Tag Archives: collapse

Guest Post: Why I stopped worrying and learned to love the currency collapse

Submitted by Christian Gustafson of Deflation Land

For the past 300 years, the historical pattern has been for the era marked by a century to continue into the following century by fourteen or fifteen years.

Let me explain.  Everyone knows that the 19th Century, its uprightness, its optimism and sense of purpose, the halcyon days of British Empire, came to an end with World War I, starting in 1914 and building to a nasty crescendo by 1916.  The 20th Century had arrived, and it had some real horrors in store for us.
 

image

Germans before Kraftwerk

 
But if we return back another hundred years, we notice that the 18th Century ends in 1815 with the final defeat of Napoleon, that final project of the Enlightenment and of the French Revolution.  With the Congress of Vienna in 1814-1815, we have a new Europe along the lines of Metternich’s plan, and the 19th Century at last is here.
 

image

“Sorry, guys.  My bad.”

 
In 1713 and 1714, we have the Treaties of Utrecht, Baden, and Rastatt, bringing an end to the era of Spain as a major power, and the rise of the Habsburgs.  Louis XIV dies in 1715, after reigning for 72 years.  The Baroque period is over, and we are now firmly in the 18th Century.
 

image

War of Spanish Succession

 
We still live in the 20th Century.  Nothing much significant has changed in our lives in the past twenty years.  Symptoms of a deeper rot are appearing here and there, foreshadowing a larger crisis, but the crisis itself has not arrived yet.  We still live in an era of Pax Americana, the old republic very much a strained and tired Empire now, with the U.S. Dollar as the world’s reserve currency.
 
That is going to change.  
 
The next task for History is to dismantle the untenable structures and institutions put in place by late Modernity, which have been extended now as far as they can go.  Our debt-based monetary system will collapse, our unbacked fiats will be worthless.  The debts and unmeetable obligations will all default.
 
There are ironies and great contradictions as the former home and hope of Liberty becomes viciously unfree and increasingly despotic.  Our leaders no longer govern, but try instead to rule us – they are less legitimate with each passing day, their laws corrupt or worse.  They are nearly finished, and will be swept away with the tide.
 
Just as in 1914, the internationalist system will break down, dashing the hopes of the would-be first-world nations.  We will probably have a pretty good war as well, or many local ones worldwide.  These transitions tend to involve war.
 
Deflation first – it clears the way for the complete loss of faith and hyperinflation that will follow.  The next big wave down in the financial markets is the battering ram.  The U.S. national debt is about faith, so is quantitative easing, and so is the very idea of magical coins that could ever be “worth” a trillion dollars.  When this is faith breaks, in concert with loss of faith in perpetual growth and unlimited cheap energy, then things will move very, very quickly.
 
There is nothing any of us can do at this point, except navigate the rapids as well as possible, and to stay out of the way of a dying empire, which is still very dangerous in its death throes.  We are actually very privileged to be alive and witnessing this next transition, to what we do not know just yet.  But what an honor to live at this time, not in ignorance but with an existential resolve to come out of it alive and much the wiser.
 

image

Ass Americana

Advertisements

Pentagon Warns To Expect “Radical” Change In US Government Soon

Posted by on Oct 5th, 2013

A highly troubling “urgent bulletin” issued earlier today by the Ministry of Foreign Affairs (MoFA) states that it has received information from the Main Intelligence Directorate (GRU) warning to expect a “radical change” in the government of the United States, possibly within the next fortnight, based on information they have received from “highly placed” sources within the Pentagon.

According to this MoFA bulletin, GRU intelligence assests were notified by their Pentagon counterparts this past week that President Barack Obama is preparing to invoke the powers given to him under 50 USC Chapter 13 to hold that various American States are now in a “state of insurrection” thus allowing him to invoke the National Emergencies Act under 50 USC § 1621 and invoke the highly controversial “continuity of governmentplan for the United States allowing him, in essence, to rule with supreme powers.

Specifically, this bulletin says, Obama will invoke 50 USC § 212 that states: “ the President shall have declared by proclamation that the laws of the United States are opposed, and the execution thereof obstructed, by combinations too powerful to be suppressed by the ordinary course of judicial proceedings”

The specific laws being opposed by these “combinations too powerful to be suppressed by the ordinary course of judicial proceedings,” that Obama will outline in his reasoning’s for declaring a state of emergency, this bulletin continues, are the National Defense Authorization Act (NDAA) and Patient Protection and Affordable Care Act (PPACA), otherwise known as Obamacare.

The NDAA is opposed by many US States, this bulletin says, with California joining Alaska and Virginia this past week in passing a law making it illegal to be enforced in their territory, and with many other States, also, preparing to do the same.

The specific portions of the NDAA law being opposed by these US States allows for the indefinite detention without charges or trial of all American citizens and allows for their assassination should Obama order it.

The PPACA (Obamacare) law is, likewise, opposed by over half of the US States and has led to an American “shutdown” this past week that has closed 15% of their government, but has left fully 85% of it still open.

To the specific “combinations too powerful” Obama will cite in his declaration of National Emergency as being needed to be defeated by extraordinary measures, the MoFA says, is a faction of the US House of Representatives popularly known as the Republican Tea Party whom the President and his allies have likened to “hostage takers” and “political terrorists.”

Obama’s greatest fear, and reason(s) for declaring a National State of Emergency, this bulletin continues, was outlined yesterday by his US Treasury Department who released a report yesterday warning of potentially “catastrophic” damage should Congress fail to raise the debt ceiling and prevent the government from defaulting on its debt.

As the current US government shutdown crisis and debt ceiling fight have now merged, the MoFA warns in this bulletin, Obama further warned yesterday that an impasse on the debt ceiling beyond 17 October, when the US government will be essentially out of cash to pay its bills, could start a downward economic plunge worse than the recession of five years ago – with credit markets seizing up, the dollar’s value plummeting and US interest rates soaring and even coming close to the brink of such an unprecedented default that could roil both domestic and foreign financial markets.

Preparing to oppose Obama, should he, in fact, declare a National State of Emergency, the GRU grimly warns, is the US military who themselves are preparing to invoke 50 USC § 842 which allows them to protect America from “The Communist Party of the United States, or any successors of such party regardless of the assumed name, whose object or purpose is to overthrow the Government of the United States, or the government of any State, Territory, District, or possession thereof…”

Not known to many Americans is that the Progressive movement Obama belongs to, and whose media acolyte “presstitutes” swept into office, have long been associated with the Communist Party.

And, as the World Net Daily News Service reported this past August, John C. Drew, Ph.D., the award-winning political scientist, met Obama in 1980 and wrote in 2011: “[Obama] believed that the economic stresses of the Carter years meant revolution was still imminent. The election of Reagan was simply a minor set-back in terms of the coming revolution. … Obama was blindly sticking to the simple Marxist theory … ‘there’s going to be a revolution.’ Obama said, ‘we need to be organized and grow the movement.’ In Obama’s view, our role must be to educate others so that we might usher in more quickly this inevitable revolution.”

With Obama’s “revolution” now at hand, the GRU warns in this bulletin, it is critical to note that that United States, unlike other nations, have all of their elected officials and military personal swear allegiance to the US Constitution, and not to their government or its leaders.

The most recent example of this conflict between Obama and the US military, the GRU further states, was in Egypt when the Obama regime supported Muslim Brotherhood was overthrown by the Pentagon backed Egyptian military, and who, like the United States, makes its political and military leaders swear allegiance to their constitution, not to any of its leaders.

As many in America now know that these present times are not the normal activities of a government seeking peace and prosperity, and as dozens of undisclosed Obama Presidential directives that define US national security policy and task government agencies are still unknown either to the public or, as a rule, to the US Congress, this bulletin warns in its summation that with each passing day American can be more likened to a communist dictatorship than a functioning democracy.

So bad, in fact, has the United States become that one of its legendary reporters, Pulitzer Prize winner Seymour Hersh wrote this past week that the Obama administration lies systematically yet none of the leviathans of American media, the TV networks or big print titles, challenge him.

Even worse, and in a further Sovietization of American Life by the Obama regime, the US this past week refused to grant entry visas to internationally renowned authors Ilija Trojanov and Ernst Titovets who were invited to speak at conferences, and which Justin Raimondo of the highly respected Antiwar.com blog calls “part of a disturbing pattern of repression that all points to one ineluctable conclusion: the United States is the Soviet Union of the new millennium – an ideological state with global ambitions that holds itself up as the epitome of “freedom” and yet is the single most powerful enemy of liberty worldwide.

Source

Guest Post: Keynesians And Ponzians

Originally posted at Monty Pelerin’s World blog,

imageThe economy cannot recover without a complete cleansing of the excesses that have built up over the last half century plus. This mantra has been repeated again and again on this website and elsewhere. It is not a unique idea. It is a foundational belief of Austrian economics and an integral part of Austrian Business Cycle theory.

Ludwig von Mises provided this fundamental observation:

Credit expansion can bring about a temporary boom. But such a fictitious prosperity must end in a general depression of trade, a slump.

There has likely never been a boom so great (and so fictitious) as the one that this country experienced for the last several decades. Its origins began with the hubris of government economists in the decade of the 1960s who believed that the economy could be managed like a piece of machinery. They believed that they had the tools (and wisdom) to eliminate business cycles by judiciously stepping on and letting off the gas at the correct times.

This incorrect belief is still fundamental to Keynesian economists, despite the impressive string of failures it has produced. Empirics notwithstanding, the belief is maintained. The misjudgments of practitioners, not the theory, are responsible.

The movement toward a social welfare state provided additional incentives for Keynesians. With its “costless” provision of increasing benefits to increasing numbers of people, the welfare state required that a boom be maintained lest the Ponzi scheme collapse prematurely. The Ponzians and Keynesians became natural comrades and allies.

Keynesianism promoted activist government. The welfare state was activist government taken to an extreme and required increasing amounts of money to survive. A symbiotic relationship was evident. The growth of one promoted the other and vice versa. The complementarity is apparent when one realizes that members of one of these cults generally belong to the other.

Whether this boom was the greatest in history might be debated. What cannot be debated is the fact that no other boom has been more dependent on government for its formation and maintenance. No boom in history has been created by easier money and bigger government interventions. Nor has any other been so desperately maintained by government.

As a result, this boom has been more artificial and damaging to the economy than any other. For decades the Fed and government interventions distorted interest rates and product prices. These incorrect price signals encouraged entrepreneurs to engage in behavior that should never have been undertaken. Massive mis-allocations of capital and labor are the result and they have built up over fifty years.

Markets are now trying to right these wrongs. Government is desperately trying to prevent the curative process. More stimulus and interventions may stem the tide for a while longer, but they also increase the distortions. Government efforts to stop markets are doomed to failure.  Markets will prevail. They always do. Regarding such efforts, Mises observed:

There is no means of avoiding the final collapse of a boom brought about by credit (debt) expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit (debt) expansion, or later as a final and total catastrophe of the currency system involved.

This quote is the bottom line. It summarizes what will be.  It describes what the last five years has been about — a battle between political desire and economic law. It is a battle of hope against reality.

Politicians foolishly believe they can bend the laws of nature. They are fools for trying. Sadly, the pain and suffering that will be incurred will be borne by the millions of citizens dependent on markets and the economy.

Do not forget the big picture. The inexorable theme that is playing out is captured in Mises’ second quote. Knowing the underlying and immutable laws of economics will ensure you don’t fall prey to the political propaganda spewed out daily from Washington, their media minions and Wall Street shills.