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Guest Post: Preserving The Status Quo With Artifice And Lies Leads To Systemic Collapse

Tyler Durden's picture




 

From Charles Hugh Smith from Of Two Minds

Preserving the Status Quo with Artifice and Lies Leads to Systemic Collapse

Suppressing dissent, transparency and fact inevitably leads to systemic collapse-- exactly what we're seeing in the European financial system.

Fortunately for us, when our immune system identifies a cancer cell, the cancer cell can't demand to be saved by threatening to kill the entire system. You see the irony here, of course; the cancer cell will destroy the entire organism/system if it is spared, so its threat to bring down the entire system if it is eradicated is pure self-serving artifice.

This is a precise analogy for the "too big to fail" banks in the U.S. and the Eurozone: once again we are hearing the heavy-breathing threats that a systemic bank failure would destroy civilization. The truth is that preserving the cancerous banking system will inevitably bring down the entire system, so the only way to preserve the global economy is to eliminate the financial cancer now, before it triggers systemic collapse.

The best way to understand this is to consider the economy as a system. All sustainable, stable systems require a free flow of information: multiple pathways of communication, experimentation/mutation and transparent feedback. This essential activity generates the low-intensity instability of volatility and fluctuation.

A system which suppresses information and the low-level instability of dissent and negative feedback thus suppresses the information the system needs to remain stable. Suppressing dissent, facts, transparency and feedback inevitably destabilizes the system. It is ironic, isn't it, that the suppression of dissent, facts and transparency creates the surface illusion of stability, but it is only a facade. Beneath the surface, the lack of information and low-level fluctuation/volatility builds up system instability which is suddenly released as non-linear, chaotic volatility and collapse.

What Europe, the U.S., China and Japan have now are leaderships that substitute lies for fact, obfuscation for transparency, artifice for feedback and propaganda for communication. The essential negative feedback of dissent has been choked off, leaving only self-reinforcing positive feedback loops in the system, feedback that inevitably leads to runaway collapse.

In a financial example, when the negative feedback of short positions is banned, then there are no buyers left when the selling begins. The selling cascades, triggering more selling, which then feeds more selling until the bid disappears entirely.

In Europe, the political and financial Elite is preserving the Status Quo with artifice and lies. This can only lead to non-linear systemic collapse. Beneath the surface, they are manipulating, intervening, propping and pumping, but preserving a terminally unstable system with more lies and intervention is impossible.

The only question left is how much longer the system can wobble unsteadily before it finally collapses in a heap of depreciating euros.

 

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Fri, 11/18/2011 - 11:52 | 1891313 Cult_of_Reason
Cult_of_Reason's picture

ECB will bail us out & save us from loses on our reckless bets!

ECB Will Save Our Bonuses!

Booyah!

http://chart.ly/uploads/shuu83d.png

Fri, 11/18/2011 - 11:52 | 1891317 IrritableBowels
IrritableBowels's picture

DOW green at +82.  Go back to sleep...

Fri, 11/18/2011 - 15:46 | 1892119 CPL
CPL's picture

Just opened that eTrade account with the 3k minimum did you? lol

Fri, 11/18/2011 - 11:54 | 1891324 4shzl
4shzl's picture

Europe's been down this road before -- many times.

Fri, 11/18/2011 - 11:58 | 1891334 Tsar Pointless
Tsar Pointless's picture

One man's junk is another man's treasure, just as one man's lies are another man's truths.

Fri, 11/18/2011 - 14:40 | 1891826 rwe2late
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Tsar Pointless

And lies are truths, and truths are lies, and what’s reality to one is unreality to another, and everyone has his own reality, and one reality is as good as another (except when crossing the street), and having no point is pointless, no matter how many men you think would treasure your "junk".

Fri, 11/18/2011 - 18:08 | 1892702 Pitchman
Pitchman's picture

rwe2late

Tsar Pointless.  And the point is?.... a permanent solution to a temporary problem.

All Americans should consider the following

"The bane of humanity is we learn nothing from the horrors of past atrocities.  And history repeats itself. Our/Your passive acceptance of one transgression always makes way for another.  This and the belief that injustice, visited on our neighbor, will not one day come knocking at our door is the banality of evil..." - Inflection Point

See: RAPE OF THE REPUBLIC

The money always tells the story. 

Cui Bono?  If you're interested in the depth of the Rabbit Hole and the psychopaths within, see the Cathrine Austin Fitts piece; "Dillon Reed and Company: And the Aristocracy of Stock Profits" at the bottom of: The Looting of America: Happy Labor Day

Here's something you might find interesting: Graphic: Financial World Dominated By A Few Deep Pockets

Also: Fibonacci Numbers - The Fingerprint of God & God Within

 

Fri, 11/18/2011 - 11:59 | 1891341 French Frog
French Frog's picture

"The essential negative feedback of dissent has been choked off, leaving only self-reinforcing positive feedback loops in the system, feedback that inevitably leads to runaway collapse"

Sounds just like the old Soviet Union ...

Fri, 11/18/2011 - 12:53 | 1891531 disabledvet
disabledvet's picture

A more accurate analogy is Hitler's Germany. "the bigger the lie the more that believe you" was his mantra. "until they don't"'is what get's left out. This is a great article save for one simple truth: "the market values accurate information. Lies being valueless simply do not exist in such in such a system." in other words "eventually all Hitler had was his phantom divisions." of course this happens all the time in the "the marketplace." we call it "money" of course.

Fri, 11/18/2011 - 12:03 | 1891352 daxtonbrown
daxtonbrown's picture

Lies work - until they don't work. Then it all collapses. I've lost two commissions worth $20,000, had someone try to steal my car, had multiple people not pay back small loans - all anecdotal. But my feeling is that the entire system is corrupt and you can no longer trust anyone to do business with. Then I watch the smoke and mirrors in DC and Wall Street.

When everyone gets this same feeling of distrust, everything locks up.

Fri, 11/18/2011 - 17:00 | 1892441 StychoKiller
StychoKiller's picture

The Tacoma Narrows Bridge proved conclusively just what happens to a system subjected to positive feedback...

http://www.youtube.com/watch?v=j-zczJXSxnw

 

Sat, 11/19/2011 - 06:20 | 1893740 S.N.A.F.U.
S.N.A.F.U.'s picture

Hey, I resemble that remark.

Fri, 11/18/2011 - 12:06 | 1891360 slewie the pi-rat
slewie the pi-rat's picture

does it seem they are starting to get the rumors, the lies, and the interventions a bit more coordinated?

Fri, 11/18/2011 - 13:34 | 1891595 baby_BLYTHE
baby_BLYTHE's picture

It is a coordinated effort to bring about their New World Order. If the Central Banks weren't working in collusion with one another, things would run-away so fast they would have no means of reigning it in. Therefore to consolidate their power, they will rake every nation state and its people across flaming hot coals while they suck up all the wealth and remainder of nation's sovereignty to bring about their agenda.

Fri, 11/18/2011 - 12:12 | 1891380 The Ram
The Ram's picture

Yes, we are indeed the last days of Rome.  I check ZH quite often these days. It seems that it may be one of the last true sources of 'Journalism.'  If the financial system does collapse, it will be over before the sheeple can can say bankrupt.  Monitoring the movements of the 'Wall Street wizards,' assuming we could do this, may be the only indication that the collapse is near.  I agree that the break down of trust is the key indicator here that tells us the end is near. 

 

Fri, 11/18/2011 - 12:14 | 1891382 Caviar Emptor
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The most devious and important lie: artificial "demand" . It's the flip side of the outlandish, 3-decade long money printing orgy which has been accelerating during the depression of the last 3 years. Without artificial "demand" there woudl be mass bankruptcy and hyperinflation from the excess dollars. It's a welfare work-program for the supply side. Even if all consumers died or were put in jail, the sales numbers would still look good. 

Fri, 11/18/2011 - 12:13 | 1891384 Dollar Bill Hiccup
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Lies and deceit are essential to life. Truth as revealing / concealing is also essential. The two are clearly not the same, yet it is not simple to separate them. This dilemma is the root of all manipulation.

Unfortunately, everything cannot be revealed for what it is. We still see as through a glass darkly.

While there are lies, damn lies and statistics, the only truth that I can currently frame is that a vote for Ron Paul would be a vote for greater transparency and less manipulation.

Fri, 11/18/2011 - 12:20 | 1891426 Dr. Richard Head
Dr. Richard Head's picture

Couldn't agree more on Ron Paul.

Fri, 11/18/2011 - 12:18 | 1891417 Caviar Emptor
Caviar Emptor's picture

Notice the progression in whom we hold in high regard, then versus now: 

Heroes, strong people not afraid of the truth used to capture the imagination and favor of people

Today the weasels of finance and politics have the spotlight

Fri, 11/18/2011 - 13:12 | 1891606 onelight
onelight's picture

Good point...another way to say it could be: our culture has substituted celebrity for character for the last few decades (fueled by debt-as-money-substitution in parallel), and reached a frivolous crescendo in the last decade.

As a result now people really have the wrong ideas about what matters, what intrinsic value is versus ephemeral...and we see it in the economy, the markets, what TV presents, etc.

Seems like a decade of scourging to come, to reverse the awareness back to what actually works in a normal human life.

Meanwhile, yes the attention priorities are flipped...that said, they seem to be turning to reality, people want it, even as they will find it to be a load of work that has been systemically avoided for quite a while now.

I think it's Quinn that writes about the Fourth Turning theory, of which a quick summation can be had from www.lifecourse.com , click on Methods and read the left-side links to fly over the whole theory.

The Millenials don't realize that, according to the theory (take it with cup of salt) they are the echo of the GI generation. Well fine, but in the '30's the GI generation did not know what it would become, nor did it ever know that it was the echo of the Civil War generation, and of like nature in some ways

The national renewal business will take a while, and it will hurt. But some things are worth doing, for their own sake.

Fri, 11/18/2011 - 12:22 | 1891436 apu123
apu123's picture

It may be anecdotal, but I have had similar experiences.  It seems that people have been trained to spend and consume and will even do so at the expense of buying necessary things like food, shelter etc.  I have also had people not pay back small loans, one guy out of five is still paying what he can, the other people just don't feel an obligation despite written enforceable agreements.

The result is on a very micro scale I will not be loaning money anymore, they can try and get it from a bank.

Fri, 11/18/2011 - 16:42 | 1892360 CPL
CPL's picture

Don't loan money you can't afford to lose.

 

I came to the same conclusion after the third paycheck in my life.  I managed to save $300 by then (In the 80's that was rent, food and gas...for a month), my then buddy that worked the same amount of part time hours somehow managed to be $300 in the hole.  I thought I would be helpful.  Turns out he respected the $300 more than me.

 

Last time I lent to that friend.   Still know him, 30 years later he still finds time and money for anything else but the $300 bucks he owes me and he's around 500k in the hole with house, divorce, lawyer fees.  What gets me in that situation is he gets to have a Retirement plan with around 120k in it.  I don't understand how someone can plan for retirement if they aren't cash positive and why the plans aren't being slushed to pay off existing and current debts. 

 

My $300 bucks a side from years back is one thing, but he and practically every Canadian that you meet is in the same boat.  They all have a registered "savings" plan even though they are hundreds of thousands of dollars in debt, the interest paid on those savings plans don't even remotely come close to the interest required on the principal of the money owed.  Plus the cash in the "savings plan" isn't liquid unless it is withdrawn with a heavy penality.

 

anycase...I'm rambling now.

Fri, 11/18/2011 - 17:05 | 1892470 StychoKiller
StychoKiller's picture

How is it that deadbeats always ask for $300?  Not $500 or $250, but $300?  Three people owe me $300 apiece -- never gonna see those buck$ again!

Fri, 11/18/2011 - 17:08 | 1892491 CPL
CPL's picture

now that is weird...and you are right.  $300 bucks.

Fri, 11/18/2011 - 12:40 | 1891491 Georgesblog
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Unfortunately, fiat currency puts the financial immune system to sleep. Economic cancer is spreading unimpeded, without opposition. Will we have to wait for the currencies to go to zero, before the immune system wakes up and gets to work?

http://georgesblogforum.wordpress.com/2011/11/02/the-daily-climb-2/

Fri, 11/18/2011 - 12:44 | 1891497 SofaPapa
SofaPapa's picture

The part that has always amazed me about the past three years is the instinctive drive by those at the top to destroy the system that has treated them so well.  They had a great thing going.  In a stable system, they could enjoy it.  But because of their raw hubris and greed, now they risk losing everything; the end result of this latest wave of discontent may very well change the game forever.   I suppose it's an example of the "gambler's gene" operating on a large scale.  No adrenaline rush if you don't place your entire bet on the table.  Unfortunately, they are now placing our money on the table, not theirs.  The rush is the same, though.  Now their excitement must come from the subconscious expectation of the masses who are about to come at them with pitchforks.  There's no more exciting gamble than when you put your physical safety on the line.

Fri, 11/18/2011 - 13:20 | 1891632 michael_engineer
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From http://www.zerohedge.com/news/observations-engineer

"As a race, we unknowingly got to this point because that is the nature of all living things.  It is natural for all living things to exploit their resources, and to go forth and multiply and have some fun.  Reaching the predicament of resource constraints would have occurred irregardless of which political party is in control, or which economic model was used by governments, or which religion is practiced by the people.  Growth is the nature of all living things.  "

Fri, 11/18/2011 - 14:52 | 1891869 rwe2late
rwe2late's picture

 The global elite (Trilateral, Bilderberg, etc.) run a global racket which utilizes "Shock Doctrine" methods to garner more power and corral more wealth for themselves. Disasters are "opportunities". They control armies, police, the media, foods, etc. and believe the chances of their overthrow are non-existent to miniscule.

Fri, 11/18/2011 - 12:46 | 1891510 TheAkashicRecord
TheAkashicRecord's picture

 

Officer/Occupier Captain Raymond Lewis

http://tiny.cc/fndci

 

 

[Retired Philadelphia Captain Ray Lewis, quite possibly the first police officer to join the movement, became an occupier this week.  In meeting him personally he was unexpectedly friendly and peaceful with a powerful message.

One day after the unannounced raid on the occupiers, I returned to Zuccotti park to find people assembled waiting for the unveiling of a large sculpture gifted by a local artist.  While waiting for the main event, I had the pleasure of meeting and speaking with retired Philadelphia Police Captain Ray Lewis. In his retirement he has enjoyed a quiet and peaceful return to nature in the Catskills, living as a humble farmer, somewhat isolated and very comfortable.  

When asked why he decided to come join the occupiers, he said, “I couldn’t take watching this go on from a distance”.  He also said that the commitment of the folks occupying inspired him to leave a very peaceful and comfortable life, dust off the old uniform and join folks on the front lines.  

He said America’s news sources are corrupt and one should only get their news from the internet {ZEROHEDGE???] if they want the truth.  If the media told the truth about what is actually happening here there would be more people in support of the occupiers. He also advocated that everyone watch the free film online; ‘The Inside Job’, to truly get a sense of the real corruption that is going on.

He went into great length about how people’s rights are unfortunately violated more often than not behind the doors of the precinct, making references to friends still detained from Tuesday nights eviction. He spoke of the nature of law enforcement to be comfortable only in an authoritative role and that they had even taken this tone with him upon arrival.  He said, “they are being exploited and they don’t even know it.” He was asked to take the people’s mic and speak to the crowd; he said “I am public enemy number 1 in this park right now.  NYPD would love to have any reason to arrest me. It might be a little too soon for that.”

He spoke of his frustration about corporate greed and what it is doing to the planet. The increasing amount of pollution and abuse of resources is a very real threat that should not be taken lightly.  He states “This must be stopped and if these folks are getting up tomorrow morning to protest at 7am, on November 17 for a day of action, than I will be here too.”]

 

 

Fri, 11/18/2011 - 13:04 | 1891578 DollarMenu
DollarMenu's picture

Thank you for your post and the video link.

 

Fri, 11/18/2011 - 17:21 | 1892552 CPL
CPL's picture

thank you for sharing this.

Fri, 11/18/2011 - 13:45 | 1891696 lunaticfringe
lunaticfringe's picture

We (the U.S.) have lost our way. We have lost the rule of law. Sometimes, when somebody steals something from you, you have to steal it back. http://thecivillibertarian.blogspot.com/2011/11/americas-lost-rule-of-la...

Fri, 11/18/2011 - 15:58 | 1892164 terryfuckwit
terryfuckwit's picture

 

tptb = cesspit of lying bastard fraudsters that dont even know when they are taking it up the ass from themselves

Fri, 11/18/2011 - 23:14 | 1893377 mbtshoe
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was almost out of the three ply Lehman's I picked up at a fire sale a couple of years back. I'll need something with the extra comfort a discerning gentleman like myself requires soonChristian Louboutin Heels Alexander Wang Shoes Christian Louboutin Sale Discount Christian Louboutin Shoes Womens UGG Boots
Alexander Wang Bag | Alexander Wang Shoes | Alexander Wang Rocco Alexander Wang Frankie Creeper Short crude oil. The world is swiming in oil as everything else. Its elevated price is just a scam. The probability of war is zero. Uncle Sam can´t go to war against Iran because both its flanks are insecure. The left flank goes to the Straits of Hormuz and if that is closed this means crude price $300 and Stalingrad for US forces in Iraq and other US vassal states in the gulf. As for the right flank that supply line goes through Pakistan. It´s shaky enough as it is.

Sat, 11/19/2011 - 01:49 | 1893598 akak
akak's picture

I would like 20,000 pairs of your most expensive shoes.

Please send the shoes to my post office box, and please bill my Nigerian bank account for the total.

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