Now that Q2 is not shaping up to be much better than Q1, other, mostly climatic, excuses have arisen: such as El Nino, the California drought, and even suggestions that, gasp, as a result of the Fed's endless meddling in the economy, the terminal growth rate of the world has been permanently lowered to 2% or lower. What is sadder for economists, even formerly respectable ones, is that overnight it was none other than Tyler Cowen who, writing in the New York Times, came up with yet another theory to explain the "continuing slowness of economic growth in high-income economies." In his own words: "An additional explanation of slow growth is now receiving attention, however. It is the persistence and expectation of peace." That's right - blame it on the lack of war!
From Ancient Egypt to Modern America …
Unions have been the real plague of society. There is not much they have not really destroyed... The problem is that the only way to pay these unions is to raise taxes. This is the poison pill that will destroy Western Society. This hunt for taxes will destroy the economy and will not save the day in the end game. Just do the math.
They say that gold is a geopolitical metal. Gold is real money with no counterparty risk and, furthermore, an excellent wealth preserver in time and space. Like fiat currencies (dollar, euro, yen, Yuan etc.), gold’s price is also influenced by political events, especially those having an international impact. Alan Greenspan, ex-chairman of the Federal Reserve, said that gold is money “in extremis”. This is why gold is part of most central banks’ reserves. It is the only reserve that is not debt and that cannot be devalued by inflation, contrary to fiat currencies.
Understanding Cuba’s past and present illustrates the consequences of misguided economic policy and how it impacts socially.
The real problem with Piketty's taxation/social welfare solution to wealth inequality is that it does nothing to change the source of systemic inequality, debt-based neofeudalism and neocolonialism.
Bad Government and Central Bank Policy Are the MAIN CAUSE of Runaway Inequality
This is how empires collapse: one complicit participant at a time.
We hear a lot about climate change, especially now that the Intergovernmental Panel on Climate Change (IPCC) has recently published another report. At the same time, oil is reaching limits, and this has an effect as well. How do the two issues fit together? Unfortunately, the real situation is that the laws of physics, rather than humans, are in charge. Basically, as economies grow, it takes increasing complexity to fix problems, as Joseph Tainter explained in his book, The Collapse of Complex Societies. Now we are reaching limits in many ways, but we can’t - or dare not - model how all of these limits are hitting.
It has happened over and over again throughout history. Nations, empires, and dynasties have made bad economic decisions which lead to their own destruction. The scenario usually goes something like this--one generation sacrifices and works hard to overcome global challenges and creates an economic powerhouse, which in turn allows it to project military power. Follow on generations take their elders work for granted and ignore and even denigrate the fruits of hard labor, they just want the benefits and start giving away the spoils for free. The next generation indulges itself in sloth and corruption and is overrun by the barbarians.
Nearly four thousand years ago, King Hammurabi of Babylon laid out his eponymous “Hammurabi’s Code”, a series of laws that is still famous to this day. Most people know Hammurabi’s Code as “an eye for an eye, a tooth for a tooth”. Yet what few realize is that the code was actually one of the original attempts at government wage and price controls. Today you can see various forms of wage and price controls all over the world– from the blatant (Argentina) to the subtle. Major farm subsidies in the United States, for example, are a form of price controls. Monetary policy (especially keeping interest rates at effectively zero) are a form of price controls. Yet today President Obama is set to lauch another far more obvious form... simply put, the rule of law means nothing.
While social unrest has been a thing that occurs "over there", the increasing visualization of people taking to the streets in the face of desperate economic situations amid an elite class of politicians, dictators, and tyrants is becoming clearer by the day. As the following chart shows, across 500 billion words in over 5.2 million books, the words "unemployment, "taxes", and "inequality" tend to correlate highly with "war". The 18th century saw these terms the most correlated and as the following chronology suggests, that is not a time to reflect gladly upon...
Our entire monetary system requires that we all trust the high priests of central banking and economics. Those that stray from the state’s message and spread economic heresy are cast down and vilified. Recall the case of Harvard professors Ken Rogoff and Carmen Reinhart who wrote the seminal work: 'This Time is Different: Eight Centuries of Financial Folly' highlighting dozens of shocking historical patterns where once powerful nations accumulated too much debt and entered into terminal decline. The premise of their book was very simple: debt is bad. And when nations rack up too much of it, they get into serious trouble. This message was not terribly convenient for governments that have racked up unprecedented levels of debt. Not to worry, though, the IMF has now stepped up with a work of its own to fill the void. Translation: Keep racking up that debt, boys and girls, it’s nothing but smooth sailing ahead.
Today’s economic model was best summed up by dictator Benito Mussolini in one short sentence: “Fascism … is the perfect merger of power between the corporations and the state”. But tyranny also has its life-cycle within the balance between the past and the future. Once the past becomes far too much of a millstone for the future generations to carry any longer, governments fall and debt and servitude recede. Empires can fall largely without violence and allow a new, freer system to emerge, as most of the satellite states of the Soviet Union achieved. Or the legacy of fallen empire becomes violent chaos followed by renewed oppression, like the French Revolution. This bottom-up style revolution is happening to nations across our 21st Century. The future lies in the balance. The bell tolls for all Western nations, too. So, in the United States, it seems, liberty will have its chance again before too long.
They have promised more than they can possibly deliver, so a lot of their promises are going to be broken before we see the end of this current bust that began in 2000. And that outcome of broken promises describes the huge task that we all face. There will be a day of reckoning. There always is when an economy and governments take on more debt than is prudent, and the world is far beyond that point. So everyone needs to plan and prepare for that day of reckoning. We can't predict when it is coming, but we know from monetary history that busts follow booms, and more to the point, that currencies collapse when governments make promises that they cannot possibly fulfill. Their central banks print the currency the government wants to spend until the currency eventually collapses, which is a key point of The Money Bubble. The world has lost sight of what money What today is considered to be money is only a money substitute circulating in place of money. J.P. Morgan had it right when in testimony before the US Congress in 1912 he said: "Money is gold, nothing else." Because we have lost sight of this wisdom, a "money bubble" has been created. And it will pop. Bubbles always do.