Category Archives: Economics

Why I’m Hopeful About 2021, by Charles Hugh Smith

The object is not to restore the 2019 status quo, but to let it crash and replace it with something better. From Charles Hugh Smith at oftwominds.com:

What we need is not a return to the corrupt, tottering kleptocracy of 2019, but a re-democratization of capital, agency and money.

I’m hopeful about 2021, and no, it’s not because of the vaccines or the end of lockdowns or anything related to Covid. The status quo is cheering the fantasy that we’ll soon return to the debt-soaked glory days of 2019 when everything was peachy.

The problem with this “brand” of magical thinking is that stripped of self-serving PR, the world of 2019 was an autocratic kleptocracy stripmining the planet to enrich the few at the expense of the many. Viewed through this lens, what’s hopeful isn’t returning to an autocratic kleptocracy but moving beyond it.

The most hopeful thing in my mind is that the Status Quo is devolving from its internal contradictions and excesses. Here’s the status quo in a nutshell:

The solution to too much debt is more debt.

The solution to autocratic elites hogging wealth and power is to give the elites more wealth and power.

And so on: every status quo “solution” boils down to doing more of what’s failed spectacularly because it serves the interests of the few at the top of the wealth-power pyramid.

The Great Reset is a perfect example of this insanity: now that we’ve destroyed the planet with our private jets, greed and corruption, give us even more power over you.

The status quo is a perverse, intensely destructive system with powerful incentives for predation, exploitation, fraud and complicity. That’s the world of 2019; do we really want to go back to that? And even if we could, how long would it last? Another year or two? And at what cost to social cohesion and the planet?

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Lockdown Politics: The Great Travesty, by Carl Boggs

Lockdowns are about power and control, not health, and they’re part of a bigger plan. From Carl Boggs at zerohedge.com:

Nearly one year into the COVID pandemic, even a modicum of critical thinking should tell us that lockdown politics as practiced in the United States is an unmitigated disaster, and with no end in sight. The reference here to lockdown politics is meant to signify a particularly assaultive, tyrannical set of government policies that in less than a year have brought severe harm to millions, more likely tens of millions of Americans and others across the world. Sadly, a Joe Biden presidency is only bound to aggravate this already intolerable repression and misery.

One grievous problem with the lockdown mania is that by obsessively fixating on the virus, a power-mad elite has ignored what must drive any public intervention: the need for a comprehensive, detailed cost-benefit analysis informing social policy. Stale rhetoric about “following the science” turns out to be not only one dimensional and useless, yet it remains a justification for continuing mass shutdowns, in state after state. The worst consequences include millions of lost jobs and businesses, escalating poverty, record numbers of bankruptcies, educational chaos, new health crises, a sharp rise in addictions and myriad psychological problems.

Meanwhile, it has become abundantly clear that lockdown rules – the very rules overlooked at times of street demonstrations and upheavals – apply only to Trump supporters, the great “super-spreaders”, wherever they gather. Those arbitrary directives have been cynically used by Democratic governors, mayors, and their health czars as a dictatorial political weapon – in part to bolster their own power, in part to subvert Trump’s second presidential run. For them, the pandemic is welcomed as a godsend, to be leveraged for a “global reset” on the road to maximum power, an incipient fascism. What we have here is what C. Wright Mills long ago called the “higher immorality” in his classic The Power Elite.

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The global reset scam, by Alasdair Macleod

It doesn’t matter much if you shift from paper money to digital money if they’re both worthless. From Alasdair Macleod at goldmoney.com:

This article takes a tilt at increasing speculation about statist global resets, and why plans such as those promoted by the World Economic Forum will fail. Central bank digital currencies will simply run out of time.

Instead, the collapse of unbacked fiat currencies will end all supra-national government solutions to their policy failures. Already, there is mounting evidence of money beginning to flee bank accounts into stocks, commodities and even bitcoin. This is an early warning of a rapidly developing monetary collapse.

Moreover, nothing can now stop the collapse of fiat currencies, and with it schemes to control humanity for the convenience and ambitions of government planners. There can only be one statist solution and that is to mobilise gold reserves to back and save their currencies, which in order to succeed will have to be fully convertible into circulating gold coinage. It will also require the role of governments to be reset into a non-welfare, non-interventionist minimalist role, which can only be achieved after a complete collapse of the current fiat-financed system.

Anything less will fail.

The Deep State and The Blob fuel conspiracy theories

Increasingly, people are beginning to realise that their world is undergoing a period of rapid change, with the future of fiat money now uncertain. For most, it is too difficult to even contemplate. But growing uncertainties are driving wild speculation about what those in authority now have in store for the human race in the form of a global reset. It is a time for conspiracy theorists, aided and abetted by our politicians and central bankers who are being increasingly evasive, because events are spiralling out of their control.

Then there is America’s Deep State, or the British equivalent, the more recently christened Blob; an amorphous entity comprised of the permanent bureaucracy with its own agenda. These faceless planners have moved on from merely making ministers’ lives difficult if they deviate from the blob’s predetermined course — immortalised in “Yes Minister” and its sequel series “Yes Prime Minister”.

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The 2025 Car You’re Voting for Today, by Eric Peters

Elections have consequences, even in the automotive world. From Eric Peters at ericpetersautos.com:

Much is in the balance today – election day – including the kinds of cars you’ll be able to buy (or not) in the years ahead.

It’s not on the ballot, per se, but the outcome of the vote will decide that by dint of deciding whether the federal government will enforce the almost-doubling of fuel economy mandatory minimums to nearly 50 MPG by 2025.

The Orange Man opposes this. The Hair Plugged Man endorses it. His predecessor attempted to impose it.

People not familiar with regulatory rigmarole – and what it takes to “comply” with it – may be under the impression that nothing but good could come from a mandate requiring that all cars average nearly 50 MPG. It’s right up there with money for nothing and your chicks for free.

And that’s just how it’s sold – or rather, how it is marketed by politicians such as the Hair Plugged Man, who specialize in the free lunch paid for by someone else.

To the average ear 50 MPG sounds great. If it takes a prod from the government to make the recalcitrant  car industry build efficient cars, then so be it.

The cost of this is never explained to people – because then it would not sound so great. How much is a 50 MPG car worth if it costs 25 percent more to buy than a 35 MPG car? If it is twice as complex – and so twice as likely to break down or need an expensive repair at some point during its lifetime?

What if it costs you what you need in terms of capability?

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Doug Casey on the End of Western Civilization

Western Civilization is faltering because its intellectual foundations—reason and the primacy of the individual—are being ceaseless undermined. From Doug Casey at internationalman.com:

End of Western Civilization

International Man: The decline of Western Civilization is on a lot of people’s minds.

Let’s talk about this trend.

Doug Casey: Western Civilization has its origins in ancient Greece. It’s unique among the world’s civilizations in putting the individual—as opposed to the collective—in a central position. It enshrined logic and rational thought—as opposed to mysticism and superstition—as the way to deal with the world. It’s because of this that we have science, technology, great literature and art, capitalism, personal freedom, the concept of progress, and much, much more. In fact, almost everything worth having in the material world is due to Western Civilization.

Ayn Rand once said “East minus West equals zero.” I think she went a bit too far, as a rhetorical device, but she was essentially right. When you look at what the world’s other civilizations have brought to the party, at least over the last 2,500 years, it’s trivial.

I lived in the Orient for years. There are many things I love about it—martial arts, yoga, and the cuisine among them. But all the progress they’ve made is due to adopting the fruits of the West.

International Man: There are so many things degrading Western Civilization. Where do we begin?

Doug Casey: It’s been said, correctly, that a civilization always collapses from within. World War 1, in 1914, signaled the start of the long collapse of Western Civilization. Of course, termites were already eating away at the foundations, with the writings of people like Jean-Jacques Rousseau and Karl Marx. It’s been on an accelerating downward path ever since, even though technology and science have been improving at a quantum pace. They are, however, like delayed action flywheels, operating on stored energy and accumulated capital. Without capital, intellectual freedom, and entrepreneurialism, science and technology will slow down. I’m optimistic we’ll make it to Kurzweil’s Singularity, but there are no guarantees.

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A New World Monetary Order Is Coming, by Stefan Gleason

The envisioned monetary order will be, like the whole coronavirus and climate change scams, just another means by which the Davos Crowd will rule the world. At least that’s how the Davos Crowd imagines things. From Stefan Gleason at activistpost.com:

The global coronavirus pandemic has accelerated several troubling trends already in force. Among them are exponential debt growth, rising dependency on government, and scaled-up central bank interventions into markets and the economy.

Central bankers now appear poised to embark on their biggest power play ever.

Federal Reserve Chairman Jerome Powell, in coordination with the European Central Bank and International Monetary Fund (IMF), is preparing to roll out central bank digital currencies.

The globalist IMF recently called for a new “Bretton Woods Moment” to address the loss of trillions of dollars in global economic output due to the coronavirus.

In the aftermath of World War II, the original Bretton Woods agreement established a world monetary order with the U.S. dollar as the reserve currency.

Importantly, the dollar was to be pegged to the price of gold. Foreign governments and central banks could also redeem their dollar reserves in gold, and they started doing so in earnest in the 1960s and early 1970s.

In 1971, President Richard Nixon closed the gold window, effectively ushering in a new world monetary order based solely on the full faith and credit of the United States. An inflation crisis followed a few years later.

In response, the Federal Reserve took the painful step of jacking up interest rates to defend its wilting Federal Reserve Note and tame rising prices.

Fast forward to 2020, and the Fed has assumed for itself novel policy mandates that are a precursor to a new monetary system.

But the monetary masters aren’t contemplating a return to sound money. Rather, they’re planning for even more debt, more inflation, and picking of winners and losers in the economy.

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The Coming of Corporate Collectivism, by Jeff Thomas

Corporate collectivism, aka crony socialism, has already arrived. From Jeff Thomas at internationalman.com:

Benito Mussolini stated that “Fascism should more appropriately be called Corporatism, as it is the merger of corporate and government power.”

Quite so.

Interestingly, many, and perhaps most people today, lack an understanding as to the system under which they are ruled.

In the US in particular, most people who vote Republican take pride in believing that the US is a capitalist state.

Democrats, too, regard the US as a capitalist state, and take the view that that’s what’s wrong with America today. Increasingly, they seek a move in the socialist (or collectivist) direction to save them from the perceived evils of capitalism.

Interestingly, though, the evils to which they refer are the socio-economic inequalities that exist and the fact that those on the lower levels of society have decreasing opportunity to improve their lot in life. And, of course, since they believe they live under a capitalist system, they assume that capitalism must be the problem.

But this is not the case.

It can be said that the first major introduction of corporatist collectivism occurred in 1913, with the introduction of the Revenue Act and the Federal Reserve Act.

These were enacted under President Woodrow Wilson and were peddled to the American public as being anti-corporatist. The Revenue Act, which introduced income tax, was touted as creating a tax primarily for the rich, which would even out income disparities. The Federal Reserve was claimed to be a government agency that would ride herd over the greedy banking interests on Wall Street.

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This Is How A State Goes Bankrupt, Illinois Edition, by John Rubino

Politicians have been buying votes with pension promises to government employees for decades. Now, in Illinois and other states, the bill is coming due. From John Rubino at dollarcollapse.com:

Somewhere back in the depths of the 20th century, a bunch of governors, mayors, and public sector union leaders got together and cooked up one of history’s greatest financial scams. They would offer teachers, cops, and firefighters extremely generous pensions but would avoid raising taxes to fund the resulting future obligations. Grateful workers would vote to re-elect their benefactors, while taxpayers would appreciate the combination of excellent public services and low taxes.

The beauty of the scheme flowed from its demographics: Most of the original public sector workers were young and therefore decades away from retirement, so the crime wouldn’t be discovered until long after the architects retired rich and revered.

Now, however, those baby boomer workers are retiring and the scam is revealed for all to see. Even in the absence of a pandemic lockdown, mass defaults on state and city obligations would be inevitable in the coming decade. But with the lockdown, they’re coming next year.

So what do the worst offenders do? What they’ve always done, of course, which is to look for ways to paper over the mess for one more election cycle. Illinois is the poster child for state financial mismanagement, with unfunded liabilities that have grown from virtually nothing to $137 billion in just the past two decades.

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The Making of a Market, by Eric Peters

Where does a state governor get the power to wave a wand and decree that by 2035, there will be no gas powered cars on the roads? From Eric Peters at ericpetersautos.com:

Well, the other shoes has dropped. We now know how a “market” for electric cars will be created.

It will be done by outlawing the market for cars that aren’t electric.

Having trouble selling Tab?

Forbid the sale of Coke and Pepsi!

California Governor (and Gesundheitsfuhrer) Gavin Newsome has simply decreed – via “executive order” – that anything that isn’t “zero emissions” (at the tailpipe) must be “phased out” by 2035. This means only electric cars since they are the only vehicles considered to be “zero “emissions” by the regs – no matter their elsewhere emissions – including the substantial carbon dioxide “emissions” produced by the utility plants that generate the electricity they run on.

Which there will be more of when the only cars permitted on California roads are electric. But never mind. It feels good – to the Gesundheitsguv – like the wearing of any old rag to “stop the spread” of a virus you haven’t got.

The effects will also be felt a lot sooner than fifteen years from now.

And not just in California, either.

The car companies are going to stop putting R&D money toward cars they can’t sell in California – the biggest market for cars in the country – and toward the ones they’ll be forced to sell.  

In other states, too. Because it’s likely at least some will follow California’s lead – having their own Gesundheitsguvs in charge.

Development of new non-electric cars nationally will stagnate.

The ones that remain in production will sell for more, to offset the costs of developing electric cars. The more states that force-electrify, the more expensive the non-electric car will become – until the goal is achieved of making the non-electric car at least as expensive as electric cars.

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David Stockman on the Economy’s Role in The Upcoming Presidential Election

Will the economy continue to float on a sea of debt through the election? Probably. From David Stockman at internationalman.com:

Presidential Election

International Man: Bill Clinton’s infamous phrase during the 1992 presidential election was “It’s the economy, stupid.” How important of a role do you think the economy and a continued rally in the stock market will play in the outcome of the presidential election?

David Stockman: Well, in the befuddled mind of Donald Trump, probably a considerable role as manifest in his campaign oratory. And since there are less than 50 days left, he might get away with his groundless boasting. That is, we seriously doubt that the great reckoning will commence before November 3, meaning that he will keep peddling the “but for COVID” canard, claiming that, before that, he single-handedly created the Greatest Economy Ever.

Actually, it’s the greatest BS story ever told. It rests on the utterly misleading circumstance that the Donald entered office in month #90 of what became the longest business cycle expansion in history (at 128 months in February).

Consequently, his “record” was artificially flattered by the low U-3 unemployment rates (3.5%) that naturally occur during the last 38 months of the cycle as the inventory of unused labor is finally exhausted. Of course, that’s also exactly what occurred during the final months of the 118-month expansion of the 1990s and the 106-month expansion of the 1960s, when Democrats happened to be incumbent in the Oval Office.

But when measured by something relevant, such as the average real GDP growth rate during his tenure, it turns out that the Donald’s cherished “score” is the very worst among all the presidential terms since 1948.

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