Quote Of The Day

Quote of the Day: “The bottom line is that each of us is grossly ignorant about the world in which we live. Nothing’s wrong with that ignorance, but we are stupid if we believe that a politician can produce a better life than that which is obtained through peaceable, voluntary exchange with our fellow man anywhere on earth” – Walter Williams

“The Most Fatal Thing A Man Can Do Is Try To Stand Alone”

“The most fatal thing a man can do is try to stand alone.” ― Carson McCullers

Some smart people have drawn parallels between our current global society and culture and the culture and society the world knew in the years leading up to World War I. On the surface those comparisons appear preposterous – but if one looks a little deeper then perhaps the critical traits are very similar. The primary trait that we appear to have in common with 105 years ago is the belief that the world dynamic and organization is static. Now – again – on the surface that assertion appears preposterous. Look a little deeper and it is perhaps not preposterous at all.

One can easily argue that the Trump people and the Sanders people are interested in burning it all down. However if one was to listen to what they actually proclaim then they are less interested in burning it down than they are in cherry-picking events, policies and social dynamics from the past. Furthermore they are predicating this wish list of cherry picked items on a perpetual continuation of the current system.

The differences in Trump and Sanders culture are really not about changing the fundamental system but more about which cherry picked items from the past get included on this wish list. Beyond even that the cherry picked items are often derived from a fictional past created to conform to an ideological and political imperative. The wish list has little to do with what really happened in the past and nothing at all to do with cultural, economic and political context around these supposed events. Both the Trump and Sanders people to a large degree believe that sheer government power can create a fictional past that they wish to reside in today.

Sometimes societies just collectively go insane. However it is a strain of insanity that we have known before.

In a very real way the Trump and Sanders people are fighting against change. Perhaps more specifically they are fighting against the unknown that is an inherent component of change.

Socialist in 1912 Europe were ostensibly fighting for change – but were they really? Socialism was derived as a response, and successor, to a specific government-economic-cultural model. Once that specific government-economic-cultural model ceased to exist the socialist argument also ceased to exist. In order to perpetuate the socialist argument the socialist have had to create fictional straw men to argue against – because the pro-socialist argument simply ceases to exist when the target of its’ argument also ceases to exist. Socialist always become fully invested in a static system – having to create new fictions and new straw men in order to adapt to change and make your ideas appear appealing is strenuous work. When the pre-existing system utterly melted down from 1917 to 1919 the only socialist capable of taking advantage of that meltdown were Lenin and Trotsky. Lenin and Trotsky succeeded due to their willingness to kill anyone with an alternate idea and by creating fiction on the level that Orwell wrote so eloquently of in ‘Animal Farm.’

Socialism is predicated on opposing a specific system – and if that system does not exist then a fictional opposition system must be created in order that socialism not appear as absurd as it actually is. For the socialist, Franz-Josef must always be on the throne and if he is not then his straw man must be created.

To summarize, change is the lethal enemy of socialism.

The Trump people often seem to be equally as wedded to cherry picking the past. The newsflash here is that Trump is not Reagan and this is not the 1980’s – but quite a few people seem to have predicated their view of the world on Trump being Reagan and this still being the 1980’s.

The world is changing and that change is quite possibly going to be on a similar scale as 1914-1919. Demographics, debt and the human yearning for power and wealth drives the change. These three things are intertwined with each other. To a large degree we in the United States are oblivious to the change and how these things are connected.

These three things are not secrets but the popular culture in the United States has relegated them to the category of not important – mostly because they do not fit the narrative that popular culture desires to be true. Four articles from just this weekend’s news:

From “Deutsche Bank: The Fiat Money World May Be Coming to An End”:

“Reid’s basic contention is this: The dominance of the fiat currency system since Richard Nixon decoupled gold from the dollar in 1971 “is inherently unstable and prone to high inflation,” and an offsetting disinflationary shock that kept it afloat since 1980 is now slowly reversing.

If that’s the case, Reid says the fiat currency system — a term which describes any currency whose value is backed by the government that issued it, rather than by a commodity like gold or silver — could be “seriously tested” over the next decade.”

From “Is There Any Way Out of the ECB’s Trap?”

“Despite the massive injection of liquidity, he knows that he can not disguise political risks such as the secessionist coup in Catalonia. The Ibex reflects this, making it clear that the European Central Bank does not print prosperity, it only puts a floor to valuations.”

From “Animation: The Rapidly Aging Western World”

“However, one problem of particular importance – at least in places like Europe and the Americas – is a rapidly aging population. As the population shifts grayer, potential consequences include higher dependency ratios, rising healthcare costs, and shifting economies and cities.”

From “What Now?” by James Kunstler:

“The Kingdom of Saudi Arabia (KSA) has been a giant gasoline bomb waiting to explode for decades. It occupies one of the geographically least hospitable corners of the earth. Its existence as a modern (cough cough) state relies strictly on the reserves of oil discovered as recently as the late 1930s, that is, within the lifetime of people still reading this blog. The oil supply is in steep decline, and so, of course, is the stability of the kingdom.

Politically, it’s a super-medieval operation, an absolute monarchy tied to a severe religious order with the law floating precariously between the two, and old-fashioned customs such as the public beheading of criminals (for misdeeds such as “adultery,” “atheism,” and “sorcery”). The Saud clan has controlled the throne all these years, and its grip on power is slipping as the country itself slips into the prospective next era of its history, minus the endless gusher of oil that has made its existence possible — hence, a true existential crisis without the usual pseudo-intellectual bullshit.”

Of course on top of all of this is the global debt. Global debt now approached 360% of global GDP (see attached chart) – debt accumulated by the same constituencies that also have aging demographics. Let that sink in. Paying that debt back or defaulting on that debt is a requirement – a requirement that does not fit the narrative of either the Trump or the Sanders people. The demographics-debt conundrum is driving the change that both the Trump and Sanders people violently oppose. Just a note – debt and demographics are infinitely more powerful than any political system or fantasies that our popular culture embraces. Our collective insanity is the compulsion to embrace and predicate our lives on the ephemeral when that ephemeral has a limited shelf life with the expiration date in clear sight.

The world has elected to adopt an unsustainable monetary policy that has created unprecedented debt – and elected to do that at a time when the demographics for the people who have consumed that debt are such that repaying that debt would be most damaging and unpopular. Change is barreling down the highway at us and we have decided to have a picnic in the middle of the road.

Beyond even that – the linchpin in the global monetary system is the political stability of the Gulf States and most importantly of Saudi Arabia. If Saudi Arabia were to turn away from the petrodollar it is then entirely likely that the whole house of cards as we have known it will come down.

Everything we know in terms of government services is likely to change. By change, I mean to go away. The welfare state is dying due to debt-demographics and having predicated its’ continued financialization on the House of Saud. No matter how many North Africans that Europe imports or Central Americans that the United States imports it will not be enough to change the fundamental demographics – but it does change the fundamental culture. China and Japan are not even trying to import younger people in order to salvage their welfare states – unlike Europe and the United States, Asia appears simply willing to take the pain. Global monetary policy has created a debt trap in order that the shelf life of our fantasy narratives may be extended – a debt trap dependent on the Saudi’s to boot. The debt trap will eventually spark a liquidity crisis that will lead to a general economic crisis. As I said above, it is a strain of insanity that we have known before. When interest rates rise, as must inevitably happen someday, the fantasy narratives will come to an end for all but the most deluded.

Those of us who recognize this demographics-debt-monetary policy-Saudi situation is driving the change that will come, we have more interest in determining what comes next than arguing violently over what are ephemeral issues, excepting circumstances where the ephemeral issues will determine what comes next. In short – the more freedom and liberty then the more fluidly and adeptly we will be able to adapt to the coming change. This is why enhanced government control – such as socialism – will cause more pain as the changes occur. In fact, government control can only extend the pain. The last thing we will need is government trying to ‘fix this’ or make it ‘fair.’ That is an invitation to experience the next Lenin and Trotsky.

I began this article with a quote from Carson McCullers, “The most fatal thing a man can do is try to stand alone.” A coalescing is beginning to occur among those who acquiesce to the reality of the coming change. While it may sometimes appear that we stand alone, every day more and more people from across the political spectrums who have maintained that ability to recognize fictional narratives for what they are point out the reality to come.

Buckle up.