The old order is fighting an impossible battle to preserve itself. From MN Gordon at acting-man.com:
An Epic Folly for the Ages
Today we begin with a list. A partial list. And in no particular order…
Angela Merkel. Donald Tusk. Mario Draghi. Donald Trump. Jerome Powell. Shinzo Abe. Haruhiko Kuroda. Theresa May. Boris Johnson. Mark Carney. Xi Jinping. Emmanuel Macron. Vladimir Putin. Justin Trudeau. Juan Trump. And many, many more…
Politicians and bureaucrats of the modern age of statism and central planning… fighting a rearguard action doomed to fail. [PT]
These central planners – though they may not know it – are facing a no-win situation. They have extrapolated the past and are attempting to preserve the status quo into the future. Yet their efforts to perpetuate the upward growth curve of their countries and unions are useless against the relentless turn of history.
The political, financial, economic, and social foundations that have been in place over the last 75 years – and perhaps, over the last 220 years – are breaking down. And no policy directive, no interest rate adjustment, no trade tariff, no five year plan, no extraordinary measures, no green new deal, and no technocratic prevarication is going to stop it. Big Government doesn’t stand a chance.
No argument here: much of the US, especially among its intelligentsia and political class, is crazyland. From James Howard Kunstler at kunstler.com:
Surfing the cable channels the evening before my Friday a.m. blog duties, I came upon Sean Hannity at Fox News completely losing his shit in a colloquy with Geraldo Rivera about the Iran drone incident. “Bomb the crap out of them!” Mr. Hannity ranted, several times, the veins in his neck throbbing visibly on the high-def screen. I thought I was having an acid flashback to Doctor Strangelove. Geraldo himself seemed a bit nonplussed and embarrassed by Mr. Hannity’s tantrum, but his attempts to calm down the raving anchorman only ramped up the hysteria. One wondered: are there any adult producers off-screen on that network?
Perhaps the Golden Golem of Greatness, our president, who is also known to follow the Cable TV news, witnessed the cringeworthy incident and realized that every other head-of-state on this nervous planet would also see it, and might infer he was doing the bidding of a crazed boob-tube performer if he actually went forward with an air strike. Earlier, he’d told reporters, “You’ll soon find out,” what the USA’s response to the drone shoot-down would be. He should have just kept his mouth shut. Planes and ships were on their way to the bottleneck in the Persian Gulf known as the Straits of Hormuz. Before they could deliver any payloads, Mr. Trump called the whole thing off suggesting that maybe some “loose and stupid” Colonel Borat type on Iran’s side had gone rogue in the incident.
The crash is going to be worse than what’s happened in the past, simply because debt levels are higher. From Sven Henrich at northmantrader.com:
They’re right. It IS different this time. It’s worse. Much, much worse. What is? Everything. In terms of preparedness for the next recession that is. Debt is higher than ever, be it corporate debt, government debt, central banks balance sheets, available ammunition to deal with a new recession, wealth inequality, the social divisions and political extremes, and now trillion dollar deficits, everything points to a much more fragile system. Oh yes on paper low rates keep it all afloat, but the context is as ugly as it gets.
Here we are, the great collapse unfolding in front of us. With yesterday’s Fed meeting we witnessed a confirmed breakdown in central bank narratives over last the year, an utter capitulation to market realities that are forcing central banks to commence the new easing cycle. No, this is not a temporary little rate cut event they are promising, it’s a new cycle. The Fed yesterday offered a 3 rate cut outlook, precisely what markets had been pricing in. The Fed bowing before market demands. Give us drugs. Yes, whatever you want, you got it.
The response: An overnight collapse in yields to now below 2% on the 10 year, the lowest reading since the US election in 2016.
California now requires citizens to pay for their medical and subsidize free medical care for illegal aliens. Needless to say, many are not too happy about this. From Sarah Cowgill at libertynation.com:
As the California state legislature and Gov. Gavin Newsom dislocate their shoulders in the hearty backslapping of their self-congratulatory moment in American history, the rest of the nation is snarling and spitting over the lunacy of the left coast Democrats. That is, according to the new Rasmussen Reports poll, which asked if illegal immigrants should receive free health care.
The answer was a resounding no. No way, no how, nuh-uh, nada.
It was a brief two-question survey that spoke volumes: “Do you favor or oppose making health care benefits available to young low-income illegal immigrants in your state? Is it offensive to refer to someone who has entered this country illegally as ‘an illegal immigrant?’”
Out of 1,000 online and telephone respondents, “31% of Likely U.S. Voters favor making health care benefits available to low-income illegal immigrants under the age of 26 in their state. Fifty-five percent (55%) are opposed, while 13% are not sure.” One can only imagine the responses to question number two.
The only surprising statistic is that 13% had not yet picked a side in what might be the watershed issue for 2020 presidential candidates.
Only a small percentage of people will do anything before the super-crisis headed our way finally hits. From Jeff Thomas at internationalman.com:
All countries have a “shelf-life” of sorts. Generally, they begin when an old, top-heavy government collapses from its own weight. The end of the old regime is characterized by civil unrest, revolution, secession, economic collapse or some combination of these conditions.
The new country generally has minimal government and little or nothing in the way of entitlements. It’s “sink or swim” for the people, and the recovery generally begins when a portion of the population rolls up its sleeves and creates an economy based upon production.
Over time, often a century or more, the population gets better at production and the country becomes wealthier. Along the way, whatever limited government existed has done all it could to expand itself. Governments, by their very nature, are parasites, living off the productive class, and eventually that parasite has the power to dominate those who produce, by promising largesse to those on the lower levels – who are in every society, the majority of voters.
This pattern has been followed for millennia. A nation establishes its freedom; it begins a productive economy; it develops wealth; it is taken over by a parasitical government; it goes into decline; it collapses, and the cycle begins anew.
When the European banking system melts down, you can be sure Deutsche Bank will be right in the middle of it. From Tyler Durden at zerohedge.com:
Just last week, Jeff Gundlach – in his latest DoubleLine investor call – cracked jokes that Deutsche Bank’s imploding stock, which has been hitting fresh all time lows virtually every day, has a major support area at €0.
Once again, he was on to something because now, just a few days later, the FT reports that the bank which was this close to nationalization in 2016, and failed to consummate a merger with that “other” German bank, Commerzbank, is preparing to roll out Plan Z: amid a deep overhaul of its trading operations (read: mass terminations), the biggest German lender is set to roll out a “bad bank” holding some €50 billion in toxic assets, in a plan that was quite popular in the depths of the global financial crisis.
Meanwhile, as part of CEO Christian Sewing’s ongoing restructuring of DB away from investment bank, “the bank’s equity and rates trading businesses oustide continental Europe will be severely shrunk or closed entirely as part of the revamp”, while managers are also set to unveil a new focus on transaction banking and private wealth management.
The Chinese government is bent on crushing dissent, and Western governments are moving in the same direction. From an interview with Ai Weiwei at repubblica.it:
An exclusive interview with the most famous Chinese artist, dissident and activist on Beijing expanding his power, the European countries “like Italy begging for China’s money”, the death of Europe as we know it, human rights under attack, the comeback of the 1930s and the “total failure of today’s intellectuals”
LONDON. Ai Weiwei, 61, is the most famous Chinese artist and dissident, he is based in Berlin but this week he came to London for a couple of cultural initiatives. Moreover, he met Julian Assange, the Wikileaks founder jailed in a London prison and now at risk of extradition. Ai has always been a prominent advocate of Assange’s cause but in this interview done in a West London hotel he talks also about Hong Kong protests, the decay of both Europe and the West, the “total failure” of intellectuals nowadays and why our times are similar to the 1930s.
Mr Ai Weiwei, what do you think about the Hong Kong demonstrations? Are they going to be successful?
“Well, Hong Kong’s demonstrations are very grand scale, it’s very impressive. But I would not measure the demonstration as successful or not. If the demonstration has content or meaning, then a demonstration is always successful. There were over one million people in the streets in Hong Kong. China’s political inference wants to make Hong Kong become another Mainland-controlled territory. According to reports, 90 percent of the people taking part in the demostrations are from 19 to 25 years old. That shows great hope for a new generation of Chinese. And I’m deeply impressed to see young people organizing it on such a scale, but rationally, peacefully and making a continuous effort in trying to protect Hong Kong’s freedom. That is extremely interesting. And also it’s a new lesson for the world to know. There are people who are concerned about China’s brutal violations of human rights, also because China is trying to expand its influence in territories where law, freedom and democracy are established”.