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https://www.oftwominds.com/blogaug20/collapse-unavoidable8-20.html 

Here's Why the "Impossible" Economic Collapse Is Unavoidable

A collapse of major chunks of the economy is widely viewed as "impossible" because the federal government can borrow and spend unlimited amounts of money because the Federal Reserve can create unlimited amounts of money: the government borrows $1 trillion by selling $1 trillion in Treasury bonds, the Fed prints $1 trillion dollars to buy the bonds. Rinse and repeat to near-infinity.

With this cheery wind at their backs, conventional pundits are predicting super-rebounds in auto sales and other consumption as consumers weary of Covid-19 and anxious to blow their recent savings borrow and spend like no tomorrow.

As for the 30+ million unemployed--they don't matter. Conventional analysts write them off because they weren't big drivers of "growth" anyways--they didn't have big, secure salaries and ample wealth/credit lines.

What this happy confidence in near-infinite money-printing and V-shaped spending orgies overlooks is what I've termed denormalization, an implosion of the Old Normal so complete that the expected minor adjustment to a New Normal is no longer possible.
The "New Normal" Is De-Normalization

We're already in a post-normal world because the expansion of globalization and financialization needed to fuel the Old Normal has reversed into contraction. This reversal is an extinction event for all sectors and institutions with high fixed costs: air travel, resort tourism, healthcare, higher education, local government services, etc. because their fixed cost structures are so high they are no longer financially viable if they're operating at less than full capacity.

Only getting back to 70% of previous capacity, revenues, tax receipts, etc. dooms them to collapse.

And there's no way to cut their fixed costs without fatally disrupting all the sectors that are dependent on them.

Most operational costs are mandated and cannot be reduced: union contracts, property taxes, regulatory burdens, tax accounting, debt service, employee healthcare costs, minimum wages, etc. Other essential expenses such as commercial rent are difficult to renegotiate lower, as the landlord also has the same high fixed costs and any reduction comes directly out of his pocket.

A good example of this collapse dynamic is a restaurant with high fixed costs. It can't survive financially at 50% of capacity because it can't reduce its expenses by 50%. The owners can reduce staff but there are operational limits on this: even if there are only 10 customers rather than 100, you still need a kitchen and wait staff. Stripped to the bone, the owners might be able to reduce costs by 15% to 20%. In other words, if business rebounds to 80% of pre-pandemic levels, the restaurant can survive but not generate any profit.

It might survive at 70% if the owners do double shifts, but that isn't sustainable. Eventually the overworked owners burn out and collapse.

Reducing costs is even more difficult for institutions such as hospitals, colleges and government agencies. Most of these institutions are unable to cut more than a few percent of expenses; a 10% reduction in expenses would require the closure of entire departments and eliminating core services.

Denormalization is an interlocking series of self-reinforcing feedbacks. People have less money and more insecurity, so they spend less. Those living off the fixed costs paid by the private sector (landlords, local government, insurers, etc.) can't survive on less than their full measure, and this inability to absorb massive cuts causes everyone in the food chain above them to collapse, which eventually triggers their own collapse.

The restaurant can't cut any of the big-ticket expenses: rent, taxes, wages, benefits, healthcare, tax accounting, insurance, etc. It can only lay off some staff and reduce its purchase of ingredients. Those variable costs are too small a percentage of total expenses to be consequential.

The restaurants collapse first, and since there's no way anyone can afford to pay current rents and survive on a shrinking customer base, the landlord goes bust next. These collapses cut local government tax revenues. Each of these reductions means everyone down the food chain-- enterprises that depended on restaurants, landlords and local government contracts--lose a critical chunk of their own revenues. Since there are no replacement sources of revenues, these collapse as the line of dominoes topple.

Few sectors or institutions have any buffers. They've been running at full capacity or higher and burning every dollar to keep from imploding. As a result, any deep cuts are extinction events: no income from college football means eliminating entire sports down the food chain. There is no stair-step down, there's only binary triage: save this program as is or eliminate it entirely.

Federal/Fed subsidies don't fully replace what's been lost. Giving the restaurant owner a subsidy to pay rent and stay open doesn't mean the restaurant has enough customers to keep staffing and purchases at pre-crisis levels, and giving consumers subsidies such as Universal Basic Income (UBI) doesn't mean these households won't decide to save some of that subsidy rather than spend every dime, as the zeitgeist has shifted from complacent confidence to uncertainty: any subsidy is subject to change, as it is ultimately a political decision that can be amended or cancelled.

The production of goods and services stagnates as demand declines. When money-printing expands while goods and services contract, the result is inflation--the purchasing power of the newly issued money declines as too much money starts chasing a pool of goods and services that's shrinking as small businesses dry up and blow away and the dominoes fall down the supply chain of dependent industries.

As the newly issued subsidy-money buys fewer goods and services, demands for increased subsidies rise. The Universal Basic Income (UBI) payment doubles from $1,000 to $2,000 a month, but it still only buys $750 of goods and services as the declining purchasing power of the newly printed money accelerates.

This expansion of money as the pool of goods and services contracts further accelerates the loss of purchasing power in a self-reinforcing feedback.

I have long admired John Michael Greer's concept of catabolic collapse, a dynamic in which the institution is forced to downsize some of its costly complexity but it restabilizes at a lower energy state. I now think this might be overly optimistic.

How Civilizations Fall: A Theory of Catabolic Collapse (John Michael Greer)

A stair-step down to consequentially lower complexity and cost structures is simply not practical in much of the real world as fixed costs are mandated by regulations or impossible to cut for operational reasons. (For example, reducing a fleet of airliners by half doesn't necessarily translate into an ability to reduce aircraft maintenance facilities and staff by the same percentage.)

Airports, airlines, cruise ships, sport franchises, resorts, malls, local government services, venues, theaters, hospitals, universities and so on can't reconfigure at 50% of previous complexity and capacity. Their fixed costs and mandates simply don't allow for a 50% reduction in complexity and revenues.

This is why denormalization is an extinction event for much of our high-cost, high-complexity, heavily regulated economy. Subsidizing high costs doesn't stop the dominoes from falling, as subsidies are not a substitute for the virtuous cycle of re-investment.

The Fed's project of lowering the cost of capital to zero doesn't generate this virtuous cycle; all it does is encourage socially useless speculative predation as Tim Cook et al. sell Apple bonds in order to buy back more shares of Apple, further enriching Tim Cook et al. This is not a virtuous cycle, it is the denormalization of what remains of free markets, which require capital be priced by markets, not central banks.

Collapse isn't "impossible," it's unavoidable.

There was no New Normal for the dinosaurs. A few winged species survived and evolved into the birds of today, but that is by no stretch of the imagination a New Normal that included all the other dinosaur species. For them, denormalization meant extinction.

De-Normalization: everything that was normal is gone and will not be replaced with some new normal.

 

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 http://www.informationclearinghouse.info/55439.htm

 Who Profits from the Beirut Blast?

The narrative that the Beirut explosion was an exclusive consequence of negligence and corruption by the current Lebanese government is now set in stone, at least in the Atlanticist sphere.

And yet, digging deeper, we find that negligence and corruption may have been fully exploited, via sabotage, to engineer it.

Lebanon is prime John Le Carré territory. A multinational den of spies of all shades – House of Saud agents, Zionist operatives, “moderate rebel” weaponizers, Hezbollah intellectuals, debauched Arab “royalty,” self-glorified smugglers – in a context of full spectrum economic disaster afflicting a member of the Axis of Resistance, a perennial target of Israel alongside Syria and Iran.

As if this were not volcanic enough, into the tragedy stepped President Trump to muddy the – already contaminated – Eastern Mediterranean waters. Briefed by “our great generals,” Trump on Tuesday said: “According to them – they would know better than I would – but they seem to think it was an attack.”

Trump added, “it was a bomb of some kind.”

Was this incandescent remark letting the cat out of the bag by revealing classified information? Or was the President launching another non sequitur?

Trump eventually walked his comments back after the Pentagon declined to confirm his claim about what the “generals” had said and his defense secretary, Mark Esper, supported the accident explanation for the blast.

It’s yet another graphic illustration of the war engulfing the Beltway. Trump: attack. Pentagon: accident. “I don’t think anybody can say right now,” Trump said on Wednesday. “I’ve heard it both ways.”

Still, it’s worth noting a report by Iran’s Mehr News Agency that four US Navy reconnaissance planes were spotted near Beirut at the time of the blasts. Is US intel aware of what really happened all along the spectrum of possibilities?

That ammonium nitrate

Security at Beirut’s port – the nation’s prime economic hub – would have to be considered a top priority. But to adapt a line from Roman Polanski’s Chinatown: “Forget it, Jake. It’s Beirut.”

Those by now iconic 2,750 tons of ammonium nitrate arrived in Beirut in September 2013 on board the Rhosus, a ship under Moldovan flag sailing from Batumi in Georgia to Mozambique. Rhosus ended up being impounded by Beirut’s Port State Control.

Subsequently the ship was de facto abandoned by its owner, shady businessman Igor Grechushkin, born in Russia and a resident of Cyprus, who suspiciously “lost interest” in his relatively precious cargo, not even trying to sell it, dumping style, to pay off his debts.

Grechushkin never paid his crew, who barely survived for several months before being repatriated on humanitarian grounds. The Cypriot government confirmed there was no request to Interpol from Lebanon to arrest him. The whole op feels like a cover – with the real recipients of the ammonium nitrate possibly being “moderate rebels” in Syria who use it to make IEDs and equip suicide trucks, such as the one that demolished the Al Kindi hospital in Aleppo.

The 2,750 tons – packed in 1-ton bags labeled “Nitroprill HD” – were transferred to the Hangar 12 warehouse by the quayside. What followed was an astonishing case of serial negligence.

From 2014 to 2017 letters from customs officials – a series of them – as well as proposed options to get rid of the dangerous cargo, exporting it or otherwise selling it, were simply ignored. Every time they tried to get a legal decision to dispose of the cargo, they got no answer from the Lebanese judiciary.

When Lebanese Prime Minister Hassan Diab now proclaims, “Those responsible will pay the price,” context is absolutely essential.

Neither the prime minister nor the president nor any of the cabinet ministers knew that the ammonium nitrate was stored in Hangar 12, former Iranian diplomat Amir Mousavi, the director of the Center for Strategic Studies and International Relations in Tehran, confirms. We’re talking about a massive IED, placed mid-city.

The bureaucracy at Beirut’s port and the mafias who are actually in charge are closely linked to, among others, the al-Mostaqbal faction, which is led by former Prime Minister Saad al-Hariri, himself fully backed by the House of Saud.

The immensely corrupt Hariri was removed from power in October 2019 amid serious protests. His cronies “disappeared” at least $20 billion from Lebanon’s treasury – which seriously aggravated the nation’s currency crisis.

No wonder the current government – where we have Prime Minister Diab backed by Hezbollah – had not been informed about the ammonium nitrate.

Ammonium nitrate is quite stable, making it one of the safest explosives used in mining. Fire normally won’t set it off. It becomes highly explosive only if contaminated – for instance by oil – or heated to a point where it undergoes chemical changes that produce a sort of impermeable cocoon around it in which oxygen can build up to a dangerous level where an ignition can cause an explosion.

Why, after sleeping in Hangar 12 for seven years, did this pile suddenly feel an itch to explode?

So far, the prime straight to the point explanation, by Middle East expert Elijah Magnier, points to the tragedy being “sparked” – literally – by a clueless blacksmith with a blowtorch operating quite close to the unsecured ammonium nitrate. Unsecured due, once again, to negligence and corruption – or as part of an intentional “mistake” anticipating the possibility of a future blast.

This scenario, though, does not explain the initial “fireworks” explosion. And certainly does not explain what no one – at least in the West – is talking about: the deliberate fires set to an Iranian market in Ajam in the UAE, and also to a series of food/agricultural warehouses in Najaf, Iraq, immediately after the Beirut tragedy.

Follow the money

Lebanon – boasting assets and real estate worth trillions of dollars – is a juicy peach for global finance vultures. To grab these assets at rock bottom prices, in the middle of the New Great Depression, is simply irresistible. In parallel, the IMF vulture would embark on full shakedown mode and finally “forgive” some of Beirut’s debts as long as a harsh variation of “structural adjustment” is imposed.

Who profits, in this case, are the geopolitical and geoeconomic interests of US, Saudi Arabia and France. It’s no accident that President Macron, a dutiful Rothschild servant, arrived in Beirut Thursday to pledge Paris neocolonial “support” and all but impose, like a Viceroy, a comprehensive set of “reforms”. A Monty Python-infused dialogue, complete with heavy French accent, might have followed along these lines: “We want to buy your port.” “It’s not for sale.” “Oh, what a pity, an accident just happened.”

Already a month ago the IMF was “warning” that “implosion” in Lebanon was “accelerating.” Prime Minister Diab had to accept the proverbial “offer you can’t refuse” and thus “unlock billions of dollars in donor funds.” Or else. The non-stop run on the Lebanese currency, for over a year now, was just a – relatively polite – warning.

This is happening amid a massive global asset grab characterized in the larger context by American GDP down by almost 40%, arrays of bankruptcies, a handful of billionaires amassing unbelievable profits and too-big-to-fail megabanks duly bailed out with a tsunami of free money.

Dag Detter, a Swedish financier, and Nasser Saidi, a former Lebanese minister and central bank vice governor, suggest that the nation’s assets be placed in a national wealth fund. Juicy assets include Electricité du Liban (EDL), water utilities, airports, the MEA airline , telecom company OGERO, the Casino du Liban.

EDL, for instance, is responsible for 30% of Beirut’s budget deficit.

That’s not nearly enough for the IMF and Western mega banks. They want to gobble up the whole thing, plus a lot of real estate.

“The economic value of public real estate can be worth at least as much as GDP and often several times the value of the operational part of any portfolio,” say Detter and Saidi.

Who’s feeling the shockwaves?

Once again, Israel is the proverbial elephant in a room now widely depicted by Western corporate media as “Lebanon’s Chernobyl.”

A scenario like the Beirut catastrophe has been linked to Israeli plans since February 2016.

Israel did admit that Hangar 12 was not a Hezbollah weapons storage unit. Yet, crucially, on the same day of the Beirut blast, and following a series of suspicious explosions in Iran and high tension in the Syria-Israeli border, Prime Minister Netanyahu tweeted , in the present tense: “We hit a cell and now we hit the dispatchers. We will do what is necessary in order to defend ourselves. I suggest to all of them, including Hezbollah, to consider this.”

That ties in with the intent, openly proclaimed late last week, to bomb Lebanese infrastructure if Hezbollah harms Israeli Defense Forces soldiers or Israeli civilians.

A headline – “Beirut Blast Shockwaves Will Be Felt by Hezbollah for a Long Time” – confirms that the only thing that matters for Tel Aviv is to profit from the tragedy to demonize Hezbollah, and by association, Iran. That ties in with the US Congress “Countering Hezbollah in Lebanon’s Military Act of 2019” {S.1886}, which all but orders Beirut to expel Hezbollah from Lebanon.

And yet Israel has been strangely subdued.

Muddying the waters even more, Saudi intel – which has access to Mossad, and demonizes Hezbollah way more than Israel – steps in. All the intel ops I talked to refuse to go on the record, considering the extreme sensitivity of the subject.

Still, it must be stressed that a Saudi intel source whose stock in trade is frequent information exchanges with the Mossad, asserts that the original target was Hezbollah missiles stored in Beirut’s port. His story is that Prime Minister Netanyahu was about to take credit for the strike – following up on his tweet. But then the Mossad realized the op had turned horribly wrong and metastasized into a major catastrophe.

The problem starts with the fact this was not a Hezbollah weapons depot – as even Israel admitted. When weapons depots are blown up, there’s a primary explosion followed by several smaller explosions, something that could last for days. That’s not what happened in Beirut. The initial explosion was followed by a massive second blast – almost certainly a major chemical explosion – and then there was silence.

Thierry Meyssan, very close to Syrian intel, advances the possibility that the “attack” was carried out with an unknown weapon, a missile -– and not a nuclear bomb – tested in Syria in January 2020. (The test is shown in an attached video.) Neither Syria nor Iran ever made a reference to this unknown weapon, and I got no confirmation about its existence.

Assuming Beirut port was hit by an “unknown weapon,” President Trump may have told the truth: It was an “attack”. And that would explain why Netanyahu, contemplating the devastation in Beirut, decided that Israel would need to maintain a very low profile.

Watch that camel in motion

The Beirut explosion at first sight might be seen as a deadly blow against the Belt and Road Initiative, considering that China regards the connectivity between Iran, Iraq, Syria and Lebanon as the cornerstone of the Southwest Asia Belt and Road corridor.

Yet that may backfire – badly. China and Iran are already positioning themselves as the go-to investors post-blast, in sharp contrast with the IMF hit men, and as advised by Hezbollah Secretary-General Nasrallah only a few weeks ago.

Syria and Iran are in the forefront of providing aid to Lebanon. Tehran is sending an emergency hospital, food packages, medicine and medical equipment. Syria opened its borders with Lebanon, dispatched medical teams and is receiving patients from Beirut’s hospitals.

It’s always important to keep in mind that the “attack” (Trump) on Beirut’s port destroyed Lebanon’s main grain silo, apart from engineering the total destruction of the port – the nation’s key trade lifeline.

That would fit into a strategy of starving Lebanon. On the same day Lebanon became to a great extent dependent on Syria for food – as it now carries only a month’s supply of wheat – the US attacked silos in Syria.

Syria is a huge exporter of organic wheat. And that’s why the US routinely targets Syrian silos and burns its crops – attempting also to starve Syria and force Damascus, already under harsh sanctions, to spend badly needed funds to buy food.

In stark contrast to the interests of the US/France/Saudi axis, Plan A for Lebanon would be to progressively drop out of the US-France stranglehold and head straight into Belt and Road as well as the Shanghai Cooperation Organization. Go East, the Eurasian way. The port and even a great deal of the devastated city, in the medium term, can be quickly and professionally rebuilt by Chinese investment. The Chinese are specialists in port construction and management.

This avowedly optimistic scenario would imply a purge of the hyper-wealthy, corrupt weapons/drugs/real estate scoundrels of Lebanon’s plutocracy – which in any case scurry away to their tony Paris apartments at the first sign of trouble.

Couple that with Hezbollah’s very successful social welfare system – which I saw for myself at work last year – having a shot at winning the confidence of the impoverished middle classes and thus becoming the core of the reconstruction.

It will be a Sisyphean struggle. But compare this situation with the Empire of Chaos – which needs chaos everywhere, especially across Eurasia, to cover for the coming, Mad Max chaos inside the US.

General Wesley Clark’s notorious 7 countries in 5 years once again come to mind – and Lebanon remains one of those 7 countries. The Lebanese lira may have collapsed; most Lebanese may be completely broke; and now Beirut is semi-devastated. That may be the straw breaking the camel’s back – releasing the camel to the freedom of finally retracing its steps back to Asia along the New Silk Roads.

....

Comment to this article,

" Israel profits, and USA by association since Israel owns America too. This expert in explosives explains that this was a 25-kiloton mini-nuke courtesy of Israel's Mossad. Israel has been threatening Lebanon for years because Israel fears Hezbollah which has its base of operations in Lebanon, but not in Beirut. Israel would like to see Lebanon totally destroyed along with Hezbollah, All of the details of this explosion are presented here in fascinating details. He discusses colors / sizes / timing of the blast clouds and says no ammonium nitrate explosion no matter how large can create such a mushroom cloud, only a nuclear bomb. None of those many ammonium nitrate explosions worldwide over the years every yielded a mushroom cloud I suggest reading this and decide for yourself if this author makes sense. He does to me:
https://fort-russ.com/2020/08/mossad-attack-beiru....

Israel's motive to wipe out Lebanon is explained in detail besides the detonations. Mossad exploded their nuke there so they can use the stored ammonium nitrate and fireworks for an excuse, or "plausible deniability", which is working so far. Gamma radiation from such a mini-nuke is not yet reported, if a nuke, but radiation is minimal from such a nuke anyhow. "

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http://endoftheamericandream.com/archives/has-america-entered-a-new-era-of-permanent-civil-unrest

Has America Entered A New Era Of Permanent Civil Unrest?

In 2020, it seems like each new day brings more headlines about chaos on the streets of America, and on Monday that included violence right outside the gates of the White House.  It is being reported that there was “an active shooter near the White House”, and we are being told that the Secret Service shot a “male suspect” and that the “male suspect” had been transported to the hospital.  I am sure that we will learn more about this incident in the days ahead, and we should be thankful that the Secret Service was able to easily handle this situation.  But there are reports that a group of protesters plans to “lay siege” to the White House in the weeks leading up to the election, and so officials will undoubtedly have their hands full as we draw closer to November.

Meanwhile, we just witnessed five hours of rioting, looting and violence in Chicago.  Some rioters exchanged gunfire with police, and ultimately a decision was made to raise bridges going into the city in order to contain the violence…

Chicago officials raised bridges and suspended some train and bus service Monday morning after unrest and looting caused widespread damage in the city’s downtown overnight.

Videos that were circulating on social media captured the early morning scenes of hundreds of people in the streets, dozens of police officers, looting and confrontations with the police. There was also an exchange of gunfire with the police in the downtown, according to a police spokesman, Tom Ahren. He said on Twitter early Monday that there were “shots fired at police who returned fire,” and that no officers were injured.”

In the past, a night of chaos like that would have been the top headline in the country for days, but now it is “just another riot” which will soon fade from memory.

These days, it takes quite a bit to shock us, and what happened at a “Back the Blue” rally in Fort Collins, Colorado on Saturday did shock many of us.  A group of leftists decided to confront the protesters that were supporting the police, and that confrontation ultimately degenerated into a full-out brawl…

Video shot during the event captured the moment tensions between the two groups boiled over as a group of men who apparently attended the rally approached a group of counter-protests dressed in black.

As the two groups approached a ditch, a fight broke out among the groups with people scuffling on the ground, punching each other, and spewing obscenities.

A lot of people celebrated that brawl, but the truth is that it should make us all very sad.

Americans shouldn’t be fighting Americans.

Is this what the future holds for our nation?  A house divided against itself will surely fall, and right now the U.S. is very, very deeply divided.

Every single night there is more violence, and the entire world is watching.  In Portland, rioting has been a nightly occurrence for two and a half months straight, and President Trump wants the National Guard to be called out…

Portland, which is out of control, should finally, after almost 3 months, bring in the National Guard. The Mayor and Governor are putting people’s lives at risk. They will be held responsible. The Guard is ready to act immediately. The Courthouse is secured by Homeland!

Ultimately it will be up to the governor of Oregon whether the National Guard is deployed or not, and it appears to be doubtful that it will happen any time soon.

Further north, law and order desperately needs to be restored in Seattle as well, because rioters continue to turn the downtown area into a war zone…

Riots broke out in Seattle on Sunday evening ahead of an expected city council vote to defund the police, according to videos on social media.

Video by @BGOnTheScene showed Antifa protesters attacking an Amazon store. Journalist Andy Ngo, who tweeted the video, said the protesters had been using sledgehammers and have been rioting for hours, smashing businesses in and around Capitol Hill.

I didn’t think that we would still be seeing this much violence here in August, and now that we are getting close to the election there is a strong possibility that a new wave of chaos could erupt in cities all over America at any time.

Of course if President Trump wins in November of if the outcome is very closely contested, that will only add fuel to the fire.

For years I had been warning that anger and frustration were building to exceedingly dangerous levels in this country, and now we are reaping what the mainstream media and many of our political leaders have sown.

Sadly, what we have experienced so far is just the tip of the iceberg, because much worse civil unrest is still on the horizon.

So it makes sense why so many people are wanting to move away from the big cities at this point.

The other day I wrote an article about the hundreds of thousands of wealthy New Yorkers that have already fled NYC, and now we are being told that moving companies “remain inundated with requests from people leaving New York City”…

Even as the number of confirmed coronavirus cases has leveled off in recent weeks, moving companies say they remain inundated with requests from people leaving New York City.

Big Apple-based moving company Oz Moving, for example, told FOX Business that the volume of moves continues to rise at a “substantial rate” – in addition to a “drastic” spike in storage compared with years prior.

On the west coast, Joe Rogan says that there is “a mass exodus” out of the state of California, and he recently decided to flee the state himself.

Of course all of this movement is rapidly driving up property values in desirable rural communities all over the nation, and this is going to make it more difficult for those with more limited financial resources to relocate.

 If you are among those that are considering fleeing the major cities, I would encourage you to make your decision quickly.  Things are only going to get crazier in the months ahead, and the longer you wait the more difficult relocating will become.

 

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https://www.oftwominds.com/blogaug20/mortal-wound8-20.html

The Economy Is Mortally Wounded

We all know the movie scene in which the character is wounded but dismisses it as no big deal, and then lurches into the closing sequence where we discover the wound was not inconsequential, it was mortal, and the character expires.

That's a fair depiction of the economy--both the U.S. and the global economy. The rapt audience is assured it's just a flesh wound and the character will soldier on, teeth nobly gritted, and that sets up our surprise when he/she tragically expires in the climatic scene.

Financial-political authorities and their paid cheerleaders are sparing no expense in assuring us the pandemic-triggered Greater Depression is a mere bump in the road and the recovery will be record-breaking, and they lavish excessive optimism on the triggers of this astounding recovery that's just waiting in the wings: a covid-19 vaccine, a covid-19 treatment, herd immunity, etc.

What the cheerleaders and authorities cannot dare acknowledge is the extreme fragility and vulnerability of the pre-pandemic economy: the unprecedentedly excessive leverage, debt, speculation, wealth and income inequality, asset bubbles, etc. that had all started to roll over as gravity finally took hold in Q4 of 2019.

Also missing from the astounding recovery that's just waiting in the wings narrative is the recognition of second-order effects as the dominoes of fragility and vulnerability continue toppling.

Even super-duper covid-curing space rays beamed at our planet by helpful Martians couldn't stop the financial conflagration that is now raging, a conflagration that was inevitable given the monetary deadwood that was piled ever higher for 12 long years, a mountain of dry tinder awaiting a random lightning strike or careless match.

As a example of second-order effects, consider a sector we are all familiar with as customers: dining out: restaurants, cafes, bistros, brew-pubs, etc. We all understand that when these establishments close, the owners, managers and employees all lose their livelihoods.

But this isn't the full extent of the losses. Behind the visible facade of any industry is a long line of dominoes behind what the customer sees.

When 50% of all dining-out establishments close, that immediately causes equivalent losses in sectors that supplied those establishments with clean linens and uniforms, meats, vegetables, culinary supplies, accounting, advertising, marketing, consulting, specialty magazines, etc., in a nearly endless profusion of businesses dependent on the dining-out sector.

And then there's all the retail real estate landlords that depended on these establishments to pay high rents on costly commercial spaces, and those nearby businesses that depended on the foot traffic generated by concentrations of dining-out establishments.

The cheerleaders don't dare acknowledge the absence of any sectors that can absorb the 32 million workers drawing unemployment, or those who aren't in the unemployment system, for example sole proprietors who closed and those in the informal cash economy.

The dining-out sector was a haven for marginalized workers seeking the higher compensation of tips, and a major entry point for new workers entering the workforce. There is no substitute sector to absorb the millions of workers who lost their livelihood in the dining-out sector and all those whose jobs were dependent on providing the dining-out sector with goods and services.

A less financialized, less debt and speculation-dependent economy would be more resilient, but a fully financialized, totally debt and speculation-dependent economy is terminal once leverage and debt stop expanding exponentially.

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https://scheerpost.com/2020/08/10/chris-hedges-americas-death-march/

America’s Death March

Regardless of the outcome, the election will not stop the rise of hypernationalism, crisis cults and other signs of an empire's terminal decline.  

The terminal decline of the United States will not be solved by elections. The political rot and depravity will continue to eat away at the soul of the nation, spawning what anthropologists call crisis cults — movements led by demagogues that prey on an unbearable psychological and financial distress. These crisis cults, already well established among followers of the Christian Right and Donald Trump, peddle magical thinking and an infantilism that promises — in exchange for all autonomy — prosperity, a return to a mythical past, order and security. The dark yearnings among the white working class for vengeance and moral renewal through violence, the unchecked greed and corruption of the corporate oligarchs and billionaires who manage our failed democracy, which has already instituted wholesale government surveillance and revoked most civil liberties, are part of the twisted pathologies that infect all civilizations sputtering towards oblivion. I witnessed the deaths of other nations during the collapse of the communist regimes in Eastern Europe and later in the former Yugoslavia. I have smelled this stench before.

The removal of Trump from office will only exacerbate the lust for racist violence he incites and the intoxicating elixir of white nationalism. The ruling elites, who first built a mafia economy and then built a mafia state, will continue under Biden, as they did under Trump, Barack Obama, George W. Bush, Bill Clinton and Ronald Reagan, to wantonly pillage and loot. The militarized police will not stop their lethal rampages in poor neighborhoods. The endless wars will not end. The bloated military budget will not be reduced. The world’s largest prison population will remain a stain upon the country. The manufacturing jobs shipped overseas will not return and the social inequality will grow. The for-profit health care system will gouge the public and price millions more out of the health care system. The language of hate and bigotry will be normalized as the primary form of communication. Internal enemies, including Muslims, immigrants and dissidents, will be defamed and attacked. The hypermasculinity that compensates for feelings of impotence will intensify. It will direct its venom towards women and all who fail to conform to rigid male stereotypes, especially artists, LGBTQ people and intellectuals. Lies, conspiracy theories, trivia and fake news — what Hannah Arendt called “nihilistic relativism” — will still dominate the airwaves and social media, mocking verifiable fact and truth. The ecocide, which presages the extinction of the human species and most other life forms, will barrel unabated towards its apocalyptic conclusion.

“We run heedlessly into the abyss after putting something in front of us to stop us seeing it,” Pascal wrote.

The worse it gets — and it will get worse as the pandemic hits us in wave after deadly wave with an estimated 300,000 Americans dead by December and possibly 400,000 by January — the more desperate the nation will become. Tens of millions of people will be thrown into destitution, evicted from their homes and abandoned. Social collapse, as Peter Drucker observed in Weimar Germany in the 1930s, brings with it a loss of faith in ruling institutions and ruling ideologies. With no apparent answers or solutions to mounting chaos and catastrophe — and Biden and the Democratic Party have already precluded the kind of New Deal programs and assault on oligarchic power that saved us during the Great Depression — demagogues and charlatans need only denounce all institutions, all politicians, and all political and social conventions while conjuring up hosts of phantom enemies. Drucker saw that Nazism succeeded not because people believed in its fantastic promises, but in spite of them. Nazi absurdities, he pointed out, had been “witnessed by a hostile press, a hostile radio, a hostile cinema, a hostile church, and a hostile government which untiringly pointed out the Nazi lies, the Nazi inconsistency, the unattainability of their promises, and the dangers and folly of their course.” Nobody, he noted, “would have been a Nazi if rational belief in the Nazi promises had been a prerequisite.” The poet, playwright and socialist revolutionary Ernst Toller, who was forced into exile and stripped of his citizenship when the Nazis took power in 1933, wrote much the same in his autobiography: “The people are tired of reason, tired of thought and reflection. They ask, what has reason done in the last few years, what good have insights and knowledge done us.” After Toller committed suicide in 1939, W.H. Auden in his poem “In Memory of Ernst Toller” wrote:

            We are lived by powers we pretend to understand:
            They arrange our loves; it is they who direct at the end
            The enemy bullet, the sickness, or even our hand.

The poor, the vulnerable, those who are not white or not Christian, those who are undocumented or who do not mindlessly repeat the cant of a perverted Christian nationalism, will be offered up in a crisis to the god of death, a familiar form of human sacrifice that plagues sick societies. Once these enemies are purged from the nation, we are promised, America will recover its lost glory, except that once one enemy is obliterated another takes its place. Crisis cults require a steady escalation of conflict. This is what made the war in the former Yugoslavia inevitable. Once one stage of conflict reaches a crescendo it loses its efficacy. It must be replaced by ever more brutal and deadly confrontations. The intoxication and addiction to greater and greater levels of violence to purge the society of evil led to genocide in Germany and the former Yugoslavia. We are not immune. It is what Ernst Jünger called a “feast of death.”

These crisis cults are, as Drucker understood, irrational and schizophrenic. They have no coherent ideology. They turn morality upside down. They appeal exclusively to emotions. Burlesque and celebrity culture become politics. Depravity becomes morality. Atrocities and murder become heroism. Crime and fraud become justice. Greed and nepotism become civic virtues. What these cults stand for today, they condemn tomorrow. At the height of the reign of terror on May 6, 1794 during the French Revolution, Maximilien Robespierre announced that the Committee for Public Safety now recognized the existence of God. The French revolutionaries, fanatical atheists who had desecrated churches and confiscated church property, murdered hundreds of priests and forced another 30,000 into exile, instantly reversed themselves to send to the guillotine those who disparaged religion. In the end, exhausted by the moral confusion and internal contradictions, these crisis cults yearn for self-annihilation.

The French sociologist Emile Durkheim in his classic book “On Suicide” found that when social bonds are shattered, when a population no longer feels it has a place or meaning in a society, personal and collective acts of self-destruction proliferate. Societies are held together by a web of social bonds that give individuals a sense of being part of a collective and engaged in a project larger than the self. This collective expresses itself through rituals, such as elections and democratic participation or an appeal to patriotism, and shared national beliefs. The bonds provide meaning, a sense of purpose, status and dignity. They offer psychological protection from impending mortality and the meaninglessness that comes with being isolated and alone. The breaking of these bonds plunges individuals into deep psychological distress. Durkheim called this state of hopelessness and despair anomie, which he defined as “ruleless-ness.”

Ruleless-ness means the norms that govern a society and create a sense of organic solidarity no longer function. The belief, for example, that if we work hard, obey the law and get a good education we can achieve stable employment, social status and mobility along with financial security becomes a lie. The old rules, imperfect and often untrue for poor people of color, nevertheless were not a complete fiction in the United States. They offered some Americans — especially those from the white working and middle class — modest social and economic advancement. The disintegration of these bonds has unleashed a widespread malaise Durkheim would have recognized. The self-destructive pathologies that plague the United States — opioid addiction, gambling, suicide, sexual sadism, hate groups and mass shootings — are products of this anomie. So is our political dysfunction. My book, “America: The Farewell Tour,” is an examination of these pathologies and the widespread anomie that defines American society.

The economic structures, even before the pandemic, were reconfigured to mock faith in a meritocracy and the belief that hard work leads to a productive and valued role in society. American productivity, as The New York Times pointed out, has increased 77 percent since 1973 but hourly pay has grown only 12 percent. If the federal minimum wage was attached to productivity, the newspaper wrote, it would be more than $20 an hour now, not $7.25. Some 41.7 million workers, a third of the workforce, earn less than $12 an hour, and most of them do not have access to employer-sponsored health insurance. A decade after the 2008 financial meltdown, the Times wrote, the average middle class family’s net worth is more than $40,000 below what it was in 2007. The net worth of black families is down 40 percent, and for Latino families the figure has dropped 46 percent. Some four million evictions are filed each year. One in four tenant households spends about half its pretax income on rent. Each night some 200,000 people sleep in their cars, on streets or under bridges. And these stark figures represent the good times Biden and the Democratic Party leaders promise to restore. Now, with real unemployment probably close to 20 percent — the official figure of 10 percent excludes those furloughed or those who have stopped looking for work — some 40 million people are at risk of being evicted by the end of the year. An estimated 27 million people are expected to lose their health insurance. Banks are stockpiling reserves of cash to cope with the expected wave of bankruptcies and defaults on mortgages, student loans, car loans, personal loans and credit card debt. The ruleless-ness and anomie that defines the lives of tens of millions of Americans was orchestrated by the two ruling parties in the service of a corporate oligarchy. If we do not address this anomie, if we do not restore the social bonds shattered by predatory corporate capitalism, the decay will accelerate.

This dark human pathology is as old as civilization itself, repeated in varying forms in the twilight of ancient Greece and Rome, the finale of the Ottoman and Austro-Hungarian empires, revolutionary France, the Weimar Republic and the former Yugoslavia.

The social inequality that characterizes all states and civilizations seized by a tiny and corrupt cabal — in our case corporate — leads to an inchoate desire by huge segments of the population to destroy. The ethnic nationalists Slobodan Milošević, Franjo Tudjman, Radovan Karadžić and Alija Izetbegović in the former Yugoslavia assumed power in a similar period of economic chaos and political stagnation. Yugoslavs by 1991 were suffering from widespread unemployment and had seen their real incomes reduced by half from what they had been a generation before. These nationalist demagogues sanctified their followers as righteous victims stalked by an array of elusive enemies. They spoke in the language of vengeance and violence, leading, as it always does, to actual violence. They trafficked in historical myth, deifying the past exploits of their race or ethnicity in a perverse kind of ancestor worship, a mechanism to give to those who suffered from anomie, who had lost their identity, dignity and self-worth, a new, glorious identity as part of a master race. When I walked through Montgomery, Alabama, a city where half of the population is African-American, with the civil rights attorney Bryan Stevenson a few years ago, he pointed out the numerous Confederate memorials, noting that most had been put up in the last decade. “This,” I told him, “is exactly what happened in Yugoslavia.”

A hyper-nationalism always infects a dying civilization. It feeds the collective self-worship. This hyper-nationalism celebrates the supposedly unique virtues of the race or the national group. It strips all who are outside the closed circle of worth and humanity. The world instantly becomes understandable, a black and white tableau of them and us. These tragic moments in history see people fall into collective insanity. They suspend thought, especially self-critical thought. None of this is going away in November, in fact it will get worse.

Joe Biden, a shallow, political hack devoid of fixed beliefs or intellectual depth, is an expression of the nostalgia of a ruling class that yearns to return to the pantomime of democracy. They want to restore the decorum and civic religion that makes the presidency a form of monarchy and sacralizes the organs of state power. Donald Trump’s vulgarity and ineptitude is an embarrassment to the architects of empire. He has ripped back the veil that covered our failed democracy. But no matter how hard the elites try this veil cannot be restored. The mask is off. The façade is gone. Biden cannot bring it back.

Political, economic and social dysfunction define the American empire. Our staggering inability to contain the pandemic, which now infects over 5 million Americans, and the failure to cope with the economic fallout the pandemic has caused, has exposed the American capitalist model as bankrupt. It has freed the world, dominated by the United States for seven decades, to look at other social and political systems that serve the common good rather than corporate greed. The diminished stature of the United States, even among our European allies, brings with it the hope for new forms of government and new forms of power.

It is up to us to abolish the American kleptocracy. It is up to us to mount sustained acts of mass civil disobedience to bring down the empire. It poisons the world as it poisons us. If we mobilize to build an open society, we hold out the possibility of beating back these crisis cults as well as slowing and disrupting the march towards ecocide. This requires us to acknowledge, like those protesting in the streets of Beirut, that our kleptocracy, like Lebanon’s, is incapable of being salvaged. The American system of inverted totalitarianism, as the political philosopher Sheldon Wolin called it, must be eradicated if we are to wrest back our democracy and save ourselves from mass extinction. We need to echo the chants by the crowds in Lebanon calling for the wholesale removal of its ruling class — kulyan-yani-kulyan — everyone means everyone.

 

SC216-11

https://www.globalresearch.ca/world-fire/5720593

The World on Fire 

Massive uncontrolled unprecedented wild fires are consuming portions of the Amazon rainforest and several regions of the Arctic. Somebody somewhere must be asking why all of a sudden in unison, all over creation, two of the planets largest ecosystems are going up in smoke. It’s eerily spine chilling.

“Major fires have hit the Amazon and the Arctic for the second year in a row.” (Source: NewScientist, June 26, 2020)

Where’s the world’s largest fire alarm when so desperately needed?

Sure, all of mainstream press covers the fires and people hear about the fires and read about the fires. But that’s the end of any sort of impact because the sensationalism of reading about and hearing about massive fires thousands of miles away in vast wilderness areas doesn’t move the needle enough for people to express serious concern or even go so far as to panic. Maybe they should.

These are not regular ole run of the mill fires. Rather, these are firestorms so powerful that they create their own wind systems and self-perpetuate. More to the point, the world is on a biblical fire alert that posits the Book of Revelations 16:8 smack dab into contemporary society, to wit: Then the fourth angel poured out his bowl on the Sun, and power was given to him to scorch men with fire, and men were scorched with great heat.

For example, recent bushfires in Australia (2019) were not just unprecedented. They were “deadly catastrophic,” thus leaving some ecosystems “forever changed.” The conflagrations obliterated landscapes, not just patches of landscape but entire landscapes.

Why obliteration? Climate change is the villain. It supercharged the wildfires by turning landscapes into tinder. As such, and contrary to political opinions by right-wing whacko nutcases, climate change does not constitute surreal events in thin air, rather, it’s power-packed hard-hitting damage to our “one and only” planet. It’s authentic.

Australia’s wildfires convulsed above and beyond any known scale of normal fires, from which animals are usually able to escape. They didn’t. They couldn’t run fast enough! The fires took out entire landscapes, not patches of landscape that leave behind pockets of safety untouched for scampering animals. Nothing was left untouched by the hot lapping flames.

The wildfires permanently crippled iconic habitats that make Australia an ecological wonder for all to behold. From loss of crucial plant life to decimation of species that serve as a meal for a higher species, the ripple effects remain unaccountable, extensively beyond human calculation.

Now, two of the world’s largest, and most significant, ecosystems are on fire like never before, similar to Australia’s biblical fires of a year ago, as more, and more, precious natural resources suffer waves of obliteration. Of course, normal fires in the wild are healthy; however, these fires are anything but normal. They’re truly biblical in scale.

“Six months of record-breaking temperatures have sparked massive fires in the Siberian Arctic this year. Great plumes of smoke were visible on satellite… temperatures more than 5°C above average over much of Siberia… A Met Office-led international study has concluded this period of exceptional weather would have been impossible had the world not been warmed by man-made greenhouse gas emissions. (Source: New Warning Over Climate Change From Siberian Arctic, BBC News, July 15, 2020)

“What we’re seeing really is unprecedented… we’ve never seen the probability of a change of an event of more than 600 times. We’ve never seen a result like that, Professor Peter Stott, Met Office,” Ibid.

“Looking at the geologic record, we don’t think we’ve ever seen CO2 levels this high in about 5 million years… We are in uncharted territory, Dr. Katharine Hendry,” Ibid.

Meanwhile, bad vibes with strong undertones of contempt upend civilized society, as follows: America’s president Don Trump has tweeted 120 posts that variously poke fun at, and ridicule, climate change. Moreover, he has issued dozens of tweets claiming that “cold weather” disproves climate change. It should be noted that 62 million people voted for Trump in 2016 and many “live by his words.”

At the same time, in the real world of the Amazon rainforest, Brazil’s National Institute for Space Research reported 6,803 fires in the Amazon in July 2020 alone, nearly 30% more than July 2019 when the Western world went bananas over the loss of rainforest due to human-set fires. When in fact fires are not a regular feature of rainforests.

Now, environmentalists are going batty because August is traditionally the start of the human-generated fire season, but it already has a roaring head of steam. Not only that, but according to INPE data, the first six months of 2020 are already the worst on record for deforestation. Yes, “the worst on record.”

Sure enough, the Amazon rainforest, similar to landscapes in Australia in 2019, is subjected to obliteration forces, and it’s not just deforestation as the root cause. Climate change has kicked into high gear all across the magnificent rainforest with devastating drought conditions galore!

Excessive drought conditions, in part, originate early in the morning in garages around the world as fossil-fueled gasoline engines crank up, spewing out CO2, and the whir of a jet engine igniting, the blast of a diesel train engine cranking up, the murmur of a jet ski, ignition of hot coals for an electricity-generating plant, a furnace blast molding steel, all are the basis, the origin, of greenhouse gases that blanket the atmosphere, in turn, enhancing devastating severe droughts.

According to a landmark Amazonian rainforest in-depth analysis: “Several studies indicate that the region has been suffering severe drought since the end of the last century, as in 1997/1998, 2005, 2010 and 2015. The intensity and frequency of these extreme drought episodes in the AB during the last years, approximately one episode every five years with a significant increase in the coverage area, is remarkable.” (Beatriz Nunes Garcia, et al, Extreme Drought Events Over the Amazon Basin: The Perspective from the Reconstruction of South American Hydroclimate, Departamento de Meteorologia, Instituto de Geociências, Universidade Federal do Rio de Janeiro, Nov. 7, 2018)

Back-to-back-to-back-to-back 100/yr. drought events, every 5 years, are not normal, meaning something somewhere is horribly wrong. After all, major ecosystems that profoundly influence all aspects of the planet’s health and well-being are burning, collapsing, melting like there’s no tomorrow. The message is clear.

Along the way, Brazilian President Jair Bolsonaro feigns attempts to limit rainforest damage, but experts say the government’s response has been largely ineffective, more symbolic than real. In truth, he’s the primary driving force behind record-setting deforestation. Similar to Trump, on the world stage he’s a laughing stock and archenemy of the planet.

According to NASA, this year’s dry season will be more prone to fires than last year’s record-setting affair. Moreover, according to NASA, warmer ocean surface temps in the North Atlantic (global heating at work) create conditions for more extreme drought in the Amazon, as excessive ocean heat brings on far-flung damage. Everything in nature is somehow connected.

“The world on fire” is merely a prelude to a climate “gone berserk” disaster scenario that’s almost certain to eventually take civilization down to its knees, by all appearances sooner than mainstream science suggests, but frankly scientists don’t make such predictions.

Yet, isn’t a climate gone berserk scenario already playing out in real time, e.g., in Siberia, in the Amazon, in Australia?

Meanwhile, climate-related crises on a grand scale never before recorded throughout human history continue building to a crescendo, in earnest, right before society’s “eyes wide shut.”

Postscript: Reports out of the London School of Economics claim one-half of the Arctic fires are peat soil, normally too wet and too cold to burn, but now burning because of powerful intense heat… peat soil is carbon-rich and can burn for months/years, emitting carbon dioxide (CO2) and methane (CH4). (Source: Arctic Fires Released More Carbon in Two Months Than Scandinavia Will All Year, Grist, Aug. 4, 2020)

Speechless, once again!

SC216-10

https://www.peakprosperity.com/its-time-to-position-for-the-endgame/

It’s Time To Position For The Endgame

Are you, like us, sensing that things are poised to fall apart?

 Do you sense an approaching endgame?

Like there’s another heavy shoe to drop? Perhaps an entire closet’s worth?

Certainly there’s entirely too much confusion surrounding SARS-CoV-2 and how to deal with it.

Should people wear masks?  Will schools re-open?  Should they?  Why isn’t Covid-19 being treated consistently across medical centers?  Are there things we could and should be doing to minimize the impacts before people catch it?

I believe there are good common-sense answers, even if complicated, to these and many other related questions  But common sense is in short supply these days, especially amongst our “leaders” in the US (who actually act like bad managers).

Our clueless politicians busy themselves either pandering to or hiding from the media cameras when it comes to Covid-19 response. Meanwhile, Big Pharma is doing everything it can to direct the action in ways that funnel any profits into its pockets — public health be damned.

It’s a certified shit show. No question about it.

But It Gets Worse

Beyond the pandemic, the central banks are busy ignoring Plutarch as they embark on the grandest social experiment in all of human history by floating billionaires’ yachts ever higher as more and more average folks drown beneath the rising waterline.

Displaying either a level of tone-deafness exceeding that of Marie Antionette, or a level of psychopathy matching that of Ted Bundy, the US Federal Reserve is — RIGHT NOW — engaged in the largest transfer of wealth in all of US history.

Between March-April 2020, the Fed added a staggering $282 billion to the bottom-line wealth of US billionaires:

But that wasn’t enough.

So the Fed kept printing. And buying, buying, and buying more and more financial assets held – of course – mainly by the already-wealthy.

By May 2020 the total added became $434 billion, making all the US billionaires more billionaire-y:

But even that wasn’t enough for the Fed.  So it printed even more, increasing the total to $583 billion by June:

Yep, you guessed it. It didn’t stop there. By July, the grand total was up to $637 billion:

Considering that US GDP dropped by -32.9% (annual rate) and clocked in at an annual rate of $19,408 billion in the second quarter of 2020, the US Federal Reserve had granted an astonishing (truly!) 3.3% of the entire output of the entire country to US billionaires.  For doing absolutely nothing.

Yes, people have many reasons to be angry and to protest these days. But they ought to be furious with the Federal Reserve and its lackeys in Congress who have utterly and completely failed to check these egregious, unfair, and socially destructive policies that grossly reward the elite at the expense of the bottom 99%.

Let’s do a little math here. Handing 3.3% of the value of the entire economic output of 160,000,000 working people to roughly 600 individuals is the equivalent of granting each one of those 600 billionaires the entire yearly output of 9,020 people.

It’s like the Fed decided that each billionaire deserved to have 9,020 people become their slaves for the year.  How is that *not* psychopathic?  How is that fair?  What’s the plan here? Keep going until these 600 people own everything in the world?

And where’s the media on this? They happily parrot every statement the Fed makes, without asking even the slightest of critical questions. They are failing us badly, too.

Okay, so why should you care?

Because what the Federal Reserve is doing generates enormous systemic risks which could well destroy the economy and much of our future prosperity.

At heart, I am a conservative in the sense that I’d like to keep (i.e. “conserve”) what we’ve got, both ecologically and economically. I’d vastly prefer that we change our nation’s destructive path now on our own terms than being forced to on reality’s terms later on. As painful as the former may be, the latter will be much more so.

History is complete on the matter: one cannot print one’s way to prosperity.  It’s been tried over and over again and my view is that if it could be done, we’d all be speaking Latin because the Roman Empire with it brilliant engineers would have figured it out millennia ago and would never have collapsed.

If the Romans couldn’t work it out, it simply can’t be done.  Mathematically, it also doesn’t pencil out.  Money is a social agreement, a contract.  It’s not real wealth.  Taking the attempt to the extreme, what would happen if everybody had a billion dollars and nobody had to work?

So printing currency only manages to delay and exacerbate the inevitable by building up the energy for its own destruction.

And the longer the delay, the worse the reckoning when it ultimately arrives.

Being Resilient

Given the fact that America is doing a supremely poor job of managing Covid-19 at the national level – mirrored by many other countries worldwide – it’s all but certain that ‘the economy’ (such as is was) is not coming back.

Tens of millions of jobs have vanished and are not coming back in time to save our over-indebted system.

The central banks’ efforts to prop everything up by jamming stocks, bonds and derivatives to higher and higher price levels are seriously misguided.  Such efforts both add to social injustice – a friction that eventually bursts into flames – and badly distort the price discovery mechanism which then leads to faulty economic and financial decisions.

As Charles Hugh Smith writes:

 If the “Market” Never Goes Down, The System Is Doomed

August 6, 2020

“Markets” that never go down aren’t markets, they’re signaling mechanisms of the Powers That Be. Markets are fundamentally clearing houses of information on price, demand, sentiment, expectations and so on–factual data on supply and demand, shipping costs, cost of credit, etc.–and reflections of trader and consumer emotions and psychology.

If markets are never allowed to go down, the information clearing house has been effectively shut down. Whatever information leaks out has been edited to fit the prevailing narrative, which in this moment is “central banks will never let markets go down ever again, so jump in and ride the guaranteed Bull to easy gains.”

The past 12 years offer ample evidence for this narrative: every dip draws a near-instantaneous monetary-policy response that reverse the dip and gooses markets higher.

That permanent monetary intervention distorts markets doesn’t matter to participants. Who cares if markets have become “markets,” simulacra of real markets that are now nothing but signaling mechanisms that all is well so buy, buy, buy? If gains are essentially guaranteed, who cares that markets are not longer information clearing houses?

Indeed. There’s no reason to care until the fatal spiral downward surprises us all.

(Source)

Yes, it’s all about narrative control. Which is why we cannot trust our health authorities, our monetary authorities, or our political authorities. Each are engaged in their own interlocking versions of narrative control that stretch further and further from the truth (and obvious common sense) with each passing day.

Charles’ words above remind of why we need to care: a fatal downward spiral awaits, one that will catch much of the world by surprise.

Which then brings us to resilience.  More and more people are turning to self-reliance, in whole or part, as they correctly assess that the rising risks.  Social decay, erosion of public services, loss of trust, and even failure points in the food system.

These risks threaten the very bottom of Maslow’s hierarchy of needs: food, shelter, water, and safety.

In the post-Covid-19 world, gun sales are up and urban apartment sales are down.  There’s a cultural sea change occurring, not that you know it by the mainstream press. As with most important things, it’s ignored at first:

Here at Peak Prosperity, our wish for you is to be happy, joyous, healthy and to live in peace and safety.  In a word: resilient.

To get there (and stay there) you’re going to have to try new things, skate to where the puck is going to be, and take some risks.

Myself? I moved to the country, bought cows, chicken and pigs, and have a garden.  These things bring me joy and provide me with food security.  I’ve had more than half of my net worth stored in gold and silver for a long time now, because I knew that someday the Endgame would arrive.

We’re there.  The Fed’s recent actions are nothing more and nothing less than a final looting operation.

Same as every other time in history, the last official act is to loot the Treasury.  But today, in the US, we don’t have a Treasury with anything of value left within it.  It has no gold, neither does it have any silver.  It has a negative net worth, with a Net Present Value (NPV) of approximately -$200 trillion.

So what’s left to loot?

The answer is both grubby and disturbing: the purchasing power of every dollar in circulation. 

That’s all that’s left to loot.  At least at scale.  We’re not (yet) to the point of the government confiscating half my chickens, which I half-jokingly (and half not) expect may come to pass once everything falls apart.

Every bank account, every reserve dollar, and every dollar claim is going to be debased.  There’s nothing to debate or even argue about because it’s all right out in the open:

Fed Weighs Abandoning Pre-Emptive Rate Moves to Curb Inflation

Aug. 2, 2020

The Federal Reserve is preparing to effectively abandon its strategy of pre-emptively lifting interest rates to head off higher inflation, a practice it has followed for more than three decades.

Instead, Fed officials would take a more relaxed view by allowing for periods in which inflation would run slightly above the central bank’s 2% target, to make up for past episodes in which inflation ran below the target.

“It would be a significant change in terms of how they are thinking about” the trade-off between employment and inflation, said Jan Hatzius of Goldman Sachs. “A lot of those things look very different now from the way they looked a few years ago,” he said.

(Source)

Translation:  The Fed is going to let inflation rip. And the media’s favorite Fed apologists will do their best to convince us this is actually a noble and good act.

As I’ve explained extensively, inflation is merely government-enabled theft.  It steals a tiny bit from everyone’s past efforts, saved as money, and transfers those bits mainly to itself and a few well-connected insiders.

Snip a penny’s worth of purchasing power from every dollar and you’ve nipped 1% off of tens of trillions of stored dollars.  1% of $1 trillion is $10 billion.  So many tens of billions of dollars of purchasing power is being snipped and transferred.

It’s one of the oldest games in the book, and the Fed’s apologists and enablers help them keep the game covered up.  But it’s not hard to understand if you take the time to look.

Your financial resilience depends on your understanding of inflation and how it works.  My Crash Course chapter on Inflation is a good starting point — you can watch it here.

It’s Time To Position For The Endgame

Between Covid-19 and the Fed’s crazy actions, there’s not a lot of hope of returning to normalcy any time soon.

A lot of people have already arrived at that conclusion. A growing number have already moved to homes outside of cities, where at least they have a degree more control over their destiny.

That’s a good thing, in my view. But it’s just a start.

If current trends continue, we’re actually looking at many years, possibly decades of very difficult times....