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Guest Post: The Coming Global Instability, Part I
Submitted by Charles Hugh Smith from Of Two Minds
The Coming Global Instability, Part I
The root causes of global financial instability cannot be wished away or "solved" with modest policy tweaks: they are systemic.
Systemic financial instability is spreading rapidly around the globe. Nobody knows the precise timing, of course, but if we consider the systemic causal forces at work, it seems the future is now: the next few months could see unstable markets gyrate wildly and unpredictably as the latent instability breaks out and plays out into the 2012-2013 timeframe.
This is an excerpt from my new book An Unconventional Guide to Investing in Troubled Times which has just been issued in Kindle ebook format; a print edition will follow in September. (You can read the ebook now on any computer, smart phone, iPad, etc.--see below.)
Here are a few of the structural causal factors behind the coming global financial instability:
1) What was once considered “impossible” has been normalized to the point that truly unprecedented imbalances are now accepted as "normal." But the normalcy is illusory.
For example, it is now considered “normal” that the Federal government borrows $1.6 trillion every year to prop up the Status Quo, fully 11% of America’s Gross Domestic Product (GDP) and 40% of all Federal expenditures. This stands in stark contrast to the traditional view that deficits in excess of 3% of GDP a year are inherently destabilizing. Now we borrow roughly four times that much (including the off-budget “supplemental appropriations” that run into the hundreds of billions of dollars every year) and the political and financial Elites evince a complacent faith that these extremes are benign and sustainable.
Those who believe unprecedented central bank and State interventions in global markets are not just necessary but positive point to Japan, a nation that thus far is untroubled by debts far in excess of 200% of its GDP. They also point to the rapid growth in developing countries as the engine which will grow the world’s financial pie so everyone’s slice gets bigger every year.
But the fundamental problems in the global economy have not been addressed--they’ve just been papered over with trillions of dollars in printed or borrowed money. Behind the paper-thin façade of “extend and pretend” normalcy, the foundations of the financial Status Quo in China, Japan, the European Union and the U.S. rest on shifting sand. By avoiding structural reform in favor of facsimiles of reform and by “fixing” over-indebtedness with more debt, the political and financial Elites have simply increased the height the world will have to fall to correct the imbalances.
In the forest fire analogy, fixing debt crises by adding more debt is like putting out a small fire: that suppression of a healthy cleansing of the system only guarantees a monstrous fire later.
2) The global economy is now based on a widespread trust that central banks and governments will never let assets fall in value. This insulation from risk is known as moral hazard, as those who are insulated from risk will have an insatiable appetite for risky bets because any gains will be theirs to keep but any losses will be covered by the central bank.
The financial authorities’ success in propping up assets like stocks in the U.S. and real estate in China over the past three years has strengthened this moral hazard into a dangerous quasi-religious faith that central banks and governments have essentially unlimited power to keep asset prices aloft via printing money and easy credit.
3) This isn’t just a failure to reform an opaque and broken financial system: conventional economics has failed. This Grand Failure of Conventional Economics has gone unnoticed, as all those wedded to the Status Quo keep applying “lessons learned” during The Great Depression of the 1930s. They are pursuing the magical-thinking hope that the old rules still apply, even though the fundamentals have changed dramatically.
The Grand Failure of Conventional Economics is more than failed policy: it is a profound blindness to the resource limitations of our planet. Not one of the many strands of conventional economics recognizes the limits on growth in production and consumption as measured by GDP (Gross Domestic Product).
When the planet's human population reached 500 million, there were sufficient resources to enable a doubling to 1 billion. Then 1 billion tripled to 3 billion, which has doubled to 6 billion. Now, as China, India and other nations are industrializing, the 600 million high-consumption "middle class" of the developed economies is expanding four-fold to 2.4 billion.
There simply isn't enough oil and other resources on the planet, in any remotely plausible scenario, for 600 million of China's 1.3 billion people to live on an American scale of consumption, not to mention 600 million of India's 1.2 billion, and another billion avid consumers in other developing economies.
4) Conventional economics is also incapable of grasping the profound consequences of disruptive technologies that are creatively destroying the old foundations of centralized economies and replacing them with decentralized models of much greater efficiency. These new technologies are resistant to controls imposed by concentrations of power such as central banks and governments. Centralization—what I call the “factory” model—reaped enormous gains in the industrialization era; now centralization is increasingly counter-productive, as coordinated monetary manipulations have destabilized the global economy.
Industries that were once mainstays of the economy have been destroyed by irresistibly efficient Internet, communications and digital technologies: long-distance telephony, travel agencies, musical recordings, print media and retailing, to name a few. Next to be disrupted: education, healthcare, finance and government, precisely those industries widely considered immune to creative destruction.
5) These forces are incomprehensible to conventional economics partly because they are triggering simultaneous effects such as deflation and inflation which have been understood as linear and sequential. Disruption of old industries is deflationary to price and employment even as massive government money printing and support of moral hazard is inflationary. As “hot money” flees old industries and seeks higher returns from speculation, asset bubbles expand and pop as capital is misallocated into overcapacity. As money is devalued by these monetary policies, bizarre analogs of money such as derivatives, mortgage-backed securities and tulip bulbs arise and then implode in what I term the speculative supernova model.
6) This dynamic intersection of disruptive new decentralizing technologies, resource depletion and the grand failure of conventional economics is unprecedented in human history; we would have to look back to the era that was transformed by the invention of the printing press, the explosive rise of Renaissance commerce and the discovery of the New World for historical precedents. The difference is the accelerated pace of transformation in our digital era: changes that took 200 years to unfold between 1500 and 1700 will likely be compressed into the next 20 years. The predictability of this process of creative destruction is low; nobody knows what will happen five years hence, much less 20 years hence.
Francis Bacon wrote in 1620 that the printing press "changed the whole face and state of things throughout the world." The same can be said of the Internet and other digital technologies, and the transformation of the global economy is far from complete.
7) From the long view, conventional economics developed in the era of ever-cheaper, ever-more abundant energy and the miraculous "low hanging fruit" productivity gains made possible by cheap energy and centralized mass production. Like a creature born in the morning that has only seen daylight, conventional economics has never experienced night and so it has no conception of darkness.
Thus the current failure of conventional economics is not the failure of individuals or policies--it is a profound conceptual failure. Conventional economics, based on limitless “growth,” globalized financialization, and ever-greater central bank-Central State intervention in markets, is incapable of understanding a world of resource limits and a financial system that is increasingly vulnerable to unpredictable cascades.
Behind the present rose-tinted façade, the only limitless resources are paper money and propaganda. Everything else is limited by real world constraints. An economy that consumes ever-greater quantities of real-world resources such as oil, and harvests renewable resources such as timber and wild fisheries at rates far in excess of their renew rates, will soon encounter shortages and higher prices as those with paper or electronic money bid for the remaining reserves.
8) The markets now depend on massive State and central bank intervention for their veneer of stability. The “ratchet effect” is in full force: every crisis requires ever greater State borrowing and ever larger interventions by central banks. If this vast machinery of intervention were withdrawn, the system’s fundamental instability would be revealed.
This intervention is not limited to monetary policy; official statistics have been gamed to support the Status Quo assertions of a return to prosperity. This legerdemain has two unintended consequences: it discredits the statistics and the government that issues them, and it undermines market correlations that had been valid for decades. Investors and speculators alike are rushing to the lifeboats to find they’re only paper mache stage props.
Part II will be published tomorrow.
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Global instability, bitchez.
Global Unsustainability Bitchezzzz!
If you bring a frog slowly to boil in a pot, the creature never jumps out. Likewise, since man's insanity has gradually reached an apex of utter, preposterous mass delusion over the course of decades, everybody is now guffawed by the mere mention of reality:
http://thespiritoftruth.blogspot.com/2010/04/i-think-youre-crazy.html
Yet, the truth is the truth.
It is simply extraordinary the number of people who harbour a faith-based belief in the boiling frog analogy:
http://www.snopes.com/critters/wild/frogboil.asp
The truth is indeed the truth.
When boiling frogs, you have to make sure you have a lid on the pot.
you don't need to boil it slowly if the pot is large enough and it is filled with frying oil. Tastes better too.
Global incontinence, bitchez.
labolg ytilibatsni, bitchez
Global insanity, bitchez.
You guys/ladies will think I'm making this shit up, and rightfully so, but noooooooo, the White House did stoop this low today regarding the debt ceiling debate:
Okay, I paraphrased, but it's close enough, bitchez:
From the rag that is The New York Times:
Latest Updates1:31 PM ET
Christmas is just a pagan Roman holiday anyway, I dont care, ruin it!
Obama threatened seniors that they'd lose their social security and medicare.
Now, apparently because that tactic didn't work, he's going after little Billy's Red Rider BB Gun and Mary Sue's Barbie Doll.
don't shoot your eye out kid
I've been listening to air checks of Shepherd's WOR shows for the last six nights.
What's scary about that? They'll boil over when the reforms really hit and they're forced to live hand to mouth. We gonna have some real fun coming our way
Come one Dog... never picked you for Scrooge
I am The Chief
You must be new to these parts, huh Chief?
It goes further back than the Romans. It's original purpose was to celebrate the passing of the Solstice.
It was Roman Catholics that incorporated it into their religion so the converted Pagans could continue
to party on that day.
All the Christian holidays are Pagan except Easter. They had to set the date as the first Sunday after the first Full Moon after the Spring Equinox to miss them all.
Damn pagans.
Hey, millions of American consumers max out credit cards to Christmas shop, so our federal government maxing out theirs should not be a surprise, right?
http://www.youtube.com/watch?v=xNnAvTTaJjM
For what its worth:
A very good astrologer I know predicted around 10 years ago that in the spring of 2012 there would be a major financial meltdown. Do with this information what you please.
It would appear that astrology is at least as refined a science as modern economics. In Yves Smith's book, Econned, the first 70 pages or so are devoted to the assertion that because markets do not empirically behave as the economics fetishist believe, the perception of modern economics as a science is not only wrong, but dangerous. Whether the spring of 2012 is the event horizon or not, the empircal evidence is clear - the current global financial system is unsustainable.
I hate always making late comments, but that first sentence was a total out-loud laugh.
Being a believer in contrarian human sentiment the fact that I already have 12 negative feedbacks lets me believe that the astro guy may be on to something.
Pluto is in Capricorn....
just saying
Not really. The junks are just a counter for what your comment is worth.
You should send that astrologer all your money and get more predictions!
FUCKING UNBELIEVABLE - ENERGY FACTORED INTO THE EQUATION -
Soylent Green Bitchez!!!
http://www.eurekalert.org/pub_releases/2011-07/acs-nmf071311.php
"It's people. Soylent Green is made out of people. They're making our food out of people. Next thing they'll be breeding us like cattle for food. You've gotta tell them. You've gotta tell them!"
Classic! :-)
Soylent....what the world needs now!
Who cares if we're bred for food. I think a person bred for consumption would have a much higher quality of life than, let's say, a person that's forced to live in poverty. (the global definition of it, not the American 22"s and fried chicken version)
The masses are going to acquire the taste for human flesh? I'm sure nothing could go wrong with that...
From the long view, conventional economics developed in the era of ever-cheaper, ever-more abundant energy and the miraculous "low hanging fruit" productivity gains made possible by cheap energy and centralized mass production. Like a creature born in the morning that has only seen daylight, conventional economics has never experienced night and so it has no conception of darkness.
Now what the fuck is the plan...BESIDES THE GREAT KILL OFF?
It was the most salient & profound thing he said here.
A kill off is very likely.
The only way the world is fed is through the intensive use of mechanized farming and petro-chemical fertilizers, etc. which takes ooddles of.... OIL! No solar or hy-brid John Deere's yet.
The world has a way of dealing with its over-population -war or famine.
"Salient"? How about "Soylent" as in Soylent Green? That would work.
Yes and sometimes we hit the trifecta, war and famine and epidemic disease. If the cheap energy sytems fail to be cheap, hygiene could fail allowing disease to arise rapidly.
Sewage treatment ain't just about making the air smell pretty.
the dominos are lined up, its only a matter of time until the 1st one drops.
Bleach is cheap and effective at treating water, it only makes sense to store a few extra bottles around the house. It might be priceless in a bad situation.
Dude both the Chinese and Indians sell antibiotics over the counter giving rise to untreatable infections. Combined with the aluminum petri dishes called airplanes I would expect major outbreaks of infectious disease anyway. No need to wait on the hygene thing.
Just a few 'crazy' ideas I've heard:
Space based solar power
Towing a metalic astroid to LEO and mining it
Capturing a comet and mining its fresh water for fuel and consumption
Colonizing Mars
Colonizing Detroit
Whole Foods now in Detriot, bitchez.
Gee, we covered this whole low cost energy input into the economy concept in my Grad School ecology and environment oriented classes during the mid-1990's
Since then the mere mention of such an idea brought out the name calling, such as ecotard, tree hugger, Marxists, Socialist, dumbshit, etc... from any good Ayn Rand disciple, the Libertarian religionist, and my favorites, the cornucopian "infinite wealth and resources" crowd. Now, however, it seems cheap energy is coming to an end and suddenly the economists might consider its role in the future of our economy. Dogma is everywhere.
This is total Bullshit. There is enough natural gas and reserves to last at least 200 years. We have to get off our asses and convert energy output to use the resource. The clock is ticking but we have plenty of time to develop viable solutions, but that doesn't suit the need of the government for control.
The true goal in all of this is confusion and anger, one born of the other. With this in mind the drama unfolds every day.
The planet is capable of sustaining al LOT more humans, if the stupid humans would just pay attention. This isn't about resources, it's about governments that pay farmers to grow corn for fuel instead of corn for food.
Self-knowledge is not a motivator. Smokers don't quit just knowing that their lungs are turning to mush. Only pain motivates the regular guy, and then only at the last second before complete destruction. There is not enough pain -- yet.
Ignorance is bliss.
I too am tired of the endless "gloom and doom" regarding the future of humanity. There is no reason that we cannot continue to make multiple improvements not just in how we gather energy and resources, but in how we then make use of them. For example, do people really want cars, or do they want mobility? And with things like rent-on-demand "city cars" for mobility within a city, and high-speed rail to travel between cities, wouldn't it be possible for people to have as much mobility as they could ever want, while making much more efficient use of resources? And that's just one example.
I know it's fun to get all doomy and "soylent green" about the future. Very theatrical, makes for some really prime rant material. But I think people shouldn't be quite so quick to discount human ingenuity and technological progress, and the impact this can have. Not to mention, keeping up with those who come up with new and better ways to make use of scarce resources can make for some great investing opportunities.
Have you seen the hockey stick chart of population growth? I'm not sure how close it is to unsustainable but I do know the earth has finite resources.
And, your logical conclusion is?
(Hint: The surface of a planet is NOT the correct place for an expanding technological civilization.)
have you been to north korea? where is human ingenuity and technological progress in north korean gulags? well, they are using technology to make nukes and ingenuity to come up with more brainwashing to enslave the populace.
Ditto for nazi Germany with Jews. They tricked them that they were just going to get cleaned in the shower. Oven technology was used to make mass killings more efficient.
Remember biggest driver of technological innovation is the military!
It is all about how those in power use the human potential. Do you think US is using it for the good of man kind or for good of a few men's bank accounts?
Call it what it is...a deflationists nightmare:
http://www.planbeconomics.com/2011/07/28/a-deflationists-nightmare/
The COMING global instability?
You mean to imply that what we've been through for the past 16 years is stability?
stability is relative and transitory as is chaos
Compared to what's coming the last 16 years was a walk in the park.
yup, even supposedly calm countries like Norway is destabilizing...
Gunz being the focus.
Global insolvency, bitchez.
Global stupidity bitchez! Mad Max coming to a street near you!
Talks about fundamentals, but doesn't mention that FUNDAMENTALLY A-L-L growth leads to collapse.
Sorry, I'm not paying for anyone's "insights" when they don't include REAL fundamentals. It's just more of the same, the same skittles and unicorn shit that those in power are spreading around: peddlers like this are just looking to make money off of accusing others of doing the same that they do- make decisions based on poor/fake fundamentals. And the ping-pong match continues...
Who asked you to pay?
Not all growth leads to collapse...
(Hint: The surface of a planet is NOT the correct place for an expanding technological civilization.)
China= bubble
When China pops it will have devastating consequences for the global economy.
Yeah malinvestment for decades has not been purged, and it will be painful...and? It's all predictable now. Those with power will use it to keep it shaking out the last bits of wealth from those without power. With the inevitable purging of malinvestment the losers will have to adjust downward, or use power to push the adjustment on a less powerful party. The bulk will fall on the masses and standard of living in the West will plummet. There is a reason that the police and military are getting more training about riots. Turns out when J6P loses his cheap beer, cheap porn, and cheap junk food he will get pissed, to say nothing of those living on the public dole.
Put your assets where they are least likely to be devalued or stolen, and then put your person in the safest place you think there is and ride out the storm.
2012 = Peak "Holy shit!.."
yeah, it seems like Mayans were right, after all
If they were so right why weren't they better at hanging around for the debacle?
"If they were so right why weren't they better at hanging around for the debacle?"
Uhmmm, they couldn't master "market fundamentals"? Maybe they invested like Lehman..
Looks like he cribbed a lot of this material from Chris Martenson's "Crash Course." Hope he gives credit where credit is due.
I will read his new book, but these do not appear to be new ideas.
His reference to "Convential Economics" failing is weird. I don't think "Conventional Economics" has ever really succeeded, although he does not define what he is really talking about. At least its been pretty useless to predict anything.
"I don't think "Conventional Economics" has ever really succeeded, although he does not define what he is really talking about. At least its been pretty useless to predict anything."
I don't think that you can really pin down "Conventional Economics". It is like the butterfly effect. Each time one of the Central Banks interferes with an economy, the conventions change. Some economies become dependent on low interest rates, deficit spending, or any other manner of fiscal irresponsibility. The old "wrong way " becomes the new "right way". That is why everyone is so worried about our current Chairman of the Federal Reserve - he knows a lot about how the first Great Depression started and ended, but does that knowledge allow him to avert the same type of monetary crisis under today's "Conventional Economics"? From what I have seen, fundamentals no longer matter. So, what does?
There simply isn't enough oil and other resources on the planet, in any remotely plausible scenario, for 600 million of China's 1.3 billion people to live on an American scale of consumption, not to mention 600 million of India's 1.2 billion
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Garbage this is how the NWO thinks, there are abundant ways to harness energy Now.
The world's food and energy resources are barely sufficient to support the current 1.5 billion "middle class consumers". There are 3 billion more people (mostly in Asia) that are striving to become "middle class consumers".
There is NO WAY that within any of our lifetimes there will be 4.5 billion "middle class consumers" on this planet. Through technology and innovation, perhaps this group can grow to 2 billion over the next 25 years. That means that there will be an awful lot of disappointed and frustrated people in a lot of places. It will not be pretty.
You need to look up Nicola Tesla there is abundent free energy around us. Problem is they can't put a price tag on it so it will never be around. This is how they will get Carbon tax pushed through, and push for decrease in population.
To this I can only reply as the Japanese would: Baka Yaro!
Totally agree, we have oil reserves under the Dakotas, off Califronia, the Gulf, the east coast and even under Lake Michigan. We have billions and billions of cubic feet of natural gas (last estimate is 275 years worth).
Control the resources, control the (sh)people. Isn't that what this is all about.
What really sucks is that the lying isn't close to being as creative as in the past.
global insolence bitchez
i can't wait for Pt. II!
just that one little junk is very helpful for me
Great Article! I think I am moving into my missle silo condo 6 months ahead of schedule.
Faber used the word "reset" recently in an interview, and the LEAP guys, Sinclair, and others have been talking about it for ages. I don't see anything new here, though CHS is a good popularizer. All part of the process, I supose.
you guys all worry to much. Everything is gonna be fine. That being said, my ceramic SAPI plates just came in the mail.
with my Gov. issued flak vest, the plates are rated to stop a 30-06 round.... Economic collapse? bullish for Body armor bitchez!
I am very ignorant about the micro aspects of most things posted on this site. In the macro sense the USA used to act as a safe haven for the rich to store their wealth. IMHO that why when GWB Bush made sure there would be deficiets, without them where would the rich invest? If buying T bills becomes risky it is going to really change the world, and maybe for the better. Wealthy individuals would have to invest in real business, not a goverment guarented ponzi scheme.
you guys all worry to much. Everything is gonna be fine. That being said, my ceramic SAPI plates just came in the mail.
with my Gov. issued flak vest, the plates are rated to stop a 30-06 round.... Economic collapse? bullish for Body armor bitchez!
Can you make those in pottery class?
When Uncle Sam's goody bag runs dry we'll have the aftermath of Katrina playing out in every major city in this country. Berettas and body armor, bitchez!
Bullish: Canned goods and shotguns.
Long sales pitch to purchase his book - Needs something snappy like:
BUY or DIE !!!
Long sales pitch to purchase his book - Needs something snappy like:
BUY or DIE !!!
you mean Charles is a Profit Prophet of DooM??? say it ain't so yo!
Just so much to go around. No more - no less. As more sit down - less to go around. There are 5 billion too many on the planet, depending on too few farmers. Great when these farmers have lots of cheap and plentiful energy to feed the multitudes. Take away the cheap and plentiful energy? Exactly. Who gets to sit down and who goes hungry?
World population was very stable at 11/2 to 2 billion for thousands of years, then along came the industrial revolution and the internal combustion engine, dependent upon cheap and plentiful energy, alowing the farmers to feed multitudes. Well, the enrgy is not so cheap now, nor as plentiful. Yah, but some say there is lots of different energy to be had. Just have to discover it! Great! Will it be here in time? Me thinks not.
There's a new world a comin! It won't be as kind, nor as familiar as the old one. Nor even half as forgiving.
Looking forward to Part II on this...
To many people especially retired people put all their life savings in the stock market and depended on it to survive. The market was loaded with 401K baskets.
If the government would have let the stockmarket go where it should have gone, all that would have been wiped out and those people would all be broke.
Retired people for example form a keystone in luxery goods, travels.... and that industry is really big.
So to save that circle they stepped in or all those people would be lining up at soup kitchens.
The sad part is.... all those people are still in the stock market and hopeing to make up losses and keep on living from it. WON'T HAPPEN!!
If there is another crash, it won't recovered like the first big "recovery". Not at the same value that is. Maybe there will be a DOW 15000 but at half purchasing power as 4 years ago.
You really beleive it was done to save 'the people'? lol. If the market had been allowed to stay in the crapper so would all of Wall Street: a massive downsizing, huge bankruptcies and.....wait for it....new players who would take the place of the old players. That was unacceptable!
I think 40% of GDP is finance up from 11% thanks to Reagan. To big to fail.
fully 11% of America’s Gross Domestic Product (GDP
Truly johnF, I have always known that 40% of the gdp was and is an illusion......wouldnt really care if the gov defaulted.....hell just the other day discovercard sent me a notice saying that my credit limit has been raised by 5k....funny though, I havent used the card in 3 years. While listening to CSPAN circus debate i have yet to hear anyone of those clowns say just default we dont have any money(real) anyway. Its time for slash and burn.
I basically agree with this article, but think item 1 could be further refined - the relationship between public debt and GDP. Keynesians argue that high public debt to GDP is necessary when there is slack productivity in the system. This presumes that given sufficient public stimulus, GDP growth would make the incurred debt manageable. The problem with Keynesianism in practice is that once the public spigot is opened, nobody seems to have the courage to shut it off and what happens is that total indebtedness grows to the point that only currency printing can hope to make those debts money good. The event horizon we appear to be approaching is one of ever increasing debt - at a rate GDP cannot hope to equal and further currency emission causes it to decline in value faster than it can be printed. How this might end is well beyond my crystal ball, suggesting the Mayans and the astrologer The Count alludes to above may be on to something.
Also, it is a tad spooky that recently credit-card debt is growing faster than wages That is, households as well as governments are trying to extend and pretend.
This is no mystery - it ends in the usual way. Debt expands to the point where it can no longer be serviced, and then there is a collapse. All of the Kings Horses and Men cannot prevent this. Math, bitchez!
" conventional " fail
Economics is of course about conventions. Your meaning can be lost in such vagaries.
The market place is now being ruled by decree and fiat. "Conventional Politics" is what got us here.
Take a look at Dow Jones. Since the lows in 1932 we have 2 wave lengths up. From 32 to around 65-70. And from the lows there in the 70´s to the highs around these levels.
They are equal in % and almost equal in days dependning on from what highs and lows in the sideways area in the 60´s and 70´s you measure.
I read that as one complete major cycle. Fascinating.
wasn't that the basis for inventing the Fed; to protect the bankers (the individuals) and lay off the losses onto the tax payer.
and this whole "moral hazard" premise is bullshit. There's something else called a fuduciary duty which I will leave to the lawyers in the room to comment. It boils down to this, while protecting the bankers, the Fed and the Congress is breaching its fiduciary duty to the people. Call it misfeasance, malfeasance or whatever, they are negligent and probably criminally negligent. Since most of these criminals are white boys, Eric Holder should have a wonderful time prosecuting them.
Interesting comment. Thank you. Perhaps the Fed, et al., could retort that creating obvious moral hazard was, in fact, adhering to their fiduciary responsibility. The logic goes like this: They saved the Banking Industry (and let brokerage firms become banks instantly) in order to save them so that the system didn't collapse and create Armageddon. Faulty logic to be sure, but the two concepts of moral hazard, on the one hand, and fiduciary duty on the other, need to be separated. Otherwise, how can right and proper prosecutions proceed? Conflating the two creates a legal morass that lawyers will certainly exploit, with the resultant fees going to their bottom line.
Yes. And it is the job of a good lawyer to scramble everybody's brains and the failing of a bad lawyer to allow it to happen (see OJ Simpson trial). Nevertheless, the moral part of moral hazard is immoral. Hiding behind the cloak of plausable deniability is just another scam. A tight grip on fiduciary duty prevents moral hazard in the first place.
In all my activities as Armament Minister I never once visited a labor camp, and cannot, therefore, give any information about them.
Albert Speer
Now that I look back, I realize that a life predicated on being obedient and taking orders is a very comfortable life indeed. Living in such a way reduces to a minimum one's need to think.
Adolf Eichmann
I didn't kill anyone that didn't deserve killing in the first place.
Mickey Cohen
Yup Chuck - in 2011 you are writing about the Coming Global Instability' ... Part 1 no less! Wow, glad I'm on board for this. Maybe you'll predict stock market meltdowns, high unemployment, raging deficits, deflations, inflations, bank failures, panics, plagues --- and more....
Oh wait, these have all been happening for years and we're STILL living through them. Why, that must make this piece, uhm, USELESS!
But of course it does - its two dumb ass minds with chuck smith!
hehe
Let me guess, you have a competing blog? Please refer me to some of the books you have written about this subject. I'll compare them to Survival+. Seems much better than these abusive ad hominem attacks.
I agree with the article. He says it like it is.
The end game is dissolution of the nation state in favor of a totalitarian world state. Regional groupings like the EU and the proposed NAU are foreshadowing Soviet Earth. Any crash will be used to force such global integration top down.
Robert Frank writes: In Richistan, I wrote about a new political divide emerging among the wealthy. While most Lower Richistani’s ($1 million to $10 million in net worth) were voting Republican, most Middle-and Upper Richistanis (those worth $10 million plus and $100 million plus) were voting Democrat.
So Alvin Toffler's Third Wave is here as predicted 30 years ago. The Industrial Age is over and the Information Age in ascendant. Toffler's Power Shift is on.
The powers that be futilely try to preserve the status quo. It can't and won't be done. Time and Tide march on, invincible.
Maybe Charles Hugh Smith will point the way for the next 30 years like Toffler did for the past 30.
Cordially,
TwoHoot
Shove the political clowns, banksters, religious leaders, and hedge pirates on to an island in the South Pacific. Fenced in so they can't swim out to a quick ending. Leave them there with nothing but their paper debt, derivatives, credit default swaps, and a supply of baseball bats. Let them practice economics and leadership on one another for a year. Then, go back, and nuke the survivors. Like a Phoenix rising from their ashes, the rest of us can live a decent life, finally rid of the parasites that have fucked the rest of us into the ground in their infinite wisdom.
WW3 upon us, this is the main article on yahoo news right now.
Thanks to GWB it is going to be fucking hard to sell a new war today.
But they need to be Illuminated like the article says lol. Like Winston churchill said NWO is comming they can take it, or be force fed it.
For twelve years you've been asking "Who is John Galt?" This is John Galt speaking. I'm the man who's taken away your victims and thus destroyed your world. You've heard it said that this is an age of moral crisis and that Man's sins are destroying the world. But your chief virtue has been sacrifice, and you've demanded more sacrifices at every disaster. You've sacrificed justice to mercy and happiness to duty. So why should you be afraid of the world around you?
Your world is only the product of your sacrifices. While you were dragging the men who made your happiness possible to your sacrificial altars, I beat you to it. I reached them first and told them about the game you were playing and where it would take them. I explained the consequences of your 'brother-love' morality, which they had been too innocently generous to understand. You won't find them now, when you need them more than ever.
We're on strike against your creed of unearned rewards and unrewarded duties. If you want to know how I made them quit, I told them exactly what I'm telling you tonight. I taught them the morality of Reason -- that it was right to pursue one's own happiness as one's principal goal in life. I don't consider the pleasure of others my goal in life, nor do I consider my pleasure the goal of anyone else's life.
I am a trader. I earn what I get in trade for what I produce. I ask for nothing more or nothing less than what I earn. That is justice. I don't force anyone to trade with me; I only trade for mutual benefit. Force is the great evil that has no place in a rational world. One may never force another human to act against his/her judgment. If you deny a man's right to Reason, you must also deny your right to your own judgment. Yet you have allowed your world to be run by means of force, by men who claim that fear and joy are equal incentives, but that fear and force are more practical.
You've allowed such men to occupy positions of power in your world by preaching that all men are evil from the moment they're born. When men believe this, they see nothing wrong in acting in any way they please. The name of this absurdity is 'original sin'. That's inmpossible. That which is outside the possibility of choice is also outside the province of morality. To call sin that which is outside man's choice is a mockery of justice. To say that men are born with a free will but with a tendency toward evil is ridiculous. If the tendency is one of choice, it doesn't come at birth. If it is not a tendency of choice, then man's will is not free.
And then there's your 'brother-love' morality. Why is it moral to serve others, but not yourself? If enjoyment is a value, why is it moral when experienced by others, but not by you? Why is it immoral to produce something of value and keep it for yourself, when it is moral for others who haven't earned it to accept it? If it's virtuous to give, isn't it then selfish to take?
Your acceptance of the code of selflessness has made you fear the man who has a dollar less than you because it makes you feel that that dollar is rightfully his. You hate the man with a dollar more than you because the dollar he's keeping is rightfully yours. Your code has made it impossible to know when to give and when to grab.
You know that you can't give away everything and starve yourself. You've forced yourselves to live with undeserved, irrational guilt. Is it ever proper to help another man? No, if he demands it as his right or as a duty that you owe him. Yes, if it's your own free choice based on your judgment of the value of that person and his struggle. This country wasn't built by men who sought handouts. In its brilliant youth, this country showed the rest of the world what greatness was possible to Man and what happiness is possible on Earth.
Then it began apologizing for its greatness and began giving away its wealth, feeling guilty for having produced more than ikts neighbors. Twelve years ago, I saw what was wrong with the world and where the battle for Life had to be fought. I saw that the enemy was an inverted morality and that my acceptance of that morality was its only power. I was the first of the men who refused to give up the pursuit of his own happiness in order to serve others.
To those of you who retain some remnant of dignity and the will to live your lives for yourselves, you have the chance to make the same choice. Examine your values and understand that you must choose one side or the other. Any compromise between good and evil only hurts the good and helps the evil.
If you've understood what I've said, stop supporting your destroyers. Don't accept their philosophy. Your destroyers hold you by means of your endurance, your generosity, your innocence, and your love. Don't exhaust yourself to help build the kind of world that you see around you now. In the name of the best within you, don't sacrifice the world to those who will take away your happiness for it.
The world will change when you are ready to pronounce this oath:
I swear by my Life and my love of it that I will never live for the sake of another man,
nor ask another man to live for the sake of mine.
Good Night and Good Luck, the only way to do is to do it. ZH should suggest a stay home day,week, month (who knows) for all with eyes to read and ears to hear and spread it to all other sites, in time the dent will turn to a crack and then some progress, maybe. Better than nothing.
I understand overly critical eyes and sarcasm run a lot of comments on these sites. But if you got a realistic idea by starving the beast, I'm all ears. But one that does'nt take years to see results, please.
You like this, repost it please, maybe some action can happen instead of spinning our own wheels and chasing our tails daily. Take care ZH.
what did you write this for, originally? For twelve years you've been asking "Who is John Galt?"
or do people in the galt cults know what this means?
John Galt for President.........
Nah, go for the whole enchilada - John Galt for Supreme Leader of the Entire World!
1) Abolish the Fed.
2) Treasury can create/issue their own money, debt and interest free.
3) Abolish the US Tax Code, replace by flat tax on all income (incl. bonuses)
4) Repeal Nafta and Cafta
5) Abolish entirely at least 20% of Federal Regulatory Agencies
6) Cut military waste/expenditures by 20%
7) Cut CONgress pay and benefits by 20%
8) Outlaw Double-Triple dipping by all Federal employees and members of CONgress.
9) Reinstate the Glass-Steagell Act.
All I can tell you is that there are some scared shitless people in the arena I work in. Lots of people taking early retirement to get the fuck out of Dodge. When the shit hits full on, you'll wake up feeling out of style...
https://www.gunsgrubandgold.com/forum
No such thing as creative destruction. Just destruction.
Plus it was the removal of certain laws that allow that destruction to take place. How to change that? Put those laws back in place and/or repeal the laws that made it possible.
Glass-Steagall
removed content (spam)
WTF???
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