The Last Resort Of A Dying Economic System: From "Beggar Thy Neighbor" To "Beggar Thyself"

Tyler Durden's picture

The phrase of the week comes from The Privateer's Bill Buckler, who has coined the one term that best describes the lunacy that has gripped the world: "Beggar Thyself." Unlike the 1930s when the theme of the day was "beggar thy neighbor" and which culminated in World War 2, this time the emerging paradigm is one in which the first to defect wins... if only for a few seconds. Because when the "beggar thyself" process is complete, it will mark the end of not only the central banking regime, and the days of excess wealth accrual to the financiers of the world, but also the termination of the 140 year old Bismarckian "welfare state" which is the primary culprit for the creation of trillions of imaginary wealth out of thin paper. When the fiat system ends, so will end the hallucination that developed societies are capable of providing for their hundreds of millions of existing and future retirees. And with that will come the "social instability" that always marks the closure of a failed monetary regime and the admission of global bankruptcy.

From the October 17th edition of Bill Buckler's Privateer:

What Other Choice Is There??:

In the hundreds of articles appearing in the mainstream financial press all over the world and especially the English-speaking world, one headline stood out. It was this - “Currency wars are necessary if all else fails”. The headline appeared in the October 11 edition of the UK Telegraph.

The contents of the article are not germane. What is germane is the naked contention that the nation or nations which will emerge the “strongest” from the current financial malaise is the nation or nations which succeed in devaluing their currency faster than any other. Only in that way can the “currency wars” be won. If these “wars” develop further, they will become a race to see who can come up with a worthless currency faster than anybody else. The 1930s coined the phrase “beggar thy neighbour”.  Today, the financial potentates have gone one better. They are working on a “beggar thyself” policy.

Co-operative debt-based stimulus didn’t “work” and neither have “austerity” programs, according to the IMF. Their “World Economic Outlook” comes to the conclusion that the world can neither “stimulate” its way out of the current GFC nor get there via “austerity” programs. And it isn’t too sanguine on the prospects of currency wars either. As the IMF report noted: “Not all countries can reduce the value of their currency and increase net exports at the same time”. After all, they tried that in the 1930s. The only thing that “saved the day” then was a REAL war, not one on the foreign exchanges.

But still, the global financial potentates keep thrashing around inside their own context looking frantically for a way to overcome their plight. As they want the citizens of the nations they “represent” to see it, they have no choice. If they for one second admitted that the entire system as it is presently constituted is deficient by its very nature, they would instantly have the “social instability” they are warning us against.

In other words, with each passing day the fraud that is the concept of Bismarckian social cohesion and stability, brought to you by a hundred years of central banker subjugation, like a putrid onion, loses layer after layer of its mask, until soon the entire world will see behind the lie. The resultant explosion in pent up decades of anger could easily make all prior conflicts seem tame in comparison. Hopefully it can be avoided. But for that to happen, the fate of the dollar as the reserve currency must and will end. Buckler again:

The “Game” Explained:

On October 12, the minutes of the FOMC’s most recent meeting (on September 21) were released for scrutiny. The gist of these “deliberations” are contained in one sentence - “Policy-makers had a sense that (more) accommodation may be appropriate before long.” This is the expectation on which the world has been basing its investment decisions ever since that September 21 meeting.

The reaction to the release of these minutes was by no means confined to the US. An excellent example of this is a quote from Brazilian Finance Minister Guido Mantega. For weeks, Mr Mantega has been maintaining (quite rightly) that the world is already in a currency war. This is what he had to say about  the US central bank - “The Federal Reserve is promising quantitative easing, which is monetary policy’slast resort. I don’t think it will reactivate the economy, but it will weaken the Dollar.”

This is more than “monetary policy’s last resort”. It is Ben Bernanke’s “helicopter money” scenario writ large. The US central bank proposes to use the Federal Reserve notes it creates out of thin air to “buy” the debt of the US government which the Treasury creates out of thin air. This is the last gasp of a monetary “system” which is as far from sane and historically sound money as it is possible to get. Not only is it doomed to failure, it will doom the US Dollar if it is put into practice to any substantial extent.

Since the US Dollar remains the premier global reserve currency, that will leave the rest of the world with absolutely no choice but to institute radical changes to the money which underpins everything. In the modern sense of the term, there can be no markets without a viable money. The Fed is on a path which will remove the money. The markets can only then survive with a different, and better, underpinning.

What are the alternatives? These should seem obvious.

[The BRIC nations] rank first, second, fifth and ninth in terms of world population. Two of them, China and India, are the two most populous nations on earth with almost 37 percent of the global population between them. The BRIC nations are often singled out as the coming global economic powerhouse, the nations which are and will increasingly drive world economic “growth” in future. In recent surveys done in the US, they were seen as being a better investment bet than is the US itself.

The majority of the “ordinary” people in ALL these nations, but in India and China in particular, are still living in a coin economy. They still conduct their transactions the way the whole world did until the 1920s or 1930s and the way that all but the richest nations (the US and Canada in particular) did until the mid 1960s. Coined money is not a nuisance to these literally billions of people, it remains money itself.

The history of indirect exchange developed in two main stages. First came a steady narrowing down of the physical economic goods which were seen as having the utility to be a medium of exchange. That ended when Gold (and silver) were singled out. The next development was a tangible form that these two metals could take so as to be used as money. Gold and Silver coins emerged and lasted (in the case of silver coin) right up until the mid 1960s. As an illustration of the consequences of the banishment of precious metal coin money, consider this: The US stopped minting Silver dimes (10 cent pieces) in 1965. At current prices, the silver in one of these coins is now worth just under $US 1.70. A pre-1930s US Gold $US 20 Double Eagle coin is now worth about $US 1310 in Gold content. In the early 1930s, $US 20 was a month’s wages for many. At today’s minimum wage, $US 1310 is considerably more than a month’s wages. The difference is that the wages then were TANGIBLE. Today they are promissory.

In essence, that is what the history of the global fiat money era has been. The masters of the universe have taken a simple thing like precious metal coinage and turned it, in stages, into a galactic game of GIGO (Garbage In - Garbage Out). Computers, without which our modern monetary “system” would be impossible, will accept anything that is fed into them. So will a lot of people. But many will not.

The idea of Gold and Silver coin circulating as money may seem like something out of the distant past. But Gold coin DID circulate until about 65 years ago. And Silver coin was still circulating as money in the US when Kennedy was assassinated in late 1963. For half the world, coins still ARE money.

There is little, if anything, that can be added to this.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Ethics Gradient's picture

At some point investors will realise that the best place to invest isn't in a country which is debasing it's currency. Then you'll have no jobs and no investment. Brilliant.

Conrad Murray's picture

This has been going on for some time now.  Not so much do to the rampant printing, but because the U.S. is shot on the manufacturing front.  China and the emerging/frontier markets have been attracting lots of capital that would have been destined for these shores not so long ago.

Now, add on top of it that Rule of Law is a fading memory and taxes/regulation are outrageous, and there's really not much in the way of persuasive reason to do business here.  Sad.


Edit: OT - Here is something interesting I stumbled across:

H.R. 4646: Debt Free America Act - To establish a fee on transactions which would eliminate the national debt and replace the income tax on individuals

"States as purposes of this Act the raising of sufficient revenue from a fee on transactions to eliminate the national debt within seven years and the phasing out of the individual income tax. Amends the Internal Revenue Code to impose a 1% fee, offset by a corresponding nonrefundable income tax credit, on transactions that use a payment instrument, including any check, cash, credit card, transfer of stock, bonds, or other financial instrument"

The APT tax has always intrigued me (
Here's a paper for the more scholarly readers:

B9K9's picture

Bill, Tyler and others are beginning to focus on what's really at stake here: the end of the central banking paradigm. This model enabled the growth of the leviathan state (both welfare & warfare), sheltered bankers from primary economic risk, and richly rewarded both those in public (government) and private enterprise who were in on the deal.

Is it any wonder that, once the very foundation of the model itself was exposed to a truly existential threat, the state would defend it at all costs, including the rejection of centuries old legal precedent? National security indeed; a mad attempt to protect the "state" apparatus, not the social construct supposed to represent the People.

Since a model based on compound growth is impossible in a finite world, the end point (aka death) was always accepted - only the means, place & time were unknown. The power-elite understand this; after all, it was they who designed the system in the first place. Money lenders don't need to have the mechanics of exponents explained to them - duh.

Rule of Law is a fading memory and taxes/regulation are outrageous, and there's really not much in the way of persuasive reason to do business here

The wheel is about to turn - the rats are preparing to leave. They know the end point can be brought to an immediate full stop by the mere repeal of the two 1913 monsters: The FRA and the 16th amendment.

It will require a strong man. He is coming. He must come, otherwise we will have full on dissolution. After a natural disaster, (re)growth comes at an astounding rate. There is going to be an incredible amount of change, rewarding those who are disciplined, deligent and thrifty.

There is also going to be tremendous risk, which is why if you have the means & ability, you might consider bailing out now. Soon, there will be nowhere left to turn except making your last stand right where you are.

Shameful's picture

You speak of taking the exit, and I agree that is safer.  But where do you see the best places for safety and opportunity being?

SoloSilo's picture

I don't know if it's a land of opportunity, but New Zealand is definitely a land of safety. Extremely isolated, with an exporting agricultural sector and friendly people who obey laws.

Shameful's picture

That one was list I made.  From what I saw it looks like I could immigrate there with the skill/education I have.  How friendly will the locals be to an American coming in to try to take their jobs? :)

SoloSilo's picture

They like techies, if that applies. Market it as "knowledge transfer from [American university] to NZ".

TemporalFlashback's picture

They are friendly people. However, the grass is always greener.

Based on experience, culturally, NZ is not the idealized world that I think you are envisioning. In fact, it is far from it.

I would go visit before making any type of life-changing decision. Hey, maybe you will like, but I just thought that I would throw my opinion out there. Take it for what it is worth.


CrackSmokeRepublican's picture

It is much easier to invalidate all Jew Debts and kick them out...

Better than trying to pay the Talmudic Babylonians back...


Usury In Old Babylon and In the Roman Empire


Israel Did 9/11 in case you didn't know already...


Popo's picture

It seems you clicked a link somewhere and now you're lost -- Probably trying to find your way back to Yahoo!  


Here, let me help:


(I think you'll be more comfortable with the level of discourse there.)

CrackSmokeRepublican's picture

Hey Bankrupt JewTard this is ZeroHedge, go back to your children's books....

 your Talmud Infected Bris ready Rabbi is looking for you...


Here's your Talmudi'C'iti getting another Jew-Fed Bailout again:



MsCreant's picture

If your going to be racist, make it funny or clever at least.

Lux Fiat's picture

Will likely stay put, as having lived in other parts of the world, know that the grass is not always greener, and also a desire to be part of the solution.  However, if opportunity completely withers on the vine, have to take the kids' futures into account.

Spent a few weeks in NZ about a decade ago.  Beautiful country, friendly folks, bland food.  However, what concerns me longer term is if we do get into serious nat resources shortages, not sure that I would want to be living in a country that could be relatively in close proximity to China.  Australia didn't start trying to beef up it's military just for potential stimulative effects...

snowball777's picture

I don't suppose Oz had considered not selling the means of their own destruction to said red giant?

Seer's picture

People miss this very important point: the exit is not of location but of mindset.  In essence the only "exit" is that of removing oneself from the System.  Going to some other country is NOT exiting, it's just relocating: as some note, it might be a bit tricky to fit in elsewhere.

Shameful's picture

Well I hardly fit in here :)

My thoughts of changing local is some places will do better then others, but sure there is that problem with being a stranger in a strange land, and in a lot of places I would stick out like a sore thumb.

And what do you mean by removing oneself from the system?  Sure the facts are in it's going to crash, but most of us keep going on with our lives because we don't know when the day of reckoning is.

i-dog's picture

You are very well advised to relocate, Shameful.

Politically and administratively, the federal government is 'Too Big To Fix' now.

There are also some very nasty signs of what awaits those who remain until the collapse actually happens.

Just sayin'.

Shameful's picture

I'm currently stuck till at least the summer.  And in my profession I have some experience but I'll still be a little shy of what most employers look for.  I'm looking but I'm trying to keep options open.

I figure that best case, the Fed Gov collapses, the dollar hyper inflates and we collapse Soviet Style.  The states split, and local/state govs will be a lot more important.  So in this scenario probably  months of hell until there is some level of order.  This is best case.

Now worst case is a total technofacist police sate that would make Orwell wince, and the mass culling of the population.

A more middle of the road case is a bloody long term civil war, or a wild WW3 to try to keep the game going.  So I hear you this will not be a fun place to be.  My friends and family have decided to tough it out, and most of them are relocating to what they think will be a safer area, and I'm looking at jobs there after I graduate.  Though I don't want ot jump out of the frying pan and into the fire.

Oracle of Kypseli's picture

We all need to stay put fight and install a constitutional government.

Shameful's picture

I'd be more apt to fight to break away from the Federal Government.  It's unworkable.  Look at the founders, they broke and violated the constitution.  Not the same insane level as our current "leaders", but even they could not be trusted with that power.  Liberty cannot exist with a massive bureaucracy ruling over an empire.

i-dog's picture

Great sentiment ... but exactly how do you expect to achieve this in the few months remaining?

Vote in a saviour or three? There are 535 congressmen on the take and only half of them are up for re-election in a few weeks. Expect no party to win an absolute majority in the November mid-terms, which means more deals and payoffs to get anything through. The president also holds dictatorial power -- under a raft of executive orders and directions from overseas oligarchs -- to command the military and all the divisions of homeland security (including transportation, food & energy supply, border control, internet & media, forced "vaccinations", etc).

My suggestion is for the states to dissolve the Union and start again ... since 50 states -- relying on their rights under the Constitution to dissolve the feds (just as the Constitution replaced the Articles of Confederation) -- is a far more powerful force for change than a few new congressmen jumping into the cesspool. But I expect only a few supporters here, even fewer among the general public, and probably fewer still among the state houses.

i-dog's picture

PS. Have a look downthread at all the new names posting and all the hate-mongering, bickering over red vs. blue, and misguided revisions of "history" to see how much hope we have for a "democratic" solution!


Boxed Merlot's picture

O.K., so you elect to "squat" in a residential structure as the Earls.  Fine.  Now, there are no government subsidies available in the form of "income" (because you house wards of the state), as you have recieved your lump sum.  You either recieve the capital or the income.


No double dipping from the government coffers.


Perhaps building on some sort of agreement like this?



Glass Steagall's picture

I’m with you, Oracle. The U.S.S.R. is a pretty good example of post-collapse offerings. I don’t see any of their dissidence effecting any meaningful change from their disenfranchised exiles (oligarch’s and blond call girls? Please…)

I think there is plenty of opportunity at home if one is smart and under the radar. Pretty sure things are coming to a head soon and I don’t believe for a second that TPTB are actually out of control (at least in their own minds). But this thing has taken on a momentum of its own its critical mass has already been surpassed. I’m quite sure all parties concerned, from J6P to Blankfein will require a life boat on this Titanic economy.

Just sux that a lot of us aren’t gonna make it…

Oracle of Kypseli's picture

When failure comes, Canada (natural resources) will be invaded under a trifle pretext:

"In wars the occassions may be trifling"  Aristotle

Shameful's picture

It will be invaded, but not the way you think.  Canada will be assaulted by a human wave of Americans looking for jobs, or handouts.  In an economic collapse the gov won't need to try to get Americans up there, they will swarm Canada on their own.  Would not surprise me to see Canada's pop double in ten years following the meltdown, on the plus side will create a big demand for those houses :)

The thing that kept Canada off my top picks was the fact that when the US goes, Americans will try to come over like a Golden Hoard.  Other then that has a lot going for it for things I'm looking for.

snowball777's picture

How long until the canucks are petitioning to raze the Ambassador bridge and build walls?

Diggintunnels's picture

"If we lose freedom here, there is no place to escape to. This is the last stand on Earth." 

Damn Right. As citizens of these constitutional states it is our duty and responsibility to ensure ourselves a representative government.  Change this country back from the inside.  Run for local office, support a candidate that is not from the Red or Blue team, don't just sit there and complain.  You think by leaving this country and becoming a passenger in someone else's country you will find justice?  Tell me where?  Once you arrive you will find that you not only lack justice, but are not even recognized as a citizen.  Good Luck...

hedgeless_horseman's picture

For many considering their options, the crux of the stay versus go problem centers on the question of when to go, if the decision is to leave.  Wait too long, and risk becoming trapped without proper preparations.  Leave too early, and risk false alarm or missing out on a chance of America turning it around.  One also has risk in not siding with a country that has a pretty good record of coming out ahead, in the end, once the shit really starts to fly.

If you stay, you need not worry about when, and can focus on, "making your last stand right where you are."  You also are likely to have a deeper knowledge of those standing with you, and against you.

Dangertime's picture

Unfortunately repayment of all debts is impossible in a fiat system.

It really must "grow or die".

Gromit's picture

Well, yes.

And remember that as soon as more money goes out than comes in we'll have exchange controls.

Kinda like a hedge fund that won't honor redemptions.

Oracle of Kypseli's picture


The rich will stay rich, the poor will stay poor on government assistance. Most middle class will buy farms in Chile, Peru, Argentina and Brasil and the rest of the middle class will go on an underground economy like in Greece. (Off the books.)

The elite will no longer have anyone to steal from.

Starve the beast

michigan independant's picture

Building the Perfect Beast is what you need to think since it is underway. Define poor as we seen it then as compared to what is acepted. The foot prints are clear.

High Plains Drifter's picture

Yeh, they oligarchs want everyone to make two dollars a day in wages.

Seer's picture

I don't think that they care one way or another as long as they stay in power.  What advantage is it to them that they stay in power with everyone impoverished and on the verge of revolt, vs. now, where folks get lots more and are distracted by all the toys that the overlords sell?

There's a natural state of things.  One need only note that 2/3 of the world's population lives on $3/day or less.  The ones that are going to get hardest are those most vested in the System.

AnAnonymous's picture

The only thing that “saved the day” then was a REAL war, not one on the foreign exchanges.




Wrong. The only thing that saved the day was not  the war but the very fact that the level of resources was at 1940 level and not somewhere else.


You can go at war all day long, you wont reset the level of resources as it was before this both absolutely and relatively at least for the Western world.

War will not reset oil resources level at 1940s level. People in power know this.


snowball777's picture

What 'saved the day' was that the US was left relatively unharmed while the rest of the world was obliterated...the broken window fallacy writ large worked in our favor and made those sitting on the resources beholden to us for protection for a time.

I'm pretty sure peak oil implies that there's a finite limit to how long you can 'war all day' at least with respect to the use of jets, tanks, missiles, etc; you only do so much with a nuke sub fleet alone.


The Alarmist's picture

Proverbs 22:7 ... The Rich will rule over the poor, and the borrower is a slave to the lender.


snowball777's picture

Psalms 15:5

...who does not put out his money at interest, and does not take a bribe against the innocent.

High Plains Drifter's picture

But, you can make a lot of money in the stock market.






Sunshine n Lollipops's picture

That's my plan.

With Amway as a backup.

Fucking bulletproof.

Plus, my space ship is almost complete, so I got that goin' for me.

snowball777's picture

But now how much would you pay for my materials on "How to Start Your Own Ponzi"?

midtowng's picture

Yeh. It's the welfare state. It couldn't possibly be the trillions of dollars spent on useless wars, and the trillions more that were robbed from the working class by the wealthy elite.

fuu's picture

That has always bothered me as well. People seem to point to social welfare as the root of all evil in the US but no one wants to acknowledge that corporate welfare, bailouts, and military spending dwarf social welfare. But it's the fault of the poor.

Eternal Student's picture

+1. And during the past 10 years, the biggest voices against social welfare have been the loudest proponents of corporate welfare. And recipients of  such welfare.

If nothing else, social welfare appears to be much cheaper.

doolittlegeorge's picture

"if the money's meaningless what's so hard about cutting the check?"  I agree with that.  Of course "those meaningless checks are cut to military personnel," too so I wish someone on the left would at least acknowledge that "on their road to perdition."  Needless to say "if you want your free healthcare you can serve your country" and "still have it after you leave."  In short "never forget who butters your bread." I know i haven't.

hedgeless_horseman's picture

I butter my bread with butter made from milk from my cow.  God bless her.

Seer's picture

And a big ficking Amen to That!

The greatest threat to TPTB is to be able to feed yourself.