Wednesday, August 21, 2013

An Update On The Mythology Of The Post-Industrial Service Economy And Its Coming Wage Reset - Part One

The global economy is in serious trouble.   Bonds rates around the globe are not rising because the global economy is recovering.  That is a preposterous notion put forth by financial and monetary bureaucrats that control our dumbed-down existence.  They are rising because liquidity is flowing out of the global economy at a faster rate than leading up to the 2008 collapse; something I have been writing for the last 15 months.  Frankly, most global equity markets peaked in early 2011 when I first wrote that I was bearish again on the financial sector because they started manipulating their earnings. 

Gold, bonds in all nations and of all types, emerging market currencies, commodities and emerging market equities are all tanking.   When emerging markets, gold and commodities seemed invincible and the U.S. seemed a hapless, bumbling giant, I wrote all of these things would happen on the back end of this crisis.   That the vast majority of this crisis would reside outside of the U.S.   The gold bulls, the dollar bears, the BRIC bulls, the hyperinflation dunces were all wrong just as I wrote they would be.   This isn’t rocket science but you have to be able to appreciate how this system works.  These are all signs of a coming liquidity crisis.  But unlike 2008, this one is global and far, far larger.  That means the unprecedented and essentially unlimited multi-trillion dollar global central banker’s monetary reflation has failed and a global economic crisis, bond crisis, currency crisis and debt repudiation are now germinating.   Quantitative easing didn’t do anything except bail out the one percent who own all of the paper-traded assets and ever-increasingly useless currency underpinning them.   

Central banks can’t push enough debt-based money into the global economy to support the unprecedented usury of the massive corporate & government bond/debt bubble,  the enslavement of citizens to debt serfdom, the corporate rent extraction schemes, the financial industry usury and extortion and endless statist mandates, taxes, red tape and voracious overspending of the people’s money.   We are enslaved to a system of corporate state taxes and control that are unprecedented.

Given those factors, the only choice for survival of the status quo is for this system of violence, predation and exploitation to start eating its own.  To start turning against itself.  The successful debt, usury and exploitation so necessary to maintain this system must be repudiated by the status quo participants in this system itself if they are ever to attempt to survive.  And that is exactly what I wrote would happen some years ago when I said that the status quo would eventually turn against itself.   This is the circular violence necessary to support a Darwinian economic model.  When the lions devour all of the lambs, the only option left is for predator to become prey.   This is one of the primary drivers of capitalism’s war cycles that I have written of over the years.  Arguably, all major war is driven by the inherent violence of  class-based economic systems such as capitalism, fascism, mercantilism, colonialism and every other ideological ism of state violence.   (By the way, I believe Edward Snowden’s revelations are so profound that the odds of political dunces will ever be able to start another world war have ratcheted down substantially.  We shall see.)

Violence begets violence and ultimately will lead to this system’s own death.   It will die at the hand of the sword.  Once critical mass is reached in the destabilization of this complex system, there is nothing anyone can do to stop the chain reaction from going critical.   There is a general belief by many out there that humanity is somehow without hope because the status quo has achieved nearly universal and total control.   Nothing could be further from the truth.  The reality is there is nothing anyone need do to push back against this system or to stop it, unless it is a matter of one’s survival.   Otherwise, all we need to do is  sit back and watch the internal contradictions of corporate capitalism and the corporate state fail from within.  Fail at its own hand.   Just as the Soviet Union collapsed inward on its own internal contradictions.

Central banks have little control over anything as noted on here ad nauseam.   And they definitely cannot solve a problem created by too much taxation, too much lying, too much usury, too much theft, too much economic slavery, too much corporate control, too much state tyranny, too much exploitation, too much power granted to politicians, too much rigging the rule of law to steal economic and political determinism, too much corporate & political corruption and too much political arrogant ignorance.

People who talk about China transitioning to more of a service economy, as has become a popular mantra with political, economic and financial dunces in our dumbed-down society, have no idea what they are talking about.  As noted on here ad nauseam, a service economy cannot grow and that means monetary reflation necessary to maintain a debt-based monetary system is impossible.   This same concept applies to taxes.  There is no way to reflated a service economy out of more and more taxes and government mandates.  (Which is why Obamacare is failing before our eyes as component after component of the legislation are pushed into the future using various excuses.) 

It’s important you understand that service economies cannot grow because this is where the global economy is.  It’s a topic I have remarked of on here time and again.  Without reflation, this system of greater and greater debt, taxes and political mandates is finished.  China’s attempt to transition its economy to one more reliant on service, as we are told, is nothing more than doing each other’s laundry.   It is the service economy and the attempted transition to domestic consumption that has created the debt crisis we now see in China.  (Government too is a service.  Bigger and bigger government with greater and greater taxes and mandates, the make-work of political idiots,  cannot survive in a debt-based monetary system.)

With the post 2008 crash economy creating negative production employment globally, the U.S. and, for that matter Europe, is in the same situation as China with their attempted monetary reflations.   What we have witnessed globally since 2008 is not a successful reflation but instead a global concerted policy that is hiding the fact that all currencies are collapsing.  It is not reflation we see but collapse.  We know this because there is no way to reflate a debt-based service economy.  This is what is revealing itself in 2013 with the movement in bonds-debt, gold, currencies, equities, BRIC economies, emerging markets, etc.   We may very well see all money around the world becomes useless or worthless.   While this may not be the cycle, eventually all money will die forever.  It is an institution of the ego (a system of control -violence) that serves no purpose to a free mind.  To be free we must first free our minds from the bondage of institutions of the ego.  No money…means no taxes….means no slave wages….means no hunger… means no homelessness….means no method of funding war….means no economic usury and theft…...means no covert methods of political-statist control that deny economic and political freedoms through the violent statist institution of money.  It is possible we are in the midst of such a cycle.  As I have noted before, many aspects of money are already dying.  

The only way to maintain a service-based economy is to print money forever.   To effectively torch the currency.  It requires quantitative easing to infinite.  The only way to maintain a debt-based monetary system in a service economy is to print money forever and place that money in the hands of consumers.  ie, Load everyone up with ever-increasing debt.  That dynamic has hit the wall globally.  There is no way out of the current system.  Failure is imminent be that debt monetization, debt default, debt repudiation, debt forgiveness or a new financial, monetary and economic system or all of the above or some of the above.

We know a new system isn’t coming because politicians have done everything in their power to stop any type of change that disempowers corporations, class and the state and empowers democracy and individual liberty.   We are now at the proverbial rock and a hard place.  Something’s gotta give.

posted by TimingLogic at 9:19 AM

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