I started observing the slow-motion train-wreck in process in 2001 – a year removed from my perch as a junk bond trader on Wall Street and living several thousand miles away from NYC and DC in the Mile High City, where the view is a lot more clear than from either coast.
The United States has been in a state of collapse for several decades. To paraphrase Hemingway’s flippant description of the manner in which one goes bankrupt, it happens in two ways: slowly then all at once (“The Sun Also Rises”).
The economic decay was precipitated by the advent of the Federal Reserve; then reinforced by FDR’s executive order removing gold from the citizenry’s ownership, the acceptance of Bretton Woods, and the implementation of what is capriciously termed “Bretton Woods Two” – Nixon’s disconnection of the dollar from the gold standard. If you study the monetary and debt charts available on the St. Louis Fed’s website, you’ll see that post-1971 both the money supply and the amount of debt issued at all levels of the system (public, corporate, household) began gradually to go parabolic.
I would argue the political collapse kicked into high-gear during and after the Nixon administration, although I know many would argue that it began shortly after the Constitution was ratified in 1788. At the Constitutional Convention, someone asked Ben Franklin if we now had Republic or a Monarchy, to which Franklin famously replied, “a Republic, if you can keep it.”
Well, we’ve failed to keep the Republic. Now the political, economic and financial system is controlled by a consortium of big banks, big corporations, the Department of Defense and a handful of very wealthy individuals, all of which are ruthlessly greedy and misanthropic.
The current political and social melt-down is nothing more than a symptom of the underlying rot – rot that was seeded and propagated by the implementation of fiat currency and a fractional banking system. The erection of the Fed gave control of the country over to those with the authority to create paper money and issue debt.
And now the political and social clime of the country has gone from ridiculous to beyond absurd. James Kunstler wrote a must-read piece which captures the essence of the Dickensian societal caricature that has sprung to life before our very eyes (Total Eclipse):
What do you know, long about Wednesday, August 16, 2017, House Minority Leader Nancy Pelosi (D-Cal) discovered that the United States Capitol building was infested with statues of Confederate dignitaries. Thirty years walking those marbled halls and she just noticed? Her startled announcement perked up Senator Cory Booker (D- NJ) who has been navigating those same halls only a few years. He quickly introduced a bill to blackball the offending statues. And, of course, the congressional black caucus also enjoyed a mass epiphany on the bronze and stone delegation of white devils…
…Just as empires tend to build their most grandiose monuments prior to collapse, our tottering empire is concocting the most monumentally ludicrous delusions before it slides down the laundry chute of history. It’s as if the Marx Brothers colluded with Alfred Hitchcock to dream up a melodramatic climax to the American Century that would be the most ridiculous and embarrassing to our posterity.
I would urge everyone to read the entire piece, which I’ve linked above. And now for America’s coup de grace, it has offered up “president Trump,” which by the way not any worse than the alternative would have been. Rather, it’s another symptom of the cancer beneath the skin.
Empires in collapse are at their most dangerous to the world when they are on the brink of imploding. I was discussing this with a good friend the other day who was still clinging to the brainwashing we received in middle school history classes that “America is different.” This just in: America is not different.
The Financial Times has written a disturbing – yet accurate – accounting of the current turmoil facing the White House and the world (America Is Now A Dangerous Nation):
The danger is that these multiple crises will merge, tempting an embattled president to try to exploit an international conflict to break out of his domestic difficulties…Mr Gorka’s flirtation with the idea that the threat of war could lead Americans to rally around the president should sound alarm bells for anyone with a sense of history…Leaders under severe domestic political pressure are also more likely to behave irrationally.
In commentary which reinforces my view presented above, the FT article closes with:
A final disturbing thought is that Mr Trump’s emergence increasingly looks like a symptom of a wider crisis in American society, that will not disappear, even when Mr Trump has vacated the Oval Office. Declining living standards for many ordinary Americans and the demographic shifts that threaten the majority status of white Americans helped to create the pool of angry voters that elected Mr Trump. Combine that social and economic backdrop with fears of international decline and a political culture that venerates guns and the military, and you have a formula for a country whose response to international crises may, increasingly, be to “lock and load”.
The current “everything bubble,” fueled by the creation of massive amounts of fiat money and debt issuance is America’s “supernova.” It’s the final explosion of fraudulent currency printing and credit creation. I sincerely hope that when the pieces hit the ground, there will be enough material with which the original Republic can somehow be reconstructed.