ETC

Concentrated power and wealth are intrinsically sociopathological by their very nature. We have long spoken of the dangers inherent to centralization of power and the extreme concentrations of wealth centralization inevitably creates. There is another danger of centralization: sociopaths/psychopaths excel in organizations that centralize power, and their ability to flatter, browbeat and manipulate others greases their climb to the top. In effect, centralization is tailor-made for sociopaths gaining power. Nothing infuriates a sociopath or a sociopathological organization more than the exposure of their sociopathology, and so those in power will stop at nothing to silence, discredit, criminalize or eliminate the heroic whistleblower.

In August of 2011, Argentina’s government slowly began to implement a series of actions destined to curtail the right of citizens to access US dollars (foreign exchange in general). The goal was and is to force savings into pesos, as pesos are after the taxable asset in a country that cannot access capital markets and fully monetizes its deficits. From that moment onward  physical US dollars started to trade at a premium. First-hand experience on the ground in Patagonia confirm the irreversible damage caused by interventionist policies: Widespread poverty, abandoned infrastructure, scarcity of consumer goods, unseen unemployment and criminality, and the madness of hedging against inflation with the purchase of new cars. The streets of any forgotten small town in Patagonia are filled with brand new 4×4 vehicles that would be the envy of many in North America. We can now see that the sustainability of the manipulation in a segmented/broken foreign exchange market causes a negative carry, which would create a quasi-fiscal deficit in Argentina (i.e. the deficit of the Banco Central), fully opening the gates to hyperinflation.

My guess is that in 2-3 years most folks in the country are going to hate Obamacare, but it it will be impossible to get rid of by then.

So much for the “recovery” theory. If you look at the real economy, things are getting worse and worse. When even Wal-Mart reports that people are spending less (remember that corporate email that February sales were a “disaster”?) you KNOW things are bad.

What happens to everyone in the ruling Elites and those desperately trying to join the ruling Elites when the debt-serfs stop paying and the tax donkeys drift away to lower-cost, lower-income lifestyles? If you think Tune In, Turn On, Opt Out sounds ludicrous, check back in four years (2017) and eight years (2021) and see how many of your fellow debt-serfs and tax donkeys have quietly abandoned the bloated cost-structure, debt and derangement of the Neofeudal Debtocracy's twisted consumerist dream.

Parasites must balance their drive to maximize what they extract from their host with the risk of losing everything by killing their host. This is the dilemma of the parasitic partnership of the central state and financial Elites everywhere: to extract the maximum possible in debt payments and taxes without sparking rebellion and revolution. The 30 million whose labor funds the parasitic status quo don't have to rebel; they simply have to stop going to work, stop starting enterprises, stop being productive. They just have to tire of being the host, tire of being debt-serfs, tire of being tax donkeys. The trick to suppressing revolution is to keep debt-tax serfdom bearable. The parasitic Elites are keeping the host going, but at a high cost in resiliency. Let's see how long the host lasts once a crisis hits.

In this part, we discuss stocks vs. flows, how prices are formed in a market, a broad concept of arbitrage, spreads, and how money comes into and goes out of existence.

The debate over what actions actually constitute “terrorism,” we believe, will become one of the defining ideological battles of our era. Terrorism is not a word often used by common people to describe aberrant behaviors or dastardly deeds; however, it is used by governments around the world to label and marginalize political enemies. That is to say, it is the government that normally decides who is a “terrorist” and who is a mere “criminal,” the assertion being that one is clearly far worse than the other. The more naïve subsections of our society will accept unConstitutional methods against the “radicalized” out of fear and conditioning, without realizing that the machinations of bureaucracy being used against those they hate could just as easily be used against them in the future.

It will come as a shock to all of you to know that such daylight robbery is perfectly legal and this has been so for hundreds of years.

Put down the Sunday newspaper; grab a pot of coffee; and call 'mom' and tell her she has to read this. Doug Rudisch has written a far-reaching summary of the true state of the world and 'why policy has failed'. Simply put, there is no faith in the system; real underlying faith and trust in the system, as opposed to the confidence born from economic steroid injections or entitlements. There also is a subtle but important distinction between faith and trust versus confidence. Faith and trust are longer term and more powerful concepts.There is more going on than a temporary lull in animal spirits that current fiscal and monetary policy will cure. If that was the case, it would be working already... We have ended up with a system where the worst of the risk takers have the ability to take the most risk and are currently taking it at extreme levels. We wish we could be more prescriptive and offer more solutions for the problems. But in order to solve a problem, you must first realize you have one. With respect to the Fed, we don’t think the U.S. realizes it has a problem.

The anti-consumerism Degrowth movement is gaining visibility and adherents in Europe. Degrowth (French: décroissance, Spanish: decrecimiento, Italian: decrescita) recognizes that the mindless expansion of mindless consumption fueled by credit and financialization is qualitatively and quantitatively different from positive growth. In a very real way, Degrowth embraces the devolution of paid work and wealth that cannot be reversed. Growth and consumption based on financialization, expanding credit and phantom collateral is unsustainable and will devolve or implode. Rather than pine for what cannot be, it's far healthier to embrace using less of everything and increasing well-being by leveraging the web, the commons and what cannot be commoditized or financialized.

While Paul Singer, Kyle Bass, and Stan Druckenmiller got the headlines, there were in total 14 worthwhile speakers at yesterday's Ira Sohn conference. Though many of the themes were unsurprising, it is nonetheless useful to compare your own views to those of these professional money managers, many of whom are now bludgeoned daily by the 'idiot-maker' rally... of course, that is, until they are proved 100% correct.

An independent, critical account of the American economy would soon raise questions about the structural causes of inequality by asking cui bono, to whose benefit is the system arranged? If we can honestly say that the system's primary source of inequality is a dynamic economy that rewards the top 10% who are best able to deploy skills and capital, then that suggests one set of potential remediations. If however we find the system is unequal largely as a result of its cartel-state structure, then that suggests a political and financial reset is needed to clear the deadwood of corruption, malinvestment and state/central bank manipulation of statistics, finance and credit. We had to destroy the economy to save it. Indeed.

The financial and other markets do not seem to reflect the reality of subdued growth is how Hoisington Investment's Lacy Hunt describes the current environment. Stock prices are high, or at least back to levels reached more than a decade ago, and bond yields contain a significant inflationary expectations premium. Stock and commodity prices have risen in concert with the announcement of QE1, QE2 and QE3. Theoretically, as well as from a long-term historical perspective, a mechanical link between an expansion of the Fed's balance sheet and these markets is lacking. It is possible to conclude, therefore, that psychology typical of irrational market behavior is at play. As Lance Roberts notes, Hunt suggests that when expectations shift from inflation to deflation, irrational behavior might adjust risk asset prices significantly. Such signs that a shift is beginning can be viewed in the commodity markets. "Debt is future consumption denied," and regardless of the current debate - Reinhart and Rogoff were right. Simply put, "the problems have not been solved, they have merely been contained."