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They Are "Undermining People's Trust In Their Money"

Tyler Durden's picture




 

Submitted by James H. Kunstler via Kunstler.com,

It’s not what most people think: a return to some hypothetical “normality,” with the ghost of Ronnie Reagan beaming down like a sun-god under his lopsided pompadour, and all the happy self-driving GM cars toodling back and forth from WalMart-to-home loaded to the scuppers with new electric pop-tart warmers and 3-D underwear printers. (Or drone deliveries of same from Amazon.com.)

I mean, surely the thinking folk out there must be asking themselves: what is the way out of this Federal Reserve three-card-monte, one-percenter-stuffing, so-called “economy,” and what is the destination of this society when that mendacious model for living fails?

I digress for a moment: there was a chap named Richard Duncan on the pod-waves this weekend (FSN Network) putting out the charming idea that quantitative easing (QE — governments “printing” money to buy their own bonds) had the effect of “cancelling debt” and that it could continue for decades to come. I don’t doubt that there are Federal Reserve officers who believe this. The part they leave out — and Mr. Duncan also left it out until pressed — is that there are consequences. Consult the operating manual of the universe, and you will find that there really is no free lunch or get-out-of-jail card.

The truth is, when you rig a money system with price interventions, distortions, and perversions, they will eventually express themselves in ways destructive to the system. In the present case of world-wide QE and central bank monkey business, these rackets are expressing themselves, finally, in wobbling currencies. In many nations, people are deeply unsure of what their money is worth, and how much it might be worth a month from now. This includes the USA, except for the moment our money is said to be magically appreciating in value compared to everyone else’s. Aren’t we special?

Get this: nothing is more hazardous than undermining people’s trust in their money.

All of this financial perfidy conceals the basic fact that the human race has reached the limits of techno-industrialism. There are too many people and not enough basic resources to grow more of them — oil, fishes, soil, ores, fertilizers — and there is no steady-state “solution” to keep that economy going. In other words, it must either grow or contract, and it can’t really grow anymore (despite the exertions of government statisticians), so the authorities are trying to provide a monetary illusion of growth, when instead we’re in contraction.

Yes, contraction. The way out is to get with the program, shed the dead-weight and go where reality wants to take you. In the USA that means do everything possible to quit supporting giant failing systems — Big Box shopping, mass motoring, GMO agribiz, TBTF banks — and get behind local Main Street integrated economies, walkable towns, regular railroads, smaller and more numerous farms, local medical clinic health care, artistry in public works, and community caretaking of the unfit. All this surely implies a reduced role for the national government, and maybe the states, too. You could call it a lower standard of living, or just a different way to live.

I don’t think we’ll go there via rational political discourse. The current instabilities around the world are so sinister that they are liable to lead to even more strenuous efforts at the top to pretend that everything’s working, and even war is one way to pretend you’re okay (and the “other guy” isn’t). Of course, war has already broken out, in the MidEast and Ukraine, and it has everything to do with the sequential failure of nations, in one way or another, to overcome the limits of techno-industrialism. America will be dragged kicking and screaming to the realization of what it needs to do. The 2016 election will be the convulsion point.

 

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Mon, 03/30/2015 - 11:11 | 5941941 FieldingMellish
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The Fed can't change the weather so they fiddle with the barometer. Sunny and blue skies as far as the eye can see.

Mon, 03/30/2015 - 11:20 | 5941968 kaiserhoff
kaiserhoff's picture

When the negative interest rates get to -10%, I'm buying the whole county.

Not what the banksters had in mind.  They really are profoundly stupid.

Mon, 03/30/2015 - 12:40 | 5942253 metastar
metastar's picture

Fiat money economy is a poisoned fish bowl in which we are trapped. Even kings could not print their own money. At least then the slaves realized their position and would revolt against it.

Mon, 03/30/2015 - 13:28 | 5942518 KnuckleDragger-X
KnuckleDragger-X's picture

We have no faith and they have no credit but the con game continues. At some point no matter how loud the line of bullshit, people will stop playing and it all falls apart, then we'll rebuild and the game will start over again. This is basically the same history civilization has refused to learn from for thousands of years....

Mon, 03/30/2015 - 14:53 | 5942887 TheShadowKnows
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"This is basically the same history civilization has refused to learn from for thousands of years...."

Civilization. Maybe that's our biggest mistake. Those uncivilized barbarians who ran this place before the civilized Uropeons got here had a money system for god knows how many thousands of years that never got depreciated ... well, until the civilized Uropeons got their hands on it.

http://www.hartford-hwp.com/archives/41/037.html

 

Mon, 03/30/2015 - 15:00 | 5942919 KnuckleDragger-X
KnuckleDragger-X's picture

Like I've said before, if you follow politics left or right out to their logical end point, you hit dictatorship. If you follow Libertarianism out you reach anarchy and at this point I'm ready to give it a try.....

Mon, 03/30/2015 - 19:35 | 5943860 TheShadowKnows
TheShadowKnows's picture

I'd rather skip the libertarian part as they're just as co-opted as the right and left, so it would probably be better to cut out the middle and go straight to anarchy. As far as I can see, its about the only thing we haven't tried.

Oh, and maybe throw all the fiat to the four winds (or burn it to keep warm on a cold winter's night) and learn to carve shells or something similar to use for trade, something that can't be monopolized.

Mon, 03/30/2015 - 15:08 | 5942952 nailgunnin4you
nailgunnin4you's picture

What is old jewey mcjewerson cuntsler crying about now?

Mon, 03/30/2015 - 11:20 | 5941969 Magnix
Magnix's picture

Yes, there is an EXIT - move out to Costa Rica!

Mon, 03/30/2015 - 11:51 | 5942084 Urban Roman
Urban Roman's picture

I thought the 2008 election was supposed to be the convulsion point.

Mon, 03/30/2015 - 11:12 | 5941942 lordylord
lordylord's picture

nothing is more hazardous than undermining people’s trust in their money

Actually, nothing would be more beneficial than people realizing their misplaced trust in the government's money.

Mon, 03/30/2015 - 13:22 | 5942482 PTR
PTR's picture

That's the plan, supposedly.  Let them all fail, fabricate/manipulate the stories why, then offer an alternative based on a more sturdy and precious-metals-backed SDR currency.

Oh, by the way, it's all electronic and it's the only choice they're handing you.

 

So undermining trust has a silver lining for those that want it to be that way.

Mon, 03/30/2015 - 11:12 | 5941946 astoriajoe
astoriajoe's picture

" you will find that there really is no free lunch or get-out-of-jail card."

No one goes to jail, so no need for the card.

Mon, 03/30/2015 - 11:20 | 5941965 Temporalist
Temporalist's picture

Why send anyone to jail when you can choke them out for selling loose cigarettes?  Or shoot them?  Or beat up their grandparents in their own home and shoot their pets?  Or listen to their conversations and read their emails?  Or know where they are and where they are headed at all times? 

Mon, 03/30/2015 - 11:46 | 5942061 HowdyDoody
HowdyDoody's picture

Or just shoot them and plant a loose cigarette on them. That's got to be cheaper than planting a gun.

Mon, 03/30/2015 - 11:39 | 5942032 ...out of space
...out of space's picture

to me looks like banks destroying economy on purpose. in the  last 100 years they did it 3 times allready

Mon, 03/30/2015 - 11:13 | 5941947 Ancona
Ancona's picture

The end of empire is always painful, and we're about to be in a hell of a lot of pain.

Mon, 03/30/2015 - 11:14 | 5941952 Seasmoke
Seasmoke's picture

Barter pays. 

Mon, 03/30/2015 - 11:15 | 5941956 pods
pods's picture

People have zero fucking clue about money anymore.  Magic bits stored on a machine somewhere. Good for the moneychangers/government as they can skim and you see nothing.

I think James has it wrong though.  We have reached debt saturation, not a lack of resources.
The only lack of resources we have is a lack of resources to keep exponentially growing.

And we will never try to implement any sort of sustainability as that by definition is anathema to our current monetary system.

There are literally tons of ways to out of this as a species. Just none of them will have any effect if the world keeps trying to grow exponentially.  

pods 

Mon, 03/30/2015 - 11:29 | 5941994 Dr. Richard Head
Dr. Richard Head's picture

I agree. I stopped reading at the peak resource piece.  A great example that we are NOT in peak resources is the amount of food that is thrown away into our landfills every year.  The allocation of resources is the biggest issue and those most closely associated with bond laundering or money printing are getting the concentration of those resources with their magical money printing game.  This too shall pass...at least that is my blind hope.

Mon, 03/30/2015 - 12:31 | 5942223 Usurious
Usurious's picture

 

 

 

''Life is entering backwardation where promises to deliver in the future are worth less than real things now. ''--trav7777

Mon, 03/30/2015 - 13:02 | 5942375 SeattleBruce
SeattleBruce's picture

That truly is the real economy vs. the fake/illusory one, which was also referred to nicely in the article.

Mon, 03/30/2015 - 11:17 | 5941958 logicalman
logicalman's picture

Haven't trusted fiat for quite a while, personally, but it's hard to avoid, given it is backed by the full force of government.

 

Mon, 03/30/2015 - 11:17 | 5941959 kaiserhoff
kaiserhoff's picture

Peak government.

Coming soon to a planet near you.

Mon, 03/30/2015 - 12:46 | 5942276 i_fly_me
i_fly_me's picture

"Peak government." That is definitely the way to think about this.  It is government that is in a bubble, allocating resources irrationally. The popping of that bubble will free many of those resources to flow to where they are most needed.

Mon, 03/30/2015 - 11:20 | 5941963 oddjob
oddjob's picture

Common sense undermines trust in paper notes backed by debt.

Mon, 03/30/2015 - 11:29 | 5941995 City_Of_Champyinz
City_Of_Champyinz's picture

I for one am looking forward to the $10,000,000 bill.  That will be something...

Mon, 03/30/2015 - 12:08 | 5942156 mtl4
mtl4's picture

You'll be lucky to see cash at all in a few years......

Mon, 03/30/2015 - 11:30 | 5942000 Rehab Willie
Rehab Willie's picture

Fake it till you Make it, or until it blows up in your face.

Mon, 03/30/2015 - 11:30 | 5942002 NoWayJose
NoWayJose's picture

Amazingly, the utopian 'walkable towns' scenario existed in the United States until about 1964, when we went off the 'silver standard' for our coins.  There were family farms, crafstmen, mom-and-pop hotels and grocery stores, etc.  It's almost as if the United States hit its zenith at that time -- a 'climax forest' in ecological terms -- and except for a few short periods of time, things have gone downhill since, along with a huge growth in debt.

Mon, 03/30/2015 - 12:25 | 5942202 overmedicatedun...
overmedicatedundersexed's picture

nowayjose, jfk shot, follow the change in the USA from then on..his own brother ted led the charge for wide open borders another symptom of our fall from what little freedom the ave citizen had..we now got rain taxes in MD and not one peep from the sheep. also in md we got kings men making sure the king's fish are not taken without a bribe er license.

Mon, 03/30/2015 - 11:32 | 5942008 blindman
blindman's picture

people who trust their illusions
are always disabused of them due to no
fault of the dissemblers.

Mon, 03/30/2015 - 11:36 | 5942022 robobbob
robobbob's picture

its not necessarily the end of techno-industrialization. there are billions upon billions of people without clean water, food, and electricity, let alone i-crap.

its the end of debt based economics: stealing tomorrows growth to use today, and the end of the Central/Planner/Banker knows best five year planning.

water, food, oil are just technological obstacles. obstacles that TPTB require to remain in place for the sake of their power structure. malthus was right, up to a point. as bearing limits are approached, humans have this pesky habit of being very resourceful, if they're not artificially held back or misdirected.

Mon, 03/30/2015 - 11:37 | 5942027 pashley1411
pashley1411's picture

The financial markets are just another price indicator and allocator of resources, and simply another place where "Our Masters" set a more socially-useful price than the current one; whatever is the current price, whatever is the new price.    And then we will have gone full Soviet.  

Then we have runs on toilet paper.    And then we find new enemies to blame.

Mon, 03/30/2015 - 11:48 | 5942051 Quinvarius
Quinvarius's picture

Anyone who still trusts gov/bank paper is going all the way down with the ship no matter what evidence is provided to them.  They will never change their opinion.   It is best not to Care. 

Mon, 03/30/2015 - 11:54 | 5942100 Bill of Rights
Bill of Rights's picture

The economy must really be going in the dumpster, the Puppet masters are maneuvering the Marionettes around the stage looking for distractions. IE: A Terrorist in every backyard and Gunz, Gunz, Gunz....oh and the aforementioned " Were all gonna die " save us oh dear leaders! save us~

MSNBC: Police Lives In Danger Because Of Armed Law-Abiding Citizens

http://www.breitbart.com/big-journalism/2015/03/29/msnbc-police-lives-in...

Mon, 03/30/2015 - 12:45 | 5942270 Katastrofenhausse
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"Oppressors can tyrannize only when they achieve a standing army, an enslaved press, and a disarmed populace... Crisis is the rallying cry of the tyrant." -James Madison

Mon, 03/30/2015 - 12:54 | 5942321 RMolineaux
RMolineaux's picture

Very perceptive observations by Kunstler.  Archeology suggests that civilizations go from peak monuments on grand scale to smaller but more numerous settlements.  This may occur globally as we find, indeed, that resources are growing ever more scarce and difficult to extract.  Are we already past the point of sustainability, and violence the only answer?  Only time will tell.  We need inspired leadership. Where is it?

Mon, 03/30/2015 - 13:03 | 5942377 Homer E. Rectus
Homer E. Rectus's picture

I haven't noticed a lack of trust in money yet here in the kansas area. I don't see why the Fed can't just continue with the printing for decades like was said. I used to think it couldn't, and I bought hard assets. Only then, after I lost my ass, did I learn that THOSE asset prices are manipulated too! Nobody outside websites like this have any idea what's going on. They think the economy is in recovery and Obama And the fed (if they even know what the fed is!) are doing a good job. Appearence IS reality, so why can't that reality continue?

Mon, 03/30/2015 - 21:48 | 5944213 thecrud
thecrud's picture

Everyone I have ever met still wants it. Anyone who no longer wants theirs can feel free to box it up and send it to me.

Mon, 03/30/2015 - 13:04 | 5942388 RMolineaux
RMolineaux's picture

Commentator Dan Norcino, writing on traderdan.com and kitco commentary, reports on remarks by the Atlanta Fed president to the effect that, yields on 10 year treasury notes being below 2 percent, it is an opportune time for the Fed to start unloading some of its long-term holdings.  This can be done quietly, without public announcement.  This could be the beginning of a needed, long-term process to bring the Fed's balance sheet back to something closer to rational, and would facilitate the process of reducing excess reserves to a level that can be used effectively for monetary policy.

Mon, 03/30/2015 - 13:51 | 5942618 kelley805
kelley805's picture

Here is how to get back to normal even though it has been a while.

http://michaelekelley.com/2015/03/27/the-kelley-monetary-policy-rule/

 

If this rule is not followed, then here is how to prepare for the worse.

http://michaelekelley.com/2014/10/16/8-things-to-do-when-recession-happens/

 

Thanks

Mon, 03/30/2015 - 14:10 | 5942689 Homer E. Rectus
Homer E. Rectus's picture

Artistry in public works? Do you mean graffiti? There is plenty of that in Wichita. I don't see us all joining the kaputz kibbutz any time soon.

Mon, 03/30/2015 - 15:24 | 5943023 kchrisc
kchrisc's picture

"They Are "Undermining People's Trust In Their Money"

Even more ludicrous is the idea that we must repay to them what they have stolen from us.

In a fraudulent-reserve banking ponzi-system, the so-called debts manufactured with fiat represents, is, wealth stolen from us.

Th banksters need to repay us.

 

"Well Mr. Bankster, I will need your head as collateral on what you stole from me before I can continue paying on what you say I owe you."

Mon, 03/30/2015 - 16:09 | 5943240 ersatz007
ersatz007's picture

even more absurd - we would like you to remit taxes in the form of federal reserve notes - those same notes that were loaned to the gov't with interest that is paid for by the federal reserve notes you remit in the form of taxes.  

Mon, 03/30/2015 - 17:20 | 5943474 kchrisc
kchrisc's picture

Recursive theft.

The banksters need to repay us.

 

I'm working on a recursive guillotine.

Mon, 03/30/2015 - 16:53 | 5943400 DonGenaro
DonGenaro's picture

The 2016 election will have all the effect of a tick fart in a hurricane

Mon, 03/30/2015 - 21:45 | 5944202 thecrud
thecrud's picture

Though the Republicans went ape shit ove a black winning twice wait till Hillary wins.

You Luck she will have Bill to tell faux to get bent.

Mon, 03/30/2015 - 21:43 | 5944194 thecrud
thecrud's picture

My best guess is it will cost you 100,000 to give away your 500,000 house.

This my friends is where the rubber will indeed meet the road.

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