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Guest Post: The Dollar And The Deep State

Tyler Durden's picture





 

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

If we consider the Fed's policies (tapering, etc.) solely within the narrow confines of the corporatocracy or a strictly financial context, we are in effect touching the foot of the elephant and declaring the creature to be short and roundish.

I have been studying the Deep State for 40 years, before it had gained the nifty name "deep state." What others describe as the Deep State I term the National Security State which enables the American Empire, a vast structure that incorporates hard and soft power--military, diplomatic, intelligence, finance, commercial, energy, media, higher education--in a system of global domination and influence.

Back in 2007 I drew a simplified chart of the Imperial structure, what I called the Elite Maintaining and Extending Global Dominance (EMEGD):

At a very superficial level, some pundits have sought a Master Control in the Trilateral Commission or similar elite gatherings. Such groups are certainly one cell within the Empire, but each is no more important than other parts, just as killer T-cells are just one of dozens of cell types in the immune system.

One key feature of the Deep State is that it makes decisions behind closed doors and the surface government simply ratifies or approves the decisions. A second key feature is that the Deep State decision-makers have access to an entire world of secret intelligence.

Here is an example from the late 1960s, when the mere existence of the National Security Agency (NSA) was a state secret. Though the Soviet Union made every effort to hide its failures in space, it was an ill-kept secret that a number of their manned flights failed in space and the astronauts died.

The NSA had tapped the main undersea cables, and may have already had other collection capabilities in place, for the U.S. intercepted a tearful phone call from Soviet Leader Brezhnev to the doomed astronauts, a call made once it had become clear there was no hope of their capsule returning to Earth.

Former congressional staff member Mike Lofgren described the Deep State in his recent essay Anatomy of the Deep State:
 

There is another, more shadowy, more indefinable government that is not explained in Civics 101 or observable to tourists at the White House or the Capitol. The subsurface part of the iceberg I shall call the Deep State, which operates according to its own compass heading regardless of who is formally in power.

The term “Deep State” was coined in Turkey and is said to be a system composed of high-level elements within the intelligence services, military, security, judiciary and organized crime.

I use the term to mean a hybrid association of elements of government and parts of top-level finance and industry that is effectively able to govern the United States without reference to the consent of the governed as expressed through the formal political process.

I would say that only senior military or intelligence officers have any realistic grasp of the true scope, power and complexity of the Deep State and its Empire.Those with no grasp of military matters cannot possibly understand the Deep State. If you don't have any real sense of the scope of the National Security State, you are in effect touching the foot of the elephant and declaring the creature is perhaps two feet tall.

The Deep State arose in World War II, as the mechanisms of electoral governance had failed to prepare the nation for global war. The goal of winning the war relegated the conventional electoral government to rubber-stamping Deep State decisions and policies.

After the war, the need to stabilize (if not "win") the Cold War actually extended the Deep State. Now, the global war on terror (GWOT) is the justification.

One way to understand the Deep State is to trace the vectors of dependency. The Deep State needs the nation to survive, but the nation does not need the Deep State to survive (despite the groupthink within the Deep State that "we are the only thing keeping this thing together.")

The nation would survive without the Federal Reserve, but the Federal Reserve would not survive without the Deep State. The Fed is not the Deep State; it is merely a tool of the Deep State.

This brings us to the U.S. dollar and the Deep State. The Deep State doesn't really care about the signal noise of the economy--mortgage rates, minimum wages, unemployment, etc., any more that it cares about the political circus ("step right up to the Clinton sideshow, folks") or the bickering over regulations by various camps.

What the Deep State cares about are the U.S. dollar, water, energy, minerals and access to those commodities (alliances, sea lanes, etc.). As I have mentioned before, consider the trade enabled by the reserve currency (the dollar): we print/create money out of thin air and exchange this for oil, commodities, electronics, etc.

If this isn't the greatest trade on Earth--exchanging paper for real stuff-- what is?While I am sympathetic to the strictly financial arguments that predict hyper-inflation and the destruction of the U.S. dollar, they are in effect touching the toe of the elephant.

The financial argument is this: we can print money but we can't print more oil, coal, ground water, etc., and so eventually the claims on real wealth (i.e. dollars) will so far exceed the real wealth that the claims on wealth will collapse.

So far as this goes, it makes perfect sense. But let's approach this from the geopolitical-strategic perspective of the Deep State: why would the Deep State allow policies that would bring about the destruction of its key global asset, the U.S. dollar?

There is simply no way the Deep State is going to support policies that would fatally weaken the dollar, or passively watch a subsidiary of the Deep State (the Fed) damage the Deep State itself.

The strictly financial arguments for hyper-inflation and the destruction of the U.S. dollar implicitly assume a system that operates like a line of dominoes: if the Fed prints money, that will inevitably start the dominoes falling, with the final domino being the reserve currency.

Setting aside the complexity of Triffin's Paradox and other key dynamics within the reserve currency, we can safely predict that the Deep State will do whatever is necessary to maintain the dollar's reserve status and purchasing power.

Understanding the "Exorbitant Privilege" of the U.S. Dollar (November 19, 2012)

What Will Benefit from Global Recession? The U.S. Dollar (October 9, 2012)

Recall Triffin's primary point: countries like China that run trade surpluses cannot host reserve currencies, as that requires running large structural trade deficits.

In my view, the euro currency is a regional experiment in the "bancor" model,where a supra-national currency supposedly eliminates Triffin's Paradox. It has failed, partly because supra-national currencies don't resolve Triffin's dilemma, they simply obfuscate it with sovereign credit imbalances that eventually moot the currency's ability to function as intended.

Many people assume the corporatocracy rules the nation, but the corporatocracy is simply another tool of the Deep State. Many pundits declare that the Powers That Be want a weaker dollar to boost exports, but this sort of strictly financial concern is only of passing interest to the Deep State.

The corporatocracy (banking/financialization, etc.) has captured the machinery of regulation and governance, but these are surface effects of the electoral government that rubber-stamps policies set by the Deep State.

The corporatocracy is a useful global tool of the Deep State, but its lobbying of the visible government is mostly signal noise to the Deep State. The only sectors that matter are the defense, energy, agriculture and international financial sectors that supply the Imperial Project and project power.

What would best serve the Deep State is a dollar that increases in purchasing power and extends the Deep State's power. It is widely assumed that the Fed creating a few trillion dollars has created a massive surplus of dollars that will guarantee a slide in the dollar's purchasing power and its demise as the reserve currency.

Those who believe the Fed's expansion of its balance sheet will weaken the dollar are forgetting that from the point of view of the outside world, the Fed's actions are not so much expanding the supply of dollars as offsetting the contraction caused by deleveraging.

I would argue that the dollar will soon be scarce, and the simple but profound laws of supply and demand will push the dollar's value not just higher but much higher. The problem going forward for exporting nations will be the scarcity of dollars.

If we consider the Fed's policies (tapering, etc.) solely within the narrow confines of the corporatocracy or a strictly financial context, we are in effect touching the foot of the elephant and declaring the creature to be short and roundish. The elephant is the Deep State and its Imperial Project.

 


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Mon, 02/24/2014 - 11:26 | Link to Comment Rakshas
Rakshas's picture

OH THIS SHOULD BE GOOD

Mon, 02/24/2014 - 12:45 | Link to Comment onelight
onelight's picture

Once again Charles puts the USD in context...people will debate the structure and meaning, the geosecurity implications, the values and the but this pulls together a lot of pieces not previously thought about together, or not with precision. Reminds me of Thomas Barnett's work, and how it contextualizes globalizaton, though arguments abound. And theories like Strauss-Howe, with same effect. E verything can be picked-apart, and the conclusions debated (as should occur), but frameworks do help with advancing thought beyond reactively picking through the usual pieces and parts, the (emotionallly loaded) fragments in the newsflow and cyberspace and the blogosphere that Charles Hugh Smith has referred to as The Argument Economy.

Mon, 02/24/2014 - 13:23 | Link to Comment Rakshas
Rakshas's picture

I'm sorry, what were we doing with the quadrillion dollar bonanza again?  USD/GBP/EURO/JPY - just horses in the glue factory.... no?

 

Anyway I did find the expose informative but in my world not terribly surprising..... not at all actually.  I just hope when the punch in the mouth comes they use surgical munitions and aim deep.....

 

for any that have not yet read

http://billmoyers.com/2014/02/21/anatomy-of-the-deep-state/

Mon, 02/24/2014 - 16:50 | Link to Comment onelight
onelight's picture

Moyers article probably helped Charles Smith pull his thoughts together this week, as it did for many. I have followed that Dollar System / Deep State thread for years (as have many others) and found Smith's focus on things like Triffins Dilemma and what it implies, very helpful.

It is curious how in recent years so much linear thinking about USD and related structural outcomes seemed to lack knowledge of actual mechanics of how the global system is managed. That's part of what we're up against, in trying to defend the liberty and free enterprise heritage.

One challenge with evaluating the Deep State, beyond the first steps of learning about it, is that to a large extent since WW2 it supported and allowed economic freedom to flourish in America and elsewhere, for better and worse, warts and all, in a world that had been almost ritually destabilized by prior system(s). 

A lot has unfolded since WW2 and the chains of causality really need to be understood better; knowledge of mechanics -- and actual causation of outcomes -- will lead to better debate by all sides; ZH and its readers are part of that opening-up. It's time. 

Mon, 02/24/2014 - 14:01 | Link to Comment infocyde
infocyde's picture

I heard an interesting theory.  You can't have hyper inflation unless 1) you can easily double or tripple the money supply quickly, and 2) There has to be a method to keep people's wages continuously rising.  Not sure about the second argument, but the first makes some sense.  I heard a quote that sounds fantastical, but it is something like 200 trillion dollars are floating out there.  That seems way high to me, but assuming it is a number that is very large, the fed can continue to eprint 25-50 billion a month for a long time w/o hitting that 2x or 3x of the money supply. Cronies that suck on this cash pipe buy real assets, the rest of us go belly up and lose them if we get sucked into speculating on property or anything else.  Inflation rises but slowly as the "deep state" sucks away the American middle class's wealth.

Mon, 02/24/2014 - 15:25 | Link to Comment Chupacabra-322
Chupacabra-322's picture

One word describes the new Criminal business model:

ESPIONAGE.

Mon, 02/24/2014 - 19:50 | Link to Comment Not Too Important
Not Too Important's picture

I vote 'Extortion'.

Mon, 02/24/2014 - 13:28 | Link to Comment Brutlstrudl
Brutlstrudl's picture

According to market historian Bob Hoye, during a post bubble contraction, the senior currency will rise against all others. So will gold

 

Mon, 02/24/2014 - 11:27 | Link to Comment Randoom Thought
Randoom Thought's picture

IMO, what best serves the "deep state" is the creation of greater dependence on the "deep state".

I am not sure a stronger dollar increases the strength of the deep state locally, although it may increase the power of the deep state globally.

Mon, 02/24/2014 - 12:23 | Link to Comment falak pema
falak pema's picture

its called the "corpocracy" of NWO Pax Americana matrix.

Charles V would have been proud of its hegemonic strategy.

He had a similar matrix called the Holy Empire and its Spanish Inquisition, just like the MIC/NSA today.

Catholic kings are all alike; Habsburg and Reagan/Bush/Clinton new US aristocracy; all doing God's work.

Remember his empire's demise thru an eighty year war with the dirt covered peasants of his northern domains.

History BITES.

World Bank Whistleblower Karen Hudes Reveals How The Global Elite Rule The World

Mon, 02/24/2014 - 13:55 | Link to Comment Lost Word
Lost Word's picture

If I recall correctly, although the link below does not explain it in detail,

Tommaso Campanella circa 1600 AD proposed to both the French King and the Spanish King a plan to rule the world.

http://en.wikipedia.org/wiki/Tommaso_Campanella

Mon, 02/24/2014 - 14:24 | Link to Comment falak pema
falak pema's picture

City of Sun : Theocratic monarchy, sharing of goods and WIVES... and living in peace. Utopia like Thomas Moore's seminal work a century earlier. 

He never managed to convince either the Ecclesiastic or the Spanish king. Its for that reason that Richelieu liked him ! 

Mon, 02/24/2014 - 11:30 | Link to Comment unrulian
unrulian's picture

Fittingly, your EMEGD chart is surface tension holding together a group of bubbles...pin anyone?

Mon, 02/24/2014 - 11:34 | Link to Comment Agstacker
Agstacker's picture

"I would argue that the dollar will soon be scarce, and the simple but profound laws of supply and demand will push the dollar's value not just higher but much higher. The problem going forward for exporting nations will be the scarcity of dollars."

 

52 billion created out of thin air per month and it will soon be scarce?  You're a legend in your own mind...

Mon, 02/24/2014 - 11:35 | Link to Comment NoDebt
NoDebt's picture

I owned a Ford once that had that EXACT same fan belt routing.  Weird, huh?

Mon, 02/24/2014 - 12:45 | Link to Comment DaddyO
DaddyO's picture

Now imagine getting your finger caught in the serpentine winding.

Your finger is the USSA at present...

DaddyO

Mon, 02/24/2014 - 13:30 | Link to Comment Lost Word
Lost Word's picture

Symbolic of Ford corporation as a part of the Satanic serpent worshipers?

Mon, 02/24/2014 - 11:38 | Link to Comment Dead Man Walking
Dead Man Walking's picture

"There is simply no way the Deep State is going to support policies that would fatally weaken the dollar, or passively watch a subsidiary of the Deep State (the Fed) damage the Deep State itself."

...Unless they are egotistical arrogant a-holes that believe they are smarter and more capable than they really are, and run into unanticipated consequences, which are plain to see for everyone else, etc

Mon, 02/24/2014 - 11:48 | Link to Comment yogibear
yogibear's picture

A major US dollar devaluation coming.The Federal Reserve and the IMF want to force massive inflation of assets.

Mon, 02/24/2014 - 12:28 | Link to Comment KickIce
KickIce's picture

Agree, I used to think they were going to pull the rug out on the market but now I'm not so sure.  With unlimited access to the printing press they don't really care how much something costs.  10K / acre farmland in Iowa, they don't even blink.  In short, I think they're trying to price us out of existence, it's the only way to keep all the bubbles from popping.

Mon, 02/24/2014 - 14:00 | Link to Comment kito
kito's picture

@yogi

 

 you mean like fine art, and manhattan condos, the stock market, and just about everything that the 1%ers touch these days? that kind of massive inflation of assets?

yogi, there is no need to inflate assets. the middle class already experiences hyperinflation, in the sense of being priced out of everything due to falling wages and job destruction (h/t fonz) and rising prices in gas and food, and all of the real hyperinflation in asset prices is already being seen in the realm of the wealthy. 

Mon, 02/24/2014 - 11:57 | Link to Comment verbot
verbot's picture

Now this is realtalk +1000000 to everybody who helped get this article published 

Mon, 02/24/2014 - 11:59 | Link to Comment verbot
verbot's picture

And 10 qwatloos for the tylers for letting this adult level conversation out of the box

Mon, 02/24/2014 - 11:59 | Link to Comment thtmnbhndthecrtn
thtmnbhndthecrtn's picture

This is why politics, and the argument for or against any particular party or persons in DC having a "majority in Congress," or "being a (good or inept) president," or "running the show" in any way is a complete waste of time and simply a diversion for the "well-informed" masses.

Mon, 02/24/2014 - 12:01 | Link to Comment PaperBear
PaperBear's picture
Humanity's Enemy: The Deep State
Mon, 02/24/2014 - 12:03 | Link to Comment PaperBear
PaperBear's picture

Has the Republic of the USA already fallen ? Yes.

Mon, 02/24/2014 - 13:33 | Link to Comment Lost Word
Lost Word's picture

Unless the Deep State defines itself to be the Republic.

Mon, 02/24/2014 - 12:05 | Link to Comment Mad_max
Mad_max's picture

The idea that a small group of super inteligent people are succesfully manipualting the world is absurd. To many unpredictable variables. The whole thing will run out of control.

Mon, 02/24/2014 - 12:23 | Link to Comment Johnny Cocknballs
Johnny Cocknballs's picture

well, 9/11 went pretty well.

unlimited money, weapons, a license to kill, immunity from justice, inside information on markets, and a contempt for your fellow human beings may not be able to control everything - but it sure can control a lot.

 

And get a lot of people killed.

Can Washington overthrow three governments at the same time?
Mon, 02/24/2014 - 12:47 | Link to Comment thamnosma
thamnosma's picture

True, but even in those hallowed halls, humans are humans and they will devour one another.

Mon, 02/24/2014 - 13:26 | Link to Comment Lost Word
Lost Word's picture

Peter Dale Scott wrote a few books about Deep Politics,

of JFK assassination and the criminal CIA, and 9-11,

http://www.amazon.com/gp/search/ref=sr_adv_b/?search-alias=stripbooks&un...

Mon, 02/24/2014 - 22:35 | Link to Comment putaipan
putaipan's picture

yeah. i'm a little more inclined towards pd scott- i don't see any little circles up there labled drugs or organized crime.

Mon, 02/24/2014 - 13:31 | Link to Comment Rakshas
Rakshas's picture

Interesting point about the autopsies ...... hmmmmmm i wonder......

http://www.euronews.com/2014/02/19/venezuelan-protester-dies-from-bullet...

Normally the hot chicks don't get dispatched but it sure make for outrage .......... 

like

http://www.youtube.com/watch?v=LmfVs3WaE9Y

 

Mon, 02/24/2014 - 12:15 | Link to Comment Seasmoke
Seasmoke's picture

I still will NOT trade you this Gold coin, for $5,000 of those paper dollars that you think are scarce. 

Mon, 02/24/2014 - 13:08 | Link to Comment Alpha Monkey
Alpha Monkey's picture

I will, so long as my local coin store still has em for ~1400...

Mon, 02/24/2014 - 12:16 | Link to Comment teslaberry
teslaberry's picture

this article is crap. it states a loose ghost is on the prowl (the deep state) and then does a crappy job of defining what this nebulous amorphous object is. 

 

then it has the balls to go on and explain why the existence of a ghost that wants to control the world is sufficient to ensure the u.s. dollar remains the defacto reserve currency. 

 

even stupider, the glaring contradiction of the article is that the ghost itself  is comprised of many underlying parts and smaller sub-spheres of power, and  while perfectly all powerful , the ghost is incapable of being undermined by its own component parts. 

 

this is the same argumetn as , the human body is a marvel of biological engineering and because it has an immune system, is incapable of suffering fatal infections, in any number of self-controlled organs or tissues that bring death to the organism. 

 

the path of history is not predictable. even if the ghosts of history wanted it to be. 

 

charles hugh smith, on average dumb. and another alex jones styles scare monger that distinguishes himself by being ostensibly socialist communist. on any given day, charles hugh smith will bitch about over centralization and then declare the federal government should be used to fix everything if only communists were in charge of it. 

when does sir charles hugh smith the 4th , if that is his real name, suggest realistic solutions?

Mon, 02/24/2014 - 12:35 | Link to Comment thamnosma
thamnosma's picture

Couldn't agree more.  There are quite a few crypto statist/marxists out there who somehow have the "libertarian" crowd fooled -- i.e. Paul Craig Roberts.  He, Celente and others were all wet over the Occupoo movement despite the fact that those leftists believed in MORE government control to save us from the banks.   Funny if it weren't so dangerous.

Mon, 02/24/2014 - 13:20 | Link to Comment Creepy Lurker
Creepy Lurker's picture

I agree with both your assessments, but like the tired old analogy of the broken clock, he does hit on something interesting sometimes. Its true that there is a type of 'shadow government' consisting of lifers in government work. I don't think they're as organized as Smith makes them out to be, but I do think they're capable of having some influence.

If you're a middling to high functionary in the .gov and you get a phone call from someone at the Pentagon: "You have to do this because your country needs you." Well, you'll do it, not least because you don't want to lose your cushy job with Uncle Sugar. But all-powerful global control? LOL, I think not.

The one thing in this article he says thats complete truth: No matter what flavor attempts to manipulate the economy come in, trade pieces of paper for real stuff.

Mon, 02/24/2014 - 13:51 | Link to Comment kito
kito's picture

@teslaberry, wow, youve been here a few weeks, and im sure its the real deep stuff that has drawn you here, like simon black and michael synder, etc. while the rest of the hyperinflationists have been screaming for the end, smith has been ringing the rise dollar bell for a while, and has been very right. smith actually backs up his analysis with charts and stats (gasp) and some sharp insight, which is a rare thing these days among the zh contributors. 

smiths view on who is the ultimate pupeteer is a refreshing change from the "jeckyl" hysteria that normally pervades these pages. im not sure why you believe he has done a crappy job of explaining it. he was very straightforward actually, and even included a pretty bubble graph for those intellectually challeneged who are new to this site. 

 

Mon, 02/24/2014 - 12:31 | Link to Comment WhyWait
WhyWait's picture

Useful focus on the big picture, and the "interests of the Deep State" - of the American Empire - is a useful model.  And a good argument to not discount the danger of an engineered fall into a deeper deflationary depression.

But this post begs the question "whose state is it"?  Surely it wasn't set up for its own benefit, but for the benefit of those who instituted it.  Did it at some point cast free from its creators and become an autonomous Frankenstein's Monster?  If so, where is the evidence of its interests being distinct from (and therefore at least occasionally in conflict with) those of the banksters and the billionaires

Mon, 02/24/2014 - 12:47 | Link to Comment falak pema
falak pema's picture

In the Coming years (not far away) we may remember Voltaire's quip about the Holy Roman Empire (see my post above) :

"It was not Holy, nor Roman and even not an Empire at the end."

It may be when the Reset occurs that the Deep State will be remembered as neither DEEP nor a STATE. 

Who remembers DEEP THROAT?

Much more amusing don't you think?

Wed, 02/26/2014 - 09:53 | Link to Comment dizzyfingers
dizzyfingers's picture

WhyWait  No same TPTB offing anyone who objects.

Mon, 02/24/2014 - 12:45 | Link to Comment Johnbrown
Mon, 02/24/2014 - 12:56 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

Smith is awesome, as usual.  But I’d argue that the USD fiat creation (ironically enough) actually hurts the BRIC+Ems.  It exports inflation to these countries – where it distorts and weakens their economies.  As long as they keep using the USD, rather than another currency or use some other ‘arrangement’, their countries will see ‘capital flight’ into dollars.  All it takes is some targeted disturbances by the US’s Military+Intelligence Complex.

This will continue for as long as the dollar is King.  Unfortunately, every time a country or its leader decides to resist or fight back, they become the target of such MSM and MIC attacks.  E.g. Iraq, Libya, Venezuela, Urkaine.

The US is still the biggest bully in the school yard and it is folly to think that any one player – even the next largest ones (Russia or China alone) – can successfully take on the bully that is the US.  The ONLY way the Big Bully can be put in its place, is for the other kids to gang up and to have the next largest ones (Russia+China) lead that charge in concert.  IOW, they need to make a surprise announcement that they will no longer accept the USD if not backed by adequate gold reserves, and that their own currencies will be backed by gold or a basket of PM-backed currencies.

This should happen, but won’t.  The US has and will continue to front-run such efforts.  Which means that we cannot predict ‘The End’ with any accuracy – even though those with a vested interest to do so, will do so because it's good for their business or psyche.

 

Mon, 02/24/2014 - 13:35 | Link to Comment Creepy Lurker
Creepy Lurker's picture

Not sure why you got a down arrow for that, I thought it was good logic, myself. Another reason why it won't happen is that it would require trust between the Russians, Euros, Chinese, etc. and they don't trust each other.

But it's not really necessary. They Russians have direct experience with empire collapse, they know all they have to do is bide thier time. This pile of turds will collapse under its own weight.

Mon, 02/24/2014 - 13:20 | Link to Comment El Vaquero
El Vaquero's picture

I think this article attributes too much power to the deep state.  No, we are not going to intentionally kill the dollar, but scarce dollars lead to unpayable debts, and that alone will kill the dollar by shaking confidence in the US's ability to pay its debts, freezing up the financial system, etc...  Printing to make up for that is flirting with hyperinflation, which will kill the dollar.  We have long since passed the point of no return.  To add to that, we are bumping up against real resource limits.  This cannot be sustained, and thus will not be sustained. 

 

The system is truly too complex to be micromanaged. 

Mon, 02/24/2014 - 13:56 | Link to Comment AurorusBorealus
AurorusBorealus's picture

I agree.  The policy-makers for the U.S. suffer delusions of grandeur and omnipotence.  These are delusions, however, and just because the shadow-government wants something, does not mean that the shadow government will get it.

Mon, 02/24/2014 - 13:38 | Link to Comment Uncle Remus
Uncle Remus's picture

Thanks, greatest generation.

Mon, 02/24/2014 - 13:49 | Link to Comment Creepy Lurker
Creepy Lurker's picture

I can't really find it in me to be angry with them. They were naive and under stress. Would we really have been any better?

Mon, 02/24/2014 - 14:02 | Link to Comment El Vaquero
El Vaquero's picture

 

Would we really have been any better?

Not without our experiences seeing what all this shit leads to today.  We can look back and see a lot of the BS that happened since 1941 and evaluate it for what it really is, but, back then, who would have believed we would be where we are today?  Very few people, I suspect.

Mon, 02/24/2014 - 14:11 | Link to Comment putaipan
putaipan's picture

brings me back to my line- "they fought of both the depression and fascism ... yeah, but they didn't have to do it on the homefront .... at the same time!"

good article, but i think the chink in his arguement is that he assumes that the deep state he is describing is american. uhm, well , i'm pretty sure we'd all agree that they're internationalists, and the marching orders are coming from one of the two other "cities" rather than d.c. . and frankly, i don't think the british or the vaticanish are gonna be too suportive of their tool the u.s.d. for much longer.

Mon, 02/24/2014 - 14:04 | Link to Comment elwind45
elwind45's picture

Money out of thin air ? P

Mon, 02/24/2014 - 14:17 | Link to Comment elwind45
elwind45's picture

Would explaining to Joe Q. Where his sacrificed earning end up serve him better than worrying him about the others?

Mon, 02/24/2014 - 14:41 | Link to Comment elwind45
elwind45's picture

I never knew the same stuff that clogged your ears nose and throat can be made into computers? Thank you peed etats

Mon, 02/24/2014 - 14:54 | Link to Comment elwind45
elwind45's picture

Does the deep state operate on the thesis that instead of doing GODS work it the DS is giving GOD something to do? The others believe they can do anything and everything until God shows up! Until that time the moneychangers stop changing and hope becomes islands of material comfort fighting spells of value(s)guilt?

Mon, 02/24/2014 - 15:55 | Link to Comment Creepy Lurker
Creepy Lurker's picture

Dude, either put the joint down or stop typing. Please.

Mon, 02/24/2014 - 15:00 | Link to Comment silentboom
silentboom's picture

"Recall Triffin's primary point: countries like China that run trade surpluses cannot host reserve currencies, as that requires running large structural trade deficits."

Didn't the world adopt the dollar when we were a massively productive society running trade surpluses?

Mon, 02/24/2014 - 18:44 | Link to Comment RMolineaux
RMolineaux's picture

Correct.  US exporters demanded to be paid only in US dollars on deposit in US banks.  This incentivised other countries to accumulate dollars any way they could: exporting everything, importing nothing.  Japan led the way.

Mon, 02/24/2014 - 15:14 | Link to Comment newworldorder
newworldorder's picture

I have made these points on a number of occasion before.

1.  The Deep State also provides the "world cop on the beat," namely the US Military that keeps the "flow" of international trade as designed by the major world players. This benefits all countries, but especially China and all the oil producers.

2.  The FED has evolved as the Central bank to the world wide banking/financial system. Without it - or an entity like it, - the financial system as currently designed cannot exist. Through its financial backstops and lender of last resort actions, it makes the concept of -one world order - possible.

Mon, 02/24/2014 - 15:45 | Link to Comment Radical Marijuana
Radical Marijuana's picture

"I would say that only senior military or intelligence officers have any realistic grasp of the true scope, power and complexity of the Deep State and its Empire.Those with no grasp of military matters cannot possibly understand the Deep State. If you don't have any real sense of the scope of the National Security State, you are in effect touching the foot of the elephant and declaring the creature is perhaps two feet tall."

This article is based on the assumption that that elephant is rationally sane, rather than that enormous elephant being a criminally insane rogue. The deeper dilemma regarding the success of militarism is that it depends upon backing up deceits with destruction. While in each short-term increment the people who are the best at doing that may appear to be rationally sane within those circumstances, the overall trajectory continues to be tragic, because the longer term consequences of triumphant force backed frauds is that the entire civilization which is thereby controlled by huge lies, backed up with lots of violence, becomes criminally insane overall.

The Deep State is playing through the paradox of final failure from too much success. There is no doubt that militarism self-selected to become the supreme ideology. Furthermore, from an abstract point of view, the death controls operated through murder systems, which back up the monetary systems, deserve to be the most important human activity, which means the system of ideas about doing that, militarism, indeed deserves to be regarded as the supreme ideology. However, we are collectively being herded into increasingly social insanities, due to the increasing success of controlling civilization with huge lies, backed by lots of violence. Both the people being herded, and those doing the herding, are becoming more criminally insane at an exponentially increasing rate.

One of the greatest paradoxes of the success of militarism was to reverse the meaning of murder, through operating the actual murder systems through the maximum possible deceits about itself. Since the monetary system was built on the foundation of the murder systems, that made and maintained the social systems in which those monetary and taxation systems could exist, we have therefore also developed financial accounting systems based on the maximum possible frauds. Overall, the tragic trajectory of these events is for civilization to become criminally insane, because it is controlled by the most criminally insane people. That problem has been amplified trillions of times by progress in science and technology, which is still being channeled through the social pyramid systems, which are the biggest form of organized crime, controlled by the best organized gangs of criminals, (which is, by definition, the "Deep State" or the "National Security State.")

Given that the weapons have become trillions of times more powerful, while human civilization has therefore become trillions of times more insane, the "National Security" or the "Security" of the Globalized "Deep State" or dominant empire, has become a runaway psychosis. The Deep State is PSYCHOTIC. It was selected through history to be based on being the best at backing up deceits with destruction. That enabled the human death controls to actually be done through the maximum possible deceits, which then enabled the human economy to be operated through the maximum possible frauds. While, in each increment, those who achieved that were rationally sane, within that context, the overall pattern of what they were doing was still driving human civilization as whole to become more and more psychotically insane, because the triumph of controlling civilization with huge lies, backed up with lots of violence, drives society as a whole to become further and further away from their reality, since they are more and more controlled by lies, as in the case of the political economy, more and more controlled by the financializations based on fraudulence.

The grand paradox behind the rise of Neolithic Civilization, to become the global empire of the Deep State that exists now, is that the most extreme form of its overall Bizarro Mirror World manifestation was to maximally invert the importance and operations of the necessary human murder systems, operating death controls. The paradox that successfully operating death controls depended upon being deceitful about those has resulted in the biggest bullies' bullshit about human death control systems being what the vast majority of those people being herded were brainwashed to believe, and want to believe. Meanwhile, those people herding the others were similarly trapped into their own matching whirlpool.

The most important thing that human beings do is operate the human murder systems. That was the foundation of the human money system, since money is measurement backed by murder. However, the actual history of militarism has been to suppress that under public lies, which have generally become too successful as various forms of public state religions. Therefore, we are watching the Deep State run amok, as a criminally insane rogue, while, in the public space, it only has against it some controlled opposition groups, which still operates within the same frame of reference of the biggest bullies' bullshit morality.

Given that there have been a series of prodigious breakthroughs in the paradigms of basic sciences, which have enabled a series of technological breakthroughs which have produced weapons of mass destruction which rapidly became millions, then billions, then trillions of times more powerful, and appear to be headed towards becoming quadrillions of times  more powerful, IF civilization survives through that, we SHOULD be going through profound paradigm shifts in the philosophy of science, that then apply to politics, and especially to militarism, which would then have corollaries that applied to the monetary system, and everything else regulated by the monetary system's accounting. However, that would take going through the Bizarro Mirror World set of perceptions which we have dominating our globalized Neolithic style of civilization at the present time. The current systems are trapped in a spiral of backing up bigger lies with more violence, in ways which are becoming increasingly insane, and madly self-destructive overall. The only genuine solutions would be to change the paradigms regarding how we operate the combined money/murder systems, which more than anything else would require changing the paradigms about how we think about the death controls, and therefore, operate the human murder systems.

OBVIOUSLY, at the present time, the Deep State is a rogue elephant that has become criminally insane, and its leading insanity is matched by those who follow after that lead. We should go through profound paradigm shifts in militarism, which is the only way to sustain sufficient changes in the monetary systems. However, it appears that the only way we are going to get there is through a series of psychotic breakdowns of the presently established and deeply entrenched systems. The grand paradox which continues to automatically amplify itself every day is the way that the human experiment of building brains that can model the world, including having a model of themselves within their model of the world, has resulted in natural selection being internalized as intelligence, BUT, through the torturous tunnels of almost infinite deceits, which were the previous paths of successful militarism, making War Kings, which then built sovereign states, control over which was covertly captured by the Fraud Kings.

Therefore, the whole world ended up increasingly being dominated and controlled by huge lies, backed up with lots of violence,  while the success of doing that was driving itself more insane, and therefore, towards final failure from too much of that kind of success. What we should do is go through more profound perceptual paradigm shifts regarding how we operate our artificial selection systems. At the present, human beings are operating their artificial selection systems through the maximum possible deceits and frauds. Those who are most central to actually doing that, the "Deep State," or the psychotic "National Security State," have been too successful in promoting the biggest bullies' bullshit view the world, and too successful in brainwashing too many people to believe in that bullshit and conditioning them to want to believe in that bullshit.

The more powerful and capable that human beings become in creating more of an artificial environment around themselves, due to their relative degree of success in science and technology, the more imperative it becomes to operate that artificial environment with an artificial selection system that is sane, rather than through artificial selection based upon the short-term success of the maximum deceit, backed by destruction, and maximum fraud, backed by force, in the human world of combined murder/money systems, where the death controls back up the debt controls. What we should be doing is going through profound perceptual paradigm shifts in the ways that we understand the relationship of artificial selection to natural selection. So far, the history of doing that has primarily been through the development of militarism, in order to most successfully operate human murder systems, which were then the foundation for the human money systems, as measurement backed by murder. That history has resulted in our way of thinking about artificial selections and death controls to become as backwards as it could possibly be, and therefore, driven the Deep State to become a rogue elephant which is criminally insane, which is stampeding the herd of the rest of humanity to also behave in more and more criminally insane ways, because there is a deep psychotic breakdown of the relationship between natural selection and artificial selection, due to the history of the success of warfare being based on deceits, enabling financial success to be based on frauds, so that the whole civilization behaves in more and more criminally insane ways.

Mon, 02/24/2014 - 18:22 | Link to Comment RMolineaux
RMolineaux's picture

Hugh-Smith has made some valuable observations about the true power structure of the US in the post-war period to date.  But I believe there are some weaknesses in his analysis that need to be considered.  In the immediate post-war period, there were two reserve currencies:  the pound sterling and the US dollar.  The Swiss franc was strong but little used for trade finance.   The pound sterling was in decline as the reserve currency notwithstanding its traditional use by all of the former countries of the commonwealth.  The pound's decline is an object lesson that should be studied by all who are currently analyzing the US dollar's reserve status.  It came about because of the loss of political control over the former colonies and an unfavorable balance of trade, along with the need for post-war rebuilding and debt service.  Currently, try as it might, the US deep state has not been able to establish political control over other nations.  It lacks the political convictions and traditions of governance that characterized the British experience.  The use of transnational corporations and military intimidation to serve the purposes of dominance is an inadequate substitute for empire building.  And the accumulation of immense debts to foreign governments and enterprises will eventually destroy the dollar as these outside entities demand payment.   The transnational corporations and banks have no loyalty whatsoever to the US or any other sovereign.  They will be quite content to operate out of other countries and with different reserve currencies.  HSBC has moved its headquarters to Hong Kong, others will follow to wherever is most convenient.   The ignorance of Wall Street in these matters is exceeded only by the total ignorance of the Pentagon.  The former is obsessed with increasing the nominal wealth of its participants, the latter with the exercise of military power with ever more expensive new toys.  Neither is qualified to exercise long-term leadership.

Much criticism is currenty being made of the Fed, but often for the wrong reasons.  While the Fed is nominally owned by the private commercial banks, its monetary policy decisions have a considerable amount of independence.  Most of the Fed board and its regional presidents are made up of academics and burearcrats.  There are few with actual commercial banking experience.  In fact the Fed may be more effective if it had more experienced bankers in its upper eschelons.  The great failure of the Fed in recent years is its failure to fulfill its regulatory responsibilities.  This came about, not from pressure by its "stockholders," but rather from congress and free-market ideologues.  Given the Fed's structure, its regulatory responsibilities should perhaps be transferred to the Controller of the Currency in the Treasury Dept.

Wed, 02/26/2014 - 10:00 | Link to Comment dizzyfingers
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RMolineaux  Bravo. But let's all hold our breath for Fed reform vis transfer of regulatory responsibilities.

Tue, 02/25/2014 - 07:20 | Link to Comment Ghordius
Ghordius's picture

"In my view, the euro currency is a regional experiment in the "bancor" model,where a supra-national currency supposedly eliminates Triffin's Paradox. It has failed, partly because supra-national currencies don't resolve Triffin's dilemma, they simply obfuscate it with sovereign credit imbalances that eventually moot the currency's ability to function as intended."

three problems with that: first, it completely neglects the fact that the EUR is a regional response to the USD's hegemony. second, it is based on believing in Triffin's Paradox. third it completely neglects that the EUR's history, including all the currency grids previously set up and the Latin Monetary Union

Wed, 02/26/2014 - 10:03 | Link to Comment dizzyfingers
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duplicate

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