What If the Whole Shebang Unravels? By Charles Hugh Smith

In the horse race called the future, the bettors have made “Whole Shebang Unravels” a distant long shot, but it probably should be the odds on favorite. From Charles Hugh Smith at oftwominds.com:

Nobody seems to be wondering what happens should the real world no longer respond to the Perpetual Motion Finance Machine.

Scrape away the hand-wringing about interest rates and we find a bedrock of complacency. Nobody seems to doubt that the status quo can grind on for another 30 years doing the same stuff it’s done for the past 30 years.

Japan’s Perpetual Motion Finance Machine can apparently run for another 300 years without a hitch. Here’s how the Perpetual Motion Finance Machine works: the government spends huge sums it doesn’t have by selling bonds to the central bank, which creates the money to buy the bonds out of thin air. Perpetual Motion–perfect!

Japan’s immense success with its Perpetual Motion Finance Machine offers other governments a rock-solid template for permanent funding of all the goodies everyone wants and needs. It’s perpetual motion, nothing can stop it.

This then drives another surefire financial gimmick, the Yen Carry Trade: borrow in yen at near-zero rates and then use the free money to buy US Treasuries yielding 3% or 4%. Free money! This is also assumed to be so ironclad it’s good to go for another 30 years, heck, make it 300 years.

the assumption here is nothing can bring down a system that can create as much money as it needs to solve any spot of bother and we have the past 30 years of history to prove it.

Nobody seems to think there are any constraints on the Perpetual Motion Finance Machine or the alternatives being proposed: crypto, gold-backed currencies, and so on. That these alternatives might fail to solve the underlying problem–there’s no way to keep the Waste Is Growth-Landfill Economy running with solely financial means–that’s impossible. Finance fixes everything.

Continue reading


One response to “What If the Whole Shebang Unravels? By Charles Hugh Smith

  1. This article resonated with my growing experience.

    It is becoming impossible to deal with independent judgement. In its stead, are policies, procedures, and the bureaucrats/bureaucracies that serve as independent judgements replacements.

    Whether it’s a phone call to actually speak with a human being, or purchasing with cash in which a machine does not “do the math” for the cashier, to simply asking a question of an establishment’s employee, the likely result is the same! What result you may ask?

    A combination of “who is John Galt,” and the security guard Dagney must deal with as she free’s Galt from the clutches of what has become of us!


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.