Scam Complete: The US Government Takes A Page From Diocletian’s Book...

Tyler Durden's picture

Via Simon Black of Sovereign Man blog,

Early in the 4th century, Emperor Diocletian issued an infamous decree to control spiraling wages and prices in the rapidly deteriorating Roman Empire.

As part of his edict, Diocletian commanded that any merchant or customer caught violating the new price structures would be put to death.

This is an important lesson from history, and a trend that has been repeated numerous times. When nations are in terminal economic decline, governments will stop at nothing to keep the party going just a little bit longer.

I thought of Diocletian’s desperation a few days ago when I read about the recent sanctions imposed on US rating agency Egan-Jones. It’s a similar story–

For years, major rating agencies (S&P, Moody’s, and Fitch) have championed the outright fraud of our financial system by pinning pristine credit ratings on insolvent governments and their heavily inflated currencies.

In doing so, the rating agencies are effectively claiming that the greatest debtor that has ever existed in the history of the world is nearly ‘risk-free’.

Clearly this is a ridiculous assertion. With a debt level over 100% of GDP, the US is so broke that the government must borrow money just to pay interest on the money it’s already borrowed. They’ve lost over a trillion dollars a year since 2008, yet they still spend money on things like drones and body scanners. It’s crazy.

As with any good scam, the government must maintain public confidence.  The moment someone says ‘the Emperor has no clothes,’ that shallow, fragile confidence will come crashing down and expose the scam. Dissent must be vigorously and swiftly pursued.

So when S&P finally downgraded the US one notch in August 2011, the SEC and Justice Department announced that S&P was under investigation, just two weeks later.

Egan-Jones, a smaller rating agency, has been even more aggressive, downgrading the US credit rating three times in 18 months. And while the federal government may not have imposed Diocletian’s death penalty, they are just as willing to squash dissent.

In a country that churns out thousands of pages of new regulations each week, it’s easy to find a reason to go after someone. As you read this letter, in fact, you are probably in violation of at least a dozen regulatory offenses.

In the case of Egan-Jones, the SEC brought administrative action against the agency within two weeks of their second downgrade. And a few days ago, the case was settled.

I’m sure you have already guessed the ending: Egan-Jones is banned from for the next 18 months from rating US government debt. They’ve effectively been silenced from telling the truth.

The lesson here is obvious. Just as in Roman times, bankrupt nations today will stop at nothing to keep up the scam just a little bit longer.

Given that all this is happening at a time when Congress is voting to suspend the debt ceiling entirely, these actions are the clearest sign yet of just how desperate the government has become.

Could the warning signs be any more obvious?

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CH1's picture

With outright choas, at least things are clear. Now, Joe Average lives in a hypnotic fog.

And, in real life, any Mad Max scenarios would be either short-lived or limited to very remote places.

NotApplicable's picture

With the worst possible outcome being that a new government could form. LOL

As always, chaos is not anarchy, as anarchy is living in peace with others, while chaos is usually cover for someone else's proxy war.

Totentänzerlied's picture

"With outright choas, at least things are clear."

In the sense that "shit has gotten very real and it can no longer be denied", yes. In the sense of "what is happening and why", not so much. It is this latter sense which is involved in forming an understanding which might allow one to not repeat past mistakes when the chaos ends.

After each revolution, we find that the population is only too happy to be done with the awful business --- even if they have no reason to believe they will not be worse off than before. In situations which otherwise may have produced a revolution, an insufficient portion of the population could be bothered to get off their asses, which avoided the revolution and produced essentially the same result - no change.

Andre's picture

What happens when you get both?

Andre's picture

Almost but not quite true.

The one thing they cannot imagine is how badly their plans can backfire on them.

Blowback is a bitch.

dick cheneys ghost's picture

How many lies does it take to prop up a ponzi empire?

Dealer's picture

Truth is treason in the empire of lies.

WTFUD's picture

. . . or how many ponzi schemes does it take to prop up a lie?

Mercury's picture

How much longer until all pension funds and IRAs are required to own US debt "for their own safety and protection"??

AgAu_man's picture

401k facts yo can "take to the bank":

1. If you make a withdrawal from your "401k Fiat Account" -- whose Fiat-drive is "taking you nowhere", but off the cliff perhaps (as seen on TV) -- you have to declare it as "Income" and will be taxed on it.

2. If you take out as much as 50% of your (employee) contribution of your 401k as a LOAN -- you are 'loaning' yourself! -- then it is tax-free.  And you have to repay it of some long period, at an interest rate that you like.  This way, you are assured of a higher return than from "Wand Strasse" (German).

If you were then, say, to 'invest' your 401k Fiat account into some real-wealth assets, then you've mitigated risk from TPTB.  Investments like PM's, Productive Land.   Where the latter pays real-wealth "dividends", not fiat dividends, that you either 'spend' (consume) or exchange-in-kind (barter, gift).

The only advice so far in this blog-chain, that you can actually CAPITALIZE on.  You're welcome, bitchez!

NotApplicable's picture

I borrow against mine for up to six years at 2 pts above prime. The only problem with this is that I don't like putting more money into the system that will be worthless later, so it's imperative to use the loans wisely.

CheapBastard's picture

One of the earliest fears about tax-favored savings accounts like IRAs and 401(k) plans was that when this pool of savings grew large enough Congress would not be able to resist tapping it to help solve the nation’s debt problems. We’re about to find out if those fears—persistent for decades—have been justified.

Read more:
HoaX's picture

Dont forget the fact these beautiful totally not Wall-Street owned and of course completely unbiased rating agencies that slapped AAA+ investment grades on wonderful companies like Lehmans, Bear Stearns, Fanny n Freddy, MFGlobal, etc. etc. etc. had no qualms slamming European sovereigns with trash ratings right before they were to issue another bond sale.

When is that UK downgrade coming or is the City still too important to protect?

And then silencing the only truly independent agency, sickening doesn´t even come close to cutting it.

TheEmperor's picture

"The rebels are alerted to our presence"

SmoothCoolSmoke's picture

Obivously Mr. Black, you cannot see the SCOREBOARD from you seat.  Let me help you: SP 1502.

Imminent Crucible's picture

Obliviously Mr. Smoke, you didn't notice that the score is kept in constantly debasing currency units. So the SPX is almost back to where it was six years ago, right before it fell to 666. Six years of ZERO NOMINAL GAINS, and a LOSS of 11% in CPI-adjusted terms.

Something tells me you didn't buy gold in 2007, when it was $1000 an ounce cheaper.

NotApplicable's picture

Which was right back where it was in 2000. So, make that 12 years.

I just looked at the S&P chart for the first time in a while. 2013 seems to be the official year of the full-retard.

espirit's picture

Somehow, "full-retard" is just not descriptive enough.  We need a new catch phrase for this next degeneration.

AetosAeros's picture

How about 'Shoulder Stop'?  


ex.- 'His head would go further up his ass if he wasn't at the shoulder stop point.'

ex.- 'Selling his gold to get the cash for a downpayment on that second house with a ARM must have been a shoulder stop moment.'

ex.- 'He's so full of shit that the only thing keeping us from drowning is his shoulder's have stopped the flow.'


Hope that helps to describe this generation of sheeple who are really putting their shoulder's into it!

Absinthe Minded's picture

Yeah, and it only took about $3 trillion in back door bailouts and artificial levitation by the exchange stabilization fund to get us there. I hope you're heavily invested in equities, so we all get a laugh when they go KABOOM!

AldoHux_IV's picture

As you read this letter, in fact, you are probably in violation of at least a dozen regulatory offenses.

so funny if not for the fact so true-- when are they going to make it a punishable by 30yrs in prison for not buying /es futures?

duo's picture

from Caligula/Nero to Diocletian took almost 300 years.  Caligula is in office now.  We've got time.

LFMayor's picture

i think you're wrong brother.  The internet has changed it all, now comms flow faster, so time itself flows faster.  Our collapse won't take a 1000 years like Rome's rise and fall, not even near it...

Pure Evil's picture

Obama is nothing compared to Caligula. When Caligula came to power the treasury and the privy purse were full of gold. After four year of frivolous spending and an empty treasury Caligual was murdered by his own Preatorian Guard. Caligula started running out of coin early in his reign and started murdering Roman Senators and the heads of wealthy family's, all to acquire their accumulated wealth. Those that were murdered were required to state in their wills that their wealth should be turned over to Caligual and the state before they were killed off. All of this was done to keep the party going.

BlueCheeseBandit's picture

FDR was Caligula. And we're able to speed things up with our modern tech.

flapdoodle's picture

Slick Willie is a better match...

vamoose1's picture

   respectfully    but     je   le    doute sir

Dixie Rect's picture

Bring forth the pukeatoriums

ZeroAvatar's picture

Good idea..........I micro-vomit everytime I see Bronco.

LawsofPhysics's picture

So many paper fucking promises, so little collateral and assets of real value.

XitSam's picture

It will get really interesting when they spend so fast they can't keep track of how much has been spent.

madcows's picture

Can I bring my Federal Reserve Promisory Notes to the Federal Reserve and ask it for some of it's gold in trade?  yeah, I thought not.  Full Faith and Credit, my ass.

falak pema's picture

absolutism, is the last step to social collapse; you can't ossify a society further than that.

Constantine invented a formula to stop the rot then : he moved the capital away from old Rome; fresh air, new beginnings and then gave the empire a new spiritual code. Awesome tactics that delayed ROme's fall by another century; and made Constantinople its continuator.

What will DC do? Make Anchorage new DC?

Invent a new religion called american socialism gone evangenical, to reconcile tea party to coffee drinkers and teamster unions? 

NidStyles's picture

The US has been absolutist for the past century. That word does not mean what you think it means.

paulbain's picture





Tyler Durden,

      Please stop posting columns written by Simon Black, who is a dolt.





CaptainSpaulding's picture

How is one supposed to know? Posts that are outside blogs usually have the heading Guest post.

Pure Evil's picture

Take responsibility for your own actions and stop reading columns written by Simon Black and posted on the ZH website by the owner Tyler Durden.

Jason T's picture

The disintegration continued, and there seemed no power great enough to stop it. The treasury was empty, agriculture prostrate, industry demoralized, trade stagnant, and the only commercial activity was a maddened, consuming, parasitic speculation. In A.D. 301 Diocletian issued his famous price fix- ing decree as the last measure of a desperate sovereign.

Squid Vicious's picture

did someone, i mean something, just unload 9 million SPY's ? or am I seeing things again?

rguptatx's picture

it was 7 million, not 9!

QQQBall's picture

Saw the County Sheriffs writing speeding tix on I-10 in Inland Emprie on Tuesday... Saw County Sheriffs writing near the San Onofre Checkpoint on Thursday... Soon, meter maids will be using souped up scooters to write on I-5. hahahha.

Fish Gone Bad's picture

Is San Bernardino still broke?

virgilcaine's picture

Land of the Fee, Home of the lame.

new game's picture

666 > 1500= hope and change

all is well

buy signal for next leg up

slv phys monkey hammered

gold phys tampped down

see i told you - it really is a relic of the past.

what more can be done to get thru to you?

got til 4/15 to fill that ira for future consfication

all for the good of the majority

come, be a collectivist-we are all in this together

like a village for hope and change

coming to your front door, soon

"any black guns in this house?"

we are with the special task force by executive order to make your city safer...

any gold or silver?

the patriot act deems that ownership is a violation of the monetary control act by executive order.

come with us; homeland security deems your rights revolked, by executive order.

calling private ryan; save me!!!

JR's picture

The parallels between Rome and the U.S. include the tragic transition from Rome's republican form of government to empire and tyranny.

The Roman Republic fell when more and more senators were bribed and compromised and, eventually, as in the case of Augustus, were replaced with senators who would provide favorable support.

This general erosion of honest senators was a key factor in the fall.  Augustus made the biggest use of this factor by increasing the number of senators to cut their individual power, and to rid himself of those senators that would get in his way.

At the peak of Rome’s power, the republic already had been destroyed and Rome was to be in steady decline from then on.

America, likewise, started out as a republic, but eventually her public officials, too, became compromised, specifically in 1913 to the point that they turned her constitution over to private men. That’s exactly what happened to the Roman republic; it eventually turned its power over to generals. The greatest example was when Julius Caesar crossed the Rubicon to actually fight other Romans in a civil war. But by then the republic was dead.

Edward Gibbon identifies part of this transition and its parallel to America today as the Empire of Rome began its decline, at the beginning of empire:

“It was scarcely possible that the eyes of contemporaries should discover in the public felicity the latent cause of decay and corruption. This long peace, and the uniform government of the Romans, introduced a slow and secret poison into the vitals of the empire.  The minds of men were gradually reduced to the same level, the fire of genius was extinguished, and even the military spirit evaporated….” – Edward Gibbon, The Decline and Fall of the Roman Empire, Volume I

TheGardener's picture

Let`s not forget that the Roman Empire morphed into a multicultural experiment and it ended like all others before and after.