Welfare Leechfucks”, they were hard working people who bought into the Amerikan Dream, now turned Amerikan Nightmare.  Now they ALSO are the Underclass, and will be left Hung Out to Dry as the Big Money is passed out to Big Corporations in the Capitalist system to “rebuild”.So it has always been here in the FSofA, since Alexander Hamilton openned the First Bank of the FSofA, since Andrew Jackson tried to “Kill” the Second Bank of the FSofA and since Paul Warburg and Nelson Aldrich SUCCEEDED in resurrecting said Banking System for the Illumati on Christmas Eve of 1913 with the passing of the Federal Reserve Act after Secret Meetings on Jekyll Island.  Anyone who believes that “Freedom” & “Dmocracy” have EVER existed inside the borders of the FSofA is seriously deluded, victim of 300 years of solid and continuos BRAIN WASHING.

The thing is, once the Coastal Shities fail, the Interior Shitieshere in the FSoA will also FAIL,  though not necessarily from the direct attacks of Mother Nature from Hurricanes and rising Sea levels with bigger Storm surges.  They will fail as the energy supplies they need to operate fail to reach them from the coastline.  They will fail as the huge ports which service the Container Ships are damaged and destroyed by Mother Nature.

Here in Alaska the Port of Anchorage is aging and decaying, it hasn’t been rebuilt or even maintained all that well since the Big Quake in ’64.  Next decent quake we get there, it’s all rubble and I seriously doubt will be rebuilt.

The small Fishing Boats and Kayaks will last a while longer though, and people will still live and work near the Sea, from which ALL LIFE comes, until the Sea itself has life no more.  A dangerous place to be for sure as Mother Earth becomes more Geologically and Atmospherically unstable, you never know if you picked the WRONG day to go out Dip Netting the Kings when the run and a Tsunami comes your way here on the Ring of Fire.

If you do see the tide run out real fast though, drop the dip net, drop the fish and RUN LIKE HELL for the High Ground.  At least it slopes up pretty quick here in most places and you can get up 30 meters pretty quick.  Not so true on Long Island, where you gotta get inside a good mile from the shoreline to be up more than a few feet above Sea Level.

Anyhow, you can second guess all you like all the people who lived once on the Jersey Shore and in Coney Island and Rockaway Beach and on Fire Island too, but who will live there no more even if they did escape with their lives this time.  While you are at it, you might also second guess all the folks who live in Tornado Alley on the Texahoma border.  Not to mention all the folks who live in the Flood Plain of the Mighty Mississippi.  Not to mention all those folks living on top of the San Andreas Fault or in range of Sparks from tinder dry Forests in New Mexico and Colorado.  Wherever you are, eventually the Odds catch up with you, and you never know the day the Big Show will Come to a Theatre Near You.  The odds don’t appear to be improving here either, apparently 500 year floods now arrive 2 or 3 times a decade, and we get a new “Freak” event all the time like “Derechos”, “Haboobs” and “Frankenstorms”.

Perhaps the most IMPORTANT Second Guessing to be done here is WRT the Nuke Plants distributed out worldwide in ALL of these vulnerable locations.  Nuke Plants need a HUGE amount of Water for cooling, so they are always nearby major rivers or near the coast.  The cities and Ag Land these Nuke Plants provide energy for quite often are over geological fault lines and/or subject to drought or flooding.  There is nowhere “safe” to put something that has toxins that will last for Millenia, on a Millenial Timescale just about EVERY neighborhood gets hit with some kind of major disaster.

All Nuke Plants need to be Decommissioned, and all the spent fuel collected and sequestered off where it can do the least damage, perhaps in Antarctica or perhaps by sinking it into a subduction zone around the Marianas Trench, but it MUST be moved BEFORE, not AFTER the disaster strikes.

Will we have to sacrifice the Lights and the Flush toilets?  Most probably so, but at least perhaps then we will survive as a species and eventually come up with some better ways to manage the resources of the Planet we live on, and which gives us ALL life.  Its the only one we got, and we ain’t making out to any Exoplanets anytime too soon either.

RE

The Great Race at the Finish Line

Off the keyboard of RE

 

Discuss this article at the Economics Table inside the Diner

 

A fairly popular perspective around the Collapse Blogosphere is that the overall collapsing economy will result in just the Uber Rich still driving around in Carz, while J6P makes it to work and the grocery store on foot, bicycles and trains.  Is it really possible though to maintain a network of roads and bridges suitable for Carz when only the Uber Rich can afford both the hardware of the Car and the Konsumable of Gas to run it?

Gottlieb Daimler's First Car

Back at the dawn of the Industrial Revolution when Carz were invented, they were a Toy for the very rich. They drove no faster than the typical Horse driven Carriage on the same roads designed for those vehicles. Maybe 15-20mph tops there. Yes horses CAN run faster than that, but if you are inside the stage coach and the horses are at full gallop yanking the coach behind on a dirt road, you likely hit your head on the ceiling innumerable times and come out seriously Brain Damaged.

Our Industrialist Ubermeisters though were enamored of this new technology, and wanted to build ever faster and more powerful Carz they could zip around in, just as they had built Private Railroad Cars to tack onto the back of trains carrying the Hoi Polloi.

Thes new toys were GREAT, and the Uber Rich started Racing them around tracks, and even organized up Races across countries in the new fangled Horseless Carriages. A Spoof of this called “The Great Race” with Tony Curtis and Jack Lemmon produced by Hollywood back in the 60s showed the vast number of PROBLEMS these guys had racing their carz “Around the World”

Of course, being stuck on a melting Iceberg isn’t a REAL problem early drivers dealt with, but rutted and muddy dirt roads were, along with many roads regularly washed out in the Springtime which a Horse could easily negotiate by wading through but a Car could not. 3 feet of standing water anywhere and you submerge the exhaust, water gets into the engine, DEAD IN THE WATER.

Who dealt with this problem in all its magnificent glory the most? A Young Lieutenent in the FSofA Big Ass Military, Lt. Dwight D. Eisenhower, was assigned the task in 1919 of bringing a Military Convoy across the FSofA on the Road Network of the era:

ORIGINS AND PURPOSES OF THE 1919 ARMY CONVOY

World War I (1914-1918) was the first large scale military conflict that employed vehicles powered by the relatively new internal combustion engine. Airplanes, trucks, motorcars, and tanks were used on both sides. However, they lacked the reliability, flexibility, and capacity for moving large masses of troops or equipment over long distances on inferior European roads. The vast majority of WWI military transportation on land was done by horses and railroad trains; nevertheless, by the end of the war, most military leaders saw the potential for increased use of motorized troops and equipment in military campaigns of the future.

The end of the war also inspired the leaders of the Good Roads Movement to resume their public relations (PR) campaign to convince the public to demand better roads from state and local governments. The PR campaign had been put on hold during the 1917-1918 period while America was engaged in WWI. Early in 1919, Lincoln Highway Association leader Harry Ostermann had persuaded the War Department to conduct a transcontinental motor convoy trip from the East Coast to San Francisco on the marked route of the Lincoln Highway.

The purpose of the convoy was two fold: 1) it was to be a training exercise and 2) a test of the feasibility of the long distance movement of military men and supplies by auto and truck.

From the Good Roads Movement’s viewpoint, the convoy was meant to produce positive PR by demonstrating that long distance motor travel was possible. It was also meant to heighten awareness of existing poor roads that comprised much of the Lincoln Highway and other roads in the Unites States. Return to Top

AN EPIC JOURNEY FULL OF CHALLENGES AND OPPORTUNITIES

Amid much hoopla, speeches and fanfare, a 76-vehicle combined “public-private” convoy, including 56 military vehicles, 209 officers and enlisted men, and dozens of private citizens took off from the White House on July 7, 1919. (LH/MAIN STREET, p. 83).

Later that evening, the convoy was joined by two, last minute volunteer Army officers. They were Lieutenant Colonel Dwight D. Eisenhower and Major Sereno Brett, who were to serve as observers for the Army Tank Corps. PHOTO: Major Sereno Brett, Harvey Firestone, Jr., and Lt. Colonel Dwight Eisenhower at 1919 Army Convoy stopover at the Firestone Homestead, Columbania, Ohio, July 13, 1919. Eisenhower Library Audiovisual Department, photo 70-520-3.

The convoy was to operate as if the country was at war and that an Asiatic enemy had destroyed railroad lines, bridges, and tunnels. They were also to act as if they would be traveling through enemy territory and thus, had to be self-contained and self-sustaining over the 3,250-mile route. Maintaining the illusion of being at war or being truly self-sustaining proved to be very difficult, as was the trip itself.

Among some of the military personnel, there was even doubt whether or not the convoy could actually make it across the continent. The vehicles were untested over long distances. Many sections of the Lincoln Highway were unimproved dirt roads. Finally, few military personnel; especially enlisted men, had much experience with motor vehicle driving or maintenance. Eisenhower later wrote that the trek was a genuine adventure. “We were not sure it could be accomplished at all. Nothing of the sort had ever been attempted.”

At first, in the East from Washington through Indiana, the roads were generally good but mechanical problems with the various vehicles and logistical problems slowed the convoy’s progress. Military discipline among the men also was “conspicuous by its absence,” according to one observer. About the familiarity of the men with operating trucks, Eisenhower wrote:

All drivers had claimed lengthy experience in driving trucks; some of them, it turned out, had never handled anything more advanced than a Model T. Most colored the air with expression in starting and stopping that indicated a longer association with teams of horses than with internal combustion engines. (EISENHOWER REPORT)

As the convoy (also referred to as the “train” by some) headed into Illinois and the West, road conditions along the Lincoln Highway presented serious challenges that often delayed and sometimes halted the convoy. The Highway ran on dirt roads through most of Illinois, but the weather was dry, so it was possible to cross the state in a few days. Of the roads between Illinois and California, Eisenhower, in his post-trip report wrote:

The dirt roads of Iowa are well graded and are good in dry weather; but would be impossible in wet weather. In Nebraska, the first real sand was encountered, and two days were lost in western part of this state due to bad, sandy roads. Wyoming roads west of Cheyenne are poor dirt ones, with weak culverts and bridges. In one day, 14 of these were counted, broken through by the train. The desert roads in the southwest portion of this state are very poor. In western Utah, on the Salt Lake Desert, the road becomes almost impossible to heavy vehicles. From Orr’s Ranch, Utah, to Carson City, Nevada, road is one succession of dust, ruts, pits and holes. This stretch was not improved in any way, and consisted only of a track across the desert. At many points on the road water is twenty miles distant, and parts of the road are ninety miles from the nearest railroad. (EISENHOWER REPORT)

In fact, one of the biggest problems was the poor state of the bridges along the Lincoln Highway. PHOTO: Army Truck testing the holding power of one of many small bridges crossed during the Army Transcontinental Motor Convoy, 1919. Eisenhower Library Audiovisual Department, photo 81-17-25.

Advance notice of the convoy spread and its arrival in towns along the Lincoln Highway were occasions for celebrations and plenty of speeches imploring listeners to demand more public funding for “Good Roads.” The convoy passed through 350 communities, and it was estimated that more than 3,000,000 people witnessed it along the route. Millions more followed the trek in newspapers and early motion picture “newsreels.” PHOTO: 1919 Army Transcontinental Motor Convoy on Review, Salt Lake City, Utah, 1919. Eisenhower Library Audiovisual Department, photo 81-17-55.

The convoy did make it. Battered, but unbowed, the caravan arrived at the gates of Lincoln Park in San Francisco. However, it had taken until September 6, 1919 for it to reach its destination, a grueling sixty-two (62) days!

In November 1919, Lieutenant Colonel Eisenhower wrote a seven-page report relaying the observations he made during the Army Convoy to the Chief of the Army’s Motor Transport Corps (M.T.C.). He summarized the results as follows:

The truck train was well received at all points along the route. It seemed that there was a great deal of sentiment for the improving of highways, and, from the standpoint of promoting this sentiment, the trip was an undoubted success. As stated before in this paper, it is believed that the M. T. C. should pay more attention to disciplinary drills for officers and men, and that all should be intelligent, snappy soldiers before giving them the responsibility of operating trucks. Extended trips by trucks through the middle western part of the United States are impracticable until roads are improved, and then only a light truck should be used on long hauls. Through the eastern part of the United States, the truck can be efficiently used in the Military Service, especially in problems involving a haul of approximately 100 miles, which could be negotiated by light trucks in one day. (EISENHOWER REPORT.)

Return to Top

THE 1919 ARMY MOTOR CONVOY IN ILLINOIS

The 1919 Army Transcontinental Army Convoy crossed into Illinois on the afternoon of Saturday, July 19, 1919. It stopped the next day for a Sunday rest period in Chicago Heights. The trip was resumed on Monday July 21, 1919, and the convoy camped over that night in DeKalb. On Tuesday July 22, 1919, the convoy left DeKalb and crossed over the Mississippi River Bridge at Fulton, Illinois and entered into Iowa that evening.

During the two full days it spent on the road in Illinois, the convoy covered about 172 miles in a little over 21 hours on the road. It was fairly lucky with the weather and thus the roads, but as the following account from the convoy’s daily log reveals, it had its share of problems with the vehicles, drivers, and equipment in its journey across the Land of Lincoln.

(Read the official Army account of the convoy’s journey thru Illinois).

So here in fact is the real MOTIVATION for developing a Road Network around the FSofA that could support Motorized Transport.  It was necessary to make it possible to move the new fangled War machines of Tanks and APCs around the country quickly, so as to “Protect” it from a Hypothetical Invasion of Asiatic Forces.  Problem of course was the road system did not ALLOW for that,   It took 62 DAYS for the convoy to cross the country, as compared to the 3 days or so it would take me driving my Big Rig SOLO across the country a decade or so ago.  Team driving, you can do it in under 2 days.  To traverse 172 miles in Illinois it took 21 HOURS, an average speed of a bit over 8 MPH, which Horseback Cavalry would CREAM and even Infantry can probably keep up with pretty well.

So now you have not one but TWO motivations for why we “needed” a road system for these vehicles.  First for the Wealthy Great Leslie’s and Dr. Fate’s to be able to zip quickly Around the Country and NOT get stuck in Mudholes; and  Second so these same folks could move around Big Ass Military equipment basically to be able to steal from whomsoever they wanted whenever they wanted. “Build us a Road into your Town so we can Roll our Hardware down Main Street and run the show for you here!”  LOL.

How do you SUCKER people into paying for something they don’t need at all, because they do NOT have Carz to zip around in?  Answer: You build “Affordable Carz” for EVERYONE, and convince EVERYONE they need one!  So you Fund Hank Ford as many times as necessary until he comes up with a cheap enough car and promote to everyone with Advertising why they really NEED such a vehicle.

Which after a while they actually DO need, because the farmers who have a Tractor are out-producing the farmers still running Horse Drawn Plows, and new Trucks are moving goods around cheaper and faster than any Teamster driving a Horse Drawn Carriage can keep up with.

In 1919, less than 100 years ago, it really was close to impossible for Carz to move around the country, all they really could do was drive around at just about the same speed as the Horse Drawn Carriages, Stagecoaches and Wagons.  In the intervening time, a MASSIVE expenditure of capital was undertaken to build a road network in the FSofA to support that, and the way it was built was to distribute out the debt and the cost over EVERYONE in society who had a Car.  Unless everyone DOES have a car and Drives it willy-nilly around though, not only can you not afford to build MORE roads, you can’t afford to Maintain the ones already built!

The Electric Grid is not a whole lot different than this.  Electricity when Edison first put up his DC system was only available to a VERY few people, and was clearly not economicaly viable.  However, those who did have access to it wanted MORE of it!  They didn’t want just their house ILLUMINATED, they wanted the Restaurants they frequented Illuminated ALSO.  They wanted the Streets around their Upper East Side Apartments Illuminated also.  Of course though, they themselves could not AFFORD to pay for the Streetlights, so they gotta CONVINCE J6P HE really needs Streetlights so he will pay for it with his TAXES.

Only by getting DA GOOBERMINT involved here and taking on Debt in the name of the People to build these grids did they get built.  Same story all over the world really, Goobermints taking on fabulous amounts of Debt in the name of the people so they too could have an Electric Grid and a Road system, both of which you MUST have if you are to attract Capital to your country to build Factories utilizing still MORE fossil fuel energy and become a PLAYER in this great game of Industrialization.

One by one the Dominoes fell over the intervening years as really every Elite in every country Aspired to run with the Big Boys.  If you are in charge of China, you don’t want to be running a country of Ag workers in Rice Paddies, you wanna be big time Producer of Goods to sell to everybody else and as a member of the Han Chinese Elite, begin to live the same kind of Super Lifestyle of your Western Counterpart Elites.  The Big Yachts, the Private Jets, all that nonsense.  You do NOT earn enough FOREX running Rice Paddies to become a Master of the Universe, you are just a pipsqueak Feudal Lord until you jump on the bandwagon of Debt and Industrialization.

Anybody who believes the Chinese are SOLVENT with their late entry into the Industrialization Game is seriously DELUDED.  In order to become the Mercantilist Power they are, the Chinese took on a shit load of debt  Nobody built those factories for free, and nobody built the Chinese Electric grid for free either, anymore than it wa built for free here in the FSofA.  The Debt the Chinese have is hidden in innumerable ways, they run all sorts of Public/Private “Partnerships” between the Politburo and Capitalista Pigmen.  Da Chinese Goobermint promises to Tax the Living Shit out of Chinese Peasants, and in return Capitalistas fork over megabucks for Elite Han Chinese to build Factories staffed by Slave Wage Chinese Peasants.

The continuity/discontinuity problem is partially one of BELIEF, in that does anyone actually BELIEVE the massive debt that the FSofA owes to the Chinese will or can ever be paid off?  Even more that does anyone BELIEVE the the Massive Debt the Chinese undertook to Illuminati Bankster “investors” have can ever be paid off when energy costs go stratospheric in real terms, and Konsumers of Chinese Goods no longer have MONEY to buy those goods?

It remains a bit unclear as to who goes DOWN here first, the heavy Debtors or the heavy Creditors, they are both inextricably linked and really the Creditors themselves are in fact debtors also.  The chinese Economy is EXTREMELY fragile, despite what the MSM makes it out to be and how the China Bulls spin it.  The Chinese have Bubbles in every sector of their economy all just WAITING to POP here!  Real Estate, Regional Debt, insolvent Banks, the WORKS.  They are no different in this respect than the PIIGS.

Given all of this fairly obvious stuff, does it seem likely that the Chinese can continue to “Grow” at anywhere NEAR the growth rate they have show on paper here for the last Score of Years?  Seems highly unlikely to ME, and I haven’t even touched on their ecological problems and the drought situation they face.

Where I began this article was with the QUESTION of whether it is possible to maintain a Boutique Economy of Carz for the Wealthy while the rest of the population Walks or rides Bikes. How is it really possible to maintain all the infrastructure necessary for Happy Motoring with only the Uber-Rich Driving Carz? No, it is not possible.  China is important in this question, because if there is anywhere in the world where “Investors” think Growth is Possible, it is China.  Point is here, China has no more hope of Growing than Spain or Italy does, they are equally Fucked here. In fact due to their extreme Overshoot problems and extreme Environmental problems, the Chinese are in fact in WORSE shape than the PIIGS are.

Given that it is so unlikely the Chinese will be able to pursue a Boutique Carz Economy very long, why would anyone believe it could be pursued anywhere else either?  Carz are not going to disappear here overnight, and the roads won’t get SOOOO bad you can’t drive on them for a few years, but inexorably the system will decay, until at last there are no more Carz driving around at all, though many may become Homes of the Future.  In their Final Resting Place when the Gas Runs Out, until they Rust Away to Nothingness, these Carz already are providing Shelter for the Homeless.

 

The Great Race Run on the Thermodynamic Energy of Fossil Fuels has reached its Final Stage.  As the Saudi Phrase goes:

My father drove a Camel.  I drive a Car.  My Son flies a Jet.  His son will drive a Camel.

RE

Knarf plays the Doomer Blues

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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 2019-11-15http://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 [...]

Event Update For 2019-11-13http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.html Th [...]

Event Update For 2019-11-12http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.html Th [...]

Event Update For 2019-11-11http://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

It is harder to automate home production than car production, you are right. In the US, autos are sa [...]

Thanks! I don't remember seeing the NASA study before. Louis de Sousa and Euan Mearns put toget [...]

Different types of oil produce different mixes of gasoline, diesel, asphalt, and other products, wit [...]

I have run into way too many young people who say, "I am pursuing a career related to climate s [...]

I am not surprised at the change in emphasis. China has figured out how poorly renewables work, firs [...]

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... [...]

I join the chorus in welcoming you back. Any thoughts on how the shift away from bunker fuel on Janu [...]

@Front Range Mike "Most everyone I know is trying to figure out how to cut back and sell their [...]

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 [...]