America Needs A Good, Old-Fashioned Economic Depression

Tyler Durden's picture

Submitted by Jay Kawatsky via The National Interest,

Artificial measures to stave off a downturn will only make it much worse.

Describing what he called the “crack-up boom”, Ludwig von Mises, the great Austrian economist, said:

The boom cannot continue indefinitely. There are two alternatives. Either the banks continue the credit expansion without restriction and thus cause constantly mounting price increases and an ever-growing orgy of speculation – which, as in all other cases of unlimited inflation, ends in a “crack-up boom” and in a collapse of the money and credit system.

 

Or the banks stop before this point is reached, voluntarily renounce further credit expansion, and thus bring about the crisis. The depression follows in both instances. (emphasis added)

Although it would be the wiser policy, there is no evidence that the world’s central bankers have the wisdom, either individually or collectively, to select the second alternative. More specifically, they lack “the courage to act” (as Ben Bernanke’s recent, self-congratulatory memoir was so ironically titled); they and their political, big finance and big business cronies are afraid to swallow the “d-pill”, the economic medicine named “depression”.

A good, old-fashioned, pre-1929 depression (like the short-lived, eleven-month depression in 1920-1921, before the days of “modern” central banking and “enlightened” Keynesian intervention “cures”) is the only tonic that can clear out the malinvestment built up since the beginning of the fiat money era. That era began in August of 1971. That is when Richard Nixon, informed that U.S. gold reserves were precipitously declining as a result of President Johnson’s March 1968 action to reduce the gold reserve ratio from 25 percent to zero, “temporarily” suspended the convertibility of the U.S. Dollar into gold. That “temporary” measure has been in effect for forty-five years.

Finally freed from the constraints of what they could not print (i.e., gold), central bankers and their cronies in government, finance and big business were given a license to debase all formerly hard currencies. (Such currencies were “hard”, as they were linked, via the Bretton Woods arrangement, to the dollar, which was backed by gold.) And debase they did: they replaced real investment capital (i.e. actual savings) with cheap, invented credit; they replaced market-derived price (of money) discovery, i.e., market-derived interest rates, with central-bank-proclaimed interest rates.

The actions of central bankers to suppress real price discovery (i.e., market-derived interest rates) now has led to nearly $12 trillion of sovereign debt having been issued with interest rates below zero (“NIRP”, or “negative interest rate policy”). That means that more than one third of all sovereign debt worldwide now carries negative interest rates.

That nearly $12 trillion total includes $3.2 trillion of short-term sovereign debt and $8.5 trillion of long-term sovereign debt. The total NIRP debt is up $1.3 trillion from the end of May. Even more astounding is that the total amount of negative-yielding debt with maturities of seven years or longer has ballooned to $2.6 trillion. That is nearly double just since April of this year. In fact, all of the debt issued by the Swiss government - every borrowed franc, even Swiss fifty-year bonds - now carries a negative yield. All of the debt issued by the Japanese government (JGBs) with maturities up to twenty years now carries a negative yield.

Imagine lending money to anyone, even the Swiss government, for fifty years, ultimately getting back less than you loaned … and paying for the privilege! What such an investor has to believe, in order to make such a loan, is that inflation over the next fifty years will be substantially negative (i.e., a great, and long-lasting deflation), with the result that the purchasing power of the Swissie will increase substantially over the next fifty years. But every major currency on the planet, including the US dollar, the British pound, the Japanese yen and the Euro/DM, has lost purchasing power over the last forty-five years (since the end of Bretton Woods).

Without some form of scarce commodity backing (e.g., precious metals) for currencies, why would anyone, particularly sovereign bond investors, believe that currency units, which can be conjured at will from thin air (not a scarce commodity) by desperate governments, will be worth more, not less, over the next fifty years? But believe it they do, proving that, at least with respect to high finance (better named low-IQ finance?), you can fool all of the people (the investment public) all of the time.

NIRP simply never could exist in a real-money world, where credit, like all commodities, is scarce and must be rationed by the market. But European Central Bank chief Mario Draghi, with the implicit and explicit assent of all the world’s central bankers and the urging of their cronies in government, finance and big business who get “first crack” at the conjured money, has reiterated over and over that there would be “no limits” to what he and the ECB might do with respect to printing money and further reducing interest rates. (No wonder the workaday citizens of Great Britain voted overwhelmingly for Leave.)

ZIRP and NIRP certainly have well served the central banks and their crony political, finance and big business elite masters (the top 1 percent of the top 1 percent). Money printed by central banks ex nihilo (out of nothing) has poured into the world’s stock markets, fueling stock buybacks that enrich big-business management via soaring stock-options values. Money printed by central banks has fueled an auto-loan bubble, with total auto debt now more than $1 trillion. Money printed by central banks has fueled the rapid increase in student debt that either will enslave American youth, preventing most from participating in the “American Dream” of home ownership and a reasonable retirement, or turn them into rabid supporters of socialist politicians (e.g., Bernie Sanders) who promise to absolve them of their unpayable debts.

But the central bankers’ ability to defy economic gravity may, at long last, be coming to an end. Even the radical Keynesian, Richard Koo has recognized the outrage of NIRP, which he recently described as “an act of desperation born out of despair over the inability of quantitative easing and inflation targeting to produce the desired results… the failure of monetary easing symbolizes crisis in macroeconomics."

The failure of ZIRP, QE and now NIRP is easy to see from recent corporate earnings reports and associated PE multiples: As of close of trading on Friday, July 1, 2016, the S&P 500 was trading at 24.3 times earnings over the last twelve months, close to an historical record high PE multiple. Generally (meaning before fiat money), elevated PE multiples were notched during times of increasing earnings. But for the first fiscal quarter of 2016 (FQE 3/31), S&P 500 earnings per share were only $87. That is 18 percent less than the $106-per-share earnings peak reported for the third quarter (FQE 9/30) of 2014. If money printing and central-bank-dictated interest rates were the saviors of the real economy, and if the United States were actually experiencing a real economic recovery, corporate earnings would be increasing, not declining precipitously.

Interestingly, the first quarter 2016’s $87 per share earnings were eerily equivalent to the $85 earnings per share for the last twelve months just preceding the 2008 crash. And the S&P 500 multiple was only 18.4 at that time. So stocks have a long way to fall from their elevated current levels, levels only reached as a result of share buybacks (artificially increasing earnings per outstanding share and increasing per share prices), which buybacks were (and continue to be) fueled by relentless near-ZIRP maintained by the U.S. Federal Reserve, as well as so-called “carry-trade” borrowings in currencies with NIRP (such as the Japanese yen).

The failure of ZIRP, QE and now NIRP also is easy to see from recent corporate sales reports: According to the most recently updated Inventories to Sales Ratio compiled by the Federal Reserve Bank of St. Louis, the inventory to sales ratio is hovering at 1.35, just below the highest recorded (1.41 in January of 2009) in over twenty years. That ratio exploded higher (meaning unsold goods are piling up) every quarter since the end of the second quarter of 2014. If money printing and central bank-dictated interest rates were the saviors of the real economy, and if the United States were actually experiencing a real economic recovery, inventories would not be languishing unsold on the shelves of suppliers and merchants. Workers with higher pay checks would be consuming them.

Which brings us to perhaps the easiest way to understand the failure of ZIRP, QE and now NIRP: the labor market. Contrary to the claims of the Obama administration’s Bureau of Labor Statistics’ headline unemployment numbers (which counts job slots, so that a part-time gig is the equivalent of a forty-hour-per-week career job paying over $50,000 per year), there is not more work being done in America. There actually is less, as former full time jobs (with benefits) have been, and continue to be, replaced with more part-time, lower paying jobs (without benefits). Indeed, as former OMB chief David Stockman has instructed, the number of what can be called “breadwinner jobs”, which are jobs that can support a family of four, is now almost one million below the number of such jobs in the year 2000. If money printing and central bank-dictated interest rates were the saviors of the real economy, and if the United States were actually experiencing a real economic recovery, there would be more “breadwinner jobs” now than in 2000, when the population was considerably lower.

The crack-up boom, fueled by fiat money, QE, ZIRP and now NIRP, is coming. It will hit on a global scale, and “rock the casbah” (and all points north, south, east and west thereof). It will make the Great Depression look like a picnic party in the park. Why will it be worse? Consider just two simple facts: first, supply chains are much longer and considerably more intricate than eighty-five years ago. As they fail (due to bankruptcies and business failures of those in the chain), basic necessities will not get to those in need of them. Second, compared to eighty-five years ago, the world has billions more mouths to feed, and many fewer people, including millions fewer farmers, who actually know how to produce the basic necessities.

Yes, central bankers can print currency units, but not food, energy or other commodities necessary for sustaining life. As basic commodities become more scarce or are priced out of the reach of average folks, wars, riots, rebellions, diseases and repressive governments will result. All of this human suffering will be the progeny of ZIRP, QE and NIRP, which in turn are the progeny of the replacement of the gold standard by the Ph.D standard.

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Seek_Truth's picture

I agree.

And it's coming soon.

Escrava Isaura's picture

You just can’t make this stuff up.

 

Article: A good, old-fashioned, pre-1929 depression (like the short-lived, eleven-month depression in 1920-1921, before the days of “modern” central banking 

 

What the writer forgot to tell you was that: That was a Central banking in 1920/21 that caused that “old-fashion” depression. As well as 1929 depression.

 

We get into depressions because we live beyond our means —by debt.

 

 The only way out or depressions is to repudiate the debt.

DownWithYogaPants's picture

We have a central bank that holds an IOU for absolutely ever dollar in circulation.  That means we run on the debt standard rather than the gold standard. It is the debtor that absolutely has to get up and go to work every day or go bankrupt and that is why our FedRes notes are worth anything.  Cheap bastards like me who don't owe anybody anything laugh when they try to put the hurt on me.

Repudiate debt and you make the value of the currency exactly ZERO.

You still think that will work?  So sorry if you are that retarded.

wee-weed up's picture

 

 

Yep, I agree...

We need a "wipe the slate clean" depression.

But without abolishing the FED, it will just be inflated all over yet again.

NoDebt's picture

You're all dead fucking wrong.  Now go buy something on credit.  A house, a car, a college education, I really don't give a fuck what it is, just BUY something.  Even if you can't afford it.  ESPECIALLY if you can't afford it.

- Janet Yellen (and every other central banker in the world)

tc06rtw's picture

   
 …  We may not NEED one, but we’re gonna GET one.
  

Ms No's picture

I still think a meteor is the best option.  They are piling immigrants in here pre-collapse which makes me wonder if they just want this collapse to be as absolutely epic as possible.  Not to mention that we already are near depression level real unemployment and they are surviving off of welfare.  So it seems the depression will be nothing compared to this one.  It would be worse then the depression by far if the EBTs went dry alone.  Not to mention our currency might end up at risk.

boink.voink's picture

Now Now !!

Calm down people, USA is an exceptional country, living on borrowed money from the future, there is nothing to peddle fiction with all these gloom and doom articles. USA has the best facilities available for citizens. Look at CHina and India. In India 50% still defecate in the open all because they thought living within our means is what is the sensible thing to do. As a result they breed like rabbits and are being stuffed into slave ghettos with no facilities. While the 1% of India's population is living in luxury. These are the one's who were smart and decided to borrow from the future.

 

So stop peddling this fiction. USA is years ahead of 3rd world countries

 

USA USA USA

zhandax's picture

So we can continue living on borrowed money to perpetuity simply because we have a warm place to shit?

Déjà view's picture

Soup boils down to...get in line now...or later.

Calmyourself's picture

Now you've got it the warm shit standard, many countries aspire but few make it..  We did it through epic mismanagement and borrowing from the future.  We may lose 1st world warm shit status once the storm hits however..

Itinerant's picture

We may be living on borrowed time, but not on money borrowed from the future.

Think about it: you cannot consume apples or houses from the future. Period.

For every dollar borrowed, somebody is thinking of this as a dollar saved (credit): we may be running down our stock of capital or screwing with the distribution of ownership and income or be malinvesting significantly, but borrowing from the future: NO

Tarzan's picture

Sorry, but spending future labor is exactly what we're doing. 

 

That's what debt money is, it's the engine of Fiat, and also, as history proves, it's ultimate demise. 

 

Eventually, you run out of other peoples labor, or apples and horses, if you like...

Ms No's picture

True, but if they all hang maybe he would be right.  These bastards have been booming and collapsing things in this country and many others, for their own advantage, going way back.  On first appearance it seems to just be about money and playing insider games but there are obvious power grabs going on in addition to pilfering the populations wealth and assets. 

Business schools tell everybody that the cycles are organic and to be expected.  I think that's complete BS.  Surely in a sane system there would be some ups and downs but these catastrophic extremes are caused by banks and they have to know exactly what they are doing.  This is evidenced by the sheer number of these events alone and the clearly engineered precursor of manic monetary or other instigating policies prior. 

It's interesting that the only depression that the general public knows about is the "Great" Depression when there have been so many and arguably some of previous events much worse. 

aurum4040's picture

We have a food stamp rate of about 13-14% (off the top of my head) and an unemployment rate of about 4.9%. How does this simple correlation not reveal the bullshit numbers and, in terms of this article, the depression itself? Yes I know the unemployment rate is complete crap - part time jobs, participation rate, workforce etc. but how in the hell are these two opposing stats not discussed in conjunction more often? If you are on food stamps you are effectively unemployed in my opinion. 

roddy6667's picture

Americans are dumbed-down and distracted by the Bread and Circuses of today. They pour their lives into spectator sports not realizing they are having real emotions about a made up activity. They know more about the players than what subjects their kid has in school. Countless trillions of hours watching sports, TV. Facebook, Twitter, Pokemon, none of it real. Half the people are face down in their phone at any given time. Why should they care about the Real World and how it operates?

Lost in translation's picture

+ 1

Always enjoy your posts, Roddy.

I hope you and your family are doing well.

Offthebeach's picture

wiki/Amusing_Ourselves_to_Death

Offthebeach's picture

wiki/Amusing_Ourselves_to_Death

aurum4040's picture

Yes I know, this is more then obvious and has been for decades. I am referring to finance sites like zerohedge and political figures. 

crossroaddemon's picture

No, you're not. Scenario: you are a single parent. You are working full-time at $10 an hour. about 35 hours a week. You have kids so state law requires a two bedroom apartment... lowest possible price around $600. Utilities an additional $150 if you are lucky. You need a car and even if you are lucky enough to not have payments the insurance is eating $50 plus you're putting another $120 a month (conservatively) into the tank. You're north of $900 already and you clear maybe $1400 or $1500 a month. We still haven't talked about soap and toothpaste and all the thousands of other small things EBT does not cover, the kids need clothes and shoes, and the car is likely to need fixed once in awhile. You are as employed as anyone else around you, yet you don't have money to buy food.

Calmyourself's picture

That is known as Underemployment.  Lots of that on the range, dependent on mining with Dayton running the state is a bad place for willfully ignorant rangers to be in...

Keep voting the same way you have fools...

crossroaddemon's picture

Like it matters who is in office. They all work for the same people.

shovelhead's picture

Making $10 per hour with kids is the price you pay for failure in life.

Any unskilled labor can make babies but learning skills to support them is considerably more difficult to achieve and so it becomes the road not traveled.

Actions and inactions have consequences.

 

yogibear's picture

Borrow all you can and buy physical metals, then default! Their stuck with bad loans and you hold the wealth.

roddy6667's picture

Actually a good plan. Just don't blab to ANYBODY about what you are doing.

FreeShitter's picture

I just like skipping on 20K emergency room fees.....that makes me feel alive again.

DownWithYogaPants's picture

I don't agree we "need" a depression although that would likely stop the cultural destruction caused by rampant immigration.

What we need is a banking system based on a value backed currency instead of a debt based currency.

Oh our corporate overloards won't like that one bit for the same reason stated above.  You can't squeeze a guy who is not in debt nearly as easily.  If good conditions run dry you can turtle up and wait it out.   No need for the F.S.A. WeeBee(tm)-E.B.T. card at all.

Itinerant's picture

Why is it that these Mises types want to make the economy "healthy," but never seem concerned about making plans for the millions that will die. In the 30's, half the unemployed survived by going back to the family farm where there was always food and chores. The severity of the Great depression (compared to earliers ones in the 19th century) was largely due to the degree of urbanization and the utter dependency of people on a job.

In a good old-fashioned depression today, global supply chains would be interrupted (perhaps shortly, for 6 months to a year). A large part of the urban population would have no job or income. This would translate into revolution and chaos. Millions would die (many countries today need food imports to feed the population -- millions actually did die during the commodity boom in 2008), perhaps even millions in the USA.

We no longer live in a good old-fasioned world, and supply chains are global. The whole computer and electronics supply chain would screech to a halt, and with it our ability to manage any existing processes and manufacturing. And there is no effective form of collective organization or government aid in such a Mises' reset. Instead of restructuring the debts and figuring out some orderly way out of this dead-end, they would simply let the chips fall as they may: millions cast adrift in the cross currents would simply be liquidated by "natural" processes, leaving you to wonder about the "good" part. It would probably be even far more severe than the collapse of the Soviet Union in 1991, where population was 20 million below trend after 20 years (despite a much larger rural population).

Calmyourself's picture

Read Karl Denningers plan for this he has begged state and federal officials to put back supplies for this depression as it is inevitable with the JIT system probably the first breakdown. There is no way to avoid the crack up boom of this malinvestment and fiat system.  On a personal note if you are not ready for it I suggest you start. Plan not to starve then plan to keep what you have with force if need be.  If not, start planning your bunk at the FEMA camp.

crossroaddemon's picture

We need to not have a banking system.

Radical Marijuana's picture

Crossroaddemon, whether "we" like it or not, "we" get some organized crime system.

The currently existing banking system exists BECAUSE the international bankers were the best organized gangsters, the banksters, which were able to dominate the political processes through vicious spirals of political funding enforcing frauds.

I repeat what Itinerant asked above:

"Why is it that these Mises types want to make the economy "healthy," but never seem concerned about making plans for the millions that will die."

As Itinerant previously posted regarding "these Mises types," they operate as controlled opposition, which does NOT want to face the underlying FACTS that money is measurement backed by murder, while the only thing that backing up money with some commodity does is to modify that:

money backed by gold becomes the measurement of gold backed by murder.

In that context, I repeat these basic quotes:

There are no reasonable doubts about the basic history of
the currently established systems of public governments
enforcing frauds by private banks
as described by Carroll Quigley:

"... powers of financial capitalism had another far-reaching goal, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole ... to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements. ... The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations. ... It must not be felt that the heads of the world's chief central banks were themselves substantive powers in world finance. They were not. Rather they were the technicians and agents of the dominant investment bankers of their own countries, who had raised them up, and who were perfectly capable of throwing them down. The substantive financial powers of the world were in the hands of these investment bankers who remained largely behind the scenes in their own unincorporated private banks. These formed a system of international cooperation and national dominance which was more private, more powerful, and more secret than that of their agents in the central banks."

"If history shows anything, it is that there’s no better way to justify relations founded on violence, to make such relations seem moral, than by reframing them in the language of debt — above all, because it immediately makes it seem that it’s the victim who’s doing something wrong."

— David Graerber

"Almost everyone was taught that money was invented to replace the messy business of barter. … But ... anthropologist David Graeber, and other experts on the history of money, say that this is a myth. Instead, they say that money was invented to finance war, and to keep score while armies went about pillaging and looting."

MONEY IS MEASUREMENT BACKED BY MURDER. The consensus of the intellectual mercenaries paid to promote the banksters' bullshit is the presentation of professional hypocrisies that money is NOT THAT. Rather, the consensus amongst the intellectual mercenaries manifests in proportion to their incomes being based on promoting the banksters' bullshit. "Those Mises Types" continue to operate within the same overall frame of reference regarding the econony as to the Keynesians, etc. ... The Austrian School of economics tends to just as deliberately ignore the ways that the political economy actually operates INSIDE the human ecology as the Keynesian School does.

EVERYTHING that the central banks are ABLE to do was based upon the long history of civilization transforming violence into the language of debt. In that context, the public faces of those central banks are mostly academics, who were picked and promoted because they were the best available professional hypocrites, who could advance the global agenda of trillionaire mass murderers.

In my view, the author of the article above makes a similarly profound error as you did, crossroaddemon:

It is WRONG to assert that: "We need to not have a banking system."

Whether we like it, or not, there must necessarily be some death control systems, with the murder systems becoming the most extreme forms of those. Therefore, it is WRONG to talk about "need," unless one includes that "we need" some death control systems, which actually backed up the debt control systems, in order to make the debt slavery systems that exist today drive themselves towards generating numbers which have become debt insanities, which are headed towards provoking death insanities.

Since money is actually measurement backed by murder, that operates through public governments enforcing frauds by private banks. The previous systems of paper money frauds, backed by gunpowder weapons, have rapidly, and relatively recently, within the life time of those still alive today, become globalized systems of electronic monkey money frauds, backed by the threat of force from apes with atomic bombs.

The author of the article above concluded:

Yes, central bankers can print currency units, but not food, energy or other commodities necessary for sustaining life. As basic commodities become more scarce or are priced out of the reach of average folks, wars, riots, rebellions, diseases and repressive governments will result. All of this human suffering will be the progeny of ZIRP, QE and NIRP, which in turn are the progeny of the replacement of the gold standard by the Ph.D standard.

"The Ph.D. standard" developed through the history outlined above in my quotes from Quigley and Graeber. The figureheads of the central banks were picked and promoted to do those jobs BECAUSE they were the best available professional hypocrites. Meanwhile, "these Mises types" only provide some slightly better superficial analysis of that, which otherwise is profoundly wrong, due to the overall ways that Neolithic Civilization was always based upon being able to back up lies with violence, and therefore, everyone ends up being socially successful to the degree to which they are able to operate as professional hypocrites.

If We Can't Be Honest, No Solution Is Possible | Zero Hedge

While that appears to be tautologically true, a deeper analysis of the ways that human beings and civilization operate as entropic pumps of environmental energy flows, which necessarily match the principles and methods of organized crime, indicates how and why those problems have become almost infinitely WORSE than any of publicly significant "solutions" which are proposed and promoted regarding those problems.

Civilization was always based on being able to enforce frauds, while about exponential progress in physical science has enabled those systems based upon enforcing frauds to become about exponentially more fraudulent. The only connections between human laws and natural laws is the ability to back up lies with violence, and therefore, governments operate on the basis of integrated systems of legalized lies, backed by legalization violence, while those systems are run by the people who are the best available professional hypocrites, with the central bankers currently being the All-Star Professional Hypocrites.

The essential political problems have become that the corollaries to the ways that civilization necessarily operates according to the principles and methods of organized crime are that the biggest forms of organized crime, and best organized gangs of criminals, have become the bankster controlled governments, which back up their debt controls with the their death controls. It is NOT possible for money to stop being measurement backed by murder. Although it may be theoretically possible for more people to understand that, it continues to be politically impossible, due to the degree that those systems are almost totally dominated by the best available professional hypocrites. Moreover, there is almost nothing but that core of organized crime (bankster dominated governments) surrounded by layers of controlled opposition groups, (which includes "these Mises types.")

It is barely possible to exaggerate the degree to which we are living inside of Wonderland Matrix Bizarro Worlds, due to the long history whereby the biggest and best organized gangs of criminals were able to make and maintain the globalized political economy based upon enforcing frauds, whose excessively successfulness has resulting in everything that economic system does operating through fundamentally fraudulent financial accounting systems, which are becoming exponentially more fraudulent. Within that context, it is also barely possible to exaggerate the profound ways that members of that civilization are taught to mis-perceive their world and themselves in the most absurdly backward ways which are humanly possible. Similarly, within that context, "these Mises types" do not come within light years of going through sufficiently profound paradigm shifts, in order to better understand the increasing apparent anomalies, due to the banking systems being based upon enforcing frauds, in ways which have become exponentially more fraudulent.

I REPEAT, as Itinerant correctly pointed out, "these Mises types" do NOT admit and address that any return to some "gold standard" would do nothing more than change the systems whereby money is measurement backed by murder into becoming some system whereby money is the measurement of gold backed by murder. Similarly so, crossroaddemon, your assertion that "we do not need a banking system" MISSES THE REAL POINT, that "we" get some organized crime system (whether we like that, or not), which operates through the debt controls being backed by the death controls. The ONLY way to change the money system is to also change the murder system that necessarily backs up that money system. Those who pretend that returning to some sort of commodity backed form of money tend to side-step that issue, because they tend to take for granted that there would be some return to a functioning "rule of law," while they continue to deliberately ignore the inherent paradoxes in any enforcement of such a "rule of law." It is NOT possible for there to exist any human "rule of law" outside of natural laws, and therefore, the only human "rule of law" is necessarily based upon being able to back up lies with violence. (Those who tend to promote some idealized versions of natural law, as the basis for idealized human law, tend to continue to misunderstand the real mechanisms in the most absurdly backward ways.)

Within that context, the biggest and best organized gangs of criminals have been able to publicly present their systems of legalized lies, backed by legalized violence, as if those were not actually based upon lies and violence. Furthermore, everyone tends to be socially successful to the degree that they actually take for granted operating INSIDE ENFORCED FRAUDS, while deliberately ignoring and misunderstanding that as much as humanly possible, despite that those systems continue to become exponentially more FRAUDULENT. Again, I emphasize that human beings and civilization continue to operate inside the laws of nature, and those laws of nature are never going to stop working. Therefore, everything that depends upon those laws of nature will continue to work. HOWEVER, natural selection pressures have driven the development of artificial selection systems to become based upon the maximum possible deceits and frauds, which have actually become globalized electronic frauds, backed by the threat of force from atomic bombs. MEANWHILE, society continues to be dominated by the best available professional hypocrites, who are most successful by spouting the best bullshit about that, with the central bankers continuing to be the current All-Star Professional Hypocrites, who manage to continue to double down on their systems based upon enforcing frauds, despite that becoming exponentially more fraudulent.

Theoretically speaking, human beings and civilization should go through series of intellectual scientific revolutions and profound paradigm shifts in order to better understand themselves. However, all of the established systems are based, as much as possible, upon NOT understanding themselves, but rather, those systems are based upon the maximum possible bullshit about themselves. Although the laws of nature are never going to stop working, and so, nothing that depends upon those laws of nature are going to stop working, the currently existing political economy has become based upon the excessively successful enforcement of frauds, which therefore have become exponentially more fraudulent. Therefore, those systems are headed towards eventually going through series of psychotic breakdowns, because being able to back up lies with violence never stops those lies from still being false ...

As the article above correctly stated: "central bankers can print currency units, but not food, energy or other commodities necessary for sustaining life." However, in all other important ways, the article above does NOT follow through with sufficiently changed paradigms regarding how and why human beings and civilization necessarily live as entropic pumps of environmental energy flows, in ways which have become intensely paradoxical, and have manifested through sets of consistent contradictions, because of the ways that the biggest and best organized gangs of criminals dominate civilization, and do so by teaching everyone to use the biggest bullies' bullshit-based natural languages and philosophy of science, which have become as absurdly backward as was humanly possible to sustain.

After life exists, the death control systems direct the evolution of that life. Of course, that also applied to human beings and civilization. However, that resulted in natural selection pressures driving the evolution of the human artificial selection systems, as the culture of civilization, to become based upon the maximum possible deceits and frauds. THAT INCLUDED THE CONTROLLED OPPOSITION GROUPS, JUST AS MUCH AS IT DID THE CORE ORGANIZED CRIME GROUPS. Hence, "these Mises types" tend to not propose and promote better death controls to back up better debt controls, but rather to indulge in the typical mental short-circuits, which to do not admit and address the deeper reasons for how and why "the Ph.D. standard" is the based upon the best professional hypocrites, being able to operate through systems based upon enforcing frauds, without ever directly facing those FACTS, despite that those systems are automatically becoming exponentially more fraudulent.

Civilization that operates through fundamentally fraudulent financial systems necessarily becomes exponentially more psychotic and criminally insane. (However, at no point does that stop the underlying laws of nature from continuing to work.) Ideally, human beings and civilization should better understand themselves as manifestations of general energy systems. Furthermore, that is theoretically possible. HOWEVER, doing so continues to be politically impossible, due to the degree that the entrenched, established systems are being operated by the best available professional hypocrites, which necessarily includes the various members of the controlled opposition groups, such as "these Mises types," as well as those who assert the impossible ideal that "we do not need a banking system," when that amounts to asserting that we should not have any organized crime systems that dominates civilization (when civilization is necessarily based upon an expression of organized crime, which has developed on larger and larger scales.)

The only things that actually exist are the dynamic equilibria between different systems of more or less organized lies operating robberies. Only that which actually exists can actually evolve. Therefore, the only possible solutions would have to be changing the systems of organized lies operating robberies, and thus, changing their dynamic equilibria. It is NOT possible to stop governments from being the biggest forms of organized crime controlled by the best organized gangs of criminals. It MIGHT be possible for more people to better understand the principles and methods of organized crime, in order to develop better governments, as better forms of organized crime, because of the ways that drove the best organized gangs of criminals to have to adapt to those circumstances.

However, OBVIOUSLY, at the present time, the best available professional hypocrites continue to dominate all of the established sociopolitical systems, and therefore, everything that civilization does continues to become exponentially more psychotic and criminally insane ... The series of psychotic breakdowns of a civilization based upon its own exponentially increasing fraudulence is still NOT going to violate the laws of nature, but rather, continue to be consistent with the laws of nature, despite that resulting in series of crazy collapses into chaos, when the astronomically amplified systems of globalized electronic frauds, backed by atomic bombs, become so extremely fraudulent as to suffer through the consequences of having done that ... as magnified many orders of magnitude greater than anything that previously happened during human history!

The existing systems are based upon debt controls being backed by death controls. Those debt slavery systems are necessarily driving themselves to develop exponentially increasing debt insanities, and those are set up to provoke death insanities. Since money can NOT stop being measurement backed by murder,  the only genuinely realistic resolutions of those real problems are to develop different death control systems, with different murder systems to back up different money systems as the essential features of such real, radical, revolutions. In general, "these Mises types," as well as most of the rest of the superficially correct content published on Zero Hedge, tend to deliberately ignore that the political economy necessarily operates INSIDE the human ecology, while that, in turn, necessarily operates INSIDE the overall environmental ecologies.

Although it is theoretically possible to develop better understanding of human beings and civilization, in ways which become more consistent with understanding those as manifestations of general energy systems, that continues to be politically impossible due to the degree that doing so would require series of intellectual scientific revolutions and profound paradigm shifts, the first and foremost of which would require enough people to understand enough how and why governments are necessarily the biggest forms of organized crime, controlled by the best organized gangs of criminals, which currently manifests through the ways that "central bankers can print currency units, but not food, energy or other commodities necessary for sustaining life."

The almost total triumph and dominance of sociopolitical systems based upon enforcing frauds has resulted in almost everyone deliberately ignoring the principle of the conservation of energy as much as possible, as well as deliberately misunderstanding the concept of entropy in the most absurdly backward ways. Those figureheads at the symbolic top of the systems whereby "money" is created out of nothing as debts are the supreme symbolic expressions of systems based upon enforcing frauds, whose successfulness enables those central bankers to continue to be publicly presented as somehow the "good guys," when they are actually the best "bad guys." in the sense of the best available professional hypocrites, who are able to publicly present the bullshit about MAD Money As Debt, still being positive capital, while that is actually negative capital, which has effectively destroyed "free market capitalism."

WHEN "central bankers can print currency units, but not food, energy or other commodities necessary for sustaining life," THEN those who are socially successful through their participation in those systems ARE deliberately ignoring and misunderstanding the laws of nature in the most absurdly backward ways possible.

As soon as we perceive and define human beings as separated from their environment and each other, then they necessarily live as gangs of robbers. Furthermore, the corollaries to that become the ways that the biggest and best organized gangs of robbers are able to publicly promote their bullshit social stories that they are NOT gangs of robbers.

Hence, banking systems actually work through public governments enforcing frauds by private banks, which frauds are symbolic robberies. Those who were the best at doing so have promoted their languages based upon the DUALITIES of false fundamental dichotomies, and the related impossible ideals, while those were were the best at doing so have also made sure that there is no publicly significant opposition which is not controlled to stay within the same frame of reference of the DUALITIES of those fundamental dichotomies, and the related impossible ideals. 

Since there is only ONE energy, there is only ONE political system, and that corresponds to the principles and methods of organized crime, because human beings and civilization necessarily live as entropic pumps of environmental energy flows, which means that they live as gangs of robbers, with murder being the most extreme form of robbery. As soon as human beings perceive the world through SUBTRACTIONS, then those ROBBERIES necessarily follow. However, the development of that has enabled the biggest and best organized gangs of robbers to develop languages and philosophy of science which enables them to operate as better professional hypocrites. Furthermore, that includes that the apparent "opposition" to the established systems also stays within the same overall frame of reference. Hence, there is NO significant difference between the Austrian School of economics versus the Keynesian School, but only cosmetic differences. Both tend to take for granted the ways that the biggest bullies' bullshit world views have SUBTRACTED THE SUBTRACTIONS, in order to publicly present everything in the most absurdly backward ways possible.

That is also why "these Mises types" tend to NOT directly admit and address the death control issues, which necessarily arise as the results of their superficial "economic solutions." Similarly so, all those who advance various versions of the ideals that there should not be any governments, or versions of that, such as that "we need to not have a banking system," tend to NOT directly admit and address that ways that the abilities of human minds to engage in SUBTRACTIONS, through which they can build mental models of their world, including mental models of themselves within their mental models of their world, necessarily results in there being ROBBERIES. As soon as we exercise our human mental abilities, through using human language, we must have social systems based upon organized lies operating robberies, and we do!

HOWEVER, some of the ways that expressed itself have been that the biggest and best organized gangs of criminals have been able to develop the natural languages and philosophy of science which facilitate them to do so. Since they were the biggest and best organized gangs of criminals, they were able to become the best professional liars and immaculate hypocrites, which is how and why the central bankers have become the All-Star Professional Hypocrites, whereby the realities of violence have become the language of debt.

Those realities of violence are never going to disappear. Politics without violence is as impossible as physics without force. However, the elaborations of systems based upon legalized lies, backed by legalized violence, have been able to promote the maximum possible bullshit about themselves doing that, which particularly includes the degree to which the central bankers are ALL-STAR PROFESSIONAL HYPOCRITES (which they are particularly able to publicly get away with because there are no publicly significant opposition groups that are not also dominated by professional hypocrites too!)

ENFORCED FRAUDS ARE PRESENTED AS IF THOSE WERE NOT FRAUDULENT!

I.E., THERE HAVE BEEN SUBTRACTIONS OF THE SUBTRACTIONS,

OR NEGATIONS OF THE NEGATIONS, SO THAT EVERYTHING IS

PRESENTED IN THE MOST ABSURDLY BACKWARD WAYS ...

E.G., "MONEY" MADE OUT OF NOTHING IS PRESENTED

AS IF THAT WERE STILL POSITIVE CAPITAL,

WHEN THAT IS NEGATIVE CAPITAL.

EVERYTHING PRESENTED THROUGH THE BIGGEST BULLIES' BULLSHIT

HAS BECOME AS INVERTED AND PERVERTED AS HUMANLY POSSIBLE!

Itinerant's picture

I like to illustrate with a scene from a Western, where the Indians are denied access to the land because they have no title deeds at the county town house. The Indians then ride off to burn the building with the deeds, setting up a confrontation with the US army because of their heinous crimes.

The Indians are a good counter-factual to the whole emphasis on property rights, illustrating how these have always been primarily based on conquest. Otherwise the Indians would be reaping trillions on what they own.

Radical Marijuana's picture

It is nicer to imagine a world where documents like the United Nations' Charter were respected ...

https://treaties.un.org/doc/Publication/CTC/uncharter.pdf

HOWEVER, such documents are actually mostly BULLSHIT.

At the present time, I am compromising with my "significant other" to spend an hour a day watching whatever shows we can both agree to watch (not an easy compromise), and currently that is the show called Hell on Wheels, about building the transcontinental railroad through what was previously lands occupied by other people for thousands of years, before the European Invasions of North America.

I once visited a museum in British Columbia, which displayed the native settlements in that area, before the crowd diseases, like small pox and measles (which were developed during the thousands of years when Europeans lived with their domesticated animals, etc.) were introduced by the European Invasions, which resulted in more than 90% of those original immigrants to North America, who had lived there for more than ten thousand years, dying from those disease, to which they had previously evolved no immunity.

That museum display quoted one of the Chiefs there saying that those who had lived there for thousands of year, should have been able to designate which small reserve lands were allowed to the European Invaders, rather than the European Invaders, particularly the British Crown, being able to assert that they "owned" the entire territory of British Columbia, and then allocating tiny reserves to the original inhabitants.

To consider a science fiction metaphor ...

Consider what would happen if an awesomely advanced alien species were to suddenly show up at Earth, and state that they claimed "ownership" of the planet Earth. (Imagine that, to them, nuclear weapons were relatively nothing, but rather, things that they could easily neutralize, etc., so that there was nothing human beings could do to stop them ...)

Nobody who claims to "own" anything now would still "own" anything then!

rbg81's picture

A Depression would be very painful but it would also have to main benefits:  flush out the financial system AND restore common sense to people too.  No one gives a shit about your transgender issues when they can't get enough to eat or are being evicted.  And let's not forget the chaos that would erupt if your smartphone service got turned off.  But for a 1930s style Depression to happen, youd have to find a way to disable the Enbtitlement State.  The Entitlement State provides a buffer which keeps people from feeling real pane.  In turn, it is enabled by ZIRP (NIRP) and helicopter $$.  Unfortunately, these mechanisms are great for the Free Shit Army but the kiss of death for the rest of us.

DownWithYogaPants's picture

The FSA will be set loose.  I saw something interesting in the series "Life On Earth"  ( watch free online: http://www.amarketplaceofideas.com/video-life-on-earth-david-attenboroug... )

There is a tree that has little openings in its thorns to allow a particularly agressive ant to nest in it.  When another insect tries to eat the leaves of this tree the ants attack.  The tree feeds these ants with little dabs of sweet sap.  I was put to mind of the following equivalency:

Tree = Ruling Class Oligarchy

Ants = FSA

Sweet Sap = EBT

 

Offthebeach's picture

Thorns = Housing projects, Section 8

Sap=EBT,welfare, govie jobs.

logicalman's picture

Hard re-set is what's required.

Agreed, on the FED.

Fractional reserve has to go too.

 

SgtShaftoe's picture

Yes, and they're going to hand the debt to the IMF under the SDR because presently their balance sheet is clean. I'm just sure that will work just swimmingly / s.  

Sounds like 3 card monty huh?

Escrava Isaura's picture

DownWithYogaPants: Repudiate debt and you make the value of the currency exactly ZERO.

 

Then, what do you think will happen to the currency if you try to pay $62 trillion dollars debt plus over $100 trillion dollars in obligations?

 

Our situation is so dire that, even if we were to find the largest gold reserve here in America, the deflationary aspect of it would make the old debt unpayable. 

 

The flaw in your think, in my opinion, is that you, and most here, are incapable of grasping “Money Diminishing Returns” and “Energy Return on Energy Invested.”  If you did, you’ll realize that’s almost over.

 

By the way, I like the “Debt Standard.” Never heard that before. A correct way to describe our current system.

 

DownWithYogaPants's picture

Debt has to be destroyed in the most orderly method possible.  If you do a "holiday" you'll create chaos and conditions for the recovery will wait for people to start trusting again.  The currency will be toast.  So I could see this recovery taking a while because you're going to need the capital in productive hands and helicopter cash maximizes entropy so that will take a while too.

Itinerant's picture

A sudden influx of gold has always created inflation, not deflation. It is only a boon to the people with first dibs, and a curse to farmers and labourers who get it last.

MFL8240's picture

America needs to rid the financial sytem of this Tribal control and the Federal Reserve!  Depressions are caused by these asshole banker criminals.

DownWithYogaPants's picture

An honest to goodness gold standard would probably render the Federal Reserve redundant.  The jig would be up on their scam so I bet you dollars to donuts they fold up their tent and go home if you ever really managed to get a gold standard implemented.

Offthebeach's picture

Google "John Law"

Taxes.

Even if everyone carried no debt, Fedgov would borrow from Federal Reserve....and force all through taxation to buy by labor Federal Reserve notes.

38BWD22's picture

 

 

Despite (because of?) studying some economics in college, I do not think that anyone can really give us any idea of when nor how big the next depression will be.  There ARE some indicators that might help though:

"As a general rule, the longer the can gets kicked, the worse the end result."

And this has been kicked long and hard down the road.

Prepare.

*   *   *

Escravita

I am not sure that a forced Jubilee would lighten the force of the next depression.  There would be some justice in a Jubilee, but in the end you can bet the Banksters would not be hurt.

Escrava Isaura's picture

See my answer to Yoga Pants above.

MalteseFalcon's picture

Ladies and Gentlemen I give you Secretary of the Treasury Mr. Andrew Mellon:

"liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate... it will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up from less competent people."

 

tc06rtw's picture

   
 We WILL NOT permit that!…  It’s not gender-neutral, diversity-enhancing or even environmentally friendly!