If BigThey can get CBDC to be _THE_ Thing, it's pretty much "If you want a picture of the future, imagine a boot stamping on a human face - for ever" Time.
If BigThey can get CBDC to be _THE_ Thing, it's pretty much "If you want a picture of the future, imagine a boot stamping on a human face - for ever" Time.
“There will be no curiosity, no enjoyment of the process of life. All competing pleasures will be destroyed. But always— do not forget this, Winston— always there will be the intoxication of power, constantly increasing and constantly growing subtler. Always, at every moment, there will be the thrill of victory, the sensation of trampling on an enemy who is helpless.
If you want a picture of the future, imagine a boot stamping on a human face— forever. ”
What i want to know, is who Gato is working for. Based on the subjects he is willing to speak on, i'd imagine its wall st or some sort of "rightwing" organization. Perhaps a think tank
Señor Gato defies Spectral Analysis, to my mind. But if by 'right-wing' you mean Opines Within the Bounds of Fiscal Sanity, them sure. Right wing.*shrug*
I once thought he might be Hernando de Soto but it feels like he's much younger. He sure seems economist-y, though. He's good with stats but easily meshes _vox populi_ into his conclusions.
And he refers to The Boss Guy at Brownstone casually as "Jeffrey."
Meh, his creds don't matter. He's good at distilling ideas down to some simple conclusions, and presents them brilliantly.
He's good at pointing out common sense to the choir, is what i've gathered over the past few years. He believes in push back on "social" issues but doesn't address the same make believe bullshit with regards to economics (0% rates, QE). He's like substacks version of rush limbaugh or glenn beck.
Understanding the reasons that make it reasonable to resist masking or vaxxing are both easier to understand and easier to implement on the part of We the Little People than Quantitative Easing. To be fair, mask studies are empirical while QE is basically the desperate response on the part of BigFed to their own irresponsible Monetary Policies in the first place.
"Politics is downstream from Culture."
- The Breitbart Principle
If we want to make our voices heard, we won't do it be Writing Strongly-Worded Letters to Our CongressCritters. But if a bunch of people, say, start telling the Wal-Mart greeters that, by law, they Not Permitted to Wear a Mask while also Carrying a Firearm, then at least in the profitable Wal-Marts (ie: the ones not being stoled to death), I'll bet they'll start rethinking their policies.
Got it, common person too stupid to understand that QE keeps corporations in power and it dilutes the value of what they spend their entire lives working to obtain. But i also think, everything Gato speaks about is a symptom of QE. It is the cause of all the other distractions. Kinda like he's hacking at the branches of evil while ignoring the root. Sometimes feels like its on purpose. If you understood what QE and 0% rates meant over a decade ago, you could predict where we are now. Agree or disagree?
With regards to mucking up the comments, what is their to really muck up? People come here and state yes they're so mean and i knew from the get go it was BS! Great, so your understanding of what is going on ends with that? You aren't helping people by providing them a safe space to vent how they weren't fooled.
"Got it, common person too stupid to understand that QE keeps corporations in power and it dilutes the value of what they spend their entire lives working to obtain."
This is undoubtedly true and I do wish we'd done almost anything to have prevented Our Betters from getting us here. But, again, I'm emphasizing that, for an even broader demographic, QE is not something we can really argue against, meaningfully. Like, not to Congress.
OTOH, We the Little People can choose Civil Disobedience. Be Non-Compliant within all bound of your own security and safety but Become Less Governable. In deference to you positing your own position with equally-qualified pleading, only something much more difficult for most of us to do anything tangible about.
" You aren't helping people by providing them a safe space to vent how they weren't fooled."
I think people here find more support for acting in ways that they're heart and mind and gut told them were sensible but couldn't find any support for it, thinking they/we were all alone. That is not accidental.
I don't think most here have been fooled by QE. Many know it matters. I think, instead, EGM is encouraging people to be confident, to know that there are others who feel similarly, and that there is evidence that they're not crazy in being skeptical.
To be clear, I'm not minimizing, say, QE. I'm suggesting that people here are looking for something that they themselves can do.
Stop expecting a hero will ride in on a horse to save you, stop supporting higher education, healthcare, hollywood. It's not really hard, stop supporting the people who abuse you, your history and your culture.
"Stop expecting a hero will ride in on a horse to save you"
I'm not. If this here had a raison d'etre - speaking as though I'm the host and author here, which I am not - it would be to convince people that We the Little People can and _must_ save ourselves.
You might want to read some of EGM's previous offerings. They're many and varying and include even thoughts on Fiscal Policy, as you suggest he should. I just don't think. But they're part of a larger whole.
Move money out of Large banks, go local, perhaps a credit union. Do not put any money in the stock market, starve the beast. Show discontent in greater amounts when the next round of bailouts appear and they try to take rates back to zero, even if it costs you your job. Don't look at a 401k as a savings account. Save more in your own savings account you can access anytime without taking a "loan". Essentially what i'm saying is just like most people found out most other people are rotten during covid, so they should have seen that the entire system is rotten in 2008. Good things don't come without effort and by continuing along as we have, nothing will change.
Heck, the fact that we still refer to 2020 as a "pandemic" and not a financial crisis with a dash of murder by the healthcare system is just going down the wrong road.
This I also endorse but local banks are hard since they're limited in their ability to invest via Dodd-Frank - which was a super-contributing factor to the Subprime Mortgage Crisis of '08, so not many can do it before they're gobbled up by BigBanking.
Your investment and savings advice is also sound but note that only about a third of US-type People have any stake in the Stock Market, including 401k plans, at all. In order to invest you have You, Inc. has to be running a profit. That's never been easy, and is much less so post-Stupid COVID Reactions by BigGov.
The system is rotten, no doubt. And I agree with the Don't Let Life Just Happen to You spirit you bring. I just think your advice applies less thoroughly than you think, and is more an Effect than a Cause to the How We Got Here Story.
We got here because The Clerisy finally achieved the Sheep Critical Mass of NPCs required to "Lock down for Two Weeks to Bend the Curve." I think we reverse it by being less sheeply.
I won't hold my breath with regards to people becoming less sheeply.
Wednesday, March 5, 2014
Currency Collapse is an Agency of Reform
"[...] the new philosophy takes its bearings by how men live as distinguished from how they ought to live; it despises the concern with imagined republics and imagined principalities. The standard which it recognizes is "low but solid." Its symbol is the Beast Man as opposed to the God Man: it understands man in the light of the sub-human rather than of the super-human. The scheme of a good society which it projects is therefore in principle likely to be actualized by men's efforts or its actualization depends much less on chance than does the classical "utopia": chance is to be conquered, not by abandoning the passionate concern with the goods of chance and the goods of the body but through giving free reign to it."
-- Leo Strauss, Thoughts on Machiavelli, Free Press, 1958
What sense can we make of James Madison's famous Federalist No. 10 today? This is his essay on the danger of divisive and controlling factions to government, and how the Constitution would guard against them. His solution was to eliminate the problem by encouraging factions and fragmenting them, so that none of them could abuse its influence and upend the system, and by structuring the scale of the republic so that no faction could have undue influence and deprive others of their rights.
It's not clear, from Madison's point of view, just who the factions are in our world today. Are they the political parties? The beneficiaries of transfer payments? Is the military-industrial complex a single faction, or many? Likewise with the too-big-to-fail financial elites, or the health-care cartels, the endless political bureaucracies and rent-seekers -- are they unified threats, or a multitude of self-interested parties? Or is the entire system simply overrun?
What strikes us today is the overwhelming enormity of our situation, the unpayable debt and unmeetable liabilities, the intentionally-blown asset bubbles, an economic system that can no longer create the organic credit it requires for growth, and the complete failure of politics to address the situation or even discuss it openly and honestly with the public.
There was a shift not of degree but of kind, the Republic replaced by Empire, particularly after World War II. The "republican remedy" cherished by the Madison could not be maintained in the tide of History, the changes brought by a Lincoln, a Woodrow Wilson, or a Franklin Roosevelt; of new amendments to the Constitution; of innovations such as Keynesianism and unbacked debt-based currency.
"Public choice" economics emerged in the postwar period as an effort to examine the problems inherent in this new world. Bentham and Mill could not have invented it; public choice thought was grounded in the unique situation given by the West: industrial economies (initially) with surplus productivity, with democratic institutions for allocating and dividing the spoils. In what might be putting the cart before the horse, the school of thought attempted to discern political insights from primarily economic analysis.
An important insight from the public choice school was a sort of deep pessimism about these spoils. A subsidy or favor, once granted, tends to perpetuate itself forever because of the asymmetry of costs and benefits for everyone involved. To the beneficiary -- a faction? -- a subsidy is absolutely essential, but to the rest of us, the impact is minimal.
A good example is the Small Business Administration, whose budget of $1 billion is pure gravy for its beneficiaries and the in-house bureaucracy that administers its programs. The agency budget, divided by the number of U.S. taxpayers, is about $7 per person. Those feeding from the trough will fight tooth-and-nail to keep their privilege, but who among us would campaign to end it? Who cares enough to crusade to shut down the SBA? Is $7 worth the effort? Write a letter? An email?
Extend out this analysis across the now-vast Federal government, and add to it sketchy ideas such government expenditures counting as GDP, and we see very quickly what a dire situation we are in. The monster cannot possibly be reformed, the debts cannot possibly be repaid. Why, with the current definitions, cutting government expenditures will cut GDP. We are doomed to failure.
If it were possible to reform the American system, to trim government to its bare essentials and pay off the debt, the last opportunity we had to do this was the mid-90s with the GOP surge led by Gingrich. This was the last chance as an ideological moment, but more importantly as a demographic one, since the Baby Boomers were still in their prime earning years. If the whole project had not crashed and burned so horribly, it would have been possible to tackle the outstanding debt (if not the entitlements) via austerity. But we blew it.
Our entire economic system now rests on an outrageous fiction, that the debts incurred on the nation since the 20th Century are "money-good", that they can be paid, and that they are binding on current and even future generations. This is a sickening idea, for to the young and those unborn it is odious debt and is not in any way binding on them. In fact, the system is desperate to create any new debts it can, however it can, to keep the game going. At the moment, permanent student loans, 84-month subprime auto loans, and securitized rental housing payments are holding things up.
But "the system" cannot be reformed with policy. The trenches are dug too deep. The factions are secure in their bunkers, enjoying their privileges.
The solution is currency collapse.
The collapse of the Treasury complex, and with it, the U.S. dollar, is the one event that puts a full-stop to the madness that our debt-powered society has become.
In the event of a collapse of the currency, all of the factions feeding off the system, the government workers, the recipients of transfer payments from their betters, the scandalous public pension recipients, will need to make other arrangements. No law, no arguments will be necessary. The checks may still be written, but they will lack any real purchasing power. All dollar-denominated debts and values will have to be revalued in terms of something else, something real.
No one will be spared. It's not as if your employer flips a switch, and your paycheck comes to you as Morgan dollars or Mercury dimes. Institutions simply collapse under these conditions. Most of them, in fact.
It is a fair question whether the United States itself will survive the experience, or if it will fragment into autonomous regions. We quickly get into questions of energy and societal complexity, what will be both manageable and stable in this future. A posh enclave like Loudoun County, VA, will go from the upper echelons to full-on Mad Max in the space of a weekend.
Thomas Hobbes will be the latest intellectual fashion.
More important are questions about whether or not we are still a nation, in the full sense. But that topic is for another day.
Collapse of the Treasury complex and of the Dollar do not necessarily bring back our Old Republic. Classical political thought holds that tyranny follows democratic excess and collapse, and we are very likely to have a series of Caesars.
Vladimir Putin is a Caesar, actually not a bad one at that, but he is what the Russian people needed after their own collapse, and I believe that he does act in the best interests of the Russian Federation. His personal fortune is excessive and an embarrassment; a true statesman would repatriate the bulk of it to the Russian people in their hour of need. But I am not Simonides to Putin's Hiero.
Again, I maintain that just as your regular paycheck will not transform overnight into junk silver, the United States will not magically roll back to republican government under the Constitution circa 1800. The problem is that the citizenry is thoroughly debased and no longer capable of the self-governance required of a free people. An extended period of deprivation and attrition will be needed to get the population into proper shape. The survivors have a chance to emerge as a free people one day, only if they are worthy of it. First we will have a few Caesars.
We are entering a period where all of the classic questions of our (Western) civilization will come to the fore, questions of law and order, of the true natural rights of man, questions of man's right of resistance to a tyrannical sovereign, of the nature of money, of the best political order. Our unserious, ephemeral, late-Modern culture ignored these issues, but they were there all the time, and will continue to be so.
When will currency collapse take place? To answer that, we need a bonus chart, on the 10-year U.S. Treasury bond.
I argue in this chart that we are entering a terminal phase of the bull market in bonds that began with the end of Kondratieff cycle Summer in 1980. This long-term chart shows yields forming a bullish wedge, the upper edge of which will be broken violently when it completes.
The final leg of the chart is a fifth-wave ending-diagonal pattern, a compressing, overlapping pattern that indicates that the trend is running out of steam and about to change direction. This fifth-wave has one more leg down, a deflationary shock that will rock the equity markets and take 10Y yields down to a Japanese-like sub-1%.
After the deflationary shock plays out, the folly of the Fed's maneuvers will be evident, and we will be left with a wrecked economy and unsustainable debt loads. Confidence will be lost in the value of Treasury bonds and in the Dollar. Its status as an equivalent of crude oil energy will be absolutely critical. Once yields break back above 1%, bonds will sell off in increasingly vicious cycles, and the derivatives bomb in the U.S. banking system will -- at last -- detonate.
And that's how and when you get a currency collapse, even in King Dollar. The unpayable debts will all become worthless. Any attempts to re-validate these debts -- Treasurys, Social Security payments, pensions -- in the new order will only trigger a series of nasty civil wars until these claims are abandoned.
I have on my wall a framed collection of German currency from the Weimar era, ranging from 1DM to the 500 million DM bills from the crack-up boom. The bills are dated and, toward the end of 1923, printed only on one side.
What is shocking about the German hyperinflation is the insane speed at which it took place, which you can see across the face of these bills. It was all over within a few months.
With electronic, global trading systems, how long do you think a modern Dollar collapse would take?
And, whether we like it or not, the collapse of the Dollar will be a climactic act of Reform, completing the long credit cycle with Kondratieff winter. It will change the world we live in overnight -- nothing will be the same, for the 20th Century will now, at last, come to a close.
We look to a great German stoic for advice, a witness to the last cycle.
Faced as we are with this destiny, there is only one world outlook that is worthy of us, that which has already been mentioned as the Choice of Achilles — better a short life, full of deeds and glory, than a long life without content. Already the danger is so great, for every individual, every class, every people, that to cherish any illusion whatever is deplorable. Time does not suffer itself to be halted; there is no question of prudent retreat or wise renunciation. Only dreamers believe that there is a way out. Optimism is cowardice.
We are born into this time and must bravely follow the path to the destined end. There is no other way. Our duty is to hold on to the lost position, without hope, without rescue, like that Roman soldier whose bones were found in front of a door in Pompeii, who, during the eruption of Vesuvius, died at his post because they forgot to relieve him. That is greatness. That is what it means to be a thoroughbred. The honourable end is the one thing that can not be taken from a man.
As long as we breathe there is still hope. I would have said 4 years ago there would be no chance people would have fallen for the pandemic narrative (or financial crisis with a side of death). But because such things can be imagined, cannot their counter also be imagined as well? We may not be able to reform the American system, but something can be done. I think the better way is to do something voluntarily rather than coerced through fear, lies, and manipulation though.
But you are giving them a place to know they aren't alone or insane. Could you imagine not having places like this. Well, in 2020 I was just some guy, alone in his room in March, knowing something was up, and trying to hunt it down was worse than solving a Scooby Doo mystery, it was more like putting together a jigsaw puzzle with intentionally missing pieces.
Jimmy, you're talking to a veteran here. It's been a long war, ive been saying what Gato is now saying since 2008. Where was he then? If he's so libertarian and against tyranny why is he ok with government intervention into the financial markets at magnitude levels of covid intervention?
"trying to hunt it down was worse than solving a Scooby Doo mystery, it was more like putting together a jigsaw puzzle with intentionally missing pieces."
Don't i know it. And by ignoring the bailouts of 2020 he's ignoring the largest piece of the puzzle. You don't find that odd or you just think its not important?
You're talking to someone here who is no veteran. In the 1980's in college history class I was first told about a laissez faire government and thought to myself "Yes, that, I want that." I thought that the Constitution and ideas behind it were that.
I am sure I could dig up people that have been saying this since the fifties...and before that...and before that...
I don't know where Gato was, but I can tell you where I was, I wasn't paying attention because I didn't have to participate in the fiction on a daily basis. My big take-aways from 2008 was, Grocery stores were no longer open 24 hours a day. I was one of those "leave me alone Libertarians and until 2020 was largely left alone.
Is Gato okay with government intervention into the financial markets? Maybe I missed those posts, and if he is, then that's where we diverge.
Instead of the Edwin Starr's "WAR" it should be "Government"
One of my speculations about Covid was that Obamacare has been and continues to fail, and Covid was a way to distract from it. I doubt he is ignoring the bailouts of 2020. I also don't think that just because you don't hear him talk about certain things, he doesn't ignore them.
gotcha. 2020 was a larger bailout then 2008, just an FYI. Obamacare was a bailout for the very people who pushed covid. Didn't really lower prices of healthcare like they said, did it? Just like student loan forgiveness is just a bailout for the schools and not the students. They won't have the debt anymore but the job market will still suck. Its funny how few people remember how on the edge the US was in 08.
Not sure what kind of game you think we are running here that it even requires a "gotcha,"
"Gotcha?"
The only two things I said in regards to 2020 was this:
I was one of those "leave me alone Libertarians and until 2020 was largely left alone."
And this:
"One of my speculations about Covid was that Obamacare has been and continues to fail, and Covid was a way to distract from it. I doubt he is ignoring the bailouts of 2020."
Did I say anywhere that 2020 was not as large a bailout as 2008? All I discussed was my personal experience to 2008?
"In the 1980's in college history class I was first told about a laissez faire government and thought to myself "Yes, that, I want that." "
I had an awesome 10th Grade US History teacher, Mr. Luers, who really made it cool for a math nerd like me. But the "Aha!" was much the same. I just didn't know was like that, like me, in The Standard Model of Politics.
"Is Gato okay with government intervention into the financial markets?"
You don't have to dig too deep to conclude that, no, El Gato Mato is largely un-pro-government.
Thank you for the link Eric. If you read the comments you'll see that i did read it and i did comment and i made the same push back on that article as i'm making here. Yes he talks about the debt, but doesn't talk about what it was used for or when the majority of it occurred. 2008 was the markets, those blessed free markets telling us all we're bankrupt, before they were murdered by the big banks and .gov with a ventilator. Gato made a snarky comment when i pointed out that Bush the mentally handicapped wanted to privatize SS and then never responded to any of the counter evidence i posted pointing out that the majority of the debt we've added since 2008 (national debt was around 7 to 8 trillion in 08 and is now 34 trillion) was used to keep TBTF in power.
House, I am trying to comprehend your paragraph. This is not snark, just a difference in communication styles I suspect.
There is a certain amount of ad hominem in it that I must ignore in order to drill down on the core you are asking me if I agree or disagree with. Have patience, I am not here to reflexively defend GM.
What is “TBTF”? I am not familiar with that ETLA 😂
Its amusing the lengths people will go to defend someone they've never met and know nothing about..... If this is how we are going to act, and not question those who attempt to "lead" us, how are we any different then what we oppose? Isn't not questioning those who lead us what got us here in the first place?
Is snark. If you ignore portions of an equation and say see, we'd all be better off if Social Security was invested in the stock market, without explaining why the stock market is as over valued as it is, is being disingenuous in my opinion. That is what i was asking. Read the post below this, this is what El Gato posted on the article you linked to yesterday.
el gato malo
Nov 9, 2023
Author
up, yeah. the SPX was about 1400. it's currently 4300, so up 207% since then.
meanwhile, the alleged SS trust fund (an imaginary accounting entity) earns negative nominal returns.
you sure you've got your math right?
Essentially what he's saying is look the SP 500 was 1400 in 2008 and now its 4300! That's progress bro! And i'm saying well the debt was 8 trillion in 2008 and its now 34 trillion in 2024, that is not progress bro! So yeah the stock market is up 207% but the debt is up 325%. Dude is lying.
Yes, I agree. I was explaining to my 14yo who was astonished that a real estate investment I made when she was born was up in value over 300% just 14 years later. I had to caution her though that when I bought it, a gallon of gas and a BigMac were both $2 and are now 300% more. So I asked her to do the math and she correctly calculated that my investment had gained 0% in real value. We were both relieved that at least it hadn't lost money...
I dont think that GM is lying, that supposes intent that is difficult to attribute to another. Perhaps he/she is just wrong in an assessment or perhaps we are wrong in our analyses of what he is saying.
I try to be fair...at least to a point. Still want to know what TBTF stands for....?
If you make a comment like this, but don't explain why it is up 207%, in my opinion you are lying by omission.
author
el gato malo
Nov 9, 2023
Author
up, yeah. the SPX was about 1400. it's currently 4300, so up 207% since then.
meanwhile, the alleged SS trust fund (an imaginary accounting entity) earns negative nominal returns.
you sure you've got your math right?
Perhaps he should explain what price the market would be if no bailouts had happened in 2008 and again in 2020. 15 years of 0% rates and QE. Does that seem fair to you?
I'd argue i'm the only person here who is genuine. You either have principles you apply equally to all situations or you're corrupt. Its as simple as that. You can't say "Man that meany government and healthcare and higher ed went overboard in 2020! We should really stick it to them" and then ignore when the same crap is done by your "side", that is all i'm arguing. So if he would like to write an article on WHY QE and 0% rates haven't inflated the stock market and property values, well i'm all ears. Just like unlimited credit extended to higher education has inflated the cost of a degree, its the exact same thing. Or healthcare for that matter.
Do you see what i mean? You can't write a hit piece on SS and then say things would have been better if they'd put SS into the stock market! Or am i being unreasonable?
"So if he would like to write an article on WHY QE and 0% rates haven't inflated the stock market and property values, well i'm all ears."
Maybe you don't understand how this here Substack thing works. Or maybe Capitalism more generally.
See, the Dear Sir and/or Madam who host each site gets to write about the stuff they find interesting. I suspect many authors are open to suggestions but, at least in this case, I don't think the typical consumer comes here to debate the merits of Bernanke vs Greenspan vs Glass-Steagall.
But you seem interested, and I'm willing to initially assume by your enthusiasm that your knowledgeable on Monetary Policy. So - and hear me out here - how about _you_ write some articles on your Substack, throw in some graphs (Dude, I love charts and tables and graphs https://youtu.be/WCHrYoH1D94?si=-bhM3faITniT4dAU ), and use EGM's considerable platform to lure people _like me_ who might actually be interested to _Your Substack_.
Expect some blowback from hecklers and haters and those who simply might not get it. You have a good monetary Policy article product, people will buy.
I'm more of a verbal communicator then written. I wrote as many papers as i ever wanted to in college while obtaining a degree in history. I believe the monetary and the covid are connected and i think explaining the how and why would do wonders for the public with regards to filtering out more poseurs in the future who are just empty suits. You are correct, this is his site and he can write about whatever he wants. On that note, i take my leave and apologize if i was rude. Not my intention, just frustrated.
So you think dismantling the government but leaving mega corporations in place would be a good thing? How are they different? I'm under the belief that they arent. Also i don't think you could dismantle one and keep the other. One goes, they both go.
See how you can get your boot soles stamped with your likeness at my Etsy Store for 19.99 plus shipping. We will ship you a box to put your boots in. Or you can buy from array of available boots, all in drab gray and in one size because that's the way Big Brother does it.
If BigThey can get CBDC to be _THE_ Thing, it's pretty much "If you want a picture of the future, imagine a boot stamping on a human face - for ever" Time.
- George Orwell, 1984
--
https://www.goodreads.com/quotes/139439-there-will-be-no-curiosity-no-enjoyment-of-the-process
“There will be no curiosity, no enjoyment of the process of life. All competing pleasures will be destroyed. But always— do not forget this, Winston— always there will be the intoxication of power, constantly increasing and constantly growing subtler. Always, at every moment, there will be the thrill of victory, the sensation of trampling on an enemy who is helpless.
If you want a picture of the future, imagine a boot stamping on a human face— forever. ”
What i want to know, is who Gato is working for. Based on the subjects he is willing to speak on, i'd imagine its wall st or some sort of "rightwing" organization. Perhaps a think tank
Gato works for the "other" WEF:
Worldly Eternal Felines.
Señor Gato defies Spectral Analysis, to my mind. But if by 'right-wing' you mean Opines Within the Bounds of Fiscal Sanity, them sure. Right wing.*shrug*
I once thought he might be Hernando de Soto but it feels like he's much younger. He sure seems economist-y, though. He's good with stats but easily meshes _vox populi_ into his conclusions.
And he refers to The Boss Guy at Brownstone casually as "Jeffrey."
Meh, his creds don't matter. He's good at distilling ideas down to some simple conclusions, and presents them brilliantly.
He's good at pointing out common sense to the choir, is what i've gathered over the past few years. He believes in push back on "social" issues but doesn't address the same make believe bullshit with regards to economics (0% rates, QE). He's like substacks version of rush limbaugh or glenn beck.
Understanding the reasons that make it reasonable to resist masking or vaxxing are both easier to understand and easier to implement on the part of We the Little People than Quantitative Easing. To be fair, mask studies are empirical while QE is basically the desperate response on the part of BigFed to their own irresponsible Monetary Policies in the first place.
"Politics is downstream from Culture."
- The Breitbart Principle
If we want to make our voices heard, we won't do it be Writing Strongly-Worded Letters to Our CongressCritters. But if a bunch of people, say, start telling the Wal-Mart greeters that, by law, they Not Permitted to Wear a Mask while also Carrying a Firearm, then at least in the profitable Wal-Marts (ie: the ones not being stoled to death), I'll bet they'll start rethinking their policies.
Got it, common person too stupid to understand that QE keeps corporations in power and it dilutes the value of what they spend their entire lives working to obtain. But i also think, everything Gato speaks about is a symptom of QE. It is the cause of all the other distractions. Kinda like he's hacking at the branches of evil while ignoring the root. Sometimes feels like its on purpose. If you understood what QE and 0% rates meant over a decade ago, you could predict where we are now. Agree or disagree?
With regards to mucking up the comments, what is their to really muck up? People come here and state yes they're so mean and i knew from the get go it was BS! Great, so your understanding of what is going on ends with that? You aren't helping people by providing them a safe space to vent how they weren't fooled.
"Got it, common person too stupid to understand that QE keeps corporations in power and it dilutes the value of what they spend their entire lives working to obtain."
This is undoubtedly true and I do wish we'd done almost anything to have prevented Our Betters from getting us here. But, again, I'm emphasizing that, for an even broader demographic, QE is not something we can really argue against, meaningfully. Like, not to Congress.
OTOH, We the Little People can choose Civil Disobedience. Be Non-Compliant within all bound of your own security and safety but Become Less Governable. In deference to you positing your own position with equally-qualified pleading, only something much more difficult for most of us to do anything tangible about.
" You aren't helping people by providing them a safe space to vent how they weren't fooled."
I think people here find more support for acting in ways that they're heart and mind and gut told them were sensible but couldn't find any support for it, thinking they/we were all alone. That is not accidental.
https://youtu.be/C7Cyyb0jk7Q?si=0ptQP-9p6CD3noev&t=148
I don't think most here have been fooled by QE. Many know it matters. I think, instead, EGM is encouraging people to be confident, to know that there are others who feel similarly, and that there is evidence that they're not crazy in being skeptical.
To be clear, I'm not minimizing, say, QE. I'm suggesting that people here are looking for something that they themselves can do.
Stop expecting a hero will ride in on a horse to save you, stop supporting higher education, healthcare, hollywood. It's not really hard, stop supporting the people who abuse you, your history and your culture.
"Stop expecting a hero will ride in on a horse to save you"
I'm not. If this here had a raison d'etre - speaking as though I'm the host and author here, which I am not - it would be to convince people that We the Little People can and _must_ save ourselves.
You might want to read some of EGM's previous offerings. They're many and varying and include even thoughts on Fiscal Policy, as you suggest he should. I just don't think. But they're part of a larger whole.
Move money out of Large banks, go local, perhaps a credit union. Do not put any money in the stock market, starve the beast. Show discontent in greater amounts when the next round of bailouts appear and they try to take rates back to zero, even if it costs you your job. Don't look at a 401k as a savings account. Save more in your own savings account you can access anytime without taking a "loan". Essentially what i'm saying is just like most people found out most other people are rotten during covid, so they should have seen that the entire system is rotten in 2008. Good things don't come without effort and by continuing along as we have, nothing will change.
Heck, the fact that we still refer to 2020 as a "pandemic" and not a financial crisis with a dash of murder by the healthcare system is just going down the wrong road.
"he fact that we still refer to 2020 as a "pandemic" and not a financial crisis"
I agree with this characterization completely.
"go local, perhaps a credit union"
This I also endorse but local banks are hard since they're limited in their ability to invest via Dodd-Frank - which was a super-contributing factor to the Subprime Mortgage Crisis of '08, so not many can do it before they're gobbled up by BigBanking.
Your investment and savings advice is also sound but note that only about a third of US-type People have any stake in the Stock Market, including 401k plans, at all. In order to invest you have You, Inc. has to be running a profit. That's never been easy, and is much less so post-Stupid COVID Reactions by BigGov.
The system is rotten, no doubt. And I agree with the Don't Let Life Just Happen to You spirit you bring. I just think your advice applies less thoroughly than you think, and is more an Effect than a Cause to the How We Got Here Story.
We got here because The Clerisy finally achieved the Sheep Critical Mass of NPCs required to "Lock down for Two Weeks to Bend the Curve." I think we reverse it by being less sheeply.
I won't hold my breath with regards to people becoming less sheeply.
Wednesday, March 5, 2014
Currency Collapse is an Agency of Reform
"[...] the new philosophy takes its bearings by how men live as distinguished from how they ought to live; it despises the concern with imagined republics and imagined principalities. The standard which it recognizes is "low but solid." Its symbol is the Beast Man as opposed to the God Man: it understands man in the light of the sub-human rather than of the super-human. The scheme of a good society which it projects is therefore in principle likely to be actualized by men's efforts or its actualization depends much less on chance than does the classical "utopia": chance is to be conquered, not by abandoning the passionate concern with the goods of chance and the goods of the body but through giving free reign to it."
-- Leo Strauss, Thoughts on Machiavelli, Free Press, 1958
What sense can we make of James Madison's famous Federalist No. 10 today? This is his essay on the danger of divisive and controlling factions to government, and how the Constitution would guard against them. His solution was to eliminate the problem by encouraging factions and fragmenting them, so that none of them could abuse its influence and upend the system, and by structuring the scale of the republic so that no faction could have undue influence and deprive others of their rights.
It's not clear, from Madison's point of view, just who the factions are in our world today. Are they the political parties? The beneficiaries of transfer payments? Is the military-industrial complex a single faction, or many? Likewise with the too-big-to-fail financial elites, or the health-care cartels, the endless political bureaucracies and rent-seekers -- are they unified threats, or a multitude of self-interested parties? Or is the entire system simply overrun?
What strikes us today is the overwhelming enormity of our situation, the unpayable debt and unmeetable liabilities, the intentionally-blown asset bubbles, an economic system that can no longer create the organic credit it requires for growth, and the complete failure of politics to address the situation or even discuss it openly and honestly with the public.
There was a shift not of degree but of kind, the Republic replaced by Empire, particularly after World War II. The "republican remedy" cherished by the Madison could not be maintained in the tide of History, the changes brought by a Lincoln, a Woodrow Wilson, or a Franklin Roosevelt; of new amendments to the Constitution; of innovations such as Keynesianism and unbacked debt-based currency.
"Public choice" economics emerged in the postwar period as an effort to examine the problems inherent in this new world. Bentham and Mill could not have invented it; public choice thought was grounded in the unique situation given by the West: industrial economies (initially) with surplus productivity, with democratic institutions for allocating and dividing the spoils. In what might be putting the cart before the horse, the school of thought attempted to discern political insights from primarily economic analysis.
An important insight from the public choice school was a sort of deep pessimism about these spoils. A subsidy or favor, once granted, tends to perpetuate itself forever because of the asymmetry of costs and benefits for everyone involved. To the beneficiary -- a faction? -- a subsidy is absolutely essential, but to the rest of us, the impact is minimal.
A good example is the Small Business Administration, whose budget of $1 billion is pure gravy for its beneficiaries and the in-house bureaucracy that administers its programs. The agency budget, divided by the number of U.S. taxpayers, is about $7 per person. Those feeding from the trough will fight tooth-and-nail to keep their privilege, but who among us would campaign to end it? Who cares enough to crusade to shut down the SBA? Is $7 worth the effort? Write a letter? An email?
Extend out this analysis across the now-vast Federal government, and add to it sketchy ideas such government expenditures counting as GDP, and we see very quickly what a dire situation we are in. The monster cannot possibly be reformed, the debts cannot possibly be repaid. Why, with the current definitions, cutting government expenditures will cut GDP. We are doomed to failure.
If it were possible to reform the American system, to trim government to its bare essentials and pay off the debt, the last opportunity we had to do this was the mid-90s with the GOP surge led by Gingrich. This was the last chance as an ideological moment, but more importantly as a demographic one, since the Baby Boomers were still in their prime earning years. If the whole project had not crashed and burned so horribly, it would have been possible to tackle the outstanding debt (if not the entitlements) via austerity. But we blew it.
Our entire economic system now rests on an outrageous fiction, that the debts incurred on the nation since the 20th Century are "money-good", that they can be paid, and that they are binding on current and even future generations. This is a sickening idea, for to the young and those unborn it is odious debt and is not in any way binding on them. In fact, the system is desperate to create any new debts it can, however it can, to keep the game going. At the moment, permanent student loans, 84-month subprime auto loans, and securitized rental housing payments are holding things up.
But "the system" cannot be reformed with policy. The trenches are dug too deep. The factions are secure in their bunkers, enjoying their privileges.
The solution is currency collapse.
The collapse of the Treasury complex, and with it, the U.S. dollar, is the one event that puts a full-stop to the madness that our debt-powered society has become.
In the event of a collapse of the currency, all of the factions feeding off the system, the government workers, the recipients of transfer payments from their betters, the scandalous public pension recipients, will need to make other arrangements. No law, no arguments will be necessary. The checks may still be written, but they will lack any real purchasing power. All dollar-denominated debts and values will have to be revalued in terms of something else, something real.
No one will be spared. It's not as if your employer flips a switch, and your paycheck comes to you as Morgan dollars or Mercury dimes. Institutions simply collapse under these conditions. Most of them, in fact.
It is a fair question whether the United States itself will survive the experience, or if it will fragment into autonomous regions. We quickly get into questions of energy and societal complexity, what will be both manageable and stable in this future. A posh enclave like Loudoun County, VA, will go from the upper echelons to full-on Mad Max in the space of a weekend.
Thomas Hobbes will be the latest intellectual fashion.
More important are questions about whether or not we are still a nation, in the full sense. But that topic is for another day.
Collapse of the Treasury complex and of the Dollar do not necessarily bring back our Old Republic. Classical political thought holds that tyranny follows democratic excess and collapse, and we are very likely to have a series of Caesars.
Vladimir Putin is a Caesar, actually not a bad one at that, but he is what the Russian people needed after their own collapse, and I believe that he does act in the best interests of the Russian Federation. His personal fortune is excessive and an embarrassment; a true statesman would repatriate the bulk of it to the Russian people in their hour of need. But I am not Simonides to Putin's Hiero.
Again, I maintain that just as your regular paycheck will not transform overnight into junk silver, the United States will not magically roll back to republican government under the Constitution circa 1800. The problem is that the citizenry is thoroughly debased and no longer capable of the self-governance required of a free people. An extended period of deprivation and attrition will be needed to get the population into proper shape. The survivors have a chance to emerge as a free people one day, only if they are worthy of it. First we will have a few Caesars.
We are entering a period where all of the classic questions of our (Western) civilization will come to the fore, questions of law and order, of the true natural rights of man, questions of man's right of resistance to a tyrannical sovereign, of the nature of money, of the best political order. Our unserious, ephemeral, late-Modern culture ignored these issues, but they were there all the time, and will continue to be so.
When will currency collapse take place? To answer that, we need a bonus chart, on the 10-year U.S. Treasury bond.
I argue in this chart that we are entering a terminal phase of the bull market in bonds that began with the end of Kondratieff cycle Summer in 1980. This long-term chart shows yields forming a bullish wedge, the upper edge of which will be broken violently when it completes.
The final leg of the chart is a fifth-wave ending-diagonal pattern, a compressing, overlapping pattern that indicates that the trend is running out of steam and about to change direction. This fifth-wave has one more leg down, a deflationary shock that will rock the equity markets and take 10Y yields down to a Japanese-like sub-1%.
After the deflationary shock plays out, the folly of the Fed's maneuvers will be evident, and we will be left with a wrecked economy and unsustainable debt loads. Confidence will be lost in the value of Treasury bonds and in the Dollar. Its status as an equivalent of crude oil energy will be absolutely critical. Once yields break back above 1%, bonds will sell off in increasingly vicious cycles, and the derivatives bomb in the U.S. banking system will -- at last -- detonate.
And that's how and when you get a currency collapse, even in King Dollar. The unpayable debts will all become worthless. Any attempts to re-validate these debts -- Treasurys, Social Security payments, pensions -- in the new order will only trigger a series of nasty civil wars until these claims are abandoned.
I have on my wall a framed collection of German currency from the Weimar era, ranging from 1DM to the 500 million DM bills from the crack-up boom. The bills are dated and, toward the end of 1923, printed only on one side.
What is shocking about the German hyperinflation is the insane speed at which it took place, which you can see across the face of these bills. It was all over within a few months.
With electronic, global trading systems, how long do you think a modern Dollar collapse would take?
And, whether we like it or not, the collapse of the Dollar will be a climactic act of Reform, completing the long credit cycle with Kondratieff winter. It will change the world we live in overnight -- nothing will be the same, for the 20th Century will now, at last, come to a close.
We look to a great German stoic for advice, a witness to the last cycle.
Faced as we are with this destiny, there is only one world outlook that is worthy of us, that which has already been mentioned as the Choice of Achilles — better a short life, full of deeds and glory, than a long life without content. Already the danger is so great, for every individual, every class, every people, that to cherish any illusion whatever is deplorable. Time does not suffer itself to be halted; there is no question of prudent retreat or wise renunciation. Only dreamers believe that there is a way out. Optimism is cowardice.
We are born into this time and must bravely follow the path to the destined end. There is no other way. Our duty is to hold on to the lost position, without hope, without rescue, like that Roman soldier whose bones were found in front of a door in Pompeii, who, during the eruption of Vesuvius, died at his post because they forgot to relieve him. That is greatness. That is what it means to be a thoroughbred. The honourable end is the one thing that can not be taken from a man.
-- Oswald Spengler, Man and Technics, Knopf, 1932
As long as we breathe there is still hope. I would have said 4 years ago there would be no chance people would have fallen for the pandemic narrative (or financial crisis with a side of death). But because such things can be imagined, cannot their counter also be imagined as well? We may not be able to reform the American system, but something can be done. I think the better way is to do something voluntarily rather than coerced through fear, lies, and manipulation though.
It's a long quote, and a worthy one at that.
People can be weak. But it's easier to be strong when you feel as though you're not in some super minority.
https://wallstreetonparade.com/2020/05/wall-streets-financial-crisis-preceded-covid-19-chart-and-timeline/
But you are giving them a place to know they aren't alone or insane. Could you imagine not having places like this. Well, in 2020 I was just some guy, alone in his room in March, knowing something was up, and trying to hunt it down was worse than solving a Scooby Doo mystery, it was more like putting together a jigsaw puzzle with intentionally missing pieces.
Jimmy, you're talking to a veteran here. It's been a long war, ive been saying what Gato is now saying since 2008. Where was he then? If he's so libertarian and against tyranny why is he ok with government intervention into the financial markets at magnitude levels of covid intervention?
"trying to hunt it down was worse than solving a Scooby Doo mystery, it was more like putting together a jigsaw puzzle with intentionally missing pieces."
Don't i know it. And by ignoring the bailouts of 2020 he's ignoring the largest piece of the puzzle. You don't find that odd or you just think its not important?
You're talking to someone here who is no veteran. In the 1980's in college history class I was first told about a laissez faire government and thought to myself "Yes, that, I want that." I thought that the Constitution and ideas behind it were that.
I am sure I could dig up people that have been saying this since the fifties...and before that...and before that...
I don't know where Gato was, but I can tell you where I was, I wasn't paying attention because I didn't have to participate in the fiction on a daily basis. My big take-aways from 2008 was, Grocery stores were no longer open 24 hours a day. I was one of those "leave me alone Libertarians and until 2020 was largely left alone.
Is Gato okay with government intervention into the financial markets? Maybe I missed those posts, and if he is, then that's where we diverge.
Instead of the Edwin Starr's "WAR" it should be "Government"
One of my speculations about Covid was that Obamacare has been and continues to fail, and Covid was a way to distract from it. I doubt he is ignoring the bailouts of 2020. I also don't think that just because you don't hear him talk about certain things, he doesn't ignore them.
gotcha. 2020 was a larger bailout then 2008, just an FYI. Obamacare was a bailout for the very people who pushed covid. Didn't really lower prices of healthcare like they said, did it? Just like student loan forgiveness is just a bailout for the schools and not the students. They won't have the debt anymore but the job market will still suck. Its funny how few people remember how on the edge the US was in 08.
Not sure what kind of game you think we are running here that it even requires a "gotcha,"
"Gotcha?"
The only two things I said in regards to 2020 was this:
I was one of those "leave me alone Libertarians and until 2020 was largely left alone."
And this:
"One of my speculations about Covid was that Obamacare has been and continues to fail, and Covid was a way to distract from it. I doubt he is ignoring the bailouts of 2020."
Did I say anywhere that 2020 was not as large a bailout as 2008? All I discussed was my personal experience to 2008?
"In the 1980's in college history class I was first told about a laissez faire government and thought to myself "Yes, that, I want that." "
I had an awesome 10th Grade US History teacher, Mr. Luers, who really made it cool for a math nerd like me. But the "Aha!" was much the same. I just didn't know was like that, like me, in The Standard Model of Politics.
"Is Gato okay with government intervention into the financial markets?"
You don't have to dig too deep to conclude that, no, El Gato Mato is largely un-pro-government.
Sounds like a great line out of a Dirty Harry movie.
GM has addressed economics and the cargo cult of current economic theory, as well as QE on many occasions. Perhaps you missed those articles?
Must have
You have described in some posts I read the Tytler Cycle which oddly enough GM covered quite well here https://boriquagato.substack.com/p/breaking-the-tytler-cycle?utm_source=post-email-title&publication_id=323914&post_id=138532451&utm_campaign=email-post-title&isFreemail=true&r=rac0s
Thank you for the link Eric. If you read the comments you'll see that i did read it and i did comment and i made the same push back on that article as i'm making here. Yes he talks about the debt, but doesn't talk about what it was used for or when the majority of it occurred. 2008 was the markets, those blessed free markets telling us all we're bankrupt, before they were murdered by the big banks and .gov with a ventilator. Gato made a snarky comment when i pointed out that Bush the mentally handicapped wanted to privatize SS and then never responded to any of the counter evidence i posted pointing out that the majority of the debt we've added since 2008 (national debt was around 7 to 8 trillion in 08 and is now 34 trillion) was used to keep TBTF in power.
House, I am trying to comprehend your paragraph. This is not snark, just a difference in communication styles I suspect.
There is a certain amount of ad hominem in it that I must ignore in order to drill down on the core you are asking me if I agree or disagree with. Have patience, I am not here to reflexively defend GM.
What is “TBTF”? I am not familiar with that ETLA 😂
Its amusing the lengths people will go to defend someone they've never met and know nothing about..... If this is how we are going to act, and not question those who attempt to "lead" us, how are we any different then what we oppose? Isn't not questioning those who lead us what got us here in the first place?
To big to fail.
"you sure you've got your math right?"
Is snark. If you ignore portions of an equation and say see, we'd all be better off if Social Security was invested in the stock market, without explaining why the stock market is as over valued as it is, is being disingenuous in my opinion. That is what i was asking. Read the post below this, this is what El Gato posted on the article you linked to yesterday.
el gato malo
Nov 9, 2023
Author
up, yeah. the SPX was about 1400. it's currently 4300, so up 207% since then.
meanwhile, the alleged SS trust fund (an imaginary accounting entity) earns negative nominal returns.
you sure you've got your math right?
Essentially what he's saying is look the SP 500 was 1400 in 2008 and now its 4300! That's progress bro! And i'm saying well the debt was 8 trillion in 2008 and its now 34 trillion in 2024, that is not progress bro! So yeah the stock market is up 207% but the debt is up 325%. Dude is lying.
Yes, I agree. I was explaining to my 14yo who was astonished that a real estate investment I made when she was born was up in value over 300% just 14 years later. I had to caution her though that when I bought it, a gallon of gas and a BigMac were both $2 and are now 300% more. So I asked her to do the math and she correctly calculated that my investment had gained 0% in real value. We were both relieved that at least it hadn't lost money...
I dont think that GM is lying, that supposes intent that is difficult to attribute to another. Perhaps he/she is just wrong in an assessment or perhaps we are wrong in our analyses of what he is saying.
I try to be fair...at least to a point. Still want to know what TBTF stands for....?
You disagree Eric?
Hi House, sorry, not ignoring you , just at work 🤪
If you make a comment like this, but don't explain why it is up 207%, in my opinion you are lying by omission.
author
el gato malo
Nov 9, 2023
Author
up, yeah. the SPX was about 1400. it's currently 4300, so up 207% since then.
meanwhile, the alleged SS trust fund (an imaginary accounting entity) earns negative nominal returns.
you sure you've got your math right?
Perhaps he should explain what price the market would be if no bailouts had happened in 2008 and again in 2020. 15 years of 0% rates and QE. Does that seem fair to you?
Like I said elsewhere, you should check out some other stuff he's posted.
What a waste. You're not here to be genuine, otherwise you'd present counter-arguments. That's how things roll 'round these parts.
You're just trying to muck up the comments trying to bait someone into expressing something untoward.
You have an alternative argument? Make it.
I'd argue i'm the only person here who is genuine. You either have principles you apply equally to all situations or you're corrupt. Its as simple as that. You can't say "Man that meany government and healthcare and higher ed went overboard in 2020! We should really stick it to them" and then ignore when the same crap is done by your "side", that is all i'm arguing. So if he would like to write an article on WHY QE and 0% rates haven't inflated the stock market and property values, well i'm all ears. Just like unlimited credit extended to higher education has inflated the cost of a degree, its the exact same thing. Or healthcare for that matter.
Do you see what i mean? You can't write a hit piece on SS and then say things would have been better if they'd put SS into the stock market! Or am i being unreasonable?
"So if he would like to write an article on WHY QE and 0% rates haven't inflated the stock market and property values, well i'm all ears."
Maybe you don't understand how this here Substack thing works. Or maybe Capitalism more generally.
See, the Dear Sir and/or Madam who host each site gets to write about the stuff they find interesting. I suspect many authors are open to suggestions but, at least in this case, I don't think the typical consumer comes here to debate the merits of Bernanke vs Greenspan vs Glass-Steagall.
But you seem interested, and I'm willing to initially assume by your enthusiasm that your knowledgeable on Monetary Policy. So - and hear me out here - how about _you_ write some articles on your Substack, throw in some graphs (Dude, I love charts and tables and graphs https://youtu.be/WCHrYoH1D94?si=-bhM3faITniT4dAU ), and use EGM's considerable platform to lure people _like me_ who might actually be interested to _Your Substack_.
Expect some blowback from hecklers and haters and those who simply might not get it. You have a good monetary Policy article product, people will buy.
But at this Deli, that's not what's on the Menu.
I'm more of a verbal communicator then written. I wrote as many papers as i ever wanted to in college while obtaining a degree in history. I believe the monetary and the covid are connected and i think explaining the how and why would do wonders for the public with regards to filtering out more poseurs in the future who are just empty suits. You are correct, this is his site and he can write about whatever he wants. On that note, i take my leave and apologize if i was rude. Not my intention, just frustrated.
I think he is independent and leans towards peaceful noncompliance leading to dismantling of government, but I could be wrong.
So you think dismantling the government but leaving mega corporations in place would be a good thing? How are they different? I'm under the belief that they arent. Also i don't think you could dismantle one and keep the other. One goes, they both go.
Exactly.
We made a saint out of the wrong "George".
See how you can get your boot soles stamped with your likeness at my Etsy Store for 19.99 plus shipping. We will ship you a box to put your boots in. Or you can buy from array of available boots, all in drab gray and in one size because that's the way Big Brother does it.
Cool.
So, like, Crocs. Or NASCAR.
Oh no, the 1984 stype boot stamp only comes in one size which is the average for the worldwide population and only in glorious gunmetal gray!
I expected better from Hugo Boss.