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We Must Rethink "Everything" If We Are To Survive This Strange New World
Submitted by Thad Beversdorf via First Rebuttal blog,
Most of us at this point have heard about fiat currency vs an asset backed currency. We understand that fiat currency is backed only by the full faith and credit of the American government. While this is the popular understanding the reality is that the American government generates no money and so it has no ability to back or guarantee anything. What we mean by backed by the American government is that it is backed by the American economy. That is, by the production of the American worker and entrepreneur.
So when someone accepts a US dollar in exchange for some good or service, they are implicitly validating their confidence that the US economy would continue to generate enough output to maintain, at least an effective (if not technical) condition of solvency in America. That touches on an incredibly important aspect of fiat currency which is how we value it. Most of us are familiar with purchasing power, which tells you how much you can trade for a given amount of dollars today. We see this in every store as each product has a price in dollars.
We also see the more general relative purchasing power as measured against other currencies. We’ve all exchanged money for vacation where we trade dollars at some conversion rate for another currency. That conversion rate varies day to day but generally doesn’t move very much over short periods.
But there is another valuation to currency and that is its risk valuation. Risk valuation is the price to be paid on a borrowed dollar given its current likelihood of decline in purchasing power. We find the risk valuation built into interest rates. And the relationship between risk valuation and interest rates is such that the higher the risk that the lender will receive less than they lent, either through counterparty default or declining purchasing power, the higher the interest required to borrow that currency. However, interest rates have both a risk and cost of capital aspect to them. We can see the difference in the spreads between a US treasury and Corporate paper of the same duration. The US treasury is ‘considered’ risk free and thus the respective interest is only a cost of capital component. So the spread between the Treasury and Corp paper is the risk cost associated with the Corp paper.
It is in the cost of capital aspect of currency valuation that has completely perverted the concept of money. Allow me to explain. For the first time in history the world has negative interest rates as a normal course of business. What used to be a subject for theoretical discussions of academia inside the walls of the top business schools is now very much a reality. I would suggest the concept of negative interests rates has not become anymore rational but that today’s system of global finance has become very irrational.
Let’s think about risk, cost of capital and interest rates. The idea is that the price of risk is built into interest rates. Now we discussed that major economy Sovereign debt like Euro or USD Notes are considered risk free debt. And so interest rates represent a cost of capital only. If those Notes are paying negative interest rates it suggests that the cost of capital, which is just the opportunity cost of that money, is negative. Meaning if I didn’t lend this money to a borrower the next best return I could get on this money is actually a loss. If we look at Corporate paper like Nestle borrowing at negative rates, this actually suggests that the opportunity cost (or next best return) for the lender is a loss so great that it actually offsets all of the risk represented by the the borrower because we know that risk requires positive interest be paid. This tells us that the economy is severely broken in Europe. For in stable economies we have positive return opportunities.
None of this is arbitrary. It means in order to get investors into Sovereign debt you need to pay them in accordance with other similar investments. When economies are strong there are lots of similar investments that are paying higher and higher returns. Meaning Treasuries/Sovereigns need to increase rates to compete for capital. This has a natural balancing effect that prevents an overheating of an economy. However, when the economy is bad there are very few, and currently it would seem in Europe, no similar investments that are paying even a positive return. Meaning Euro ‘Treasuries’ can offer negative rates and still get investors. As rates increase so does demand for that currency increase and results in a strengthening of that currency. Alternatively, when interest rates move lower and further negative a fiat currency sees less and less demand thus weakening that currency, as has been the case with the Euro. This is how rates, the economy and currency strength are tied together.
What this means is that if an economy continues to decline a fiat currency’s purchasing power valuation can actually move to absolute zero (meaning it is worthless) and that rate of moving to zero is going to be your negative interest rate. It would get to zero when an economy shows no possibility of a positive return investment. What we find is that with asset backed currencies this actually cannot happen. Because an asset backed currency actually derives its value, or at least its minimum value, based on the underlying asset and so it isn’t dependent on the respective economy. It has a minimum purchasing power valuation equal to the cost to produce or extract the underlying asset.
Because that will always be a positive figure you could never see negative interest rates with an asset backed currency. It is an impossibility, which until recently most would have agreed was the case for even fiat currencies. The point is that there is always at least one alternative investment with a minimum positive value for all asset backed currencies and thus must always have positive nominal rates. This is the biggest and most fundamental difference between fiat and asset backed currencies.
These negative rates that we see in Europe are a first glimpse of fiat currency destruction due to imploding economies. And again the negative rates are nominal rates meaning they are negative by way of something beyond inflation. Specifically they are moving to their natural minimum state of valuelessness because the economy is no longer strong enough to provide alternative investments for the fiat currency. Fiat currency is shown then not to be a storage of value whatsoever. But only a representation of strength of its respective economy. As the economy goes to zero so does the value of its currency. This point is exceedingly imperative to understand in our current global environment.
What it means is that for all those who are nearing retirement or those who have large cash holdings you risk losing all of that value as we head into low growth and negative growth economies. The idea that one can simply hold cash to preserve wealth is not an option. We tend to believe that in low economic growth periods that inflationary pressures are minimal and thus cash is a decent storage of value. However, the situation in Europe based on the above discussion is telling us that actually even outside of inflation, fiat currency is not a storage of value. Even with zero inflation a fiat currency will lose all purchasing power in a contracting economy.
Given the amount of money printing that has occurred the inflation risk is huge on top of the economic contraction risk. These two tend to go hand in hand. They feed on each other as central banks around the world believe they can stimulate economic growth with inflation. What is currently taking place is massive inflation (i.e. increased money supply) with no economic improvement. The worst of both worlds. It’s like losing on both legs of the spread.
Let’s look at a chart to see if we can see some empirical evidence to support what I’ve said above. Specifically, evidence describing the relationship between economic growth and purchasing power.
What see in the above chart is the percent change in dollar index (blue line) and the percent change in GDP (red line). You can see that the change in dollar index moves around quite a bit but seems to follow a trend defined by the change in GDP or essentially the economy. The GDP line looks very much like a trend line for the change in dollar index. Let’s actually compare to the real trend line of dollar index.
So we can see here the two trend lines (color coded to match) of the changes in dollar index and GDP. Very clearly the trend lines are very similar, however, note that since 2008 a dislocation between the the two trend lines has occurred. And this gets me to my main point of the article. Currently the USD has strengthened way beyond its historical and fundamental relationship to the economy. And so an arbitrage exists. Specifically we know that either GDP needs to accelerate significantly very quickly or we will get a weakening in the dollar index. If we believe the economy shows very little sign of a significant acceleration then we need to find a way to defend a significant weakening of purchasing power for our USD holdings.
If we look closely at the first chart we see that we are currently in the largest spread, since 1990, between change in growth of dollar index vs change in GDP when dollar index is above its trend line. This suggests a weakening in USD dollar index should take place very soon. The best way to take advantage of this situation is to purchase hard assets with USD. Essentially longing hard assets and shorting USD. The result, given a weakening of USD, is that the hard asset moves up and the USD moves down at which point you could sell back the hard asset for USD and your cash holdings will have grown materially rather than declined materially.
I would suggest any hard assets will work but the 5000 year old trusted and true storage of value is gold. And so why try to get cute with something like capital preservation? The recommendation is that due to the coming weakening of USD the right trade is to purchase gold in USD and wait for the USD to come in. This could be done by way of ETF’s, forwards or futures, however, the ideal trade is long physical (allocated) gold vs USD. However you choose to do so the above discussion and empirical data suggests that the right trade is buying hard assets against USD. And when we see hard commodities beaten down the way the are with USD Index at recent historical highs the trade fits well with the only formula that works every time….buy low sell high!
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No, we need to hang some folks.
Let's start with Banksters, and then move to politicians....
I was thinking the other way around, but ok.
Who do polticians blame? The bankers. Who does occupy blame? WS and capitalism
This article is kidding right.. It reads like a primer for rookie bankers, I do not need your fiat games.
You've missed it. Just stare harder at the red and blue lines until they merge into a 3D picture of a printing press. Whilst ammo is still available in the US wouldn't it be hilarious if a few militias got together and hit the sock puppets in a blaze of glory, followed up by a corral of the banksters and zionist cohorts. I reckon the whole lot could be arrested over a few of days, a quick hearing to establish their guilt and then off to the guillotine. Next stop, world peace. https://www.youtube.com/watch?v=bjeNDKSTWIg
So when someone accepts a US dollar in exchange for some good or service, they are implicitly validating their confidence that the US economy would continue to generate enough output to maintain, at least an effective (if not technical) condition of solvency in America.
What we mean by backed by the American government is that it is backed by the American economy.
The only relationship between the solvency of the American federal government and the economy is tax revenue.
reality is that the American government generates no money and so it has no ability to back or guarantee anything.
The American government generates death, backed by taxes. That is all.
The answer is to tear down real estate worth zero, and taxed at zero, rebuild(at a cost) and then tax the new wealth at the current "new" value, rinse and repete until recovery is established. Jobs and taxes all in one.
All these down arrows shows folks really do not understand you point. That is exactly how America built it's weath from the 1920's until recently for all citizens. No paper games, from roads, to towers, to neighborhoods, to airports, on and on. China was on the same road until recently and now she is stuck in the mud just like we are. When the do-nothings are stopped from paper investing and can only get a return in productive and positive endevors this economy will turn without stupid slogans like 'green shoots' as the fuel.
Take Shakespeare's advise--get the attorneys (bankers and pols close,close second. Milestones
Let's start with educators.
It has to happen naturally. The current set of "educators" will go down with the system. I'm glad more people are finally taking personal responsibility for their childrens education.
Educators are just another pig at the trough, like Realestaters, WS'ers, Insurance companies (including Fuck-Folker Warren Buffett), etc...
You are going to run out of bullets before you run out of pigs....
Educators are the guardians at the gate of the Republic.
They have deliberately let the enemy inside the walls. Without their willing and enthusiastic connivance, we would still be safe.
They are far more dangerous than either bankers or politicians, who must count on the ignorance of the people in order to realize their sinister plans.
No, you cannot be actually saying that you think some Fuckwad first grade teacher making minimum wage has done more damage than WS banksters who have wrecked this country....
And family?????
Just saying - some commie gobshite called the liberal educators the best of the useful idiots to change a society's values, perceptions etc. First thing to do when the takeover happens - shoot the useful idiots. I realize this incorporates a long term strategy - not everyone's forte. Then again - on a long enough timeline........
dup
We got where we are at and where we are headed due first to piss poor PC parenting (otherwise known as My Child is My Best Friend) and lawyers being lawmakers in the Federal and State congresses (known in their industry as a conflict of interest except that it doesn't apply to them). Educators... I hear what you are saying but that can fixed quite easily if you had good parents and lawyers out of Congress...
"No, we need to hang some folks"
Oh come now...here is a kindly oligarch dispensing compassion to a few thousand Ukrainian workers losing their jobs to IMF imposed "austerity".
"Billionaire ruler literally eaching out to laid off workers"
And notice his escort, especially the masked military in background.
https://www.youtube.com/watch?v=qiiQGiuLE3s
Thinking in general is so over rated.
moar debt! we need to spend our way to prosperity!
I wish Tyler would put up a global debt-per-citizen chart so we can discuss the global sovereign debt crisis.
Blah, blah, blah...when are the fireworks going off?
MOAR Debt! yes of course... and people like me.. who refuse to go into it are the problem!
hey, look over there, it's your future!! and it's gone....
Don't we have a "no debt "tax ....
Negative interest rates is just inflation by other means. End result is the same just going at it in an inverse manner is all. If it was a stocastic matrix this guarantees probability wise a black hole effect with all the 'currency', 'money', 'hold of all the debt notes' eventually winding back up at the FED.
The system is circularly skewed for the same outcome. It is one giant infinite swirl around the toilet bowl moving faster and faster as circumference gets smaller and smaller until it converges at the singularity 0 aka it ain't worth shit.
It ain't worth shit because it's all based on the Bankruptced Criminal UNITED STATES, CORP INC. Emergency Banking Act of 1933 which put us into receivership to the IMF, World Bank, BIS & City of London BANKSTERS.
14th Amendment Citizen Slaves.
Time for a bigger piggy bank at home.
Saving more, spending less is my motto.
"This suggests a weakening in USD dollar index should take place very soon."
Really?
the whole article suggests cluelessness
+100
'Very soon' should be taken with a grain of salt. The speed at which the $USD could see it's unwind however, could and likely will, leave quite a few at a loss - figuratively, if not $Literally. Supremacy of the $dollar today should be taken with an extreme amount of caution and skepticism, given at the very least, the current deteriorating geopolitical environment that is already trending Away from the $dollar.
Negative interest rates make my head hurt, kind of like imaginary numbers did in my controls class.
Never before in history has anything been done, like what Banksters Inc. is leading us in to. They believe that they are the masters of all things financial and can control the system forever.
It will get out of control and it will be very, very ugly.
Put your helmet on!
Last time I looked into this "fiat currency" thing, it became pretty clear that ours is definitely backed by assets - yours, mine and those of every other subject living under federal imperial rule.
LOL, unfortunately all of my hard assets were lost in a terrible boating accident...
They should rename ZH to Accidents Anonymous.
THINKING ~ In today's terms... Needs to be akin to judicious use of a SELECTIVE FIRE assault rifle...
In the end, as always, it's all about the ammo & the targets...
Old world proverb, live by sword, die by sword.
Golden Age Comic Books...bitchez !!!!
Spider-man # 1 !
The Bankruptcy of The United States
United States Congressional Record, March 17, 1993 Vol. 33, page H-1303
Speaker-Rep. James Traficant, Jr. (Ohio) addressing the House:
"Mr. Speaker, we are here now in chapter 11.. Members of Congress are official trustees presiding over the greatest reorganization of any Bankrupt entity in world history, the U.S. Government. We are setting forth hopefully, a blueprint for our future. There are some who say it is a coroner’s report that will lead to our demise.
It is an established fact that the United States Federal Government has been dissolved by the Emergency Banking Act, March 9, 1933, 48 Stat. 1, Public Law 89-719; declared by President Roosevelt, being bankrupt and insolvent. H.J.R. 192, 73rd Congress m session June 5, 1933 - Joint Resolution To Suspend The Gold Standard and Abrogate The Gold Clause dissolved the Sovereign Authority of the United States and the official capacities of all United States Governmental Offices, Officers, and Departments and is further evidence that the United States Federal Government exists today in name only.
The receivers of the United States Bankruptcy are the International Bankers, via the United Nations, the World Bank and the International Monetary Fund. All United States Offices, Officials, and Departments are now operating within a de facto status in name only under Emergency War Powers. With the Constitutional Republican form of Government now dissolved, the receivers of the Bankruptcy have adopted a new form of government for the United States. This new form of government is known as a Democracy, being an established Socialist/Communist order under a new governor for America. This act was instituted and established by transferring and/or placing the Office of the Secretary of Treasury to that of the Governor of the International Monetary Fund. Public Law 94-564, page 8, Section H.R. 13955 reads in part: "The U.S. Secretary of Treasury receives no compensation for representing the United States?’
Gold and silver were such a powerful money during the founding of the united states of America, that the founding fathers declared that only gold or silver coins can be "money" in America. Since gold and silver coinage were heavy and inconvenient for a lot of transactions, they were stored in banks and a claim check was issued as a money substitute. People traded their coupons as money, or "currency." Currency is not money, but a money substitute. Redeemable currency must promise to pay a dollar equivalent in gold or silver money. Federal Reserve Notes (FRNs) make no such promises, and are not "money." A Federal Reserve Note is a debt obligation of the federal United States government, not "money?’ The federal United States government and the U.S. Congress were not and have never been authorized by the Constitution for the united states of America to issue currency of any kind, but only lawful money, -gold and silver coin.
It is essential that we comprehend the distinction between real money and paper money substitute. One cannot get rich by accumulating money substitutes, one can only get deeper into debt. We the People no longer have any "money." Most Americans have not been paid any "money" for a very long time, perhaps not in their entire life. Now do you comprehend why you feel broke? Now, do you understand why you are "bankrupt," along with the rest of the country?
Federal Reserve Notes (FRNs) are unsigned checks written on a closed account. FRNs are an inflatable paper system designed to create debt through inflation (devaluation of currency). when ever there is an increase of the supply of a money substitute in the economy without a corresponding increase in the gold and silver backing, inflation occurs.
Inflation is an invisible form of taxation that irresponsible governments inflict on their citizens. The Federal Reserve Bank who controls the supply and movement of FRNs has everybody fooled. They have access to an unlimited supply of FRNs, paying only for the printing costs of what they need. FRNs are nothing more than promissory notes for U.S. Treasury securities (T-Bills) - a promise to pay the debt to the Federal Reserve Bank.
There is a fundamental difference between "paying" and "discharging" a debt. To pay a debt, you must pay with value or substance (i.e. gold, silver, barter or a commodity). With FRNs, you can only discharge a debt. You cannot pay a debt with a debt currency system. You cannot service a debt with a currency that has no backing in value or substance. No contract in Common law is valid unless it involves an exchange of "good & valuable consideration." Unpayable debt transfers power and control to the sovereign power structure that has no interest in money, law, equity or justice because they have so much wealth already.
Their lust is for power and control. Since the inception of central banking, they have controlled the fates of nations.
The Federal Reserve System is based on the Canon law and the principles of sovereignty protected in the Constitution and the Bill of Rights. In fact, the international bankers used a "Canon Law Trust" as their model, adding stock and naming it a "Joint Stock Trust." The U.S. Congress had passed a law making it illegal for any legal "person" to duplicate a "Joint Stock Trust" in 1873. The Federal Reserve Act was legislated post-facto (to 1870), although post-facto laws are strictly forbidden by the Constitution. [1:9:3]
The Federal Reserve System is a sovereign power structure separate and distinct from the federal United States government. The Federal Reserve is a maritime lender, and/or maritime insurance underwriter to the federal United States operating exclusively under Admiralty/Maritime law. The lender or underwriter bears the risks, and the Maritime law compelling specific performance in paying the interest, or premiums are the same.
Assets of the debtor can also be hypothecated (to pledge something as a security without taking possession of it.) as security by the lender or underwriter. The Federal Reserve Act stipulated that the interest on the debt was to be paid in gold. There was no stipulation in the Federal Reserve Act for ever paying the principle.
Prior to 1913, most Americans owned clear, allodial title to property, free and clear of any liens or mortgages until the Federal Reserve Act (1913)
"Hypothecated" all property within the federal United States to the Board of Governors of the Federal Reserve, -in which the Trustees (stockholders) held legal title. The U.S. citizen (tenant, franchisee) was registered as a "beneficiary" of the trust via his/her birth certificate. In 1933, the federal United States hypothecated all of the present and future properties, assets and labor of their "subjects," the 14th Amendment U.S. citizen, to the Federal Reserve System.
In return, the Federal Reserve System agreed to extend the federal United States corporation all the credit "money substitute" it needed. Like any other debtor, the federal United States government had to assign collateral and security to their creditors as a condition of the loan. Since the federal United States didn’t have any assets, they assigned the private property of their "economic slaves", the U.S. citizens as collateral against the unpayable federal debt. They also pledged the unincorporated federal territories, national parks forests, birth certificates, and nonprofit organizations, as collateral against the federal debt. All has already been transferred as payment to the international bankers.
Unwittingly, America has returned to its pre-American Revolution, feudal roots whereby all land is held by a sovereign and the common people had no rights to hold allodial title to property. Once again, We the People are the tenants and sharecroppers renting our own property from a Sovereign in the guise of the Federal Reserve Bank. We the people have exchanged one master for another.
This has been going on for over eighty years without the "informed knowledge" of the American people, without a voice protesting loud enough. Now it’s easy to grasp why America is fundamentally bankrupt.
Why don’t more people own their properties outright?
Why are 90% of Americans mortgaged to the hilt and have little or no assets after all debts and liabilities have been paid? Why does it feel like you are working harder and harder and getting less and less?
We are reaping what has been sown, and the results of our harvest is a painful bankruptcy, and a foreclosure on American property, precious liberties, and a way of life. Few of our elected representatives in Washington, D.C. have dared to tell the truth. The federal United States is bankrupt. Our children will inherit this unpayable debt, and the tyranny to enforce paying it.
America has become completely bankrupt in world leadership, financial credit and its reputation for courage, vision and human rights. This is an undeclared economic war, bankruptcy, and economic slavery of the most corrupt order! Wake up America! Take back your Country."
Would love to see any rebuttle to this.
Why? The uprising is the rebuttal.
There is none. We're functioning under Fraud.
Your post was another example of how some of the comments are often better than the original article.
Thanks for posting this, but since any graph I see shows no change in behaviour after 1993, I am not holding out for any change.
Not sure what to do beside a Lagavulin
No. If other major economies decline faster the dollar index could still go up - even if US GDP declines.
this is is what "democracy"/fascism looks like.
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letterman monologue.
https://grabien.com/file.php?id=39599&searchorder=date
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Guns and Butter
"Voting Machines: Computerized Election Theft" with Jonathan Simon
https://www.kpfa.org/archive/id/112191
.
"We The People, the first three words of the U.S. Constitution, enshrine the fundamental concept that the people are sovereign in the American republic.
The American Declaration of Independence tells us Sovereignty in a Republic belongs to the people, who create the government and give it legitimacy. The current federal government has forgotten who has Sovereignty.
- “It’s Our Sovereignty Not Theirs, Stupid”". c.b.
- See more at: http://www.bollyn.com/electronic-voting/#sthash.kjaEt5Mv.dpuf
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"It is enough that the people know there was an election. The people who cast the votes decide nothing. The people who count the votes decide everything.
Joseph Stalin"
Read more at http://www.brainyquote.com/quotes/authors/j/joseph_stalin.html#8qdhIvZez...
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gold and silver sound real good to me too/
Wish I knew more about currencies, but based on the article and comments, seems Italian carmaker Fiat is aptly named, coming in dead last in Consumer Reports' "Reliability" survey last year. When I keep it simple, this all begins to make sense ...
#Which Bank will go under next?
Banks Credit Default Swaps
List here:
http://cds-info.com/
Fiat currency is simply a wealth hoovering mechanism for the rich.
Read "The Road".
The American government estimated the American population will be lower in 2025. There aren't too many ways that could happen..
We must be Financial Warriors since any funds we have are Targets of Wall Street Pirates.
But people that look at what Fiat is, a Reserve Currency is, USD is, and what Money is... they forget to look at Power.
We have many Power Players on VICHY Madison Avenue, VICHY K Street, VICHY DC Congressmen, and VICHY Wall Street.
I'm no expert.
But we can produce a long list of how Corporate Powers and Wealthy Powers have taken over the US Congress.
And we know now that all US Markets are Fixed under the justification that it is crucial for the Petro Dollar, the US Currency, US Super Power Status, the US as a Financial Super Power, for stability of a complicated Financial and Banking System who has too many linkages... that banks are too Linked together to ever let them fail.
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Bail-Outs are Corruption -
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All bailouts benefit the corporations that were bad Capitalists.
Kapitalismus Totet oder Toten.
Capitalism where Corporations and Banks are Protected is probably an old Europe thing that just came to the USA in 2009. But it is not Capitalism.
It is Fascism, Inverted Totalitarianism, or Corporate Socialism.
Bailouts are for the Elites. Start a business you are a target of the Banks and Wall Street. You don't get a Bailout.
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Bail-Outs are Corruption -
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Power.
We have to defend ourselves and become Financial Warriors to protect against Debt, heavy taxes, heavy financial charges, heavy interest rates for credit, and heavy student debt.
Now the power is held by Giant Corporations that push for war and for Bailouts and for federal subsidies... We are in the midst of a huge Transfer of Taxpayer money to Giant Corporations... Healthcare, Education, Housing, Credit Cards, MIC Industries, Intelligence Industries, Private Prisons, Private Security, and huge compensation and looting by US Executives.
Nothing serious though if you are numb.
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Bail-Outs are Corruption -
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"any funds we have are Targets of Wall Street Pirates."
So Wall Street taxes you, not your own Gov.? We need to tax the rich, is that the solution? You didn't build that belief on your own, it was given to you by the system that is deperately trying to maintain power.
What a tool. Invest in <paper> AN79......or ETFs? You fool, you've just suggested one inject counter-party risk into the only asset that has no such thing. Why? Stupid or Deceptive are the only two choices.......Pick One, but don't come back as it matters not since we here at the Hedge do not suffer either well.
https://aadivaahan.wordpress.com/2015/03/16/and-the-gift-keeps-on-giving...
And the gift keeps on giving…..
MARCH 16, 2015
Which is why folks think Musk is smart - he's dumb, stoned
There will be no American revolution. The police have congealed and solidified their dominance, the president has an internet "kill-switch" and without communication, there is nothing to unify the populace. Sporadic, flash-in-the-pan type attacks may occur but they will be relatively meaningless. All this can only end by an invading force, a coup d'etat that first takes out the main girders that underpin the American government. That will be no easy feat as there are four layers of government that every american is subject to (Federal, State, County and Local). All of these entities have their own enforcement branches that together, are undefeatable. No, it will take a major nuclear or biological attack to take down America. Its people would have to be eliminated; its defenders. I'd give it a 10% chance to happen by 2050. I fully expect that this slog through time will continue.
Though I agree with the author's reasoning, my thinking has always been flawed by the basic belief that there are limits to federal power and authority. Time and again, they do things no-one would have believed possible, and yet they are quickly accepted by the markets because they control everything and have unlimited funding. Why not an elaborate "Ken Lay" style system of buying and selling between favored entities to give the appearance of a functioning economy? I know this is pretty far out, but Ken Lay almost got away with it and Bernie Madoff did too. There may be others we don't know about. What would prevent this from happening? For example, I find Apple's performance hard to believe.