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Guest Post: The Great Global Debt Prison
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Submitted by Giordano Bruno of Neithercorp Press
The Great Global Debt Prison
By Giordano Bruno
Neithercorp Press – 2/4/2011
Tense and terrible times inevitably summon an odd coupling of two
very different and difficult human conditions; honesty, and brutality.
Certain painful truths are revealed, and often, a palpable fury erupts.
Being that times today are particularly tense, and on the verge of
being spectacularly terrible, perhaps we should embrace both conditions
in a constructive manner, and become brutally honest with ourselves.
This begins by admitting to that which most ails us. It begins by
admitting how far we have fallen…
Our economy, our culture, our entire world, is built upon debt. No
one ever asked us if that’s how we wanted it, it is simply how the
system was designed when we came into it. Many of us have lived our
entire lives under the assumption that debt is a necessary function of
daily commerce and a valuable driver of successful society. Most
households in America operate at a steep loss, trapped in constantly
building cycles of liability and interest. There are even widely held
schools of economic thought that are centered completely on the
production and utilization of nothing but debt. Only recently have many
people begun to ask themselves what the tangible benefits are (if any)
in being dependent on debt based finance.
After careful examination, it becomes evident that debt does not fuel
economy, it suffocates it. It does not nurture growth, it stunts and
poisons it. Extreme debt is not a fundamental organ in a body of
commerce; it is an aberration, a spreading cancer which disrupts the
circulation of healthy trade. Debt is, in large part, unnecessary.
Of course, debt can be very useful if you are the controller or
determining overseer of a system, especially if you wish to centralize
and maintain power over that system. The tactical wielding of debt has
been used by elites for centuries as a means to imprison the masses, or
to create an atmosphere of endless dependency. Let’s take a look at
what debt really is, and how it is being used against the average
American today…
Understanding Debt
The Charles Dickens classic ‘Little Dorrit’ is commonly
misinterpreted as a “love story”, however, the primary character in the
book is not Little Dorrit, or the kindly Arthur Clennam, but the debt
system of Britain itself, and its effects on every social class from the
street beggar to the elitist socialite. Dickens despised the idea of
debt and debtors prisons, being that his father was thrown into one for a
good portion of his life, forcing young Charles to work just to support
his parents. Dickens understood well the evil intent behind the debt
system, and railed against it often in his writings.
One figure in ‘Little Dorrit’ which fascinated me was the character
of Mr. Merdle, a national banking superstar who dominates the investment
world with the help of British treasury officials and various political
deviants. Merdle is referred to by merchant circles as “the man of the
age”, a financial marvel who seems to make fortunes in every endeavor
he touches. Little does anyone realize that Merdle is a fraud, a Ponzi
scheme artist who takes money from unwary speculators and sinks it into
increasingly more tenuous investments. In order to continue hiding the
fact that all his financial ventures are ending in ruin, he lures more
and more depositors to pay off previous debts. The problem is that
Merdle is creating debt to chase debt. Eventually, his insolvency, and
that of all those who trusted him, will catch up and overtake the lie he
has carefully projected. All economic instability is invariably
revealed, no matter how expertly it is hidden.
Mr. Merdle, in my mind, is an almost perfect literary representation
of today’s private Federal Reserve and the global banking syndicates of
JP Morgan, Goldman Sachs, Citigroup, etc. The Federal Reserve, with the
help of politicians on both sides of the aisle, created a series of
illusory incentives (through interest rate cuts) which allowed banks to
begin lending almost unlimited fiat at rock bottom prices. America was
awash in credit, to the point that it was nearly impossible for the
average person to avoid the temptation of borrowing. What we didn’t
understand then, but are beginning to grasp now, is that credit derived
from fiat is not “capital”, it is NOT wealth. Credit is the creation of
an obligation, to be paid at a later date, if it is paid at all, and
because there are no rules to tie the debt to any legitimate collateral
(at least for banks), there is nothing to back the obligation if it
falters. Therefore, fiat induced credit is not the creation of wealth
(as Keynesians seem to believe), but the destruction of wealth!
Because of its lack of tangibility, debt can be packaged and
repackaged into whatever form banks like. Derivatives are a perfect
example of the phantom nature of debt; securities which have no real
value whatsoever yet are rated and traded as if they are a solid
commodity. This brand of commerce is, at its very root, a kind of
fiscal time bomb. Just as in the literary world of ‘Little Dorrit’, the
Ponzi scheme in our very literal world had to reach a tipping point, and
in 2008, it did.
One glaring difference between our troubles and those of Dickens’
fiction is that Merdle actually feels guilt over what he has done (or he
at least fears the justice that will be dealt him), causing him to
commit suicide towards the end of the novel. In the real world, the
Merdles of our era appear fully content to watch this country crumble
due to their intrigues, and rarely suffer any consequences for what they
pursue. In fact, the modern banking elite are more liable to revel in
the searing shockwave of a credit detonation, rather than feel any
“remorse”. The point is, Dickens saw clearly over 150 years ago what
many Americans today still do not; debt is an abstract idea, an absurd
game which confuses and ensnares innocent people. Debt based systems
con the citizenry into trading away their tangible wealth and labor for
the promise of future settlements that will never come. Debt serves
only to weaken the masses, and empower creditors.
The Consequences Of Debt
How has debt based economics served us so far?
The credit card debt of the average American household ranges from
$8000 to $15,000. Total household debt including mortgage and home
equity loans has hit an average of 136% of annual household income:
http://www.creditcards.com/credit-card-news/credit-card-industry-facts-personal-debt-statistics-1276.php
http://blogs.forbes.com/moneybuilder/2010/06/24/one-big-difference-between-chinese-and-american-households-debt/
Approximately 80% of mortgage loans issued to subprime borrowers over
the past decade were Adjustable Rate Mortgages (ARM), meaning 80% of
mortgages in the U.S. have reset or are ready to reset at much higher
interest rates. There were approximately 1.4 million bankruptcy filings
in 2009, and 1.5 million in 2010. One in every 45 homes in America
received a foreclosure filing in 2010:
http://www.marketwatch.com/story/top-10-cities-where-foreclosure-rates-are-highest-2011-01-27
http://www.uscourts.gov/Statistics/BankruptcyStatistics.aspx
Keep in mind that in 2005, new government regulations were
implemented making filing for bankruptcy much more difficult. In 2006,
filings collapsed. Now, despite stringent obstacles, filings are up
again over 100%.
The “official” national debt now stands at over $14 trillion, which
is around 100% of U.S. GDP (with entitlement programs like social
security included, this number is probably closer to 400% of GDP) . The
100% mark is often cited as the breaking point for most countries
struggling to sustain liabilities. Greece’s national debt stood at 108%
– 113% of GDP when it collapsed into austerity. From 2004, to 2010 (a
span of only six years) our national debt has doubled. To put this in
perspective, it took the U.S. over 200 years to reach its first trillion
dollars of debt. Now, we are looking at the accumulation of at least a
trillion every year. This is unsustainable.
The much talked about debt ceiling has been raised six times in the
past three years. This frequency is unprecedented. International
ratings agencies are now openly suggesting an end to America’s AAA
credit rating:
A credit rating downgrade would be devastating to what little foreign interest is left in the U.S. Treasury bond investment.
On the local front, cities and states are on the verge of folding due
to the evaporation of municipal bond markets. Cities depend greatly on
two sources of revenue in order to continue operations; property taxes,
and municipal investment. Property taxes, obviously, are disappearing
as property values continue to spiral downwards. This leaves only
municipals, which have also unfortunately fallen off the map:
Wall Street analyst, Meredith Witney, recently stated in an interview
with 60 Minutes that she believed 50 to 100 American cities would
default in the midst of a municipal crisis in 2011. She was promptly
lambasted by the rest of the MSM for her prediction. In my opinion, she
was rather minimalist in her estimates, especially if the Federal
Reserve does not commit to another round of quantitative easing (QE3)
for the states (Bernanke denies this policy would be enacted by the Fed,
though, which means there is a good chance it will be).
To summarize, the U.S. is swimming in debt. Absolutely nothing has
been changed for the better in terms of wealth destruction and
liabilities since the credit crisis began, and the situation only looks
more precarious with each passing quarter.
Where Is The Debt Roller Coaster Taking Us?
What is the most likely outcome of the conditions described above?
The vital factor will be the continued Federal Reserve policy of fiat
bailouts as a “counterbalance” to the evolving debt crisis.
As is clearly explored in the Dickens novel we discussed earlier,
staving off the effects of debt by creating more debt is a temporary
solution that only leads to greater calamity down the road. Anyone who
believes that fiat inflation actually “cancels out” debt instability is
going to find themselves sorely disappointed. At bottom, government
created stimulus is not a solution to corporate engineered debt burdens,
but a reallocation of debt away from banks and into the laps of the
American taxpayer. The Federal Reserve and our own Treasury have not
paid off anything. They merely shifted the responsibility of payment
away from the banks that created the problem, and handed that
responsibility to us. On top of this, they have also set the dollar up
for a crushing blow of devaluation. Here is where the prison bars
enclose…
If our historic debt is not being diminished, but only moved around
while it expands, then this means that eventually our credit worthiness
will come into question. In fact, it already has. Foreign investment
in long term Treasuries has dwindled. Our own central bank is now the
largest holder of U.S. debt, surpassing even China (Note: this news has
so far been ignored by almost all mainstream outlets):
http://www.ft.com/cms/s/120372fc-2e48-…
So, the question of debt default turns from theoretical to quite
imperative. If the Federal Reserve continues buying our debt with fiat,
it means that the effects of the debt will only be delayed, the dollar
will be dropped as the world reserve currency, and hyperinflation is a
certainty. If they do not continue buying, then our government
defaults, the country’s financial infrastructure ceases to exist, the
dollar loses its world reserve status, and hyperinflation is a
certainty. The banking elites haven’t just erected a prison, they’ve
tossed us in Alcatraz!
The battle over yet another increase of the debt ceiling has obscured
the fact that the debt has already done all the damage it needs to do.
Freezing the ceiling in place becomes a battle of principle, and an
important one, but it would in no way stop the dysfunction and chaos to
come. At best, it might shorten the duration of the disaster by a few
years. The important thing to remember is that government intervention
will only incur greater loss. There is no easy way out, no magic
shortcut, no last minute brilliant idea that will wrap up this mess.
Years of hard work, determination, honesty, and sacrifice are ahead of
us.
Inflation will be the buzzword of 2011. Endless debt facilitates
endless Keynesian liquidity. Expect to see commodities double once
again this year.
Household debt will probably level off through 2011, as more
Americans abandon their credit habits and make more concerted efforts to
save. In 2009, Visa lost 11% of its credit use, while MasterCard lost
22%. Over 8 million consumers have stopped using credit cards
altogether since the end of 2009:
http://abcnews.go.com/Business/holiday-shopping-americans-cut-back-credit-card/story?id=12367547
Bank lending is still tight as creditors raise the requirements
necessary to receive FHA (Federal Housing Administration) mortgages:
http://www.bloomberg.com/news/2010-11-17/home-ownership-gets-harder-for-americans-as-lenders-restrict-fha-mortgages.html
Will credit use and debt based consumption ever return to levels similar
to 2006? Not a chance. One might predict then that savings will rise
dramatically as credit use falls, but this too is unlikely. Why?
Because over the next year Americans will be spending far more on
essential goods due to inflation than they ever have before. Whatever
savings they would have accrued will be eaten up by the relentless spike
in commodity prices. The term used for the combination of chronic
debt, low job growth, and burgeoning inflation, is “stagflation”. I
honestly can’t think of a worse situation than being subject to
exploding costs in light of a dilapidated standard of living. As
Dickens points out plainly in ‘Little Dorrit’, how can a man be expected
to settle his obligations when he is imprisoned for them?
Breaking The Cycle In The Midst Of Global Strife
Why after thirty years under the despotic rule of the Hosni Mubarak
regime did the Egyptian people suddenly decide to revolt? Why now? The
MSM will field a number of political tales, but the key to most popular
uprisings, especially in the Middle East, has been the lack of
necessities. The last time Egypt saw an uprising of this magnitude was
during the Bread Riots of 1977, when the IMF terminated state subsidies
of basic foodstuffs. Is it any wonder that turmoil has developed so
quickly in the region as grain prices double? This is the devastating
power of debt, and the so called “solutions” which merely perpetuate
debt.
Tunisia, Egypt, and Yemen, are only the beginning. The sting of
inflation will be unbearable as austerity measures take hold in Europe,
and the potential for riots in Greece, Spain, Portugal, and Italy looms
large. The most volatile environment on the planet to date, however, is
the United States, which, as we have shown in previous articles, is
being dismantled deliberately and viciously in preparation for IMF
regulation and centralization. Today, the IMF is stalking Egypt, ready
to pounce as the nation goes mad. Tomorrow, it will be us. I will be
very surprised if we are not hearing about IMF intervention in the U.S.
economy and the dollar by the end of this year, offering more debt, and
more unaccountable governance.
The secret to breaking the circle of debt is to adopt a policy of
decentralization, and self sufficiency. To take back control of our
local commerce and to establish micro-economies with self contained
methods of trade. Debt must be removed from the equation altogether,
and systems protected by flexibility and redundancy must be applied.
Savings and meaningful production would have to take the place of
endless spending and outsourcing. The claustrophobic nurse-maid
philosophies of globalism would have to be cast aside and replaced with
goals of independence and self reliance. By cutting our dependency on
the corrupt establishment, we sever its ability to feed off of us. By
building a better system, we make the faulty one obsolete. Whether or
not we throw off the trappings of the debt machine is entirely up to us.
Two very important steps are required; the realization that debt is
not the only way, and, the realization that debt is the worst way.
Prosperity is not achieved at the expense of the future. The society
that finally takes this fact to heart will accomplish incredible things
indeed…
»
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Beware the angst of sore losers.
Well, if you don't like capitalism and the American Way, why don't you just move to RUSSIA?! Gol darn commie ratfink!
+1.
The central bank cum fiat money fraud has fed on the life-blood of the past 15 generations of the Western civilization. The money-lending cancer started in Venice, and moved on to Amsterdam, London, New York and metastized throughout the world. Every generation must learn anew, and against the blinding effect of power and money, who the real enemy is.
Know thyself, know thine enemy.
i demand Respect
you already earned it. rant on.
Lets hope my 74 year father decides to farm this year. We have talked about this topic for a long time. It is not that we have conveyed to friends and family the paradox of Human Action and the inability to reason with it. I guess the point is for me is we choose to live for providing as in being productive citizens. As for me from my family live the good fight. The war is between the ears.
The system as it currently exists requires exponential growth to keep the game going. That's fine until one gets into the steeper part of the exponential curve. At that point, the required growth rate is impossible. That's exactly where we're currently at. Without a massive flushing of debt from the system, exactly what Bernanke is fighting with absolutely zero chance of winning, we are doomed to stagnation and worse.
Watch these, they're amazing:
Money as Debt
http://video.google.com/videoplay?docid=5352106773770802849
Money as Debt II
http://vimeo.com/6822294
What if the elite of the elitest know of something in the future, such as we are all going to suffer massive super storms that will wipe out parts of the planet as shown on the Drudge Report today.
http://www.salem-news.com/articles/february042011/global-superstorms-ta.php
Maybe the Myans knew about this magnetic shift of the Earth and the shifting of the Earth on its pole.
All science aside, I bet the gov, will play out all these fears, either way. But if it is true, it points things in total different perspective. Maybe that's why this elitist are scrambling to get as much as they can and RSVP a a space ship over at Virgin Planetary Lines.
It would explain why our politicans can consisently lie to our face why smiling about it and the lies getting more and more perverse. They have to be laughing on the inside if your an elitest. And what little do we know what they have planned for us.
Unfortunately, the author (and he is one of my favorites recently) spends all his time describing the conditions that exist, but not the why or what is necessary to change them.
This is both the easiest and hardest part.
The problem is the FED and debt based fiat currency. The hard part is that the elites have been running this con since the beginning of time. They're really good at it. Worse, people never seem to learn. Their instincts drive them to accept the free lunch, without questioning when they will have to pay and how much it will be.
There is a reason cons work- greed. We all want something for nothing and we all think we're too smart to be fooled. Well, the elites know it better than we do. They know how to structure the con, how to bait the hook and how to reel us in.
The solution lies in eliminating the system that empowers the elites. One, government in all it's established forms. Not a single one will ever allow the general population to escape debt slavery. We need something new.
Two, the elimination of central banks and legal tender laws. People must be free to choose what currency to use and how to value it.
You cannot depend on democracy, because a vote can be bought. You cannot count on education, because the majority are not interested. You cannot depend on religion, because religions serve the same masters. You cannot depend on force, because force will always overwhelm the people. You cannot depend on hope, because hope is the opiate of the victim.
- Pray in one hand, shit in the other and see which one fills up first.
- Pray towards heaven, but row towards shore.
...or what is necessary to change them
Oh thats easy. Its called BLOWBACK...
as in Hey Bennie, here's your inflation right back at ya X 10. Since I expect MASSIVE inflation in the USA in the next 12 months, I can imagine that:
internet censorship must be implemented ASAP.
because the proles will be asking questions.
According to the webbots the internet goes down around February 8 and stays down for many months.
That should help the stock market.
woulda know at what time?
Why are legal tender laws such a problem? If I want to buy your motorcycle, it is not up to me in what form of payment you are willing to accept. Sea shells, tobacco, EL34s, doesn't matter. A big part of currencies utility are derived from taxes and debt. For many years large swaths of the country by necessity operated on a kind of barter system, money itself being scarce and used only to settle differences or make change. Countries did the same thing, come to think of it. Hm.
Legal tender laws require all debts be settled in one monetary substitute, regardless of it's value. This allows a fiat currency to abuse it's position. If the public are free to choose their monetary substitutes, it is more difficult to debase a currency. If the currency is debased, the people will refuse to accept it. This will in turn enforce value discipline.
But we aren't talking about debts. Nothing requires anyone to use dollars in the course of doing business. Not to say that would be good business practices, but the point still stands.
Good luck with that. It is illegal to print currency. Your taxes must be paid in currency. You are required to accept currency for all debts, public and private. Your point doesn't stand.
Coupons and gift cards are a currency, no?
Like not exceeding the posted speed limit, there are a number of things I'm required to do, and don't. I'm getting rather used to the idea - especially when the PD banks set precedence.
But we're not talking about taxes.
Look - "legal tender" just means nobody can refuse cash for a debt. Legal tender laws aren't quite what people think they are.
The grocer doesn't have to accept cash, because no debt is held. The vendor sets the terms of payment, not the prospective buyer. Say you want to sell your motorcycle. Nothing requires you to accept dollars or yen or yap stones, perhaps you want 40 gallons of scotch whisky, etc. See where I'm going with that?
Sure, I see it. However, if you eliminate the laws, then people are free to BUY and sell in any currency they please. This forces market discipline on the currencies- they can not afford to debase themselves, as people will refuse to accept them.
As the only legal currency, the dollar has no competition. We are forced to use it through a lack of any alternative, if we want to conduct exchange on a regular basis.
As John Adams once said, "you don't have to force people to accept good money".
you are incorrect, two contracting parties may decide payment/debt in any form, and it is legal. There are currently over 100 local currencies in the USA, get informed.
You get informed, those are considered coupons and presently the law has not been enforced against them. However, check out what has happened to anyone attempting to mint silver coilns for use. Do banks accept these currencies? No. Will a bank exchange them for cash? No. They are nothing more than barter coupons.
The coinage act of 1964 is very clear as are the legal tender laws.
No laws need to be changed. "legal tender" means that nobody can refuse that currency in payment of DEBTS taken out in that currency.
It doesn't force anyone to use that currency. You are free to open a business and take only Little Debbie snack cakes as payment for your goods and services.
The anecdote about folks who were arrested for minting silver coins is not a good example, at all. At the time, silver was around 10 bucks, and they had a face value of 20 bucks, and there was some ambiguity about whether they were US coinage. Don't try this at home, kids.
If you eliminate legal tender laws, anything- including little debbie snack cakes can be currency. Why do you continue to argue against something by attempting to ignore it? Why are you determined to keep legal tender laws?
My anecdote is a good example. The goverment used police power (the FBI) to close it down. This is why legal tender laws exist. To restrict the use of alternative currencies.
Greed is inherent to humans, but it is not the greed of the common man that allows these cons to be institutionalized. It's ignorance and politcal disenfranchizement.
Have the masses ever been "sold" on these schemes before voting in favor?
Of course not. The idea is preposterous. They wouldn't support this shit if allowed meaningful imput.
The elite run the entire show without the real involvement of the masses whom they thereby fleece.
well said Sean.
ironically, the solution is at the same time, asurdly simple and unbelievably hard.
all it takes is for enough people to positively embrace the concept of self-ownership. this system of legitimized theft and slavery cannot work if the people themselves do not buy into it.
michigan independent was correct above when he said "the war is between your ears."
Thanks Mouser, we need a discussion to begin. ZH is a good forum for it. There are some very intelligent thinkers here and the devil is in the details. What else do we have to do? As long as they keep printing and the people remain ignorant, we might as well have a sound alternative in place when the time comes, eh?
We are likely past the tipping point. We will create a solvent economy and local production after the current system has collasped. Summer of '39.
Well said.
Fiatuous currency.
Out of curosity? Can some one sell me a MUNI falling knife.
Forget debt.
Obama gave Putin UK nuke secrets.
What a guy.
Didn't the majority of the UK support Obama? Waaaa.
Y'all got exactly what you asked for. Suck it up, Cupcake.
So what, Clinton gave Cray Computer Technolgy info to China, thus enabling them to produce guidance systems light years ahead of their own,to hit the US ANYWHERE, till then they were limited to Just the West Coast.
This was Treason in my opinon.
The U.K. gave consent for the latest transference, or it would not have happened.
IMHO, Obama is the Ultimate Manchurian Candidate.
State even balked at that, so he gave it to Commerce. And then Ron Brown died in a tragic plane crash.
Weird.
Good thing noone gives a rat's ass about the opinions of lunatics. Try a lead helmet...it'll reflect the rays even better than the tinfoil one you've donned. I suppose you also believe that Playstation 2s can be used for nefarious uses as well?
You've got your panties all atwist over (not even close to state of the art) computer tech sales, but you're okay with Xe and Halliburton hollowing you out like a goddamn pinata?
You're okay with having a favored trading human rights abuser when it means you can buy cheap shit at Wal-Mart, but think you can define exactly what to trade with them (using money borrowed FROM them, no less)?
You can't shake the devil's hand and say you're only kidding, idiot.
Is there a problem with human right's abusers trading with each other? Are the US abuses ok, but China's are not?
No, US abuses are, if anything, worse than China's...they don't have a Constitution which claims they won't do that shit.
The article is so complete it is difficult to add a comment. There are some esoteric articles on ZH, but this one would be comprehensible by nearly any U. S. citizen. The mood of the article would undoubtedly move some citizens to change their profligate ways if the results to them were accrued quickly and measurably. We like progress and we like it now. This article is a good start on that path.
I've started several businesses, none of them with debt. A few with no money at all other than what was generated by the original small profits. Each was grown and subsequently sold at a profit, however small. Debt is not necessary, only a good idea is.
POTD. Post of the day.
Been there too. Free enterprise is the entire idea. I have failed and succeeded. I happen to be on a very secure upswing because of the failures. I was a swinging dick in the 80s and got my ass handed to me on a platter. Divorce, lawyers, bankers and government gave me a healthy cynicism. Cynics don't do debt. When morons get cynical we'll all be better off.
I want to expand on this a little bit for those that are too young to remember the 80s. I started the 80's in my early 20s. By the time I was 27 I had a jet. Cool, right. Plus 3 homes, many cars and a piece of 10-30 real estate development deals in single family, multi-family and commercial properties in Cali, Texas, NC and Florida. I was a multi-multi millionaire on paper (debt). I would roll profits from each flip (I bought into my own ponzi) into the next deal. Life was cool.
Charlie Sheen is a rank amateur. This was pre AIDS. I was into coke and women. Then I married one. When the tax law changed in 87, that's when it blew apart. I cleaned up and wised up.
When Hurricane Andrew hit and I got to experience the EOTW as far as we were concerned in Coconut Grove, Miami-Dade. You want to talk about empty store shelves and destruction? How about 65,000 homes with no roofs, no street signs, no traffic lights, no gas, no food, no ice... forget fucking A/C. Fires were burning all over the county, it looked like a war zone. Lanes of the turnpike were exclusively military...Shit, bitchez... thinks fo a second...most of you ain't seen shit. We survived. You will too.
Creative destruction. It happened to me personally. I now see it happening globally.
Bring it.
That is a great, inspiring story, 79. What are you planning for a second act?
Darwin will have his way. Either at the individual level, or he will bide his time and take down the society who tries to thwart him.
Reality bats last. Darwinism at the national level will happen whether folks like it, or not.
"In the long history of humankind (and animal kind, too) those who learned to collaborate and improvise most effectively have prevailed." - Darwin
http://darwin-online.org.uk/content/frameset?itemID=F1357&viewtype=side&...
this success took place over millions of years.
Now, we have silly fetishes like diversity to lionize failed races.
The "fittest" may not turn out to match our conception of it
Well, going by reproduction rates, caucasians seem to have hit some kind of genetic suicide trigger.
Sucks, but what can you do? Absolute domination of the world evidently leads to unpleasant side effects.
Well, going by reproduction rates, caucasians seem to have hit some kind of genetic suicide trigger.
Greed, and avarice, and ME first brought this on.
And DEBT.
An average Caucasoid family has like 1.6 children.
Way below ZPG.
The Hispanics, like 5-7, and on par with the Muslims.
This is why the U.K. and France are screwed.
America will be majority hispanic/minorities in 15 yrs.
No argument here. Those are the numbers I have.
They will be attending many, many funerals. Eventually they will learn. POPULLUTION!!! MIlestones
The future will belong to those who simply show up for it.
Mus/cau/neg/mans. It's about insurance, schools, Inflation. Let's get along.
Educate them.
Can you? Nice Grammatical educate. Just another hit and run . Def Leppard.
Them, yes.
You? Maybe no.
So your progenitors hail from where?
I'm betting any one of a billion members of those 'failed races' could whip your ass like a red-headed step-child in a fight.
I'll just buy their fixed GDP. AKA ghost cites, and populate them with Capitalism.
We'll let Ben know he's got a bid.
Yea I really liked the jobs slip. is it seven or several? You are right on Ben.
survival, of those most able to adapt, to a changing environment
Prime, we have similar profiles -- 'cept for the jet part. I was mid-30s in the 1980s and had a load of rental property. Those tax changes made it imperative that unloading begin. Ended up giving away or defaulting on a bunch of it. I had my hassles with the IRS and local governance. Those financial statements are easy to hype with property since the "equity" area can be fudged to an extreme. Being a "millionaire" was easy, but having cash was the tough part.
If you were 'defaulting' then you never 'had' anything, vermin. It's funny how the biggest thieves don't even know their own profession.
The defaults were not caused by the developers and owners of rental properties. The USG in its ultimate wisdom changed the rules in the middle of the game.
Do you remember the S&L Crisis of the late 80s, early 90s. How was the crisis manufacured? The USG took away the tax incentives on rental income, instantaneously tens of thosands of property owners became upside down on their notes. What would you do? I tell you what we did. We gave a deed in lieu and handed over the keys to the note holders. We took a hit, our investors took a hit, the banks took a hit.
Remember the GSE, Resolution Trust Corp?
These were the good old days when banks actually did foreclose, wrote off the losses and sold them off at values that made sense to new investors. Ultimately, it was a healthy collapse. Except for the redistribution of wealth part.
No one forced you (or Neal Bush) to take out loans...you just saw a tilted playing field and sunk your teeth in. Cry me a fucking river.
Tilted playing field? You have obviously not started a business or dealt with any local, state or fed agency. Which way is the field tilted?
I'm an independent software contractor. Last I checked, that was a business...and I didn't need tax law tilted my way to get into it either.
a very portable business, with low overhead and probably not much in the way of fixed assets, etc., unlike the vast majority of businesses. I have some respect for your insights, etc. Snow, but geeeeze.... you often paint things with a really broad brush, compare apples & oranges, etc. just to make a point (not that anyone here is exempt that flaw). You have been particularly pissy on this thread, i must say. But I love you, man
Yeah, I've been in fighting mood lately...the "my balls used to be this big" posts bring it out even more.
Well, good on you and your business. Let's hope that Congress doesn't pass a law that says independent software contractors need file 1099s for purchases over $600 per year for business related equipment...Oh, wait.
The rules were indeed changed in the middle of the game. The Boyz said, "Here are some really attractive depreciation options for you investing guys! Go forth and multiply."
Then all the neat rules got changed -- it all fell apart. Not much different from the strategic defaults occuring now by homeowners.
Mortgage Bankers Association Strategic DefaultReally, no tax law benefits? No home business write-offs? No use of LLC or self corporation status? No write offs for office equipment or travel costs? Paying the self employment tax rather than the full SS tax? You probably never write off mileage or your vehicle? No depreciation on equipment.
Last time I checked, all businesses factor in the effects of law on their costs and include them in a business model. When these laws are changed, they can have a dramatic effect.
You know, if you climbed down from Mt Olympus ever now and then, you might find that there are many ways to survive in this world. Your's is a choice, but it is only one choice amongst many.
You were a failure the whole time. What do you have to show for the wreckage you almost assuredly left in your wake, asshole?
Woohoo...3 fans for the rentier class.
You are commenting on a business that you don't know much about.
I appreciate your comment from the perspective of one who is probably now in trouble.
I hope you can extricate yourself without too much damage.
Your junks are not from me; I sympathize with the suffering.
Actually, I'm quite glad to be renting, but that doesn't mean I respect my landlord. Leveraging a pre-existing economic advantage (or the tax code) doesn't count as work or even value added to the economy, in my book. When I hear 'developer', I think 'empty strip-mall'.
Your so Gay.
I'd knock you to the ground and rape you anally, but that would just be ironic.
"Renting" was not what he was talking about -- it's a bit more sophisticated than you imagined. Look into it:
Rentier state Rentier capitalismWhile it may have been hasty and/or inappropos for me to apply the term to yourself and 22nd prime (like most attempted insults), I'm pretty sure I've got the concept.
Never mind. I give up. You win.
Your running out of syllables, just as fast as the patience of this forum!
Couldn't agree more. Thou who gets debt free ASAP will progress. Debt today is comparable to cotton-picking in the 1840's, could be a life of servitude! I myself will be attempting to start a business soon with NO DEBT! And, I am currently seeking a specialized, supplemental degree without accruing any debt, even though my savings is crap! Good ideas are few and wayyyyyy far between these days!
Nice, nice. But it all happened in a debt based environment. Which means that nothing indicates that your business would not have been more successful if you had relied on debt.
A similar success acquired in non debt environment would mean.
If you can define "more successful" for me we'll have a place to start a discussion.
Expanding faster, making more profits... The goal of business in a nutshell...
Really? Perhaps there is more to it than that. The people I have had working for me depended upon my making proper and reasoned decisions. We worked as a team and without them there would have been no business. I never tried to run over them in pursuit of profit but had all of them as decision-making partners. When one had to be fired it was not due to "downsizing" or any such thing. Every firing was agonizing and due to their inability to perform or infractions of honesty, not from any of my failure to run a viable business. Expanding and profits are nice but they are not the only reasons to have a business.
Well said RR.
Hmmm...interesting subject indeed. One that I could comment on for quite some time. Yes...smaller community oriented economies would serve far better than the large TBTF corporations that make us all into numbers. That is what we are. Numbers. Not people but numbers in a system. As cold and inhumane as that sounds that is what we have allowed ourselves to become.
The only type of debt that is good....is when you use it to expand market share in business where it can be paid by increased production where it stands to reason that you have produced something of value. As for the rest of debts definitions.....NOT GOOD. For anyone including the misguided lenders that fail to know, appreciate or understand what constitutes true value. Is an overpriced house a value when it relies upon a greater fool to purchase an overpriced asset, what about a commodity, a stock, a treasury or any other financial instrument. Has any value been created or is it simply an expansion of credit (M3) more commonly known as debt. Demand likely never existed in the first place but it was perceived as such because of the creation of cheap money which finds a tangible to be exchanged for. We can look at what is happening now as no different. Debt s not being erased but rather is being expanded still. The money given to the banks to rectify their losses is put into tangibles like commodities where the hot money jacks hp prices as speculation runs rampant. Demand does not exist to the extent that prices is rising but it seems like it because of the cheap dollars chasing a few goods. When we lost our manufacturing base in the US and here in Canada and we stopped producing products the world needed, we turned to asset price appreciation as a measure of our wealth. As some of you have stated here money was then created out of thin air to fuel massive speculation. Of the speculative ventures that the hot money poured into only a few ever materialized into companies producing valuable products. With easy cash comes risky behavior. We know what happens in high risk ventures right. 95% of them don't come through. In our zest to take the easy money to find products of value we lost our ability to judge what value truely was. Which is why most of it ended up in the riches hands who patiently waited out the manias and made long term low risk bets that were far better odds than what we did. By accepting the cheap cocaine from the pushers we tried to create the value where there was none. A demand where none existed. This is the eventual conclusion to the 30 year ponzi. Everyone is poorer, highly indebted because of foolish losses or bankrupt. It ends no other way. The anger and frustration that follow are because all of these false booms created no lasting wealth and leaves us with the feeling that the past thirty years of our life were all for naught.
My recommendation. Wipe the slate clean. The rich are going to take the biggest hit but if they were as good at innovating as they were to accrue their wealth to begin with they will rise to the top again. If they are not...well someone else will take their place. Not exactly fair but neither is 1% of the worlds people controlling 90% of its real wealth.
They promised us Chinese trinkets and i-Crap and we traded them our souls.
The Devil won.
But at least I got this stupid t-shirt?
Everyone is poorer
Are you kidding, dude? Chit, I just got a temp job shoveling some snow. Might last a week. And I can get a 120K mortgage tomorrow. Don't you get it man? The House of Fraud controls The House of Saud. Thats all the world needs to know.
I get your point. A 30 year mortgage might not be "bad" debt. Using the credit card to buy a box of cookies and paying 29.99% over 40 years might not put you on the road to riches. If the PTB had rung up deficits 30 years ago to invest in solving today's problems instead of government pork, maybe we would be thanking them now-
Haha! Using (equity) in your mortgage to pay the 277% accrued interest charge on that Credit Card purchase of "cookies"........PRICELESS!
So someone using debt to expand your market share is bad?
What would happen without a nation full of sheep who brazenly buy what they can't afford?
I have Jet Lag. I'll break down the sentence structure after some rest.
In biblical times, they called it BONDAGE. Now, it's just debt!
Treasury BONDS. Muni BONDS. Corporate BONDS.
Are you daft?
bail bonds
How many basis points did the y10 close up Friday?
Ashes to ashes and debt to debt
http://www.youtube.com/watch?v=lxFOVtr9fbk
People, paradise lies straight ahead
The capitalist world system relies upon a never ending, growing supply of cheap labour.
Obviously it can’t continue forever, now the whole globe is populated and we have a system of global capital mobility.
As such it is time for capitalism to change to whatever configuration is best suited to accommodate these two new realities. Either capital or labour will dominate the next century, and I say, go long labour and short capital.
http://liminalhack.wordpress.com/
Sad that the socialists were so far out ahead about the collapse of capitalism.
You periodically post these little rants directed at my blog.
Who are you and why are you reading my blog if you find it so distasteful?
Your equation omits resources. Fail. Try again.
i thought mention of new rules that dont allowe bankruptcy to clear off debt might be mentioned. or some sort of lean agaisnt wages to pay of debt to credit card companies.
some sort of sevituted forced upon people to clear up debt,
Student loans, too.
The idiot banker-gangsters who thought it wise to give $250,000 to religious studies majors deserve to get their money back.
They deserve to be first in the queue, because they're so smart and irreplaceable!
I don't understand why everybody says Adjustable Rate Mortgages will reset higher, isn't LIBOR low?
Its all based on the 1 year something or other, no? Another hoax.
Pssst, I'd like to share a secret with you. If you haven't seen this excerpt of Rollover, it is important if you want to understand the world we live in and it complements this excellent piece:
http://www.youtube.com/watch?v=GPYLJoq_40Y
Understand that Iran chairing a unified OPEC (2011) might not be great for Western oil importers. Understand that the Arabs trade dollars for gold to store their wealth (as do other central banks and China). Understand the fluctuations in gold and oil of late with Egypt uncertainty. Understand that a comex precious metals default (see the url above) could spell doom for the dollar and treasury bonds. Understand that when Iraq moved from dollar oil to Euro dollars the US Dollar risked losing its backing (military protection of oil lanes / oil backs the US Dollar). Understand that deficit spending is confiscation of wealth through inflation. Understand that private central banks want governments in as much debt as possible since they pay interest to those banks (same reason for house appraisal appreciation - greater loans = more interest). Understand that when diplomacy fails, war is a failure of diplomacy. Understand that most of the wars in history have been over resources. Understand that since the atomic age there has been much less war and therefore many more people - the demand side of the equation is increasing with population.
Excellent article excerpt:
"The tactical wielding of debt has been used by elites for centuries as a means to imprison the masses, or to create an atmosphere of endless dependency. Let’s take a look at what debt really is, and how it is being used against the average American today. Therefore, fiat induced credit is not the creation of wealth (as Keynesians seem to believe), but the destruction of wealth!"
Relevant Qutoes:
As Marc Faber has stated, the central banks have managed to blow a bubble in just about everything. A financial system needs a tether to reality in a world where a quadrillion+ in derivatives could be stretched to the sun and back many times if it was in dollars laid end to end (truly astronomical figures). If Exeters pyramid collapses from a lack of trust/confidence, then the traditional tether (precious metals) will be revalued dramatically. At the same time, I understand gold is just the default store of value but it is deeply rooted in the psyche from thousands of years.
The system can be explained to "you", but it can't be understood for "you." (forgive the sound of that it is not meant to be patronizing for those in the know). Let's put the pieces together so we can understand it together.
The original Obama comment that "now would be a good time for long term investment in the market" could really be useful today for another tell. My suggestion is that we let J-Lo leak it on American Idol after her Superbowl party with Obama. We didn't trust or believe him the first time as the market tanked for the beginning months of his term. If we could trust Bernanke, we could ask "Where do you want us to put our savings for maximum wealth effect"? The herds of nervous investors are stampeding back and forth between asset classes and countries creating uncertainty and volatility. Do we buy in at the top, and risk being slaughtered by TBTB?
Artificially supressing gold, silver, VIX, and negative or inverse ETFs does not reduce uncertainty, it just sucks money from the rational fundamental investor to insiders and stupid people. If you see the correlation between having resources to reproduce offspring, then an argument could be made that they are promoting a civilization like the one in the movie Idiocracy where those of low IQ prosper. Because people are the lifeblood of the economy and credit is the lifeblood of business, water and credit have been replaced with POMO-ADE, the Growth Thirst Mutilator - Rich in "electronlytes". Pour it on everything and watch it grow.
Clearly bonds and cash are poor over the long term, but if they pull POMO so are equities, as fundamentals do not currently apply. If they drive down the price of hard wealth financial assets at the same time then they are nothing more than financial terrorists slowly suffocating us. The bankers have stated in the past to congress, "we will have world government, the only question is whether it will be by consent or by conquest". If you take this stated goal of world government, it might be useful for the bankers to have everyone poor so they can acquire assets at pennies on the dollar. Hungry people that have been kicked out of their houses do not put up much of a fight. A tenent of communism is abolition of private property. We are back to trust and confidence, and in a fiat system the only thing of value is the statement "In God We Trust" printed on the note. For all others we accept gold. You are right, we are in a prisoners dilemma. If we all agree to put our money on the same assets we could all experience the wealth effect. Can we trust B.B., does he really have our back or at the first sign of trouble or needing to corral Congress will he let equities fall? The May flash crash was on the day of a crucial vote in Congress for financial reform, and the debt ceiling issue is fast approaching.
Savers receive negative real interest while bank credit card interest rates can exceed 20% and banks are being handed free money through a shell game. Living costs are increasing. 11% of homes are vacant, more than 18 million homes and banks won't mark to market since they would have to record a loss. Read FDR's statement regarding the loss of trust and financial theft on Wall Street, and you will see that we are in the exact same predicament as the Great Depression. Over the last ten years the market has lost significant ground when adjusting for inflation, but if you look at the cash flows you will see that the financial industry (GS, JPM, MS, etc) siphoned off trillions in pension and 401K fees despite poor performance. They own the financial media so don't listen to sell side analysts, they are all talking their own book (contrarian thinking could be beneficial here). Wages are going down for everyone except Wall Street banking pirate bonuses, it is truly a tail of two cities. It was the best of times, it was the worst of times...
Well done AN, hadn't seen that link in a while...
A round of "POMO-ADE" for all my buds! Love it!
this could be your best missive yet, colonel.
the question remains: how do we escape the yoke?
what are the real assets outside of/beyond control?
It's good to see you 'round these parts again, AN.
Sincerely,
A Fan
Thanks all, I read and appreciate your comments all the time.
The most important quotes from Thomas Jefferson:
Unlike those nations whose rulers use their country's resources to seek conquests, to carry on warring contests with one another, and consequently plunge their people into debt and devastation, free societies are organized for the happiness and prosperity of their people, and this is best pursued in a state of peace.
I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.
And the best quote for this article:
If we run into such debts as that we must be taxed in our meat and in our drink, in our necessaries and our comforts, in our labors and our amusements, for our callings and our creeds, as the people of England are, our people, like them, must come to labor sixteen hours in the twenty-four, and give the earnings of fifteen of these to the government for their debts and daily expenses; And the sixteen being insufficient to afford us bread, we must live, as they do now, on oatmeal and potatoes, have no time to think, no means of calling the mismanagers to account; But be glad to obtain subsistence by hiring ourselves to rivet their chains around the necks of our fellow sufferers; And this is the tendency of all human governments. A departure from principle in one instance becomes a precedent for a second, that second for a third, and so on 'til the bulk of society is reduced to mere automatons of misery, to have no sensibilities left but for sinning and suffering...and the forehorse of this frightful team is public debt. Taxation follows that, and in its train wretchedness and oppression.
Cost of Government Work Days is now August 19th, read this link:
http://fiscalaccountability.org/?content=cogdteas10
Now for solutions:
Balance the economy in the same way that government has a balance of power with three branches. Always balance power, that is the lesson of the Lord of the Rings, when people come into power some people change. Always vote for distributed power, never for centralized power. Never allow religion (one world heirarchial religion), bankers (Global TBTF Central Banking Franchise), politicians (we need a 3rd party), corporations (little taxes paid despite cash flow and firing millions of people while paying billions in lobby $), unions (can act like the mob, necessary but need balance), or citizens (need republics vs pure mob rule democracy) as a group to have too much power. The system should create prosperity for all, but the FIRE industry almost tripled in size over the years (%GDP) while other corporations experienced reduced margins and incomes dropped (wealth transfer). Bankers have conquered the world by printing money without backing and buying people and assets.
This is like designing a car, is a wheel more important than the engine or transmission? We need balance and that can only be applied through principles that are then applied in both the letter of the law and spirit of the law. Let us know the principled rules and then do not change them in the middle of the game to suit campaign contributers. In a principled system, the government can get out of the way without constant intervention. This causes stability and reduces volatility.
What has banking done right? It allows those with a great idea and no current savings to fund their ideas. The equity market does the same for corporations that want to expand with a second offering. It allows people to live in homes earlier that they could not otherwise afford and spread that payment over a longer time period for payment to increase the quality of life for some people. Banking fiat also makes people less attached to their money (in paper form) and more ready to spend (imagine if we were trading silver and gold, people would consume less because it is so tangible). Banking makes it easier for governments to collect taxes since most of it is deducted from earnings. Banking (electronic funds) has also eliminated the need for soup lines with unemployment benefits.
However, the existence of debt capability makes everything more expensive for others who are significant savers without debt (due to bailouts from loan defaults as well as debt inflating the price of everything by increasing the supply of dollar liquidity floating around). For those that can control their urges, I recommend a cash back credit card for a 1-5% discount on various purchases - but I also recommend fully paying it off each month so you don't feed the beast.
I am calling for a full financial system review specifically with regard to the creation of money and tracking its flows with transparency (audit). On September 10th, 2001 Donald Rumsfeld announced the pentagon was missing $2 trillion dollars. On September 11th, 2001 the accounting offices of the pentagon were attacked and the records along with the accountants were destroyed. Fractional reserves are fine if there is transparency and restraint that is followed religiously. A banks $10 should not be worth $400 just because they can leverage it up 40 times while they risk our deposits and then ask us to bail them out if they lose at the casino.
The more corrupt the state, the more numerous the laws." - Cornelius Tacitus (55-117 A.D.). Eventually the sheeple do catch on and realize they are on a treadmill going nowhere due to inflation and taxes. They notice the bankers and the politicians both have dramatically increased their wealth while whipping the sheeple to go faster, there is a deficit to overcome so we need more taxes. They begin to notice the laws do not seem to be applied or enforced equally, and they begin to grumble, complain, and lose an incentive to produce as there is little reward. The crisis of confidence and lack of trust lead inevitably to a collapse unless theft is punished and productivity is rewarded.
Respect to the Colonel.
This is why i find the comments mostly more interesting than the articles, respect also to TD for assembling the debate.
I'm a novice when it comes to this level of 'plans within plans'.
The quote 'plans within plans' comes from 'Dune' a well known sci-fi book that is essentially politics at a high level with nothing as it seems.
In its world of the future the system is feudal and there is a distinctly islamic flavour with 'Jihad'.
Not bad for something written in 1965.
Apocalypse....I guess it's you they are calling Colonel...I'm so new I d0n't know why they are calling you colonel.
I do know that I appreciate your post on this subject. Truely a giant aid in educating all those sincerly interested in reading and learning of which I am one.
A heartfelt thanks Apocalypse to you for posting!
http://en.wikipedia.org/wiki/Walter_E._Kurtz
delete duplicate
A humble thanks Col. Kurtz. Your depth of knowledge and willingness to share is why I come to this site. As someone mentioned above, many time the comments are more enlightening than the original article (which I did enjoy BTW) and this is one of those time.
So, thanks again.
I am struggling with this one.
As I understand it at present, the Americans need cheap oil. Since the Arabs actually have a clue, they do not trade civilisation lifeblood for paper - they want gold. To enable the Arabs to get the gold they want with oil revenue based on a cheap oil price, the price of gold must be controlled and kept subdued. This is done with all sorts of tricks - mainly fractional reserve practices in the physical unallocated gold world and leveraged derivatives in the paper gold realm. So far so good.
I translate (all others equal) this mechanism into when gold goes up due physical constraint, monetary policies etc. then oil has to go up as well. When Gold is under control, then oil is cheap(er).
The last many weeks, gold has been under pressure, but jumped something like 30$ on mid day of the 3rd of Feb. Brent breached 100$ around the 1st Feb, fell back and rose again up above 103$ mid day 3rd Feb, but then started falling, around the same time when gold had just jumped.
I don't get that? What did you derive from those fluctuations? and how do they particularly relate to the Arab's accumulation strategy, and not just the fact that the news bulletins dictated ebbing and flowing of fear for the Suez canal?
And if the January sell of in paper gold/plunge in comex open interest was the "big one", we have been waiting for - namely the "loss of confidence due to imminent physical delivery default" one - then paper price should have continued the plunge and the oil price continued to the moon in a revaluation outburst.
Am I totally off track and what am I missing here?
the market is rigged and doesn't act as it should due to fundamentals or technicals
The market isn't rigged. Proper margin management yields good returns. The big guys have no intrest in taking out your stops/ call spreads. Get educated. Also remember everyone was in Chief mode. Survival of the fittest. Best wishes.
You are missing nothing because nothing makes any sense any more. The price of oil soared on January 28 ostensibly because of the Egypt thing - threat of Suez closure and all that. Fast forward to last Friday (yesterday) and oil dumps because of a rumour Mubaruk has resigned? (see ZeroHedge) How does that make sense? Investing in anything these days has a half life of Iodine-131.
Just my opinion-
Intelligence agencies and the owners of massive capital are related, therefore information is power and can be used for insiders benefit. Insiders will know what is going on in Egypt before we read about it on ZH or MSM with regard to Mubarek versus his likely successor and how friendly each is to the West (oil pricing and physical gold holding/leasing). Typically we talk softly but carry a big stick and use diplomacy.
The important point is not to think like an accountant in a closed system, Mao had a quote that all power comes from the end of a gun. So, let's say hypothetically a country or group of countries checkmate a country that has the most powerful military in the history of the world? What happens next is that the etch-a-sketch is shaken and the game starts over. That could occur with overt war (Iraq) or covert revolution (Egypt). The successor in Iraq or Egypt that is friendly to the Western powers might even lease their physical gold to the West to prevent physical shortages. In the US, we could argue OPEC colludes to maximize oil price. At what price would you say it is too much? Everyone has a number, what if oil was $500 per barrel? It would take some time to set up alternative energy sources and meanwhile the economy would crash.
The Suez canal is very strategic and impacts oil more than gold (supply flow), and the Egyptian successor is only one of many countries in OPEC (partial impact on oil). The successor may be willing to loan its gold, but could want to maintain OPEC pricing. Someone in power for 30 years might be more stubborn (old dog new tricks) and less flexible than an up and coming successor that would love the promotion.
Like you, I am not sure if the paper / physical precious metals price discrepancy signals a coming collapse or a new source of physical gold (Egypt?). It could be that many speculators are in precious metals and dropping the paper price is an attempt to shake them out. If everyone stood for delivery we could have a problem.
If everyone kept their wealth in gold in their vault, there would be little loans and wealth effect. Perhaps the poverty in these countries is a lack of effective banking with their leaders sticking $70 billion (rumor) of wealth into his own vault in gold. It doesn't benefit anyone else if it is stuck in a vault.
Great article!
I've just read today that the House GOP announced that they propose to cut a paltry $32 billion from the budget this year. That's less than 1% of the budget. The deficit is expected to be $1.5 trillion, and they can only find $32 billion to cut?
This is the reason why I remain convinced that economic collapse and financial armageddon is inevitable. Best to prepare accordingly!
$32B represents the percentage of Government that is not controlled by some lobby group or another. Pretty sad state of affairs.
It also represents a measly 10% of the treasury's monthly roll.
Closing hospitals and libraries seems to be a great way of dealing with this fake debt 'crisis'.
Don't forget closing the Washington Monument and sending out for pizza. - Ned
I learned a long time ago that debt was the road to ruin, unfortunately many of my friends didn't figure it out and I don't know if some of them ever will.
I always like to pose questions about the use of cash vs. credit cards and see how they would answer, like would they actually be able to lay down 400 dollars on the counter when they wanted a new cell phone...could you do it? The CC is not the same to use as cash, it doesn't seem like it's the same, that is until you have to pay the bill, but even then the check doesn't impact a person the way laying currency does. I personally think checks and cc's were designed to separate a person from the mental issue of getting one to part with their money...at least it seems so.
I also like to ask those who drive big gas guzzlers if they would change their behavior if they had to feed cash into a slot on the dash based on every gallon of fuel used, so like a Suburban that maybe gets 12mpg....every 12 miles you have to feed 3+ dollars into a slot on the dash...how long do you think they would suffer with the gas pig if that were the case? Would they grasp how much they spend on fuel? Or because they fill the vehicle and pay with a CC or DC are they conscious of what they're actually doing? Of what they're actually spending.
As the author said, eventually it all catches up to you.
As for whether the Repubs will do anything substantive in DC I'm not holding my breath, the seeds of this problem were planted decades ago and the damage cannot be undone. Even if reps in DC could be replaced in time I don't think there's the stomach for the massive cutting that needs to happen.
As I've mentioned before, the ship's course has been set and we're just all along for the ride. Self-sufficiency and preservation are the only tools we have at our disposal, so make the best of what you've got.
Excellent. This is why I carry a money clip and do not have an ATM card. I do not do any online banking other than check my balances or balance the accounts. I do NOT do any bill paying online. I have credit cards for convenience -- 3 of them, and one is used for internet purchases exclusively, with a low credit limit. If it is highjacked I can cancel it easily since it's on a local bank.
I had to rejigger my online banking account once and called customer support (yeah, I know, an oxymoron). The lady on the phone asked for my ATM info to verify that I was who I said I was. She was dumbstruck. There was no other way for her to do the verification! That led to my own incredulity and we had to get a "supervisor" on the phone to get a password change effected. JFC.
Along the same vein, I ask people if they would hand over a pile of hard earned physical cash to a government salesman knocking on your door looking for people to "invest" in bonds. Somehow the idea of exchanging a wad of money for a piece of paper with an IOU written on it doesn't seem as compelling yet that natural hesitation we would all feel due to fear of losing it has been conditioned out of people.
I'm one of those that had to learn the hard way about debt. Better late than never I guess.
Pretty amazing how the conditioning regarding debt has been so successful. Debt is portrayed as what makes the freakin' world go 'round! Listening to people talk about an "acceptable" level of debt or an "appropriate" percentage of debt to GDP or any other number is apalling and completely misses the point. We've been brainwashed into thinking that it's impossible to operate without debt, and that to try to reduce or eliminate debt is actually unreasonable. WTF?
Granted, there are situations where borrowing is appropriate. However, when it becomes the drain on productivity and massive wealth transfer system of today, it's way past the point of reason. Money spent servicing debt is money not invested in something productive. If we could all get rich by borrowing from each other, then we would have done it a long time ago.
Where have you guys been? Cash is King has been the motto of everyone I've ever known who lived through the first Depression. They were all pretty sure it would happen again.
Who said we had to 'all' get rich doing it? Maybe you got a different version of the script.
You think we could have built up the nuclear arsenal and engaged in three overt (and who knows how many cold) wars without it? Lunacy.
Hey DosZap (or should we just call you DumbZero?), you missed one!
Insulting random ZH's when they aren't even in the conversation is a bit sad, even if you are a sooper-cool software engineer, with the posting equivalent of verbal diarrhea.
He went on a junking spree, but missed that post. So, in a sense, he was "in the conversation", even if he's too cowardly to actually post.
Angry liberal, like most of them..
Stupid conservative, like most of them...
Obviously cupcake.. Everyone knows we have to change our avatar daily and ask for uncle sugy to take care of us or we are stuppidd.. What was it "progressives" were progressing towards again? headlights meet deer..
Hmmm...I've changed my avatar once since...last June, when it changed to the baghead (without action from yours truly) from the snowman warming his hands on a pile of burning cash I'd had since I got my account, but thanks for pointing out the irrelevant anyway, Sweet Cheeks.
Progressing towards a world where opportunity is more evenly distributed (outcomes are on you), markets are regulated and transparent, elections are decided by the people instead of the media, and civil rights are protected instead of flushed down the drain "in the name of temporary safety", as Franklin would say.
You're more than welcome to address the question of what you're 'conserving' below.
The value of what we own is a function of decree of the monetary authority and the rule of law.
First, consider the false perception of equality among individuals within the State under the rule of law. Sadly, the rule of law is suspect in these times. The laws of these States are, in moments of truth, further instruments of those with power (generally associated with access to invoke the decree power, either outright (thru the Fed power lattice) or indirectly (as an organism attached and flourishing vis a vis savvy manipulation of fiat lattice)). Do you have student debt? By proclamation, you may never (basically) be free of this obligation, but must support a financial complex that makes riskless profit by statutory decree. However, the same lawmakers see fit to bestow amnesty upon certain defaulting entities, but not others. Do you wish to contest the State's seizure of power and value? Ask Schiff or Armstrong how that worked out.
What value exists that is not clearly a function of the fiat? Oil. Patterns of profitable application of intellectual capital (abilities of people to do useful things). Land rights. Energy and food creation. Gold, etc. Perhaps others, but consider those:
Oil: held in stasis with fiat because of the symbiotic nature of exchange. Oil, without demand for consumption and without value redeemable for capital goods, is valueless. It requires a medium, an intermediary, to realize its value potential. The obvious goal of an oil-rich country would be to be the one who establishes the fiat, but this is not something the oil-rich countries can currently realize--too few of other resources. Because of the resources of the countries that decree the fiat, they prevent oil-rich countries from claiming fiat ability. For this reason, oil remains outside the direct control of fiat, but closely linked to it. Ownership of oil is certainly a method of sustainable value-ownership outside of fiat, but it relies on fiat to maximize its value.
Business/collective human capital: the ability to create or otherwise provide useful things has inherent value. We will always need doctors, barbers, and tree trimmers. Computer solution architects. These abilities have value that is not lost as a function of fiat, although certain abilities have much lower value without fiat (for example, investing and banking). Unfortunately, as things stand, the greatest rewards of so much of this human capital accrue to those who control the fiat by the public and private equity complex intermediated by the fiat. Even those few corporations and businesses that choose to maintain ownership of their equity have no real choice except to play along, because their incentives and interests are entwined with the fiat.
Land rights: although in many countries land rights are fairly inviolate, the privilege of ownership is only allowed by a pledge to support the fiat by property taxation. The wealthy have access to legal power that enables less onerous tithing (such as how to structure land in fact used for energy and mining profit as agricultural land in order to benefit from tax breaks). Those unable to make their pledge to the fiat must surrender the value of those property rights.
Energy and food creation: here is perhaps the only example that is in fact 'off the grid.' The value of something that produces enough energy and food to sustain life and enjoy a certain quality of life cannot be revoked or seized by decree vis a vis the fiat. However, it is not that unusual for the legislative or executive arm of the fiat owner to impair these rights. 'Are you creating energy?' 'That energy belongs to the State, so that the State may properly allocate it. This law, enforced by these authorities, declare this to be so.'
Gold, etc.: again, perhaps gold and silver and other real assets are inviolate. They have held their value over the centuries. However, it would not be difficult for the State to impair the ability of a possessor of gold, etc., to redeem or use these real assets beneficially. It has happened in the past in our country. The value remains, so long as there is no attempt to realize that value in such times of State trespass on property rights.
In conclusion, the power of fiat is one so dominant that it may subvert the value of virtually everything. Play along or become a criminal. If only more realized how little power they have in spite of the perceived value of what they think they have. Play along or become a criminal. Live in a state (of mind, I am aware of few compelling geographies that may offer otherwise) without cognitive dissonance, that is, ignore the premise of ultimate fiat ownership. This really seems like the best choice, assuming you can make some preparations to ride out any shenanigans of the monetary authority.
It is sad to know that so much misallocation of value has created so many promises that we cannot fulfill, that when broken will be bourne so harshly by so many that did not agree to those promises. Damn this is way longer than I planned.
"Live in a state (of mind, I am aware of few compelling geographies that may offer otherwise) without cognitive dissonance, that is, ignore the premise of ultimate fiat ownership. This really seems like the best choice, assuming you can make some preparations to ride out any shenanigans of the monetary authority."
thanks for answering my question from above.
sad indeed it is...perhaps it behooves those of us who see this to help cushion the blow for as many as possible, even if they are still too blind to see for themselves.
"...perhaps it behooves those of us who see this to help cushion the blow for as many as possible, even if they are still too blind to see for themselves."
It's probably safe to say that many of us have tried, and are continuing to try to influence those whom we care about.
Speaking for myself, the first time someone "rolls their eyes" or offers me that stupid, sheep-faced look of incomprehension, or attempts to change the premise by pointing at Red/Blue politics, my desire and attempts to warn anyone quickly fade.
yes its unfortunate that truthtellers are often downers
the Rule of Law and the State are incompatible. under the State, there is nothing but the Rule of the Gun.
I haven't watched MSM or TV in over a year (I've tried - can't stomach it). Always go to Zero Hedge first ........
Keep up the good work.
Excellent post.
My late father--who loathed debt--built wealth the old fashioned way by producing and saving/investing far more than he consumed. He was deeply troubled by what he saw of America's burgeoning debt bubble over the decades.
One of his, now my, favorite expressions was 'tighten your belt,' for the inevitable cyclical contractions that come. He said most people can't fathom such a thing anymore.
Today unfortunately belt tightening due to much more than a cyclial contration is about to be forced on us, ready or not. Sadly, people who're reading this piece don't need it nearly as much as the ones who aren't.
Like it or not, we are hurling towards mega economic/political chaos.
What if, as Marc Farber suggests, all physical bullion is called in by our government as it was in 1933, I believe it was? Is it possible this could happena again?