Guest Post: How Does This End?

Tyler Durden's picture

Originally posted at Monty Pelerin's World blog,

When Suckers Finally Realize

The fleecing of the American public continues.

The theft takes different forms, but it all serves one purpose — to transfer wealth from the average Joe to the crony corporatists and their political lackeys. Here are but a few examples of how this has been accomplished:

  • Bailouts for the wealthy and well-connected are paid for by the unconnected middle class.
  • Subsidies are provided for unworkable schemes submitted by political donors and favorites. These schemes inevitably fail and the tax-payer is left holding an empty bag.
  • Laws are routinely ignored when “friends” need help. In identical circumstances, would you receive the same treatment as Jon Corzine?
  • Despite the biggest theft in world history, no one was prosecuted. The Savings and Loan crisis in the 1980s was trivial in comparison to the recent financial crisis. More than a thousand S&L executives were prosecuted.
  • Ever-increasing sacrifices in the form of higher taxes from the productive sector are demanded to continue the plush living of the ruling class.

Capitalism and free markets depend upon trust, integrity, property rights and the rule of law. Without these, there are no advantages to free markets. Nor are there any incentives to create wealth. Instead, an economy becomes little more than a massive plunder scheme where the powerful exploit the weak. No economic recovery is possible under such circumstances.

french revolution

When Suckers Revolt

As people recognize what is happening, they alter their behavior. Three reactions are to be expected:

1. Some will become discouraged when they realize the game is stacked against them. They will diminish their efforts to succeed, even perhaps dropping out of the game altogether. Given the enhanced returns to not working, it should not be surprising that this alternative has become popular.

2. Others will adopt the same behavior as the ruling class. They will exploit those lower on the food chain than themselves.  Justice Brandeis warned of the implications of government misbehavior:

In a government of laws, the existence of the government will be imperiled if it fails to observe the law scrupulously. Our government is the potent, the omnipotent teacher. For good or ill, it teaches the whole people by its example. If government becomes a lawbreaker it breeds contempt for law: it invites every man to become a law unto himself. It invites anarchy.

Daniel Patrick Moynihan described the process of declining moral values as “defining deviancy down.”

3. Others may resort to acts of violence. These reactions could be isolated domestic terrorist acts against government and corporations seen as the exploiters. Or the acts might be broader based where the poor see fit to attempt to take from the wealthy. They also could manifest in wide civil unrest against the government if it is seen as the cause of misery or if it is seen as intending to default on promises made. 

All of this behavior is anti-social and it is unproductive. It reduces the output of the economy, further exacerbating the problems. 

How Does This End? 

It is difficult to know how the current condition ends. Here are a few possibilities, with some opinion added: 

  • Will our ruling class alter its behavior? That is very unlikely. History provides no examples where power is willingly relinquished.
  • Will our economy collapse? That is a likely outcome, although the process could take years or decades. 
  • Will social unrest occur? Probably. The government, at some point will be unable to honor its promises. It is broke and left with the printing of money as its primary source of funds. Stopping the printing means dishonoring promises and likely plunges the country into civil unrest.
  • Will hyperinflation occur? If the government continues to print, that seems to be the inevitable result. 

Issues That Need To Be Solved


We are too far into this economic disaster to escape without an economic collapse of some sort. Return to normal economic times is impossible without a complete and thorough purging of the economic distortions and capital mis-allocations produced from decades of government interventions.

The following issues prevent a recovery:

  • No economy can prosper without a strong middle class. They are the productive class in society. They are the small businesses and job creators. Without them, society does not produce. Without production, there is only poverty.
  • Inflation, the cruelest tax of all, is driving up prices while wages and salaries do not keep pace. For those without wealth, there is no way to protect against this theft. For those with wealth, they can rearrange investments to take advantage of inflation, particularly if they are privy to what is coming next.
  • The economy is dysfunctional. It no longer functions efficiently as a result of the burdens it is forced to labor under. The price system has been made less efficient as a result of inflation, manipulated interest rates, subsidies, penalties and other impediments. It no longer provides the information needed by economic actors to make proper decisions.
  • Regime uncertainty discourages action. When economic actors are unable to judge the future, they pull back. Money goes to the sidelines or out of the country.
  • US economic policy and the uncertainty of what comes next has been a great job creator for other countries.
  • Economic growth cannot be forced by central diktats. It occurs only in a climate that is receptive and friendly to risk-taking. It is hard to imagine a worse environment than the current one. That is why there is no investment and no hiring.

What Is The Outlook?

There should be no optimism regarding government changing its ways. History suggests it never does.

The recent plunge in the gold market suggests government has gone all in in its attempt to continue exploitation. Chris Martenson commented on this event:

I am very disappointed by, but not surprised at, the latest transfer of weath to the bankers from everyone else. The most recent gold bear raid has vastly enriched the bullion bankers, once again, at the expense of everyone trying to protect their wealth from global central bank money printing.

Gold is considered a safe-haven against government plunder. It is one of the few escapes from fiat currency debauchery that the small investor has. Whether this latest attack on gold was to make the bullion bankers better off or to scare those trying to protect themselves against government exploitation is irrelevant. When government intervenes (assuming it did, and the circumstantial evidence is pretty strong) in markets in such a manner, it is no longer a referee. It has chosen a side and is a participant in the game. There can be no fair competition when one team owns the referee. That is what happens when government participates in markets.

Historians judge that it took Rome almost two hundred years to die. That determination depends very much upon what you mean by “die.” Arguably Rome died much earlier than historians acknowledge. Rome was dead-man walking before the couple of hundred years it took for it to fall down. 

The US is in similar position. Unless you believe in the miracle of sovereign resurrection, the US is over. The coroner-historians have not pronounced death yet, but they, like with Rome, are behind the curve. This dead man too will eventually fall down.

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Kiss My Icelandic Ass's picture

"Will social unrest occur? Probably."

Look at Cyprus. Lives and livelihoods destroyed by Cypriot polititians in league with Eurocrat criminals.

Do you see any unrest ?

Sheeple, sheeple, sheeple ....

The Juggernaut's picture

What the fuck?  Its ALWAYS been in the central banks hands!  Its just that the cloth is coming off for everyone to see its ugly face.  Before 2007 it was just the politicians faces.

General Decline's picture

Like I say to my kids when they are doing something stupid... "This is going to end in crying"

Skateboarder's picture

This story will end and another shall rise from its ashes. Nothing new here, just hopeless negligence of history and the consequences of actions of fellow man is all.

"...and the story ends.
Insanity said coldly,
Still waiting for the chance -
So out of nowhere it will rise,
And another journey starts
By the call of the moon."

francis_sawyer's picture

To all you 'technical' traders out there... There's a mathematical formula to tell you how it all ends...


Divide by ZERO...

hedgeless_horseman's picture



You haven't been doing your reading, Francis.

"Divide by zero," is fundamental analysis...whereas, "plenty of support at zero," is technical.

Ying-Yang's picture

/0 is "ghosts of departed quantities"

MillionDollarBogus_'s picture

In the 'Issues That Need To Be Solved', the author made no mention of personal responsibility in regards to health care.

No mention of regular exercise and a proper non-processed food diet.

Fat and sick Americans - the problem nobody seems to be able to discuss.



CPL's picture

No that is an issue that will resolve itself by June.  Fat and sick Americans along with wealthy and healthy Americans will have limited means to both food, medication and...well...everything.


Supply chains are already shutting down, medical staff has walked and along with basic medical supplies.  Expecting a high technology advancement to offer anything beyond lip service in a stage of Entropy is silly and naive.


3 minutes for air

3 days for water

3 weeks for food.  <--- this is the metric that has to be met.


Good luck to all.


dontgoforit's picture

Corporal!  Don't forget 3 months for sex.  Devastating.

CrimsonAvenger's picture

Obviously you're not married.

Payable on Death's picture

" Unless you believe in the miracle of sovereign resurrection... "

Interesting choice of words. We are in this mess because our leaders and people are unconstrained. The Founders knew that the freedoms established under our constitution would be abused if we relied upon oursleves to act in a moral fashion. Belief in God is the constraint that prevents the faults identified in this article.

ZHers often (alwyays) complain about leaders (TPTB) that serve only their own interests. What we hope for are servant leaders. Our very concept of servant leadership comes from Jesus.

Manthong's picture

Jesus is alright with me, but the founders were Deists (God be with them) and the big deal now is that the unGodly empiricists are eliminating any notion of Natural Law and moral dignity from the American psyche.

Get natural law and moral dignity/ethics/justice back as the priority and maybe there will be some hope.

Either that, or get an anal tattoo, a genital piercing, a homosexual soul mate or two or three, become a Democrat, sponsor an abortion and enjoy the slide into eternal dark. 

Oh.. and buy bonds.

Cathartes Aura's picture

who defines "natural law"?

what's your definition of "natural law"?

does it include things that happen naturally?

Manthong's picture

I suggest you study the Hamilton/Seabury discourse or discern an a priori V an  a posteriori argument,

..just sayin'    :-)

(got a litttle too into fight club a few moments ago)

Cathartes Aura's picture

you're merely dodging the questions asked, pumping yourself up with man-made ideas of what Is.

you believe you derive your authority via man-made laws, discourses, etc. - I believe that which is nature-all will outlast all these things, always.

Manthong's picture

um.. no.. I am on the other side of that fence.

not a Positivist.. not a modernist or humanist.

There is crap out the universe that is way above my pay-grade and I understand that,

I've been trying get this little Pi thing down to the area of a circle with absolute precision and I can't get'er done.

Cathartes Aura's picture

well, you threw the "discourse" memes out there, not I. . .

rumour has it that enlightened "aha!" moments can happen through the path of math, or occasionally un-co-opted science,

so I wish you luck.


Manthong's picture

Well,.. all I can say is that there might be some surprising new sources for the support of natural law.. that is to say a morality and ethics (Aristotelian) based  treatment of stuff.

“If you believe that capitalism is a system in which money matters more than freedom, you are doomed when people who don't believe in freedom attack using money. Russia has spotted that the weakest link in the Western approach to life is inattention to the moral and ethical basis of capitalism.'”

Edward Lucas, The New Cold War: Putin's Russia and the Threat to the West,
2nd edition (Palgrave Macmillan, 2009).
ref.. Models Behaving Badly.. Emanuel Derman 2011

And.. good luck with science and math when ethics and human certainty take hold.

Cathartes Aura's picture

there are always surprises, certainly agree, but  "new sources" supporting whose "natural laws" is always the question-ing.

nature predates human langugage-ing, and the categorising/laws derived/belief systems take a back seat when nature drives.

Manthong's picture

At that point it is up to right minded reason (I don’t quite have the perfect model, yet).

Good –evil

Coercion, submission, conflict

Freedom, servitude

Justice – slavishness.

I suppose science and math will work the issues so that everyone lives according to the models of the enlightened..  or not.

de3de8's picture

But your the first to give them free health care.

Liquid Courage's picture

But ... if we can have negative interest rates, why not negative equity? Who the fuck knows?

Dividends? Fuck dividends! You schmucks have to pay us for the honor of holding this POS that's going to zero ... or LOWER!

See how that works Muppets?

steve from virginia's picture




Revolution? Yr joking!


People want cars, they want to DRIVE cars ... they aren't interested in 'free markets' or 'liberty' or 'democracy' or any other airy abstractions.


They want cheap gas, they want flat-screen TVs, they want i-Pads, they want granite countertops. They want luxury jobs in giant highrise towers in cubicles with computers sending e-mails back and forth to others just like them. They want to sell stuff for big profits and speculate with other people's money and live like American gangsters in a Joe Pesci movie.


The want cocaine and their finger up a girl's cunt, they want mink coats and nightclubs. They want $100 bills and Rolex watches and steak dinners. They don't want jobs where they have to dig holes or pick onions in a field or wash dishes in restaurants. They don't want to be poor. Nobody wants to be poor.


They want wealth or else ... they know if they rock the boat they get Syria or Yemen.


All these symbols of weath and prosperity are what the 'system' promises. No other system can promise these things and the sheeple know it. It's this or nothing. Whether the system can deliver on the process is never discussed because the answer is too horrible to contemplate.


Reality -- and Mr. Entropy -- sez everyone gets less. LESS .. the 'word of the now' ... LESS!


Less is something the world's human cargo is not used to dealing with, the world's economies cannot process, the managers have not the tools to properly manage. A revolution? What is the outcome?


... you need to be able to figure out that answer for yourself ... your life may depend upon it.



kito's picture


dontgoforit's picture

There's a little bit of matrix in all of us.

stuman's picture

Brilliant comment!

Though some are farther down the rabbit hole than others ;) 

angel_of_joy's picture

Well, regardless of what they want, they'll have less and less of it !

If prices will be left relatively free by the powers to be, more and more "stuff" will become unaffordable to more and more people. An ever increasing percentage of your revenue will be required just to hold on to every day basics (food, a roof, energy). Poverty will spead until the 99% will get all poor... at which point they might wake up and do something about it.

If the government will try so manage prices, scarcity will quickly follow and people will get to the same place (i.e. poor), only much faster.

In both scenarios, things end pretty badly for everybody.

Backtable's picture

But...but...If less is more, just imagine how much MORE more would be!

PolishErick's picture

exactly... no one does anything.. only hope is to bail out of society and go live in the wilderness- either that or You are on the same ride as the sheeple, heading for the slaughterhouse. 


go long hunting bows.

12ToothAssassin's picture

A short thong will do just fine for me thankyouverymuch.

MeMadMax's picture

Way ahead of ya bro!

/typing this somewhere in the rocky mountains near the canadian border ^.^

Freddie's picture

The sheep are easily controlled by TV and Hollywood.  If you watch them - you support it and no Fox News is noty your friend. They are all shit.

MrNude's picture

All the shit in Food and Booze control the sheep, the rest is the icing on the cake, that is why i've never been keen on Mikey B's attack on Soda, weening yourself of easy sugar and additive access is worse than crack supposedly according to doctors i've spoken to. NYC wouldn't survive a full chimp out. 

vato poco's picture

Then docs you've spoken to have been either wrong, or lying. I cold-turkeyed a **massive**, decades-long soda/sugar habit last year. Some unpleasant-but-not-too-bad headaches & irritability, but after the first 5 days......not hard at all. I've been led to believe crack, meth, etc., is a little harder to kick than that. 

TBT or not TBT's picture

Bread is harder to kick than sugar, because in addition to being a blood sugar bomb, also stimulates opiate receptors in the brain. Panem et circenses bitches. Gotta turn off the tv too.

NotApplicable's picture

I've given up ALL processed foods, as well as grains. Without even increasing my physical activity, I've lost all of my adult fat (approx 25 lbs), and I've never felt better in my life (well other than the stress of living in a world filled with mindless zombies).

I've found these sites to be invaluable for my health.

Maos Dog's picture

I need to agree here, I am 100% Paleo now, and the hardest thing I ever quit, harder than even the Cig's, was bread! 

The only physical symptoms from going to Paleo was headaces, and that was only in the begining. Now for me, Paleo is self re-enforcing, because eating processed foods and other junk actually makes me ill.



dontgoforit's picture

The headaches were from caffeine - or the lack thereof.

respect the cock's picture

@ MrNude

The doctors you spoke to are morons.

If someone wants something, they'll find a way.

If they don't, they'll find an excuse.

Pretty fkkn simple. 

Seer's picture

"They are all shit."


Those who speak the loudest speak the least truth (as they have the megaphones from TPTB).

Did I ever mention that humans were deceptive, and that this is a trait that all animals have for survival?

Better use of one's energy is to not engage the projected lunacy (it's meant to have our brains locked up so we continue to serve TPTB) and go about our business...

krispkritter's picture

Dammit Janet. It was a 'nipple' slip.