Friday, March 8, 2019

Economic End Game Set To Be Very Ugly!

Edvard Munch, The Scream
Sooner or later all great Ponzi schemes must come to an end. When the markets finally succumb to the fact that current economic policies have failed all will collapse and the "end-game" will have arrived. Following the financial Armageddon and I do mean following, as by "several" months, central banks will be forced to unleash such a massive amount of new currency into the system to combat a scourge of deflation that it will stagger the mind. This will in effect clear the deck of deadwood through hyperinflation and pave the way forward to introduce a new or a "batch of new" currencies. Call it a "re-alignment" if you wish, but in reality, it will be the recognition that our path was an unsustainable illusion and that a new start will be deemed the best path out of the legal morass that contagion and collapse has rendered. The debts that are not written off will become a moot point in that most will be devalued and paid off in worthless paper. The issue will not be what is fair but how to get from here to there with the least damage to the institutions and wealth those in power seek to protect.

We must recognize that we are but pawns in the giant game known as the global economy. Please excuse the tone of this article, it is rooted in the idea that on occasion it is good to vent or say what is on our mind. Sometimes we have to simply concede things are what they are and find solace in the thought that things could be far worse. You can expect promises to be rewritten and broken. Rules will change as we go through the wash. Most people will see their assets rinsed away as society is put through the wringer. For example, expect the cost of living adjustment on social security to be modified reducing payments to the elderly. Adding to the woes of retirees is that many pensions will be forced to reduce payouts and break promises as the returns on their investment fail to meet expectations. Many of the guarantees and paper promises granted over the past decades will prove to be less valuable than the paper they are printed on.

Venezuela Stands As Another Recent Example
Recent revelations showing the Fed has been in collusion with Goldman Sachs and complicit in allowing them to do damn well as they please garnered little attention. The scheme to transfer wealth to the large banks is intact and most Americans know something is wrong but are too busy with their day to day existence to react. Eyebrows should be raised over the revolving door between large financial institutions and government that allows former employees with connections and strong ties to policies to flow freely back and forth between the two and the conflict it raises. It is not illogical to consider this growing wave of crony capitalism will soon sweep us off our feet. This is something that has inflicted pain upon people throughout history and closely related to what we know as government corruption.

With big business increasingly exerting its power over small enterprises it is not surprising that many people feel trapped in a world where their options are rapidly vanishing. In many ways, those in control have paved over economic reality masking and covering a multitude of sins against the laws of supply and demand. It is impossible to deny this has also taken its toll on "true price discovery" that allows our economic system to adjust and properly function. As pawns in this game, we can either choose to sacrifice ourselves or fight. In this case, fighting means to undertake a strategy that protects what we can of the life we have created within the power we have been granted. The fact you are reading and thinking about this subject puts you in a far better position than the masses who see before them blue skies and unicorns grazing upon a hill.

Make no mistake, we cannot and should not look for a white knight to come riding in to save the day, no such leader exists to lead us out of the economy hell we have created. Predictions of  "lost decades" are not uncommon as we recover and struggle to find a path forward. Here in America, the political system we have created often ask a majority of voters to cast their ballot for the candidate they "hate the least" or in more politically correct terms the "least of two evils".  Adding to our woes is the constant reminder that even if we garner up the enthusiasm to go to the polls rather than disengaging from the process the poorly crafted electoral college will soon strip us of any illusion that all votes are created equal.

As the global economy moves forward it is difficult to ignore that it is constructed on a weak foundation of imbalances, lies, and excesses. We only need to look towards China with its ghost cities and the fact its massive factories continue to crank out far more steel than is needed. Across the world, debt has exploded as wages stagnate. Countries have borrowed against the future by running up huge deficits. Good jobs based on creating and doing a real task that can be economically justified are in short supply. The situation has become dire and the numbers do not work, borrowing money to merely pay the interest on past debt and NIRP is not a prescription that leads to economic nirvana and bliss. The option to what you have just read is a war so nasty and devastating it will make the above look like a walk in a rose garden. 


  1. I see it a little differently. When this Ponzi Scheme goes down it will go down for the final count and there will never be a recovery. Little wonder that the upper 1% are buying and building bunkers for this event.

    Shale oil is a byproduct of this Ponzi Scheme because it in itself is also a Ponzi Scheme to milk investors because Shale Oil is a money pit and if it were not for ZIRP, Shale Oil would not be a viable option. When this ship goes down for the final count, you can expect the global economy to collapse in total along with it. Governments will be overthrown and collapse. You can also expect the lifeblood of industrial civilization which is oil to collapse because no one will buy it because they can't afford it and so it won't be produced, see Zimbabwe. They have plenty of oil but no one can afford to buy it.

    We have put close to 8 billion people on this planet because of oil. That's how we feed and put people to work. It's why we have to keep producing whether the product is needed because it puts people to work and keeps the monetary and banking Ponzi Scheme going.

    I'm not a doom and gloomer but a realist and it tells me when this all comes crashing down we are not going back to the Little House on the Prairie days.

    1. What will be the impact of the Leonardo Corporation E-Cat SK 20 kilowatt thermal LENR generator which is available for commercial delivery now?

  2. There's no fixing this; and that's a fact. Stand by for heavy rolls as the ship comes about...

    As for the Electoral College though, if it weren't for that, everyone's life would be at the mercy of New York, L.A, Chicago, etc... The Electoral College was actually the best attempt at keeping elections fair ever instituted...

    1. If not for the EC, our children would be studying in the WarHog Hag's hagwons, and suiting up for deployment. We dodged that bullet, but it looks like Donald rolled over. Anyone touching the Third Rail of Deep State is silenced.
      If Green New Deal passes, however, even EC won't save US. IPCC's $2,700-a-CO2-ton carbon tax = $35 a gallon gas.

  3. As long as USA has biggest and baddest military in the world, nothing mentioned is going to happen. Whole world runs in circle to get their hands on mighty dollar, something created out of thin air by USA banks and government.
    I can't recall ever purchasing or desiring anything specifically made in USA products, to be honest I don't think anything of value is produced in USA. So once military collapses, dollar Will be worth Zimbabwean currency because no country would want to exchange products for worthless currency.

  4. I am skeptical about how this plays out. Issuing currency like mad to stop deflation can be kind of neutral - as with the 2008 crisis.

  5. Relax and enjoy the ride to chaos...this is the "nature of man" driving.

  6. We survived before gas of all types and we can again.Have faith we just need to get back to basics for probably quite some time.But we can survive and perhaps be better off for it,(if we are strong).

  7. Since When has Zimbabwe been an oil producer ? Data doesn't support that.

  8. Put in an over simplified way...
    With the electoral college, hacking into one computer can win you a state.
    With the popular vote, hacking into one computer can win you everything.