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Guest Post: An Ungovernable Democracy

Tyler Durden's picture




 

Submitted by Gordon T Long of GordonTLong.com,

There are five distinct stages in the life cycle of sovereign nations. These life cycle stages map to generational cycles and to Long Cycles such as the Kondratieff Cycle. Since these cycles are fundamentally behavioral shifts, they consequentially take the nations economic and political process with it. Democracies become exposed and borderline ungovernable in Stage V. This is a result of the electorate's expectations, entitlements and James Madison's "Complicity from the Tyranny of the Majority", as outlined in the "Federalist Papers".

 

STAGE V

After bubbles burst and when deleveraging occur, private debt growth, private sector spending, asset values and net worth decline in a self-reinforcing negative cycle. To compensate, government debt growth, government deficits and central bank “printing” of money typically increase. In this way, their central banks and central governments cut real interest rates and increase nominal GDP growth so that it is comfortably above nominal interest rates in order to ease debt burdens. As a result of these low real interest rates, weak currencies and poor economic conditions, their debt and equity assets are poor performing and increasingly these countries have to compete with less expensive countries that are in the earlier stages of development. Their currencies depreciate and they like it! As an extension of these economic and financial trends, countries in this stage see their power in the world decline.

ACCEPTING STAGE V

Success breeds complacency and complacency breeds leverage. Fiat currency enables a late stage country to delay the realization that it is no longer rich, but not avoid it.  The developed and emerging nations are in obviously different positions and consequentially their behavioral traits and priorities are different. Accepting the realities of Stage V is still to come for the developed world, and when it does it will be sudden and shocking to most people -- and to the financial markets.

The Stage I, II and III countries remain dependent on the late-stage countries, which will make the Stage IV & V descent into poverty painful for all involved.

THE END GAME

Because governments are borrowing aggressively to offset declining private sector leverage, the focus of the next crisis will be sovereign debt/currencies rather than housing or the stock market.  In a period of major Global Imbalances, which the world presently faces, this will make democratic policy setting extremely difficult and in fact will show democracies to be borderline UNGOVERNABLE. In cases of grossly distorted expectations, such as the US, it will be found to be UNGOVERNABLE.

This above confluence and much more discussed in the video, indicates that it is leading to a Constitutional Crisis in many developed democratic countries by the end of the decade.

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Tue, 12/11/2012 - 16:53 | 3053029 rich_wicks
rich_wicks's picture

That was 65 freaking years ago.

The poeple who did that, are now, by and large, either dead or wearing colostomy bags.  This isn't the country that won WWII in 5 years of intense fighting and developed the nuclear bomb.  This is the country that has "Homeland Security", spies on it's citizens. has 16 trillion dollars of debt, and tacks on 9.4% a year on top of that debt every year, and has for 41 years (do the math if you care to).

This is NOTHING like the nation it was 65 years ago.  Nothing.  Quit living off from past glory that you weren't even a part of.

The US of 1945 is already dead.  It's long dead and burried.

The UK had the empire that was world wide in 1930.  By 1950, it was a little podunk island that still had a monarchy.  Today it's a fascist police state with a completely criminal financial sector.  That's our future.

Tue, 12/11/2012 - 17:53 | 3053305 Harbanger
Harbanger's picture

The US is not the UK.  They fought a revolution against the British empire.  If the US were an empire, they would have taken territory from the losers of the last 2 world wars.   It's true we're becoming more socialized and group minded like the rest of the world, but there is still a large % of Americans that want to live free, easily 50 million, that's bigger than most countries.  Today's police state doesnt have to be our future.

Tue, 12/11/2012 - 18:08 | 3053355 rich_wicks
rich_wicks's picture

No point in arguing about this.  Time will tell soon enough.

And if you think the US isn't an empire, you're delusional.  The US spends more money on it's military than the rest of the world combined does.  For what?

No point in taking territory, they just steal resources.  Why do you think we went to Iraq?  Because Saddam was going to build a nuclear weapon?  Think we're in Afghanistan to find binLaden and bring Dumbocracy there?  Why do you think we're threatening Iran?  Because they are BAAD?  Why do you think we went to Libya?

Grow up.  Just grow up. 

Today's police state doesnt have to be our future.

You live in a nation of fat, lazy, stupid morons who have absolutely no freaking idea what is going on.  None.

http://www.youtube.com/watch?v=Skw-0jv9kts

They are lazy stupid morons.

It is said suffering is a good teacher.  Well, the entire nation is about to go into a crash course may they learn well.  What is about to happen is a direct consequence of people's willing ignorance.  They absolutely deserve this, and you cannot stop it.

Tue, 12/11/2012 - 18:23 | 3053408 Harbanger
Harbanger's picture

I guarantee you there are just as many lazy stupid morons in the rest of the developed world as there are here, if not more.  I also guarantee you that there are more patriots willing to shed blood for liberty here than there are anywhere else in the world.  But stay safe where ever you are.

Tue, 12/11/2012 - 18:52 | 3053484 Parrotile
Parrotile's picture

Really?

Maybe you'll be able to enlighten us on the number of American Suicide Bombers then? Seems to be a round Zero from what I can see on the "Net.

Y'all want to see REAL patriotism - just visit the "more rural" parts of the Countries you mock and despise - China, Tibet, India, Pakistan, Palestine . . . . and the list goes on. These people are fighting for a cause which is important enough to them to justify their certain demise.

THAT my friend is true Patriotism. It's what keeps them going against impossible odds. Impossible odds that are often directly traceable to American involvement, overt and covert.

Tue, 12/11/2012 - 19:10 | 3053526 Harbanger
Harbanger's picture

No, those are just the consequences of tyrannical rule.  They're dying from lack of liberty.

Tue, 12/11/2012 - 17:05 | 3053081 reader2010
reader2010's picture

It was Stalin and his troops that killed the 3rd Reich. The turning point was Stalingrad.

Tue, 12/11/2012 - 17:06 | 3053083 jomama
jomama's picture

the russians might have something to say about that WWII thing. 

enciting an attack on our own troops and then dropping an atom bomb is hardly something to be proud of.

you're probably just being sarcastic.

Tue, 12/11/2012 - 17:35 | 3053220 LawsofPhysics
LawsofPhysics's picture

The generation of Americans that had anything to do with defeating the nazis is long gone (you might want to give the soviets some credit there too idiot) and did so at the expenses of 70 million or so of their own.  They were a generation that knew how to fabricate tools and build shit from the resources in the immediate location.  What does the average american actually know how to do again?  Look around the planet for that matter, sorry, humanity is in desparate need of a catharsis.

Tue, 12/11/2012 - 16:53 | 3053031 Harbanger
Harbanger's picture

Does anyone know where the new global society headquarters will be?

Tue, 12/11/2012 - 16:56 | 3053045 Quinvarius
Quinvarius's picture

In the end it boils down to fiat collapse.  Everything else is a sideshow, symptom, or red herring.

Tue, 12/11/2012 - 17:01 | 3053062 q99x2
q99x2's picture

Why does the US only enter recession when the small percentage of wealthy have income loss and not when 80% of the people have income loss. Something doesn't seem right.

Tue, 12/11/2012 - 17:09 | 3053096 tlnzz
tlnzz's picture


"such as the US, it will be found to be UNGOVERNABLE"

 

This is what happens when the governed class withdraws the consent to be governed by a bunch of thieves and criminals.

 

 

 

 

Tue, 12/11/2012 - 17:17 | 3053134 AgShaman
AgShaman's picture

Stage VI: HD

Let the slaves feed on themselves....

Bring in order....out of chaos

Tue, 12/11/2012 - 17:19 | 3053143 Steve in Greensboro
Steve in Greensboro's picture

What the author refers to as "the democracy becoming ungovernable" is in fact the leviathan U.S. Federal government growing so big and so dysfunctional that it chokes on its own vomit.  Unfortunately, with the death of the current U.S. Federal government will come its replacement, something even bigger and more totalitarian.  This is Obama's dream for you.

The important thing is to have a second passport and a place outside the country to go when Obama's dreams come true.

Tue, 12/11/2012 - 17:48 | 3053282 Bastiat
Bastiat's picture

Is it OK to sit in back and shoot spitballs in re-education camp?

Tue, 12/11/2012 - 20:49 | 3053904 Winston Churchill
Winston Churchill's picture

If you survive the arrival 'showers' sure.

Most of the Nazi concentation camps didn't start as death camps.

Evolution, and showering is a terminal bitch.

Tue, 12/11/2012 - 20:42 | 3053869 gnomon
gnomon's picture

Obummer!  There could not be a better buffoon, (who thinks his excrement does not stink), to preside over the coup de grace of the Republic.  I don't care what History writes about him.  He will always be that two bit undertaker of a President with a cob up his butt, a pervert lusting over drone kills in a dark room.

Tue, 12/11/2012 - 23:11 | 3054533 dunce
dunce's picture

Redistribution of wealth only lasts as long as wealth is "produced", much weath is consumed. Cars, yatchts, and mansions all need regular maintenance. Some one has to raise cattle if you want beef steak. some one has to find oil, drill wells, build pipelines and refineries and then deliver fuel to fuel users. The USA does not grow any bananas but you can buy one in every grocery store in the whole country every day. The govt. did not build that distribution system. When the fruits of your labor go to some one else and you must provide that by force it is the definition of slavery. What color are the slaves in America today?

Tue, 12/11/2012 - 23:48 | 3054638 Mike Cowan
Mike Cowan's picture

You know in my heart, I am no longer a loyal citizen. I am sure we are heading to dictatorship. I don't even regard Obama as President. I don't even care anymore. The only thing that can save America is legalizing gay marriage. (sic)

 

Wed, 12/12/2012 - 01:30 | 3054814 newengland
newengland's picture

Democracy has a habit of descending into rule by mob, and cronies in control.

The U.S.A. was founded as a Republic.

Wed, 12/12/2012 - 08:41 | 3055181 overmedicatedun...
overmedicatedundersexed's picture

the republic can only exsist if the people are of a moral status and courage to be free..look at the union men on other threads here on ZH.. what I see are people who cannot be free, they are obuma voters who beg to have freedom torn from them so that the big union/state can give them security..we in america have bred and have allowed by immigration a nation of serfs, who fear, freedom above all else..they think they cannot survive in a free world..and the wolves  and sociopaths(.gov to big corp) prey on them, and see them as the cowards they are, fit only to be slaves to them.

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