Money And Markets Update; Part One - A Comparative To The Great Depression, The Real Issue Facing The Global Economy, China’s Desperate Moves With Its Creation Of The Asian Development Bank And Other Timely Remarks
I’ve promised an upcoming post that is the final in my 2015 series about state violence and its tie in to the November 2013 turn date. (As noted at that time, as I interpret the astrological events of November 2013, it is the kickoff of the battle of good versus evil and quite possibly the most important turn date in two or three thousand years.). I noted back in 2013 that I may eventually post more specifics about that turn date. I have decided to put that post up on July 4th of this year for obvious reasons. If you are intuitive and sense what is happening as many people are in this mass awakening, you may find this to be the most compelling post I have ever put up regarding what is happening around the world. Or maybe not. But after that it is back to worldly topics.
In the interim I want to put up a few more updates regarding monetary and economic events. This post will focus generally on macro issues around the world like the desperation in China that is leading to its creation of the Asian development bank (This is widely being reported very inaccurately as doom for the dollar. This is typical of the lack of critical thought that defines modern corporate capitalist society. The Asian development bank is a sign of imminent doom for the yuan.), an update on Russia’s compounding economic crisis, another level-setting on the U.S. financial bubble comparative to the Great Depression and the largest crisis facing the global economy. Well, and a smattering of a few other topics. The second money and markets post or part two will focus more specifically on U.S. financial markets and U.S.-specific dynamics. I’m not sure yet if there will be a third post.
I want to start out with a few paragraphs of a level set. That includes reiterating the overarching theme on here. For newer readers, the major them on here the last ten years is that we are in a cycle of volatility. And that volatility extends to all of the natural world. Frankly, while I have only talked about it in passing in a few dozen posts, the basis for that forecast in volatility is a change in the energy patterns of the universe that is captured by many cycles associated planetary and solar astrology. This is not a financial crisis. It is something much larger and well more profound. Given that economies are a manifestation of human expression, and humanity is part of the planet and universe’s landscape, they are subjected to the same forces of the universe. Astrology (which is simply the cyclicality of planetary forces acting upon each other) tells us when it’s time, it’s time. This present moment appears to be that time. And the ego and all of its mythical delusions of power and control are not going to change that.
Volatility always precedes a change in trend. So, what we are witnessing with the mass volatility unfolding in the world is a paradigm shift. The only question is how massive is that paradigm shift? Well, given the scope of the volatility, if one opens their mind to possibilities, everyone is capable of receiving that answer through their own unique experiences. It’s quite obvious this is big medicine and because of that, we don’t get a choice as to whether we want to take it. Whether it is the volatility in climate, ecosystems, politics, economics, monetary policy, state control, finance, the earth, the natural world, the solar system, the sun or whatnot. The status quo doesn’t yet see the truth. Institutionalized science, corporate bureaucrats, politicians and all institutionalized status quo keepers-of-the-faith have been and will continue to be caught completely off guard. That’s because they are busy doing everything they can to keep existing paradigms from collapsing. (control) Nothing could prove this more than Obama’s remarks again that the world is less violent than it was forty years ago. There is spiritual, emotional and physical violence. The most common is not physical violence but the more sinister emotional and spiritual violence perpetuated by the state and state actors. The ego’s intent of control is based on violence. So, anything the state or corporations do is based on violence. Because humanity is not going to sit back and accept physical violence on a daily basis, the state and is pathology has perfected the hidden and more sinister emotional and spiritual violence. It seems literally everything in this world that is based on social dynamics has become a contrived manipulation or meme. We have never, in the history of the world, experienced such massive violence as we are witnessing today. That Obama truly does not see this gives us insight into the bureaucrat’s closed-mindedness and the self-deceit that is a manifestation of the intent of control that subverts the truth that is in plain sight. That is how someone can be presented with the truth right before them and honestly deny it exists. They truly do not see it.
This system has already collapsed be it monetarily, financially, economically, socially or politically. If one opens their mind, they can easily see this. This system is not going to recover. Ever. The ego’s intent of control is but an illusory construct created by and held completely in the mind. It isn’t real. That illusion disconnects us from the experiences of the present moment and its truths. That is, until the universe decides to awaken us from our own attempts at control. In “normal” times that moment of awakening is different for each person and is seemingly based on experiences we individually create in our fate-filled lives. Or, for some of us, we don’t ever create those experiences and thus never wake up from our own delusions. For this moment all of humanity is witnessing many global experiential events that we have cumulatively created and that is contributing to a global awakening from one large mass delusion. There is no way forward without crisis for the status quo (those with an intent of controlling existing paradigms and people) and I will address that with a fine tooth comb at some point.
Over the last ten years I have put up a gargantuan number of posts on what lies ahead. But my best economic and monetary posts are yet to come, and they will reveal a future that you will not read anywhere else. Literally. That’s not some statement of self-arrogance but rather the fact that the world has become so incompetent and that critical thought is being actively suppressed physically, emotionally and spiritually. As far as what is coming economically, every future outcome discussed on here remains in play or is starting to reveal itself or is already well-along. I can continue to slice and dice current events as new or revelationary but in actuality, the vast majority of daily news today is mostly noise that is not going to affect the outcome. They are small, dependent perturbations that really play no independent role to the end state of what is to come. In other words, they are functions of what is coming rather than independent events altering the outcome. Of course, the possibility exists that something will develop that could change the outcome to some degree but I am dubious that will happen because of the ego’s (the status quo, the state, corporations, hierarchical institutions, etc) overarching intent of control. The status quo will hold on tightly, regardless of what they are holding on to for their own self-interest, until they experience “Oh shit” moments that they have gone too far. Then they will finally realize it will be well too late to change course and that their intent of control has sealed their own demise.
I’ve made comparisons to many historical events and periods on here, including the Soviet Union, the British Empire, the Revolutionary War economic times, the Civil War, Nazi Germany, the Roman Empire, etc. This past few weeks, Robert Prechter, someone that I have come to appreciate as an independent thinker who is more accurate than not, and someone I would consider to be a very good to excellent forecaster, noted that from his perspective this is the most dangerous time for financial markets since the fall of Rome. And a noted Russian economist has recently stated the world is about to enter a depression many times worse than the Great Depression. Over the years I have remarked of such similar profundity of this moment and how it is being drastically underestimated. The status quo, be they bull or bear, or economist, politician or corporate bureaucrat, or any of the economic aristocracy, IS severely underestimating this moment.
Markets reflect no semblance of reality and valuations are far, far higher than at any time in our nation’s history. Far higher than 2000 and 1929. As noted ad nauseam over the years, this is the biggest financial bubble in the history of the world. As I have noted many times when market prices were much lower, stock prices were upwards of five times more expensive than 1929. Now that number is even greater with the massive spike higher in prices that we saw in 2013. At some point I’ll show you why Tobin’s Q, PE ratios, free cash flow, book value and other metrics are lulling the status quo into substantial ignorance about the scope of this bubble and the massive overvaluation of assets, including stocks. This bubble is unprecedented by magnitudes and so are the valuations of financially-traded and monetarily-determined asset values.
Alan Greenspan noted a few months ago that we appear to be in a time that looks a lot like the later stages of the Great Depression. Professor Robert Shiller has made similar remarks in the last few months. I actually started penning a response using cycles to a recently published article citing Shiller’s comparative to the Great Depression but axed it. I still want to respond to his and Greenspan’s remarks. There certainly are some comparatives to the Great Depression but any comparatives are in reverse. Let me explain. 2008 was our 1929. It was off by a year when looking at a decennial cycle (a cycle looking at recurring stock market patterns based on years ending in 0-9 and then recurring at 0-9 again and again.) Both dates were preceded a decade earlier by a very short but very deep recessions in 1920-1 and 2000-1 where the Federal Reserve fanned the flames with liquidity to make both appear as just another recession. Neither were. 2000-1 was the beginning of the end as noted on here many times. Most people nonchalantly discount that statement but that’s because they don’t understand economics nor do they appreciate how hard the status quo fanned the flames of liquidity in 2000 to keep the economy from collapsing. I noted many years ago that the economy’s collapse was so sudden and severe in 2000 that CEOs were calling Washington and telling them their businesses were literally collapsing. I remember that quite well. And both liquidity fanning exercises leading up to 2008 and 1929 resulted in housing bubbles. Although this most recent one was magnitudes more massive comparative to that leading up to the Great Depression. There is a very ominous reason for that and I will explain it in a future post. Regardless, those housing bubbles peaked respectively in about 1927 and 2006. There are other parallels but I don’t want to write a book on this particular topic. I want to provide some level of baseline on the scope and reversal of events in what is likely yet to come in comparison to the 1930s. But, mind you, this is already far, far worse than the 1930s. One data point I want to place here is the United States already has a much higher unemployment rate (24%) than all of the 1930s (~17%) after the recovery of the initial Great Depression shock. Given how reliant we all are on corporate capitalism and the state comparative to a much more agrarian existence in the 1930s, that number still doesn’t capture how bad today really is. What happens if we have another shock as bad or worse than 2008 and it cannot be stopped? (You’ll see why it may not stopped later in this post.) A larger crisis is assured given in 2015 the entire world is in economic shambles and is trending in the wrong direction. In 2008 the crisis appeared to be just the United States. Which, by the way, I have noted since 2008 that a global economic crisis was coming where the illusion of prosperity outside of the United States would reveal itself as just that and most future crises would occur outside of the United States. Dare I say we could eventually see unemployment at 40-70%+ in the United States, Europe, China, etc. Remember, as noted countless times on here, the only about 15% of employment in this country creates any wealth. The rest of employment may create money and jobs but that is a much different statement. If wealth-consuming jobs and parasitic jobs disappear, then employment is headed into a massive death spiral not just here but around the world. Hold that thought until later in this post because it’s going to matter.
Regardless, back to the Great Depression. Central banks like all bureaucracies are fighting the last war, something noted on here over the years. And, as such they are using failed tactics that they believe would have won the last war (the Great Depression) after an anti-scientific ex post facto analysis of the Great Depression. They are wrong. 1929’s fundamental crisis was not solvable by monetary factors within the purview of the Federal Reserve or other central banks and neither can today’s crisis be solved through monetary policy as many are now starting to understand. A common theme on here is this is not a monetary crisis or a financial crisis. It cannot be solved my monetary policy or by finance. This is a crisis of capitalism (aka a crisis of control). Bernanke, a self-described expert on the Great Depression, viewed the 1929 collapse through the eyes of a central banker. In other words, how every bureaucrat views every problem - every problem is a nail and the power within the purview of that bureaucratic institution is the hammer. In the case of Bernanke, that power is monetary power. There wasn’t enough money in the economy during the metastasis of the Great Depression according to Bernanke and those who think like him. Well, that may be technically true but it isn’t the cause nor is it the answer per se. It was and is today a dependent variable to the true causes of the Great Depression and this crisis. So, anyone with any semblance of basic understanding of mathematical functions and complex systems knows monetary policy cannot and will not solve this crisis. It can only be used as a dependent variable to solve the function of the real issue but not alone as a dependent variable. That the world’s most eminent economist and central banker doesn’t understand this is not a good thing. But, yet in 2008 he flooded the world with dollars in an effort to fight the last war, and made the ultimate crisis, which we have yet to experience, that much worse. It didn’t need to be this way. That money could have gone to reforms that would have averted some of the coming crisis. But it would have been very, very painful to the status quo. In many regards, Bernanke’s actions of fighting the last war and that of his central banking peers that have joined in on this lunacy have likely cemented the terminal fate of central banks. Again, something talked about many times over the years.
In 1929, there was an economic religion that believed letting all debts and malinvestment resolve themselves through collapse was how economic events should be handled. And that this would lead to a quicker recovery. This type of ignorant, fundamentalist, economic religion still exists today within the political far right. There are a lot of bloggers too who espouse this voodoo and they are often associated with the teachings of Ludwig von Mises. It’s not that Mises was wrong per se on anything he noted, but their fundamentalist view has hijacked and distorted his views as all institutionalized thinking and fundamentalism does. Anyway, because of this religion, in 1929 central bankers sat back and watched the system collapse. Then after the system had completely gone bust, and after massive savings, banking and economic destruction, the United States then devalued its currency against gold and some nations abandoned the gold standard all together to give them the ability to flood the world with liquidity. So, this happened after the stock market had already dropped 90% and the economic world had completely collapsed. But what is similar to today is that world collapsed because of massive fraud and corruption created by capitalism and private, class-based, self-interested parties working in conjunction with politicians destroyed the rule of law and government just as has happened today.
In today’s world or in the mind of Bernanke and central bankers, flooding the world with liquidity before the system collapses would stop the Great Depression. This because Bernanke views the Great Depression through the lens of a central banker. So that collapse of 1929 has been subverted today by central banks proactively printing massive amounts of completely economically-unhinged, useless money. Or so they think. The end result is that none of the corrupt investments, systemic fraud or pathological human elements dominating an economic system have been expunged. And because the state and politicians benefit from all of this corruption and fraud, no reforms have been nor will be instituted. Financial and health care reform were nothing more than frauds that perpetuate the current corrupt system. So, instead of the fraudulent and pathological elements of our society experiencing losses, jail time, the guillotine or whatnot for their behavior, these elements are simply minting even more fraudulent money off of current central banking policy. This useless monetary emission exercise will almost certainly either evaporate in a deflation or in some way will reveal itself as useless. Possibly in a future where the value of money is meaningless.
There are a lot of other esoteric factors I am going to leave out about the parallels to the Great Depression and today because of the length of this post, but I’ll address their horror in the future. Horror for the status quo. But to summarize the last few paragraphs, it goes something like this. In the Great Depression the course of events were economic collapse, monetary devaluation, then monetary reflation in that order. In today’s world if this decennial cycle repeats itself, these course of events will be exactly reversed. They will unfold as monetary reflation, monetary devaluation and then economic collapse. We clearly have not yet entered the final state of collapse but seem to be teetering very close to the edge. And that means outcomes that happened on the front end of the Great Depression will happen on the back end of this crisis. In other words, the cycle is reversed. So the end state of this depression, if this pattern holds, will be economic collapse after monetary reflation and monetary devaluation fail. Because central bankers really are just pissing into the wind without any scientific rhyme or reason, they are simply recreating history and that means eventual failure of their “last war” policies. Ultimately quantitative easing and central banker’s ability to control this crisis will wane and there will likely be nothing anyone can do to stop what comes next. Or, more pointedly, their policies will eventually have the effect of pissing up a rope. The arrogance that some central planning bureaucrat can control a world of trillions upon trillions of known and unknown moving parts, billions of people’s actions and behaviors and countless known and unknown forces, including cyclical ones, is hilarious. It’s anti-scientific in its principles and shows the level of arrogant, ignorant faith in the state (and the rule of man) that has arisen within modern capitalist society, the economic aristocracy and the state.
I find it most interesting that Ben Bernanke is getting ready to release his book of how he essentially averted a massive crisis and saved the world. How does he know that he saved anything given his policies are still fanning the flames with massive unintended and unknown outcomes without any understanding of what comes next? The title of Bernanke’s upcoming book is “Courage to Act”. Arrogant and ignorant is what that title is. That’s a marketing title. Making a profit by selling a book stating that his actions were self-described as courageous and that you saved the world is a perfect presage for a karmic fate. This also happened with Alan Greenspan and his book that nearly immediately presaged the 2008 collapse. Ben Bernanke, while good intentioned, like Greenspan has paved the road to hell for this economic system with his good intentions. Now, it’s certainly not his direct fault per se because he didn’t create this system nor did he directly create its massive fraud and corruption. But, just like the Nazis, all of our individual actions are intertwined and we all have worked together to create our own fate-filled future. The Nazis never could have been successful if the railroad worker didn’t take Jews to the concentration camps or the factory worker didn’t make the weapons or the police didn’t enforce the laws and on and on. No one is innocent. In today’s world that includes central banker’s good intentions. But we have a chance to stand to wake up, stand to account and resist the intent of control’s fraud and corruption as millions, if not billions, are currently doing around the world.
So, today central banks are simply recreating and extending the fraud, corruption and financial bubble dynamics that originally led to 1929 and 2008. During the Great Depression 1937 was the start of its back end or second wave of the crisis. This crisis wasn’t as deep. It was certainly one of the steepest stock market crises of the twentieth century but not nearly as bad as 1929. Obviously because much of the fraud and corruption had resolved itself in the collapse of 1929 when those who were benefiting from it lost most everything or did lose everything. Since none of that fraud and corruption was vanquished in 2008, but has only become massively worse, we can expect their actions will lead to a back end of this crisis that is far worse than the front end in 2008. And if the pattern of the Great Depression in reverse holds up, economic collapse would then occur cyclically on our upcoming equivalent to the 1937 crisis. On a decennial pattern we are 1-2 years forward of the Great Depression so that should happen some time between later 2015 and the end of 2016 according to decennial cycle characteristics. (2016 is also one of the three future dates talked about on here over the years - 2013, 2016, 2022. It is the first planet Jupiter-driven business cycle trough year after the 2013 turn date.) Given central bankers have been the enablers for massive fraud and corruption, and that pathology was not reformed in any way, nor was it expunged in 2008, it is plausible that entire economic, political, banking and monetary systems around the world will fail and future central banking attempts will have no effect. Or central banks themselves will need bailed out. In fact, I think we can count on monetary policy eventually having no successful impact.
If you understand the U.S. economy peaked three to four decades ago, then you know that monetary-impacted assets (stocks, housing, bonds, art, collectibles, etc) became unhinged not since 2008 but 35-40 odd years ago. That’s almost too much for anyone to consider. So most people in the system simply won’t. They cannot believe this system could keep going for so long if the economy peaked that long ago. Ahem. But this is how history unfolds. The Roman Empire obviously didn’t collapse at its apex of vibrancy. It peaked well before that and it was simply the massive self-interest that kept anyone in power from seeing what was happening beyond the intent of control. There is incontrovertible mathematical evidence that the U.S. economy peaked long ago. Math doesn’t lie, people do. Whether financially-traded assets are going up or down in today’s madhouse simply reflects whether the status quo is in control. It’s that simple. The scale and scope of this bubble cannot be captured in words, but that said let me provide a few simple talking points to consider. Detroit and thousands upon thousands of other cities and communities didn’t turn into literally third world, bombed out ghettos and ghost towns since Obama took the presidency. These effects took many decades or more. That we only have three companies in this nation with a AAA credit rating is also another metric that took decades. Ditto with the horrible credit ratings of countless cities, communities, counties, etc. This system relied very substantially on economic voodoo since Reagan took office. Something George Bush Sr. had the moxie to say but then in typical political fashion, he abandoned his morality and joined the Reagan Whitehouse. He then became an advocate for perpetuating the very policies he railed against for his own self-interest as every president and Washington politician since has done. The greater and greater embrace of tomfoolery and corruption was essential for this system to continue to operate. Junk bonds going mainstream, the S&L crisis, the 1990s bond crisis, the mythical post-capitalist service economy bubble, the tech bubble, the housing bubble, the private equity bubble, the hedge fund bubble, the military spending bubble, the M&A bubble, the Washington DC central planning & power bubble, the industrial food bubble, the medical-industrial complex bubble, the student loan bubble, the subprime auto and housing bubble, the 1% bubble, the central planning Federal Reserve power bubble, the MBA bubble, the art bubble, the alternative investment bubble, the college graduate bubble, the entertainment & sports industry bubbles, the lawyer bubble and on and on and on. Each of these extended the application of credit into more and more fraudulent and corrupt business practices that eventually became acceptable mainstream memes of a wildly dystopian reality. Most importantly of all bubbles is the willful ignorance bubble that is required by society for this type of dystopian reality to even exist in the first place. We turned out heads away from what was happening because of various self-interested reasons and that allowed evil the flourish. One must understand that without these massive misallocations of credit that corporate capitalism needed to survive, corporate capitalism itself would have collapsed ages ago. Maybe even before the Soviet Union. If nothing else, certainly in parallel with it. There is literally almost nothing sustainable about our economy or the global economy. And if you believe this isn’t capitalism, then I have some amazing posts for you in the future. There is no post-capitalist society. What is happening today isn’t something new. It’s just on an amazingly incomparable scale given the unprecedented pathology that dominates humanity.
Many people at the bottom of this system, who are exploited by those at the top, intuitively recognized much of this long, long ago. But, what is different is that many people at the top are now starting to recognize something is very wrong. But they think all of this is a recent phenomena. It’s not. No one who is actively working and successful in this system has made an honest living. I certainly include myself in all of these statements of ignorance, hypocrisy and the like. People may tell themselves they have. But the ego tells itself endless lies. I know. Because I recognize the lies I am capable of telling myself on this very topic. No one who has been or is successful in this system anywhere on earth has made their lot through virtue. They may have tried to be a decent person to the lives they personally touched but they also turned a blind eye to the consequences of their actions beyond their line of sight that ripple through space and time. They have made their wealth by serving the state or private, class-based, profit-driven interests who relied upon the state for their control and exploitation, victimization and predation of humanity and all life. And that means they have made their wealth through violence.
Genichi Taguchi, one of the great engineering and quality minds, noted that any variability to the expected outcome is a loss for society. And that loss could be quantified. Taguchi’s work notes that loss increases as variability from the desired outcome increases. Obviously, this is very intuitive and easy to understand once we bring it into our conscious mind. But, if we apply this to the anti-scientific voodoo of the Federal Reserve, central banks, Wall Street, the state and corporate capitalism, we can appreciate that right-action has strayed massively for a long, long time and literally just about none of the outcomes have been desired for decades. At least they haven’t been desired for democracy and all life. Greenspan, as just one example, buffoonishly noted a few years ago that a rise in the price of assets creates stability and wealth. So, in effect, what Greenspan and other monetary dunces believe is that manufacturing money out of thin air without any economic value, that is then used to buy assets, creates prosperity. If this is true, then why not just create endless streams of money to keep pushing assets into the stratosphere and then no one would ever have to work. Better yet, why even worry about printing money. Let’s just determine by state decree that assets have reached a permanently high plateau and none of us never again need to work because of our unprecedented prosperity. This is the type of lunacy that is so endemic to this system. Even as unemployment is horrendous and we have massive bubbles everywhere in the world. My point is that those losses Taguchi remarked of simply have not yet been realized. In other words, we don’t see them yet let alone have we not “booked” those losses. But be assured they are horrific. They are not debt either. I’ll get into this in further detail in a few paragraphs.
I have noted many times that we could see assets fall to 30+ year lows. If one considers my downside targets for assets going all the way back to their valuations around 1990 and with a remote possibility of them returning to 1980-ish levels, well, if that happens…. Money is not wealth and we are long overdue to learn that lesson. Money is simply a medium through which the exchange of goods and services that humanity desires are made. Money could be jelly beans, rocks, dog shit or anything else. And in history it often was. Those that will learn money is not wealth are the Federal Reserve, the state and the moneyed aristocracy. There is a strong argument to be made that global wealth creation peaked over 30 years ago. One must consider that we will say goodbye to all existing control paradigms, belief systems, economic systems, financial systems, etc controlled in Washington, Wall Street, the Federal Reserve, the stock market, corporate capitalism, corporate “careers”, the military-industrial complex, health care and the Federal Reserve dollar just to name a few. Say hello to reality. That reality is corporate, banking and political idiots, ie the state, in their service to the god of money, profit and themselves, have f$cked up everything beyond recognition. And as a result, we are in the biggest bubble in the history of the world. That bubble has been building for so long that its nearly impossible to appreciate the massive illusions it has created. We don’t have any perspective because it has defined our perceptions of reality for so very long. It’s not that we have a bubble in biotech or a bubble in housing or a bubble in small caps or a bubble in China or a bubble in CEO pay or a bubble in entertainment or a bubble in consumption or the dozens of other bubbles. We have a bubble in everything because money is fungible. And, as a result, it has distorted the reality of literally everything touched by it. And for reasons of their own self-deceit, literally no one in the world who is in a position of control or who benefits from this system sees the extent of that truth. Yet. Boy oh boy do I have some incredible posts that will blow everyone’s mind if I ever get off my butt and write them. Actually, I promise that will happen. Especially since the entire world is in a trance of state power because what is yet to come is going to be incredible. Literally everything we have come to accept as a social or economic phenomena is headed for massive change. And while it will not be without pain, it will be for the betterment of humanity and all life. Nothing worthwhile is ever free or easy. That’s not a cliché either. There is ample evidence that we only evolve spiritually or emotionally through pain and suffering. That without greater evil, there can never be a greater good.
Last year I wrote that liquidity was draining out of the global economy even faster than leading into 2008’s crash. Lo and behold, about that time the dollar index started rising. And it has been rising violently ever since. People don’t seem to understand a weak dollar is a sign of global economic growth. It has absolutely nothing to do with impending dollar collapse or U.S. The global economy runs on dollars. The more dollars in circulation (declining dollar value), the greater the strength of the global economy. The dollar is now at about a thirteen year high. Again, long time themes on here are that globalization as we know it is dead, the dollar is putting in a major secular bottom and as this cycle ends, the dollar would rise violently. There are a lot of high profile economic and financial “experts” that have called repeatedly for a dollar collapse. Yawn. They have simply exposed that they really don’t understand even the most rudimentary dynamics about economics or money. The U.S. Empire is THE global economy. Period. Detailing that fact was one of the first posts I put up on here ten years ago when I wrote never have so many (the entire world) relied on so few (the United States). Now, that is not a statement of admiration but of fact. I don’t admire anything about this economic system or about our current government because it is based entirely on violence and forced competition of the masses to please our aristocratic economic masters. Today the long dollar trade is very crowded so we are seeing a technical correction of sorts. But that correction is not a fundamentals-driven connection. It is an artificial, technical or sentiment-driven correction created by an overcrowded financial trade. By the way, just like the oil snap back in the last few months. That is not driven by fundamentals either. But rather than massive amount of negative positions in the crude futures market. Longer term, crude is likely going lower. Much lower. Because global fundamentals are going much, much lower over time.
On that note, with the Chinese yuan pegged to the violently rising dollar, Chinese exports are becoming well too expensive for much of the world. If this trend continues, China risks substantial economic consequences. Which, by the way, will then eventually lead to an even lower yuan valuation. If this dollar trend continues, China must devalue its yuan in order to maintain employment. Or the yuan will make its own course of action and head lower. Don’t listen to the debt mongers be they in China, the U.S., Greece or elsewhere. Debt is an illusion. Show me a debt? What does it look like? Iceland flipped its bird at debt and what happened to them? Debt is nothing more than an artificial control construct meant to enslave us to our own misery. This cycle is likely to be the cycle where that illusion is exposed and debt-based money disappears forever. If everyone in the world said they would no longer pay their debts, what would happen? No one would die. No one would starve. It wouldn’t blow up factories or food production. Debt, like wage slavery and taxes are purely myths created by pathology and the state to enslave us for the benefit of moochers and parasites who would otherwise be nothing more than piss boys. It’s good to be the king. Not much longer though.
The REAL issue facing China and the world is not debt. The real issue is employment. For without employment, the state cannot domesticate humanity and maintain its violence and control over it. Corporate employment, like war, is a tool through which the state plunders and controls humanity. Certainly those in positions of state power don’t consciously recognize this in themselves. But, the ego’s intent of control subconsciously understands that power is achieved by building hierarchical bureaucracies that grant itself control over others. Why else would hierarchical bureaucracies even exist? So, there are really two main elements involved in deriving state power through the provision of employment. One is the actual power granted by being at the top of these structures. That is, actually being the authority figure in these structures. This is almost certainly behind the massive immigration movements in Europe and the U.S. where it has become harder and harder to brainwash people in these societies to do many of the slave wage jobs and fill the positions of front-line military personnel to fight the state’s wars. These structures require people willing to play the role of slave to be manipulated and controlled by class and hierarchy. The second is the more base construct of creating and maintaining these structures in the first place. In other words, in the case of employment, creating hierarchical paradigms that turns society into wage slaves that are then controllable. Pathology certainly doesn’t think this overtly about what it is doing. It simply unconsciously understands this intent of control through its own megalomania and pathology.
The reality is civilizations that were very advanced worked a third as much as we do thousands of years ago. We work because it serves class and the state. It creates and maintains hierarchical power and control paradigms. The state wants you to be a debt and tax slave. How do they best accomplish this? By ensuring you are employed as a wage slave. It doesn’t matter if that is a good job or if it is a democratic job or a virtuous job or a criminal job or a job that pays a living wage. They just want you to have a job. Then corporations, financiers and politicians, ie state actors, can extract endless rent from you in the form of regular racketeering and extortion payments. Car payments, apartment payments, tax payments, cable TV payments, mortgage payments, credit card payments, student loan payments, gym membership payments, industrial food grocery payments, welfare payments, Wal-mart welfare payments, whatever. The list of rent extraction schemes is endless. A national economy is how the state wages war against humanity. This is how the pathology of the state enriches itself off of our backs. They want us to be employed so they can steal from us. Debt is just one mechanism of that theft. But if we aren’t employed, they find another way to socialize those losses with the indignity of poverty handouts paid for by rent extraction from the wage slave while they continue to loot humanity. The key point I want to make here is that if we aren’t employed, then state pathology and its manifestations of debt, usury, graft and the like loses its power and the state has no reason to rationalize its existence. The violence we see around the world today is substantially about this. If the state cannot provide jobs for its people, what reason can it use to justify its control and the associated endless misery and violence? How can it continue to enrich itself of the backs of our labor and intellectual talent? If the state cannot provide for its people, then people will find ways to provide for themselves. That includes selling drugs, the underground economy or whatnot.
This is the real crisis in China and around the world. Communism, like capitalism, is a state-created economic control system. Communism coupled with capitalism, as is the case with China, is the worst of both worlds. If the state cannot provide under that control system, then what ultimately happened in the Soviet Union will happen everywhere. That is, the system will collapse under its own contradictions. We are already seeing this with massive backlash against the state everywhere on earth.
This is the primary driver behind China’s creation of an Asian development bank meant to rival the U.S.-dominated IMF and World Bank and the European Union and its European Investment Bank and Bank for Reconstruction and Development. China must do something because there is no longer an endless supply of dollars to prop up the massive fraud that is the Chinese economy. This is more evident by the recent AP report that China’s exports have collapsed 15% in the most recent reporting period. Now, none of the data out of China can be trusted but there is no doubt that China is starting to tip into its serious and unavoidable crisis. China isn’t acting out of good graces or interest in humanity or Asian development for the sake of freedom or liberty. It MUST pay other nations (through its Asian development bank loans) to take its massive overproduction so that it can maintain domestic employment. Just like it had to pay Americans through the endless purchases of Treasuries aka loans to Americans that subsidized our overconsumption. Because if China experiences mass unemployment, its monstrous 60+ million member communist bureaucracy and all of the bloated state institutions of control that parasitically exist off of the exploitation of the masses in China will collapse. Then the moochers and parasites that dominate Chinese communist society would lose their ability to control the masses. The reason that Australia, Britain and other European countries are joining China’s Asian bank isn’t because they are turning away from the dollar or are anti-dollar or any other reason given by countless wrong rationalizations. It’s because they are in the same predicament as every other state as it pertains to economic rent extraction. They all need to provide employment at any cost or state actors will experience systemic failure in their ability to maintain control, class, privilege and power over the mass of humanity. The state is in a fight for its life. These nations are looking out for their own self-interested survival of their massive predatory, pathological bureaucracies. People who cite the creation of the Chinese Asian development bank as the end of U.S. dollar are clueless. U.S. empire will fail. Most likely from within. It almost certainly won’t be for the reasons cited of dollar alternatives. The yuan is a worthless, corrupt currency well more rotten than the dollar. The argument that empire is failing because China is starting a non-dollar development bank is the same line of failed rationale used to justify the gold bubble. China and Russia, two of the most corrupt states in the world, were buying gold. So, this was used as a confirmation bias by those who owned gold that it must be a good investment and must continue its rise higher. Meh. Now, the same argument is being used about the end of the dollar. China is creating an anti-dollar bank so that means the dollar must now collapse. More bullshit. China is creating an anti-dollar bank because if it doesn’t, it is going to experience mass unemployment, social instability and political collapse. China needs to create new outlets for its massive production infrastructure or else. Central banking bureaucrats around the world were selling gold when it was $250 an ounce and buying it at $1800 an ounce. The same outcome will come to pass with all of these global political bureaucrats lining up to support China’s Asian development bank. They are simply following the cheese and their timing is most often a contrary presage of maximum ignorance and their own impending doom. All bureaucrats everywhere are anti-humanist, anti-progress, self-interested buffoons. That’s why they are bureaucrats. Because they can’t do anything else other than manipulate and control other people or maintain the status quo, regardless of its ethics or morality.
This is also the same reason Russia is attempting to advance its own economic interests with the rest of the world. Russia’s biggest concern is unemployment. And why Russia recently floated the incredibly horrible idea (horrible for humanity, great news for the state) of a pan Asian currency, following in the foot steps of the European Union and the complete failure of the euro currency. Another dunce idea by another state dunce. A pan Asian currency would fail just as the euro has failed for exactly the same reasons. A pan country currency is not to advance democracy but to advance the power of the state over humanity. Russia is grasping at straws as its economy implodes. Russia’s crisis too is going to get much worse. Its pivoting to Asia and away from the west is the same ignorance that is driving states to join the Asian development banks. How is becoming more reliant on the massive incompetence of China’s communism and its massive capital bubble going to provide the way forward for Putin and his economic stooges? By the way, I never commented on the murder of a Russian politician a few months ago. But the conspiracy theorists were all over the United States as the central blame. It gets a little boring when everything is blamed on U.S. politicians. If only they were so competent to be worthy of such blame. But they aren’t. The reality is Russia is and has been a version of the Wild West and a massive murder machine for anyone who tries to speak the truth about its systemic corruption. 56 journalists have been confirmed murdered in Russia since 1992 by the less than political Committee to Protect Journalists from the state. The U.S. can only blush at such efficiency. In the U.S. rather than murder people, we prefer to simply brainwash them through mainstream media and political propaganda. Blood is just too messy and unnecessary. That includes the brainwashing of the journalists themselves. We have a much more refined form of state violence. Hitler and other European predators taught us well.
The return of the multipolar world is another farcical meme that has developed with many. There are those who wrongly believe the world is somehow better off with four large economic entities pumping massive weapons sales into the rest of the world instead of one. The answer to U.S. hegemony is not the rise of even more U.S. wanna-be’s. It’s a paradigm shift away from large, dominant powers manipulating all of humanity for their own self-interest. It’s a restoration of power to localities, individuals and communities all across the world. Democracy and self-rule is local. This is the answer to the pathology of the state. With Europe, Russia and China feverishly pumping weapons out of their factories for foreign sale, and Japan re-joining the fray, how exactly is this ever going to turn towards the benefit of humanity? It benefits the state and its need for employment to domesticate humanity and increase its power and control. The state is a virus and the answer is to see the extinction of the state and its inventions of control and violence.
The reality is the state is at permanent odds with humanity. And the state is at odds with other states for the same reason it is at odds with its own citizens. We can unequivocally expect those odds (control) and that violence necessary to maintain those odds (control) to continue ratcheting higher around the world until humanity rises up to stop it. The state can only exist by DIVIDING humanity through pathological manipulation, deceit and evil rather than uniting humanity in all of our highest good’s common wants and needs as sentient beings. The state endlessly seeks to enslave humanity to its power through money, debt, corporate capitalism, socialism, communism, dictatorships, feudal control systems or whatnot. And its invention of war is the method through which it maintains that divisiveness and control. It’s really all of the same dynamic. Different lipstick, the same pig. Corporations and corporate capitalism love all manner of centralized state power including socialism, fascism, communism, dictatorships, feudalism,etc. How often did I hear GE’s CEO, Jeffrey Immelt, as just one of countless examples, praise China and Middle Eastern dictators for their economic policies? Corporate capitalism is a centrally-planned construct that relies on an all-powerful centralized control bureaucracy to enrich itself. That’s why our founding principles of the Articles of Confederation (power distributed to the people) was quickly replaced by a centralized, federalist government. Because moneyed economic interests of corporate capitalism and private, for-profit banks needed that control structure to enslave our people to corporate and financier domination.
If only the U.S. could be even more controlled centrally, then corporate power could run roughshod over us even more than they already do. Well, that is behind the rise in power of a centralize, far-off bureaucracy in Washington, DC that has more than a passing resemblance to King George in 1776. It’s the will of our corporate masters. Just like King George’s moneyed corporate aristocracy that Thomas Jefferson wrote about. Throughout history and today corporations have shown an affinity for any totalitarian form of state violence be it fascism, socialism, communism, dictatorships, feudalism, kings or whatnot. Fawning over China, Russia or Saudi Arabia is a favorite pastime of corporate bureaucrats. Thinking of this reminds me an article written in the Guardian some years ago about the Bush family wealth and how they essentially made no distinctions of morality in any economic decisions they made in support of Nazi Germany. And how capitalism funded and helped create the two prior world wars. This is substantially again in play today. Those who have stolen all of our money and wealth do so without any moral distinctions. And they criminally steal and pass our intellectual knowledge and labor to any nation on earth regardless of whether it is democratic or not. And that lack of morality creates massive unintended crises around the world by providing technology, knowledge, funding and arms to state pathology, predators and the like. All in the name of greed, profit and the free market. By the way, this too was in play during the Civil War when the South wanted to trade with the murderous, economic-slavery-driven British Empire under the propaganda meme of free trade. All socially-created memes are propaganda and control constructs created by class for the benefit of class whether they are southern plantation owners or Wall Street predators or political toadies. Then when this all backfires on the rest of us, we fight the state’s wars and die for them by the millions. Does anyone wonder if the capitalist class or the state cares how many of us die in today’s world? They are already killing all of us through various legal, profitable methods of control anyway.
Let me take a paragraph to remark about those last few sentences before I continue on. There have been quite a few reports recently about military morale and the trouble the armed services are having in filling employment quotas. That includes reports headlining that many religious people (People with value systems that may be inconsistent with state violence.) leaving the military. This is happening even though the military is spending massive amounts of money on brainwashing and propaganda. There are also large studies that show an equally low morale in korporate amerika. I noted many years ago that the U.S. military could eventually see mass desertions. Now, what is happening is not a mass desertion yet but the military is now lowering its standards of acceptance for this very reason. We haven’t seen a corporate exodus because people are on a forced march of korporate werk to stay alive but we do hear corporations repeatedly telling us they cannot fill the front-line, rank-and-file employee positions or those that are often the most exploited. Those front-line positions would be comparable to front-line military personnel thrown into battle. This dynamic is the exact same across corporate capitalism and the military. Both are state-created, anti-democratic, command-and-control institutions that rely on people abandoning their value systems and their own ability to think for themselves and adopting the value systems of their masters who bark orders at them. It’s no coincidence our founders warned us about both standing armies and the king’s corporate capitalism. It’s no coincidence that both are also experiencing massive morale problems. I noted on here some time ago how corporate command structures are the exact parallel to the military with a king or commander, generals, the propaganda unit, the foot soldiers, etc. They are both forced competition (Godlessness) that exploits the masses of humanity battling each other for the glory and power of class and hierarchy enforced by the state. The mass awakening we are witnessing is making it more and more difficult for the state to wage war on its own population and against people around the world. That mass awakening has not yet filtered through all of the world but it definitely is a major social development in other parts of the world as well. Modern economics as it has always been practiced is a form of violence against humanity that is a creature of the state. I keep hammering on this point because the future of what societies and socioeconomic constructs will look like will likely change very, very radically. Thousands of years ago wealthy societies worked a fraction of what we work today and there is a reason for that. Because modern economies are an extension of state power rather than expressions of democratic and human want or need.
Jefferson’s warning about the aristocracy of moneyed British corporations is finally coming to pass more than two hundred years later. There are many parallels between Russia, China, Europe and the United States as the four major world powers today. Within the rural and small town areas away from corporate, financier and political power of the state, the masses of people generally live by a well-developed ethical code of conduct. In rural and small community China it is still Confucianism and Taoism, in the U.S. and Europe generally Christianity and in Russia it’s Orthodox Christianity. There are obviously other sects of these philosophical value systems as well but that’s irrelevant to the point. My point is these philosophies (and many other valid ones as well including Islam, Hinduism, Buddhism, Sikhism, etc,) provided philosophical guideposts for ethical behavior and a just existence for the right-minded person. But once one enters the major metropolitan areas in any nation, the guideposts of ethical behavior are determined by the state and the philosophy of statism determined by corporations, financiers, religious lunatics, politicians and the like that dominate and control major metropolitan economics for the masses. Not only did Jefferson resist the social values of financiers, corporations and politicians, but he very much tied them to living in large cities that were cesspools of moral rot. He espoused a society that was generally agrarian or based on the philosophical social fabric of community and rural identities still manifested through Confucianism, Taoism, Christianity and Russian Orthodox Christianity in small and rural communities of the world’s largest states today. It’s no coincidence that the fall of humanity and the rise of the state has been correlated to a massive human movement in the last century away from rural and community living to major cities where people are now reliant on the power of the state and its inventions of finance, politics and corporations. People have lost all power of community in this process and now lead fate-filled lives intertwined with state power. There is almost no reliance at all on people’s own abilities or local communities. And those ethical philosophies have been dumped by the wayside in favor of ego-driven rationalizations regarding what is acceptable. Now people are reliant on the projection of violence of the state and corporations, politicians, financiers and many religious lunatics that endorse their behavior. In other words, with this century-long massive migration to cities, the state is more reliant than every in providing employment to the masses for its very survival. The issue around the world is NOT debt. The issue facing the state is providing employment in a world where there is no employment other than make work. Mind you, this creation of make work by the state and modern economics is a dynamic that has been unfolding for decades. This is the major destabilizing factor facing the state and its accumulation of power and domination over every aspect of our lives. And why states are now turning against one another in a final bid at maintaining their own power at the expense of other states. This employment pact between the states and its domesticated citizens is one the state cannot keep without massive inwardly and outwardly focused emotional, spiritual and physical violence to further its control and its need for employment growth. Which is a major reason why many peoples around the world, led by political and corporate dunces, now support war, the violence of the state and corporate governance (TPP trade agreement, WTO, IMF, NAFTA, etc) as a method of resolving differences between states. The fate of all who serve our corporate masters is directly intertwined with the fate of the state and its projection of violence. For without it, our wealth, employment and careers will collapse.
Finally, I want to make some comments about the climate and economics. One of those volatile factors is that we are likely moving into a cold, dry climate as has been noted on here for many years. There are astronomical/astrological events that dictate the behavior of the sun. (As well as many other factors we just don’t understand.) And the sun, being a million times the size of the earth, and millions upon millions multiplied by millions upon millions of times far more impactful than anything humanity is ever going to do to climate, is far and away the most important aspect of solar system climate variability. After five decades of the most active sun in 11,000 years according to the Max Planck Institute’s analysis, the sun has collapsed. California and many parts of the world are experiencing major droughts. Honestly, I am just as clueless as anyone else as to how long that will last. But, changes to the planet come with economic consequences. Economic volatility is often coincidence with natural volatility. Some people would surmise the latter creates the former but the evidence does not support that perception. It is more apparent the same energy is causing both – I have forecasted a cold, dry climate, global economic chaos and a weak sun well before any of them unfolded. And none of those forecasts are predicated on effects of the others. They are predicated on the cycle of volatility we are in. Regardless, California is now facing an economic crisis as the U.S.’s major fruit and vegetable producer. The methods used to produce much of this abundance are unsustainable. If these mega farmers, many of whom rely upon exploitative economics, (slave labor, destructive farming methods, privatizing mass public water resources for their own personal profit while socializing the cost to society, etc) cannot adapt, democracy and humanity has the right to allow those who can adapt to more sustainable farming methods to act as stewards of the land on behalf of humanity. But nature may accomplish just that anyway. It’s not a democratic right or a natural right to garner massive amounts of nature’s resources and then exploit that power for personal gain and profit as many farmers do. The industrial food complex is headed for the dung heap. That likely includes many of the massive strip mining efforts at food production.
The sign of end times of this system are everywhere. This cycle, which is reliant on a very small number of people dominating all of humanity, is thus best characterized by ignorance. When the vast majority of human expression is suppressed under the rule of man, what results is a worldview created by a small number of people. Invariably, that will, without exception, be a control system based completely on ignorance. For a relative few people can never invent, create and express themselves with the endless diversity of needs and abilities of all of humanity. The tolerance for ignorance, sameness, conformity and incompetence and the tolerance of average or poor performance is systemic in any system of class. Just as any form of state tyranny always is. I can see myself in the actions and deeds of others, and because of that I can clearly see the end in almost everything. The ego amuses itself to death or collapse. Quite literally. Reality TV, infatuation with Hollywood and sports figures who have become the most emotionally-stunted, self-centered people in society through their desire to be famous or adored because they don’t grant their own love themselves, unprecedented centralized political power and control over humanity, monetary emission with no benefit to humanity, the glorification of war and corporate violence, infatuation with sports, entertainment and self-amusement, ignorant thug culture that has gone mainstream, deviance or acting out of all sorts, addictions of all sorts, bureaucrats literally making it illegal to feed the homeless and other asinine forms of bureaucratic control, endless useless rules and regulations that protect the ruling class while subverting freedom, the rise of a class of ignorant self-assuming wealth that serves no purpose other than its own endless self-amusement like the Kardashians, Hollywood, Wall Street, Washington DC, lobbyists and the like. And an infatuation with that class of people’s vile ego-driven behavior by the media and society as a whole. This certainly must have been what the world looked like in France before the French Revolution, in Britain leading up to the American Revolution and the fall of the Roman Empire. There was once a time when one may have wondered how a bunch of rag-tag, underfunded, underqualified average joe’s kicked the British Empire’s ass, routed the French aristocracy or sacked Rome with all of their resources and power. But now it has become all so evident and clear. The buffoonery of a class-based society controlled by the force of the state eventually becomes so self-consumed with its own ignorance, inanity, self-centeredness and incompetence that barely blowing on it can create its own demise. And that is what we see all around the world today. The state is now reliant on massive overt violence in order to maintain its control. The deft manipulation of emotional and spiritual violence is failing to achieve desired results as people wake up to their own suffering created by this system. There is no consent of the governed anywhere. There is literally no legitimate right to rule so rule is established through state-enforced violence. And so it will be until we stop it or they end up killing us all and themselves through their miscalculations of aggression and power they need to maintain domination over humanity.