We Are On The Road To Serfdom

Tyler Durden's picture

Authored by Detlev Schlichter; originally posted at DetlevSchlichter.com,

We are now five years into the Great Fiat Money Endgame and our freedom is increasingly under attack from the state, liberty’s eternal enemy. It is true that by any realistic measure most states today are heading for bankruptcy. But it would be wrong to assume that ‘austerity’ policies must now lead to a diminishing of government influence and a shrinking of state power. The opposite is true: the state asserts itself more forcefully in the economy, and the political class feels licensed by the crisis to abandon whatever restraint it may have adhered to in the past. Ever more prices in financial markets are manipulated by the central banks, either directly or indirectly; and through legislation, regulation, and taxation the state takes more control of the employment of scarce means. An anti-wealth rhetoric is seeping back into political discourse everywhere and is setting the stage for more confiscation of wealth and income in the future.

War is the health of the state, and so is financial crisis, ironically even a crisis in government finances. As the democratic masses sense that their living standards are threatened, they authorize their governments to do “whatever it takes” to arrest the collapse, prop up asset prices, and to enforce some form of stability. The state is a gigantic hammer, and at times of uncertainty the public wants nothing more than seeing everything nailed to the floor. Saving the status quo and spreading the pain are the dominant political postulates today, and they will shape policy for years to come.

Unlimited fiat money is a political tool

A free society requires hard and apolitical money. But the reality today is that money is merely a political tool. Central banks around the world are getting ever bolder in using it to rig markets and manipulate asset prices. The results are evident: equities are trading not far from historic highs, the bonds of reckless and clueless governments are trading at record low interest rates, and corporate debt is priced for perfection. While in the real economy the risks remain palpable and the financial sector on life support from the central banks, my friends in money management tell me that the biggest risk they have faced of late was the risk of not being bullish enough and missing the rallies. Welcome to Planet QE.

I wish my friends luck but I am concerned about the consequences. With free and unlimited fiat money at the core of the financial industry, mis-allocations of capital will not diminish but increase. The damage done to the economy will be spectacular in the final assessment. There is no natural end to QE. Once it has propped up markets it has to be continued ad infinitum to keep ‘prices’ where the authorities want them. None of this is a one-off or temporary. It is a new form of finance socialism. It will not end through the political process but via complete currency collapse.

Not the buying and selling by the public on free and uninhibited markets, but monetary authorities – central bank bureaucrats – now determine where asset prices should be, which banks survive, how fast they grow and who they lend to, and what the shape of the yield curve should be. We are witnessing the destruction of financial markets and indeed of capitalism itself.

While in the monetary sphere the role of the state is increasing rapidly it is certainly not diminishing in the sphere of fiscal policy. Under the misleading banner of ‘austerity’ states are not rolling back government but simply changing the sources of state funding. Seeing what has happened in Ireland and Portugal, and what is now happening in Spain and in particular Greece, many governments want to reduce their dependence on the bond market. They realize that once the bond market loses confidence in the solvency of any state the game is up and insolvency quickly becomes a reality. But the states that attempt to reduce deficits do not usually reduce spending but raise revenues through higher taxes.

Sources of state funding

When states fund high degrees of spending by borrowing they tap into the pool of society’s savings, crowd out private competitors, and thus deprive the private sector of resources. In the private sector, savings would have to be employed as productive capital to be able repay the savers who provided these resources in the first place at some point in the future. By contrast, governments mainly consume the resources they obtain through borrowing in the present period. They do not invest them in productive activities that generate new income streams for society. Via deficit-spending, governments channel savings mainly back into consumption. Government bonds are not backed by productive capital but simply by the state’s future expropriation of wealth-holders and income-earners. Government deficits and government debt are always highly destructive for a society. They are truly anti-social. Those who invest in government debt are not funding future-oriented investment but present-day state consumption. They expect to get repaid from future taxes on productive enterprise without ever having invested in productive enterprise themselves. They do not support capitalist production but simply acquire shares in the state’s privilege of taxation.

Reducing deficits is thus to be encouraged at all times, and the Keynesian nonsense that deficit-spending enhances society’s productiveness is to be rejected entirely. However, most states are not aiming to reduce deficits by cutting back on spending, and those that do, do so only marginally. They mainly replace borrowing with taxes. This means the state no longer takes the detour via the bond market but confiscates directly and instantly what it needs to sustain its outsized spending. In any case, the states’ heavy control over a large chunk of society’s scarce means is not reduced. It is evident that this strategy too obstructs the efficient and productive use of resources. It is a disincentive for investment and the build-up of a productive capital stock. It is a killer of growth and prosperity.

47 percent, then 52 percent, then 90 percent…

Why do states not cut spending? – I would suggest three answers: first, it is not in the interest of politicians and bureaucrats to reduce spending as spending is the prime source of their power and prestige. Second, there is still a pathetic belief in the Keynesian myth that government spending ‘reboots’ the economy. But the third is maybe the most important one: in all advanced welfare democracies large sections of the public have come to rely on the state, and in our mass democracies it now means political suicide to try and roll back the state.

Mitt Romney’s comment that 47% of Americans would not appreciate his message of cutting taxes and vote for him because they do not pay taxes and instead rely on government handouts, may not have been politically astute and tactically clever but there was a lot of truth in it.

In Britain, more than 50 percent of households are now net receivers of state transfers, up 10 percent from a decade ago. In Scotland it is allegedly a staggering 90 percent of households. Large sections of British society have become wards of the state.

Against this backdrop state spending is more likely to grow than shrink. This will mean higher taxes, more central bank intervention (debt monetization, ‘quantitative easing’), more regulatory intervention to force institutional investors into the government bond market, and ultimately capital controls.

Eat the Rich!

In order to legitimize the further confiscation of private income and private wealth to fund ongoing state expenditure, the need for a new political narrative arose. This narrative claims that the problem with government finances is not out-of-control spending but the lack of solidarity by the rich, wealthy and most productive, who do not contribute ‘their fair share’.

An Eat-the-Rich rhetoric is discernible everywhere, and it is getting louder. In Britain, Deputy Prime Minister Nick Clegg wants to introduce a special ‘mansion tax’ on high-end private property. This is being rejected by the Tories but, according to opinion polls, supported by a majority of Brits. (I wager a guess that it is popular in Scotland.) In Germany, Angela Merkel’s challenger for the chancellorship, Peer Steinbrueck, wants to raise capital gains taxes if elected. In Switzerland of all places, a conservative (!) politician recently proposed that extra taxes should be levied on wealthy pensioners so that they make their ‘fair’ contribution to the public weal.

France on an economic suicide mission

The above trends are all nicely epitomized by developments in France. In 2012, President Hollande has not reduced state spending at all but raised taxes. For 2013 he proposed an ‘austerity’ budget that would cut the deficit by €30 billion, of which €10 billion would come from spending cuts and €20 billion would be generated in extra income through higher taxes on corporations and on high income earners. The top tax rate will rise from 41% to 45%, and those that earn more than €1 million a year will be subject to a new 75% marginal tax rate. With all these market-crippling measures France will still run a budget deficit and will have to borrow more from the bond market to fund its outsized state spending programs, which still account for 56% of registered GDP.

If you ask me, the market is not bearish enough on France. This version of socialism will not work, just as no other version of socialism has ever worked. But when it fails, it will be blamed on ‘austerity’ and the euro, not on socialism.

As usual, the international commentariat does not ‘get it’. Political analysts are profoundly uninterested in the difference between reducing spending and increasing taxes, it is all just ‘austerity’ to them, and, to make it worse, allegedly enforced by the Germans. The Daily Telegraph’s Ambrose Evans-Pritchard labels ‘austerity’ ‘1930s policies imposed by Germany’, which is of dubious historical and economic accuracy but suitable, I guess, to make a political point.

Most commentators are all too happy to cite the alleged negative effect of ‘austerity’ on GDP, ignoring that in a heavily state-run economy like France’s, official GDP says as little about the public’s material wellbeing as does a rallying equity market in an economy fuelled by unlimited QE. If the government spent money on hiring people to sweep the streets with toothbrushes this, too, would boost GDP and could thus be labelled economic progress.

At this point it may be worth adding that despite all the talk of ‘austerity’ many governments are still spending and borrowing like never before, first and foremost, the United States, which is running the largest civil government mankind has ever seen. For 5 consecutive years annual deficits have been way in excess of $1,000 billion, which means the US government borrows an additional $4 billion on every day the markets are open. The US is running budget deficits to the tune of 8-10% per annum to allegedly boost growth by a meagre 2% at best.

Regulation and more regulation

Fiscal and monetary actions by states will increasingly be flanked by aggressive regulatory and legislative intervention in markets. Governments are controlling the big pools of savings via their regulatory powers over banks, insurance companies and pension funds. Existing regulations already force all these entities into heavy allocations of government bonds. This will continue going forward and intensify. The states must ensure that they continue to have access to cheap funding.

Not only do I expect regulation that ties institutional investors to the government bond market to continue, I think it will be made ever more difficult for the individual to ‘opt out’ of these schemes, i.e. to arrange his financial affairs outside the heavily state-regulated banking, insurance, and pension fund industry. The astutely spread myth that the financial crisis resulted from ‘unregulated markets’ rather than constant expansion of state fiat money and artificially cheap credit from state central banks, has opened the door for more aggressive regulatory interference in markets.

The War on Offshore

Part and parcel of this trend is the War on Offshore, epitomized by new and tough double-taxation treaties between the UK and Switzerland and Germany and Switzerland. You are naïve if you think that attacks on Swiss banking and on other ‘offshore’ banking destinations are only aimed at tax-dodgers.  An important side effect of these campaigns is this: it gets ever more cumbersome for citizens from these countries to conduct their private banking business in Switzerland and other countries, and ever more expensive and risky for Swiss and other banks to service these clients. For those of us who are tax-honest but prefer to have our assets diversified politically, and who are attracted to certain banking and legal traditions and a deeper commitment to private property rights in places such as Switzerland, banking away from our home country gets more difficult. This is intentional I believe.

The United States of America have taken this strategy to its logical extreme. The concept of global taxation for all Americans, regardless where they live, coupled with aggressive litigation and threat of reprisal against foreign financial institutions that may – deliberately or inadvertently – assist Americans in lowering their tax burden, have made it very expensive and even risky for many banks to deal with American citizens, or even with holders of US green cards or holders of US social security numbers. Americans will find it difficult to open bank accounts in certain countries. This is certainly the case for Switzerland but a friend of mine even struggled obtaining full banking services in Singapore. I know of private banks in the UK that have terminated banking relationships with US citizens, even when they were longstanding clients. All of this is going to get worse next year when FATCA becomes effective – the Foreign Account Tax Compliance Act, by which the entire global financial system will become the extended arm of the US Internal Revenue System. US citizens are subject to de facto capital controls. I believe this is only a precursor to real capital controls being implemented in the not too distant future.

When Johann Wolfgang von Goethe wrote that “none are more hopelessly enslaved than those who falsely believe they are free” he anticipated the modern USA.

And to round it all off, there is the War on Cash. In many European countries there are now legal limits for cash transactions, and Italy is considering restrictions for daily cash withdrawals. Again, the official explanation is to fight tax evasion but surely these restrictions will come in handy when the state-sponsored and highly geared banking sector in Europe wobbles again, and depositors try to pull out their money.

“I’ve seen the future, and it will be…”

So here is the future as I see it: central banks are now committed to printing unlimited amounts of fiat money to artificially prop up various asset prices forever and maintain illusions of stability. Governments will use their legislative and regulatory power to make sure that your bank, your insurance company and your pension fund keep funding the state, and will make it difficult for you to disengage from these institutions. Taxes will rise on trend, and it will be more and more difficult to keep your savings in cash or move them abroad.

Now you may not consider yourself to be rich. You may not own or live in a house that Nick Clegg would consider a ‘mansion’. You may not want to ever bank in Switzerland or hold assets abroad. You may only have a small pension fund and not care much how many government bonds it holds. You may even be one those people who regularly stand in front of me in the line at Starbucks and pay for their semi-skinned, decaf latte with their credit or debit card, so you may not care about restrictions on using cash. But if you care about living in a free society you should be concerned. And I sure believe you should care about living in a functioning market economy.

This will end badly.

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Precious's picture

It's not a road.  It's a cul-de-sac, we're there already, and they've run out of Halloween candy.

Sabibaby's picture

no no no no no... burn the houses down then!

Spirit Of Truth's picture

Serfdom is coming IMHO....compliments of Russia...

NUCLEAR WAR ALERT: Is Israel Preparing For All-Out War Next Week?!

http://thespiritoftruth.blogspot.com/2012/10/nuclear-war-alert-is-israel...

Manthong's picture

Most folks here get their skivvies all twisted in knots about the federal government coming down on them.

The sad truth is that the feds will come down on what’s left after the state and local governments are through pillaging America.

Manthong's picture

Gee, I guess a number of folks up there see no effect on their lives from  all of those red light cameras, speed cameras, ticket revenue campaigns, construction permit fees, municipal fees, school funding, energy taxes, property and transfer taxes, city street parking, sales taxes, use taxes, homeless programs, immigrant programs and all that other crap not to mention the pressure to exploit any and every new revenue approach to delay the collapse of their pension systems or the full tilt militarization of local law enforcement.

Must be wonderful where they live.

Overfed's picture

I live in what is basically two conjoined towns in the PNW, population between the two is about 50K, with a strong libertarian bent. Lots of Ron Paul campaign signs during the primaries, with this county going to him by a wide margin. But I digress.

The city across the river tried putting up red light cameras, and the backlash was so big that they were taken down within a couple of months. Even a local retired judge lent a hand in gettting them removed. Big brother can be pushed back if the people band together.

Questan1913's picture

Spirit Of Truth,

You are already a serf. .... "Compliments of RUSSIA??....no, compliments of your own passivity and servile tendency.

 

 

matrix2012's picture

Spirit Of Truth,

your article may have some factual info to prop it... but the slant of "Compliments of RUSSIA" just flattened your credibility! What's the hell to do with Russia here??? Feel free to elaborate.

TheFourthStooge-ing's picture

.

Spirit Of Truth,

your article may have some factual info to prop it... but the slant of "Compliments of RUSSIA" just flattened your credibility!

His claim to be the second coming of Christ doesn't help his credibility much either.

Surly Bear's picture

On the road? We've arrived, parked, and are enjoying the sights.

crusty curmudgeon's picture

I can't speak for "Spirit of Truth" but I'm not sure I'd dismiss him (her?) as the huge kook most readers appear to be doing.  I don't know what he meant, but there are some serious flaws to the conventional wisdom that the USSR lost the cold war and is now a harmless, struggling country yearning to be free.

A couple of fairly short articles by Jeff Nyquist would be a good place to perhaps reconsider whether you've been led to believe yet another false idea.  Hard to believe, eh?

http://www.financialsense.com/contributors/jr-nyquist/a-serious-threat-to-western-nations

http://www.financialsense.com/contributors/jr-nyquist/eastern-europe-market-system-changes-of-1989 

P.S.  I junked him nevertheless -- for writing in all bold.

Spirit Of Truth's picture

Correct.

You are all deluded and cooperating in your own destruction.  I'm here to redeem you from the Evil One who is now in control via mass deceit.  You see, the whole Christ thingy is true and you all are not smarter than God.

http://thespiritoftruth.blogspot.com/2010/03/quick-review-of-history.html

http://thespiritoftruth.blogspot.com/2012/07/why-belief-in-god-is-reason...

http://thespiritoftruth.blogspot.com/2012/05/great-transformation-of-wor...

Precious's picture

Hey, hebe with a keyboard.  Ever heard of Google Adwords.  Go buy some, you cheap little bitch.  

And quit pumping your two-bit blog by spamming things up around here with your links.  

giovanni_f's picture

The Russians. Sure. The Russians run secret grand jury courts in the US of A, too.

CPL's picture

In some old childrens myths I've run into, depends if four of the Israeli tribes that are capable of seeing them for what they are manage to find the Aluka in their leadership and kill them.

...or then they all burn in hell. 

An Aluka is the Judiac equivalent of the Edward type of Vampire.  Walk around in day, doesn't die, beheading, usually in political or power position in the myths.  Landowner, co-opted king...that sort of thing.  Weirdly the story of the Aulka starts in Mesopotamia and every culture talks about them after that, Ancient Jew, Arab and Egyptians had a tale about them.  Or it could just be a parable of douche bags that were too mean to die.  It was never used as an adjective until much later, in myth it's used as a noun which is pretty creepy.

 

Overfed's picture

The Russians aren't our enemies. Washington D.C. is our enemy.

vast-dom's picture

 

BE A TRUE PATRIOT THIS YEAR AND DO NOT VOTE!

 

LIARS AND SOCIOPATHS THAT CANNOT MIND THEIR BUSINESS. BIG GOV BIG SPYING ON POPULACE AND THREAT OF REVERSING ROE V. WADE. WE ARE FUCKED EITHER WAY!

it will end badly with either party

 

lemonobrien's picture

i'm voting; it's like jacking off, and the boths are nice.

 

help me out, who should i vote for president? i was thinking of writing in ron paul; my name, or gary johnson...but... you know about gary johnson... i vote for writing my name in :)

Precious's picture

Were you born in Hawaii?  

You can be the first Hawaiian president.

francis_sawyer's picture

There are too many 'Johnson's' on the ballot already

~~~

http://www.youtube.com/watch?v=0B4suxQVUAQ

matrix2012's picture

@ vast-dom

TOTALLY BLUNDER STANDING!

Given ONLY the two ugly choices, one instead should CHOOSE THE LESSER EVIL to elude the BIGGER DISASTER!!!

That's, to pick the one who's LESS LIKELY to resort to the BLOODY WARS in carrying out the plunder!!!

 

The best is of course to have the 3rd candidate who represents the people's very interests... but i guess we all need to have deep sleep first to have it realized.... as George Carlin had warned us: "That's why they called it the American Dream... because you have to be asleep to believe it."

 

Davalicious's picture

I think it would be better to have Obama again because most Amerians will go to sleep once Romney takes office. We know that Romney is owned by the same Jew interests, but most of the public are ignorant of that. Romney would be able to dismantly the US with less scrutiny than O'Bongo.

lakecity55's picture

We have a chance to continue working towards a Libertarian Agenda under Mittens.

Under M. T. Suit, we'll all just get droned while muslims and commies run wild.

Stoploss's picture

Take a bag of shit, soak it in lighter fluid, light it, ring the door bell. Run..

That'll teach 'em.

joe6px's picture

That would be a big steaming bag of Ron Paul.  Now that the deadline approaches how bitter is the taste of compromise?

KK Tipton's picture

Snort.

It's kinda like a half LOL. Green for you.

 

Well baited sir, well baited.

Harbanger's picture

"The Road to Serfdom" by Hayek, should be required reading for all people wishing to remain free.

FreeMktFisherMN's picture

As an econ major at a 'prestigious college', I can attest that most econ majors here (and around the world, for that matter) probably don't know a thing about the Austrian school or that there is such a thing. 

 

I emailed a prof (a marxist who was on the Boskin Commission in the late 90's that implemented hedonics/substitution into CPI, meaning I guess steak=hamburger) and asked why is there this aversion to the Austrian school in mainstream academia? Got no response from him, other than that I am more extreme than the Tea Party. I had also criticized the FDIC, as well as his blaming the loan sharks for giving out NINJA loans, when really it was Congress and lobbyists that used extortion to coerce lenders into subprime for these people who had no merit to homeownership, as well as Fannie and Freddie backstops and the monetising/rate lowering Fed always there to prop it up.

 

What a joke. If I could get a decent consulting job like for estate management (help people, like those on fixed income, see the urgency in preserving purchasing power by hedging with phyzz. PMs) or commodities dealings, instead of finishing out my junior and senior year, I would do it. I want no part of i-banking/govt-co-opting cronies. Just want a job with some integrity. 

joe6px's picture

As a selective whore I only want to have intercouse with those who will have the ability to pay me...I really only want to pleasure those who I think are worth my tender loins......

joe6px's picture

"Just want a job with some integrity. " Create it then my brotha.  Or just take your degree and grope harmless citizens as a supervisor...meaning you get to watch while shitheads molest would be airline passengers.  Your useless degree in econ..unless gs or any other fed member would hire you.. If you want to be honest you are screwed.  if you were smart enuf to get here and ask that question, then why are you here and asking that question?

joe6px's picture

Just because you may be a special case, in my ealier resopnse I used the TSA as an over-reaching example of what becomes of young idioligical types...give it a few years.  I was almost you once....as was everyone here.... you get to unrememner your whole investment.  Econ has become central planning...right before our very eyes.  I hope you have a crystal ball worth more than your student loans.

FreeMktFisherMN's picture

I hear you, joe6px, although I do not care for your previous comment that was very crude. I realize it is a free for all, but have some decency. 

I'll probably respond in more detail later, but for now, I would say I am taking steps to prepare, probably in the 99.9th percentile as far as 21 year olds, what with a solid stack of Ag and even some 1/10 Au eagles. I posted a while ago on a ZH thread that I liked the job I had this past summer of freelance, be my own boss work, where I went on craigslist and through family connections found jobs in the Twin Cities metro doing yard work and painting. Paid pretty well per hour, especially for painting a whole exterior of a home, and it was interesting to negotiate and bargain with people. I had plenty of work, and also arbitraged a bit in wheeling and dealing electronics by buying low on ebay and craigslist and selling high, learning about leverage and counterparty risk. 

I have to make a living, obviously, and I need to trust in the Lord that He will show me His purpose for me. I am with you on this reliance on somebody else giving a job to me being a bad mentality. That being said, I don't have the capital to start a full scale business or anything, and I have committed 2 years to get this signaling device piece of paper at an expensive school, and am blessed not to have to go into debt. I only woke up to this economic sham about last fall. I realized how not only is govt intervention bad policy and not efficient, etc., as far as Austrian critique of it, but also how evil Keynesianism/mainstream economics is. The immorality of leveraging out and passing the buck to future generations, and envy/coveting what with people anonymously/cowardly voting to redistribute wealth to their own benefit using govt's point of a gun power to do so. It's disgusting.

 

I would like to find some way to be an apprentice at some wealth management/consulting firm and/or work under a guy who thinks like I do. I obviously think commodities is the place to be what with CBs hitting ctrl + p incessantly, and I genuinely want to do something productive and that I can live with. I didn't go the engineering path, so I have to be realistic. In the mean time, I don't know the future. I think this thing is reaching the final stages, and the Bible lays out which things must pass before the Lord returns. I am not scared at all. I just have to navigate my way and find my niche and trust in the Lord. 

To say I am 'screwed' is absurd, by the way. I am awake to this corruption, and have hedged accordingly a lot already. And even though I don't trust the security of this house where I'm living in this campus town to hold phyzz. here, I have my stack at my real home hidden, and opened up a brokerage account and buy silver ETNs/ETFs and plan on buying commodity ETFs and preferably PM trusts like PSLV perhaps that beats having money sit in the bank earning nada. And am ready to cash out and convert to phyzz at moment's notice.

And as a believer in Christ, I am saved. Faith in Christ alone saves. I am on the side of life, and vehemently oppose the cop-out attitude of 'I don't want to be alive when TSHTF.' 

Fedaykinx's picture

well good for you on the silver and all, i hope you're not tithing too much, save it.  i'd save myself the whole headache, personally, i grew up protestant but don't buy into the whole "jesus is coming" thing.  he ain't coming back, he's too pissed off.

 

i didn't junk you btw, but a piece of advice, talking about that sort of stuff is pretty much going to shut down most of the conversations you may have here.  just sayin.

zhandax's picture

Interesting.  I emailed an article I wrote in 2008 about the fed reserving the last bubble to itself to my last living finance professor to ask him to fact check it and his response was, "I don't concentrate on banking; I sent it it to a colleague at Brown".  I couldn't fault him as he did teach corporate finance but thought he would at least send it to someone qualified to review.  Colleague writes back a couple of weeks later something along the lines of 'this isn't my area of expertise'.    That's two different finance professors at two different universities admitting they don't know enough about the fed to critique an article.  WTF???

lakecity55's picture

And why is that? A man has some heartfelt beliefs and acts on them.

He gets junked by some of the same people who would be up in arms against the banksters.

Who tossed the banksters out of the temple? Who died for doing so?

There is too much ba'al worship going on=Nihlism=socialism=humanism.

People need to find something good to believe in, because, trust me, you are going to need moral/spiritual help to cope in the Reset.

 

shovelhead's picture

I have my dog.

Semper Fi and never lies to me.

Doesn't ask for 10% and is happy with an ass scratch and some occasional canned food on his kibble.

 

ZeroAvatar's picture

As soon as I saw "faith in Christ" I started scrolling.................

GeezerGeek's picture

Everyone has some sort of a belief system. Don't be such an anti-Christian bigot that you don't pay any attention to what he said aside from his proclamation of belief.

Gutterballs's picture

About 10 years ago I failed out of a "prestigious" computer science program because I smoked too much weed. Ended up enlisting in the navy, and got a taste of real life over five years as I lived in Japan, visited six countries in East Asia, and had a bonus year of duty as a cell block guard in Guantanamo Bay.

I finished my bachelor's degree on the government dime while I was still enlisted, and my major was economics. I have no intentions of finding a job with that degree, I just got it because it was free and I enjoyed studying economics. The skills I got in the military (electronics repair) are way more practical and valuable than the fucking voodoo I was taught in most of my classes.

I am currently applying for an MBA program, which is probably the only hope for economics majors. I have little desire to return to academia for another two years, but once again the almighty dollar speaks: my tuition is covered by the GI Bill. Not only that, but the uber-entitlement of the most recent revision to the GI Bill provides me with a housing stipend as well. I want to be a producer, not a consumer, and I understand that many of these people end up in business school. So I go there.

Listen, you're not going to get shit for your economics degree. It is effectively worthless, if you want to maintain your soul. Get the fuck out while you still can. This is the turning point for you. Stop relying on your knowledge, or what knowledge that you think you have, and lose the entitlement mentality. If you want to create something in this world, do it yourself, or find someone who has more balls than you and be their wingman.

But what do I know. I'm still applying to an MBA program. I guess I'm implicitly betting that the system won't collapse until 3 years from now.

joe6px's picture

Your advice is sound Gutter..As much as a Squid's advice can be.. :-)  You are correct in that the FED GOV's investment in us is better spent than any amount of QE,,but the entitlement class sees no end to the paycheck.  That is the difference is that we were trained to be self sufficient (to different ends). Those that take just learn that a gubbmnt check is their right.  No Federal Aid Without Ferderal Service.  Or, perhaps, no State aid without State service.  I prefer the State route, as the Fed is getting too much favor.

 

FreeMktFisherMN's picture

You're preaching to the choir in many ways, Gutterballs. I have no entitlement mentality. I am trying to figure out my best strategy. In the meantime I have already bought quite a bit of silver and gold, because this thing is very precarious. 

 

There is no one size fits all for everybody. I am thankful I am awake to the corruption and realize that most of this is just bread and circuses to trick people into falling for socialism and ultimately a NWO. This new mindset has put me on an island in a lot of ways, as most people do not think this way, so I come on sites like ZH frequently to be told what's really going on. 

My trust is in Christ.

I was originally responding to the Road to Serfdom being required reading comment, and was explaining how I can attest to the corrupt principles they inculcate into kids, as an econ major right now at an 'elite university.'

It would be great if it were a true free market and not this one size fits all, must go to college paradigm. I would be willing to pay somebody to take me under their wing as an apprentice to them in their business and learn the ropes about real American entrepreneurship. As it is, I'm well aware of what a joke this whole thing is, but I still have to find my way. I would welcome any advice other ZHers may have if they are in the finance/economics field, or just in general. 

 

JoBob's picture

My advice is to stop boring us with your religious beliefs.

TooBearish's picture

Thank you for your comments FreeMkt, I am encouraged that the younger generation is awake and motivated - yours will be the Artists that will lead the Fourth Turning in the Kondratieff cycle - stay true to your convictions and faith and continue to challenge your MS tenured - for -life profs, but know that they are part of the problem, not the solution as they are not paid to take academic risks, and therefore career and lifestyle risk.

Peace

northerngirl's picture

Most Americans are too lazy to read, and they think being free is living in a country where the federal government provides all their basic needs:  Housing, food, and medical care.  Oh, I forgot a cell phone.

Bicycle Repairman's picture

"they've run out of Halloween candy."

Then hand me an egg.

Shelby Moore III's picture

HOW TO OWN THE (OLD) WORLD

http://www.mpettis.com/2012/10/07/how-to-be-a-china-bull/#comment-17427

Shelby wrote on Professor Pettis's blog:

Very interesting. But is the culture amongst your intelligent students indicative of the culture and economic awareness of the citizens and thus politics at-large.

If the students rise up again (thinking of Tiananmen Square) to say "enough is enough" of this corrupt system, will the citizens at-large be in support of further dismantling the centralized gridlock.

I like to draw on different scientific disciplines to analyze reality, e.g. economics, political science, pyschology, physics, etc..

I can understand that for obvious reasons (being a professor in China) you can't probably speak to such political outcomes in public. It seems to me that the politics is very important for determining what outcome China will choose.

In the USA, the start of "QE-Infinity" before the election (with the M0 monetary base just in past 3 years malforming to a massive hockey stick two centuries in scope), is in my opinion a death call to the ubiquitous "do not tread on the free market" American culture endemic to Andrew Jackson's era. That culture still lingers but has fragmented into for example a minority of millions "take my gun from my cold dead hand" (which is something different than "I will take my pitchfork to D.C.")-- individualistic nonetheless. Perhaps the people don't realize that QE-Infinity is so the bankers can own all of the mortgaged real estate:

http://www.financialsense.com/contributors/catherine-austin-fitts/qe3-pa...

Perhaps they don't understand we are at step "Buy up as many remaining assets on the cheap as possible. Hide this action." in the banker business model:

http://www.silverbearcafe.com/private/01.10/thinklikeabanker.html

http://www.silverbearcafe.com/private/06.11/owntheearth.html

All over the world it seems very few people want to fight the theft from prosperity caused by rampant centralizing of the management of global capital. In Europe, the citizenry of the periphery are rioting to have their debt cake extended without any defaults, thus without any return to free markets. And in the core, the citizenry support such, if it is coupled with ever more centralized control over the periphery.

I felt so ashamed/depressed to be living in this epoch, until it occurred to me that maybe this ubiquitous idiocy is reflective of some major shift between some old paradigm that can no longer compete, and that the majority of the people are still stuck in that old paradigm.

I have explained in past comments on your blog:

http://www.mpettis.com/2012/09/16/by-2015-hard-commodity-prices-will-hav...

that I think we are in the transformation at the cusp of the death of the industrial age and a new information technology age. Many of the youth seem to be totally immersed in the coming information technology age. A problem is that demographically the youth are much diminished in political power in the developed world, because the boomers were killing 40 million a year with abortion alone (not including contraceptives). Thus the youth can not overthrow the current Apocalypse in time to prevent the boomers from destroying themselves (to culminate within this decade).

I have found the 10 year research into the 4th Turning (Long Wave Cycle) to be very relevant in explaining what we can expect coming:

http://goldwetrust.up-with.com/t9p570-inflation-or-deflation#4735

P.S. I love your blog, but I won't continue spamming it with my repetitious points.