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.
Does not the serpent bite deepest when it is dying?
Yep. Same deal
With all due respect Dave I would take with a large pinch of salt anything that comes out of the the FT. A staunch defender of the fiat currency system that has got us into this mess. They have often run the standard line that……”gold is an ancient relic” propaganda. They are big supporters of the central bank model, and supported the bank bail outs.
They adore the globalists, and hate populism. (Right or left) They were against BREXIT. (Still are fighting it in the UK. ) They want internationalism, one world govt and the world run by their Financial elite masters. Nothing would terrify them more than the American public rallying round a populist president. They had no such concerns when Bush or Obama was playing the war president.
Finally, they attack the idea of guns and an armed society as the problem with their “lock and load” drivel. They don’t like that the people can defend themselves. Their latest column could have been written in Clintons office. If Clinton or Bush had been elected they would now be saying everything is fine and cheering on More wars.
America like much of the Europe has big problems, but the solutions won’t come from the Financial Times. It’s their policies that have helped to get us into this state.
Let’s not be guilty of throwing the baby out with the bath water here. The FT in my estimation has a higher level of credibility than any U.S. MSM publication. Willem Buiter was the big “gold standard is an ancient relic” writer and he went to Citicorp. Isabella Kaminska is their main gold reporter and she can be a mixed bag of nonsense and fact. I quote the FT in the context of my blog post because it happens to reinforce my thesis and it’s written from an “Olympian stance” perspective.
This slow-motion train wreck has been planned for a long time, and Franklin was part of it:
And, the Congressional Black Caucus and its friends have happily played their role, too:
What a world!
“The Final Stage Of Collapse” – I just wonder who is going loose , most probably us.
They had 10 long years to steal as much as they could , prepare themselves , change the law against us . It looks like They maybe little bit down but not out . They are most probably ready for total programmed collapse. When we have next Big Recession they will finish , whatever left to enslave us. They are not going anywhere till there is bloody Revolution or War.
My problem with fiat $$$ has and all ways will be this … infinity is not a number …
Look I think economics is a study of the human wants and needs combined with some social norms of morality … measured by numbers … and some math models… of prediction … but haw can it ever work if you can have a denominator or multiplier of infinity …bends my mind… so all they can ever do is just lie there is no truth …in any of their pronouncements …for the basic underling fact is infinity is not a number.
Sunday morning cartoon