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Archive for August, 2009

Snippits

(from:   http://www.marketoracle.co.uk/)

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“The way the system is supposed to work, when times like this come, the solid people, the competent people, take over the assets from the incompetent people and then you start over again from a sound base, this is what South Korea did, this is what Russia did, and they did fine. What they’re doing this time is they’re taking the assets away from the competent people and giving them to the incompetent people and saying now you compete with the competent people with their assets and their money – it’s terrible economics and it’s not going to work, it hasn’t worked before and it’s not going to work this time. The way the system is supposed to work is when you make a mistake you go broke, [Bernanke] refused to let people go broke, he saved his friends and now we’re all having to pay for them.”

– Jim Rogers

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The moral hazard created by the Federal Reserve’s and the government’s response to every financial difficulty faced by banks and corporations have left our financial system teetering on the brink of collapse. Our largest banks are insolvent.

It has gotten so bad that it takes the leader of a socialist country to provide capitalistic free market common sense to American leaders:
“This crisis did not come about because we issued too little money but because we created economic growth with too much money and it was not sustainable. If we want to learn from that, the answer is not to repeat the mistakes of the past.” – Angela Merkel

Our fiat currency system has proved to be a wretched failure.

Average Americans have been victims of the boom and bust caused by the Federal Reserve policies. The sole beneficiaries have been bankers, politicians, the military industrial complex, and the super rich elite.

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Journalist H.L. Mencken understood overbearing government, the ignorant masses and the power of a few brave men:

“All government, of course, is against liberty.

Most people want security in this world, not liberty.” 



“The most dangerous man to any government is the man who is able to think things out… without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane, intolerable.  It doesn’t take a majority to make a rebellion; it takes only a few determined leaders and a sound cause.”


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The abolition of the Federal Reserve will not be without a ferocious, possibly deadly, fight.

Without a fiat currency, Democrats would not be able to tax and spend on their social program agenda. Republicans would not be able to tax and spend on their beloved military industrial complex and the wars it encourages.

A sound commodity backed currency would force government to become smaller and dramatically reduce the obscene profits of bankers.

A commodity backed currency would favor saving and investment versus borrowing and consuming.

If there is one thing that should have been learned in the last two years is that an unsustainable trend will not be sustained.

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If it feels like your family has fallen behind since 1971, you’re right. Your pay has not come close to keeping up with the cost of a new house, a new car or gas to fill up that car. This is why it takes two parents working to just to keep up with inflation.

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By C H Smith

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The first task is replacing the crumbling intellectual framework of the present status quo system with one grounded in reality.

You may well disagree with much or perhaps most of this book; that’s fine, because the primary goal of the book is to spark a reappraisal of our situation and generate practical responses. I don’t claim to have “the answer,” or even answers; what I hope to present is a way of thinking about the challenges which is more productive than the status quo.

You may also find some of the ideas presented here difficult to accept. None of us like to think of ourselves as debt-serfs, yet how can we move forward if we cannot be honest about our responsibilities and dilemmas? We are all vulnerable to groupthink, propaganda and marketing at various times; there is no shame in simply being human.

Some of you may find parts of the analysis smacking of warmed-over Marxism, while an equal number may find certain sections “right-wing”. That much of what we accept as “obvious” might be wrong is deeply unsettling.

Unfortunately, humans are prone to a formidably long and varied List of cognitive biases.

Despite the many traps in our default modes of thinking and our pernicious tropism toward short-term contexts, when we have no choice left then we are capable of making short-term sacrifices to further long-term gains. This is the response we need to foster to survive the Great Transformation just ahead. 


While every era of crisis is unique, authors such as David Fischer (The Great Wave: Price Revolutions and the Rhythm of History), Jared Diamond ( Collapse: How Societies Choose to Fail or Succeed ) and Joseph Tainter ( The Collapse of Complex Societies) have carefully researched how cycles of price, conflict and resource depletion/exhaustion tend to repeat as human populations rise beyond the carrying capacity of their environment.

I hesitate to even attempt a short summary of all the interwoven structural challenges of our era. But the key context is this, while financial and resource crises are not new, they are recurring features of human civilization, many aspects of our era’s crises are unique in all of human history: never before have we faced depletion of fossil fuels and the population pressures of over 6.5 billion humans to feed, house, clothe, transport, heal and care for in their old age. Never before have we as a species been so dependent on fragile supply chains and fast-depleting global resources.

Ironically, this cyclical nature of crisis lends itself to the emotional power of complacency: if we managed to get through those crises, then we can do it again. Unfortunately, there have been many times when the human populace did not “get through” the crisis; populations collapsed to mere shadows of their levels reached in the years of rising abundance.

Current structural challenges include:

1. demographics (promised retirement benefits are unaffordable)

2. global financial deleveraging (renunciation/write-off of debt)

3. high-cost advanced economies, “Planet of Slums” developing economies

4. rising interest rates (shortage of surplus capital)

5. de-scaling/disruption of entrenched industries/State fiefdoms by the Web

6. scalability traps/structural job losses in all economies

7. crippling regulation and overhead burdens on small entrepreneurs

8. fossil fuel depletion (Peak Oil)

9. political disunity; elites’ interests diverge from those of the society as a whole

10. rising income disparity

The 100+ year cycle of price inflation and stagnation of wages’ purchasing power which began around 1901 is now reaching the final stage of widespread turmoil, shortages, famine, war, conflict and crisis.

Without a firm understanding of the cyclical nature of human history and the unique challenges of our era, we are hard-pressed to escape the comforting illusions of complacency and fatalism.

A key point is that the above crises (or potential crises) are not discrete phenomena which can be solved in piecemeal fashion but rather interlocking, overlapping and in some cases reinforcing problems

We can safely predict the complacent and/or fatalistic nations and citizens will suffer more than those who proactively anticipated the likelihood of interlocking, reinforcing crises occurring within the next decade or two.

Ideally, such proactive anticipation should involve households, communities and the nation at large. But if the State (government at all levels) is in denial or deadlock, or crippled by debt or otherwise insolvent, then households and communities will also have to prepare themselves for some scenarios where a domino effect could transpire, toppling vulnerabilities which encircle the globe.

In a world so deeply dependent on cheap, abundant liquid fossil fuels for everything from transportation to food, the vulnerability and interdependency of all energy-dependent systems to shortage or disruption is acute

Every industry and financial sector ultimately rests on cheap, abundant petroleum. Once petroleum is no longer cheap or available in sufficient quantity to meet demand, then the energy domino will topple all the rest in rapid succession.

The unique commodity petroleum is thus the very foundation of interlocking/reinforcing crises on a global scale.

The human population has exploded in a geological eyeblink from several hundred million to 6.5 billion. the reality that the planet does not have the resources to support 3 billion middle-class consumers is readily visible.

Add these realities up and the context is a potential crash of global food and fresh water supplies, exacerbated by energy shortages.

In essence there are four interlocking crises: environmental, energy, financial and geopolitical.

The End of Debt-Based “Prosperity”

The “prosperity” of the past two decades was based not on savings, investment and productivity, as the mainstream financial media and think-tank punditry maintain, but by extremes of speculative credit, leverage, debt and risk-taking, all enabled by a financial system based on obfuscation, deception, embezzlement, fraud, abuse of credit and grossly inflated asset valuations, a.k.a. bubbles.

Compounding the collapse of this debt-based bogus “prosperity” are the end of cheap, abundant fossil fuels which enabled inexpensive global supply chains and tourism, and the “end of work,” a global contraction of paid labor. 


The intersection of various long-term political and financial trends is effectively squeezing the middle class, which the State (government) depends on to pay most of the taxes. Caught between the over-reach of both the state and its elites (the Plutocracy) and the end of debt-based, cheap-oil “prosperity” which enabled it to maintain an illusion of wealth, the middle class is being squeezed to the breaking point.

Our responses to these interwoven, reinforcing challenges of our era can be organized into three inter-related levels:

–family

–community/networks

–nation

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By C H Smith

Contexts and Causes

If we are indeed entering a multi-decade Great Transformation, then as prudent as it is to stockpile a few months of food and supplies, that will obviously not get us through the Transformation, either as individuals or as communities. We need a response that will make the Transformation a positive one. Our goal is a sustainable, productive economy and a full appreciation of the fundamentals of life.

First, we must identify the fundamental “problems” and then, present solutions. Our goal is that the solutions become “obvious”.

Not all critiques manage this; the grandfather of cul-de-sac critiques was Marx, whose profound critique of capitalism did not produce any coherent alternative system.

It is also important to understand that every “solution” benefits someone, cui bono, to whose benefit?, and why we take such care in analyzing how “problems” are being framed by the status quo.

The intellectual framework which supports the Elite’s dominance and makes it apparently “natural” or “beneficial” is the Plutocracy’s key defense; Thus a defense of “capitalism” turns out to be a targeted grab-and-run exploitation of vulnerable resources and peoples.

Identity itself can be reduced; thus a citizen is reduced to “consumer.” As long as “consumers” benefit in any way, then what might be lost to workers, voters, citizens, etc. can be cast aside as meaningless.

Since profits are made by selling something to consumers, it’s extremely handy for all other roles and identities to be extinguished, diminished or marginalized.

In this sense consumerism is in effect the de facto state religion of the U.S.A., and it directly benefits the Elites who own or control the vast majority of the nation’s financial wealth, income, law-making machinery and productive assets.

Even as the economy slips into a Plantation-like structure populated by debt-serfs laboring under the illusion they are free spirits pursuing their own self-interest, the upper caste bureaucrats and technocrats labor to maintain the facade via the distraction of “entertainment,” the “staging” of “news” and the dispensation of “justice” even as “theft by other means” (looting, embezzlement, fraud, collusion, etc.) is the modus operandi of an unaccountable Plutocracy.

since free markets are inherently risky (that is, ontologically based on risk and return and shifting supply and demand), the Plutocracy and State functionaries/parasites both have compelling incentives to escape exposure to market forces via exemptions.

The point is that this process of persuasion/gaining compliance is not a conspiracy; it is a complex mixture of conscious and subconscious realignments of incentives and disincentives.

It isn’t corruption per se, simply the “rational response” to incentives and cost-benefit ratios embedded in the very structure of the system.

The middle class outside the “caste” of State technocrats is squeezed by Plutocratic and State over-reach; as they drop out then the taxes they paid to support the ever-growing State decline, eventually leading to the State’s insolvency.

structures (both political and intellectual) which once made sense are extended to absurdity/non-sense as the State and Plutocracy over-reach to sustain the status quo,

empires and States collapse when the costs far outweigh the gains

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By C H Smith

The irony is that neoliberal Capitalism supposedly reveres free markets: but that is mere propaganda. A simulacrum of free markets is erected for middle class consumption but behind the veils of obscure tax laws, sweetheart deals and the like, the Plutocracy and State functionaries both avoid any exposure to actual market forces which might expose them to risk or limit their share of the national income.

let’s call this dominant ideology Neoliberal Capitalist Democracy for want of a more accurate term).

that intellectual framework must increasingly substitute carefully designed simulacrum for authentic structures (for example, elections in which 98% of all incumbents win re-election)

Why are the State and the Plutocracy (two sides of the same coin) substituting simulacrum for authentic structures and truthful accounts? Let’s answer by asking: what would a truthful accounting of cui bono— to whose benefit?–reveal?

A truthful accounting would reveal that the entire status quo system benefits the rentier-financial Plutocracy and the high-caste class of State employees and corporate technocrats at the expense of the rest of us: the 99% who do not own 2/3 of the productive assets of the nation and the 75% who do not belong to the State/technocrat upper-caste which serves and enforces the system for its own self-aggrandizement.

In sum: a truthful accounting of cui bono would result in the exposure of the over-reach, exploitation, deception, fraud, mismanagement, mal-investment, manipulation and self-aggrandizement of the Plutocracy and its high-caste State/corporate technocracy (two “masters,” one system). A truthful accounting would result in the shattering of the illusion that belonging to and supporting the status quo is in your self-interest.

To maintain their share of the dwindling national income, it is essential that the Plutocracy and State mask the devolution and insolvency of the State. The primary prop of non-elite belief in the system is the faith that the Savior State will fund everyone’s retirement, healthcare and security as promised–a promise which cannot be fulfilled. (A Savior State promises to save everyone from personal responsibility via entitlements funded by demographic and financial fraud.)

Common purpose is replaced by self-aggrandizement and game-the-system looting. The Elites’ interests diverge from those of the society as a whole. The result is a profound political disunity of hardened, bitter camps warring over the remaining spoils of a decaying State.

Regulations are replaced by protection schemes and layers of purposefully impenetrable obfuscation which provide the Elites exemptions from market forces (risk and subsequent losses).

Healthcare is replaced by a highly profitable simulacrum structure in which 25% of the citizenry receive no care and another 25% pay for sham “healthcare coverage” which offers little to no actual care. The high-caste class of State and corporate technocrats is rewarded for their services to the State/Plutocracy with full coverage. (Observe the parallels to State employees’ coveted positions in Third World kleptocracies.)

The unavoidable failures and destructive consequences of the status quo are systematically internalized as personal failings: lack of will power, poor judgment, etc.; a simulacrum of “personal responsibility” masks the internalization of propaganda/master narratives which leave the Plutocracy and State safely unaccountable.

From the perspective of a media sustained by marketing, the ideal internal state is a deep, un-resolvable insecurity which can be temporarily soothed by shopping/entertainment.

A simulacrum of citizenship reduces a self-directed populace to passive “consumers.”

once you understand this substitution mechanism, a type of enlightenment occurs; you no longer accept simulacrum for “the real thing,” and the State/Plutocracy has lost your compliance, that is, your belief in the system’s fair accounting of your self-interest.

This conflict between direct, lived experience of our ever-worsening problems and the State/Elites’ “ignore reality, keep believing in our system” machinery causes a pervasive cultural and individual schizophrenia which causes participants to feel adrift, depressed, alienated, isolated and misunderstood.

This growing gulf between lived experience and the Elites’ heavily hyped narrative of how our world works eventually causes an enlightenment in some of the managerial/technocrat caste: their belief in the system fades and they drop out.

Once they realize the institutions they have given their lives to will fail, they either withdraw or begin work on an alternative framework of understanding.

They have learned that the Power Elite has essentially rendered itself unaccountable and thus the consequences of its vast over-reach will fall not on its own small membership but the ill-prepared citizenry below.

Then we will have to choose which trade-offs have the best chances for long-term success–not in preserving the bankrupt, unsustainable structures of the present but in constructing a sustainable, productive economy and a political culture based not on self-serving game-the-system looting

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End note: I know this must strike some readers as lunacy; there are no simulacrum, and the State cannot possibly dissolve in insolvency. Others will be tempted to enter the merry-go-round “debate” as to whether the State should or should not be a “Savior.” It doesn’t matter; the State cannot print up $100 trillion without reducing the value of the dollar to zero, nor can it fund the military/security/Empire, its own domestic fiefdoms and the Savior State entitlements now promised to 300 million citizens without borrowing/printing $100 trillion– so however you care to calculate the end-state, it remains the same: insolvency and the complete devolution of the Empire/Savior State. 




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Alienation

I can speak directly to the points that Charles is making in his essay “Survival +”

I was speaking with my father on the phone recently and he said that he had been talking to a cousin of mine. Now the back-story on this was that when I was not long out of school I had gone to work for this cousin and his brother in their small business which made photo-frames. Anyway, the comment made to my father was that I had been the best worker they ever had. I was quite chuffed with that comment at first but then had time to think about that some more and started to see it all from a rather different perspective.
I had worked there as my first real job for about 3 and a half years. In the end I left because I wasn’t getting anywhere. After all that time, I was literally no further ahead than when I had started working. In other words the money I was earning was enough to cover the rent, food, bills and transport and after that I was ending up with – bugger all. What’s more I had zero prospects of advancing with that job either. I was doing a blue collar manual job that a monkey could have done, and did it conscientiously and well. Which is more than anyone else after me managed to do apparently.
Now I am no dummy, I later went on to get a graduate degree, but apparently hard work, dedication and intelligence aren’t of any inherant value. Or at the very least weren’t valued enough to make any sort of effort to hang onto a good staff member and pay them better or otherwise develop them. We are always hearing about how people are a companies greatest assets and that developing your people, respecting them and rewarding them well is the key to an engaged, committed team. Well that’s all bollocks. Actually it might be true in theory, and even in practice – if anyone actually did it in practice.
But the reality for most people, and definitely for me, is that that sort of “corporate speak” is only ever jargon, posturing and propaganda. The only reality is the bottom line, the more you can sell at the least cost in wages the better. Anything less than 100% commitment to the bottom line is sub par and something to be eliminated. From picture framing, I went on to working in a bank. Once again you were just a number, a cog in the machine. They demanded total loyalty from you, but there was nothing like that in return. So, over the course of my working life I have gone from one job to another where I have gone in with a positive attitude and come out disappointed and disillusioned. I have been part of a workforce (in aviation) that worked hard and with enthusiasm in a job we had a passion for, to find that corporate incompetence at the top means that the answer to financial losses is mass redundancies. You are merely something to be used, abused and discarded. The priority is to ensure that the company’s regular 7-10% profit and dividend comes through. The quarterly statement is God, people are dispensable. Your career and security is of no consequence and if the costs of a problem can be passed off onto you instead of absorbed by the company, then so much the better. It is the pollution in the river principle, once you have unloaded you trash into the water, the flow carries it off down stream and it is some-one else’s problem. No-one wants to pay the costs of their own messes.
Maybe I am not as smart as I think I am, it took me a long to to realise what was going on and that this is not an accident or isolated instances, this is the norm. Actually it is possible to game this system and get ahead, but it sure as eggs isn’t going to be beneficently awarded to you just because “you deserve it”. Unfortunately, by this time I am not interested in playing the game. At this point I am disappointed, disillusioned and alienated, they can all go screw themselves.
The game is rigged, so why should I want to participate and support it. My working life has been a succession of jobs where I was either underpaid and over worked or simply treated with contempt. Over the course of my working life I have become more and more dis-inclined to put up with that. How many other people feel the same way? How long before there are enough people who simply aren’t prepared to support a status quo that only rewards unethical corporate institutions.
Companies are given in law the fiction of a corporate body, in other words treated as if they are a real person. Which is all very nice I am sure, but somehow they manage to just fold up and vanish if there is any real trouble and leave real people holding the bag. What’s more, corporate behaviour has been analysed and determined to display the traits of a psychopathic personality – and we let these entities run our lives???

The status quo is not a level playing field, it is not ethical or honest and it is not sustainable. Your problems are not all your fault, they are systemic and deliberate. Unfortunately, the sins of the system are coming home to roost and the economic shell game is collapsing. It is time to wake up to the reality that the interests of the plutocracy are not your interests. The end game of this is that one is going to destroy the other – which side is it going to be and which side are you on?

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An Overview
by C H Smith

A great clash between what we are told is unfolding and what is actually unfolding lies just ahead.
The status quo “Powers That Be” and its mainstream media repeatedly insist that:
The Social Security entitlements promised to all will be paid; all that is needed are modest policy adjustments.
The current financial meltdown was unexpected and could not have been foreseen; it is a temporary “bad patch” which has already been fixed by government intervention and modest policy/regulatory adjustments.
The consumerist culture which has evolved over the past 60 years is a natural and highly successful perfection of capitalism, prosperity and American values; Americans are the happiest, most prosperous people on the planet.

Yet all of the above is demonstrably false.
The current financial meltdown was not only easily predictable, it was inevitable, as the consequences of systemic fraud, deception, embezzlement, misrepresentation, collusion, debauchery of credit, exponential expansions of risk, debt and speculative leverage could not be held off forever.
The devolution of American culture and values was not natural, rather it has produced the perfection of crony capitalism, monopoly capital and an ever-expanding State beholden to an Elite which owns or controls the vast majority of the productive assets, financial wealth, income and lawmaking machinery of the U.S.
We have a cultural disorder we “treat” by numbing the patients’ awareness of their own alienation, anxiety and unhappiness.
I believe the evidence is overwhelming that all the soothing contentions pressed upon us by the Powers That Be on a daily basis are in fact false. If this assertion is true, the vast majority of what is “reported” and “consumed” as “news” and “commentary” is essentially propaganda, either conscious or subconscious.
As a result, we will have to construct an alternative understanding of our world which aligns far more closely to reality.
If all the fundamental contentions of the Powers-That-Be are demonstrably false, we are forced to ask why they press them so mightily and persuasively on us.
The answer to this critical question can be found by asking cui bono: to whose benefit? Although we are constantly told the system benefits all of us, this is also demonstrably false.
This leads to the conclusion that the entire intellectual structure which supports and enables the U.S. economy, government and culture is nonsense, and those pushing it so mightily and pervasively are doing so out of a highly refined self-interest.
Compare your own lived experience and intuitions with the mass media’s “happy story” that everything is just fine, minor financial perturbations have been resolved and a consumerist Utopia is still firmly in place.
those who control the vast majority of assets, wealth, and tools of persuasion have the most to gain from a continuing belief in the system’s soundness and stability. Thus their defense of the system which serves their interests above all else will be fierce and unremitting.
The Plutocracy is not a conspiracy in the formal sense of a membership which gathers like the Bohemian Club or even an informal assemblage such as the Bilderberg Group.
Thus in describing a Plutocracy I am not positing a semi-formal conspiracy but simply a financial elite which controls some 2/3 of the productive wealth of the U.S. This is simply a statement of fact. Their collective self-interest is in maintaining the conceptual, legal and financial systems which enable their continued dominance of wealth and influence.
people with similar self-interests naturally band together in self-organizing networks and groups to protect those interests, and since information is power then the inner workings of various self-organizing groups are confidential as part of that self-protection.
Thus when I speak of The Plutocracy I refer to a self-organized Elite based on protecting their ownership of 2/3 of the productive wealth of the nation. As each acts to protect his/her wealth at the highest reaches of influence (tax shelters, tax breaks, legislative exclusions, legal rulings, etc.) then they are also acting to defend their class.
If you conclude that favoring the status quo in all matters will protect your career, income and status [you are less likely to] announce the Emperor has no clothes.
As a free-lance writer in the mainstream media, I witnessed how such mechanisms work in the real world. Thus stories which reflect poorly on major advertisers like realtors and builders are not killed outright–they are merely strangled by demands for more evidence, more documentation, etc., or watered down in the name of “fairness” and placed in little-seen areas of the media outlet’s offerings.
As its own interests diverge from those of the culture and economy at large, the Plutocracy has an irresistible incentive to foster the illusion that policies which benefit the Elites also benefit the middle class. Thus while the Plutocracy and its mass-media minions trumpet the benefits of the free market, these same Elites work with unremitting zeal to exempt themselves and their State factotums from these very same free market forces.
Thus even as the global financial pyramid of highly leveraged bets and debts unravels, the status quo response is bureaucratic shuffling of oversight duties, minor tweaking of regulatory rules trumpeted as “major fixes” and behind the scenes, trillion-dollar bailouts of the Plutocracy funded by the non-Elite taxpayers.
When the non-Elite citizen comes to understand this, a new mechanism takes hold

This is how empires fall:
Unfortunately for both the Elite and the underclasses, ultimately, This widening structural imbalance creates a profound cynicism and political disunity which cripples any attempt at structural solutions.
Given that any real solution would reduce the Plutocracy and State’s share of the national income, both the Plutocracy and the State (including all those dependent on its various fiefdoms) resist all structural change, preferring stagnation and eventual collapse to any reduction in their income and power that would otherwise require the Plutocracy to absorb the catastrophic consequences of its over-reaching leveraged gambles.
This failure to address the underlying cause–systemic over-reach and Plutocratic domination of the economy and political system–insures the instability will only worsen.
It is worth recalling that the average compensation for the 10 top [US] hedge fund managers during the go-go years of the 2000s was $600 million each. That is not a typo. the Elite inadvertently provides the lower classes with a compelling example of increasing wealth via fraud and manipulation rather than actually producing goods and services.
Thus petty corruption and fraud increases in all State entitlement programs as every sector of society seeks to suck off the maximum benefits while contributing the least possible to the public coffers.
Thus does a nation or empire built on the sacrifices and communal spirit of its citizenry degrade into a doomed culture from the Plutocracy on down through the technocratic upper caste to the underclass. [an underclass who are bought off with minimal social welfare programs and endless entertainment via TV – Bread and circuses]
This evasion of hard choices (and free market forces) will eventually bring down the nation’s currency and its debt-ridden State
As the wheels fall off the U.S. economy and the bubbles cannot be re-inflated, fruitless attempts at holding back the tide with incantations (stop, tide, I speak for the U.S. Treasury!) and loopy sand castles (the bottom is in, buy now!) abound. Unresponsive to propaganda, the real world grinds down into a global Depression without visible end.
If we do nothing, we will be swept along with the Great Descent. Alternatively, if we want to prosper, then we must first gain an understanding of the crisis we face. 


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And some more from Charles H Smith.

He writes a lot of good stuff and I often shamelessly appropriate his writing, because – why reinvent the wheel.
If he has said it very well already, then all I need to do is spread the wisdom further to the best of my ability.
In any event, if you want to read his entire essay, it can be found on his website. Follow the link in my Blogroll panel: “of two minds”, and go to “Survival +”.
It is written to an American context, but I believe it is all relevant to the New Zealand situation as well, even if it just takes a bit longer for the axe to fall here. Where the US leads, we shall be swept along too.

In the meantime, here are my selected extracts.
(heavily redacted)

PB.

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Survival +
By Charles Hugh Smith

Since launching my blog http://www.oftwominds.com in May 2005, nothing seemed more important than warning readers that the unsustainably leveraged credit-mad global financial system was poised to break down. Once the system finally crashed in late 2008, my goal switched … This requires liberating ourselves from failed models of credit expansion, resource depletion, financial looting and a counterfeit prosperity built entirely on debt.

… stockpiling six months’ supplies would not sustain anyone through a 20-year Crisis and Transformation; a single person or household can’t prosper without a stable, caring community for reciprocal support.

individuals, households and communities exist in larger units: city-states, counties, nations and continents. Even if nation-states were to break apart, the world would remain tightly interconnected. Events, weather, shortages and surpluses in distant places would continue to impact us all. States (by which I mean all forms of government) will continue to extend control over resources and wealth.

Prosperity ultimately depends on stable communities, surplus production and trade.

To believe that we can prosper individually without regard for the actions of our fellow citizens and the State (government) is simply not practical.

As I organized the book, I realized that the way a problem is phrased implicitly stakes out the eventual solution. As a result, the greatest challenge in understanding our plight, both as individuals and communities, is essentially conceptual. The forces which benefit most from the status quo are pouring all their prodigious resources into framing the “problems” in such a way that the “obvious solutions” leave their own power, influence and wealth intact.

Lest you wonder how this works, recall that all through the initial phase of the financial crisis in 2008, the mainstream media and standard-issue financial punditry (SIFP) blamed the entire crisis on foolish low-income homebuyers who had chosen to finance their purchases with subprime mortgages.
Framed in this way, the “problem” appeared to be caused by credulous citizens in the lower socio-economic levels. The “solution” was thus to eliminate these people from the pool of potential homebuyers, and auction off their foreclosed homes to worthier buyers.
But subsequent events revealed this framing of the problem to be highly selective: the “problem” extended far beyond feckless subprime borrowers into the top rungs of American Capitalism: the money-center and investment banks, and a politically driven absence of oversight by the very governmental agencies tasked with protecting the public.
The status quo’s convenient “framing of the problem” insured that any “solutions” would leave their power, wealth and influence entirely intact; only the impoverished subprimers would suffer, not those who profited so immensely from the housing/credit bubble.

Transformation requires a deep understanding of how “solutions” are set in the framing of the “problem.” Indeed, what must be questioned on the deepest levels is “solutions” which leave the rentier-financial Power Elite (what I call the Plutocracy) intact.

books attempting to present solutions typically focus on either individuals (along the lines of “get rich as the world falls apart”) or idealized policy “fixes” based on academic understandings of large-scale structures (articles on G-20 trade policies, etc). The flaw in both approaches is that neither flows from an integrated understanding of the actual problems.

the so-called “subprime crisis”, the “solution” of limiting uncreditworthy borrowers did nothing to address the actual problems: highly profitable and highly fraudulent practices riddling every level of the mortgage/rating/securities industries, perverse incentives that created unprecedented opportunities for windfall exploitation, over-reach and looting, etc.

I cannot claim that reaching such an integrated understanding will be easy. Many of the concepts presented may be unfamiliar and thus difficult to grasp at first. Many are so alien to status quo “explanations” that they may well strike you as the opposite of “obvious.” But since I have thought about these concepts and forces for years, they seem “obvious” to me. In the language of our Declaration of Independence: I hold these truths to be self-evident.

So let us begin.
We stand on the threshold of a Great Transformation that will unfold over the next 20 years–a generation. The exact turn and sequence of events is unknown, but a clear-eyed appraisal of the forces, trends and cycles already at work will help us, collectively and as individuals, weather the challenges and turn what could be a catastrophe into a positive transformation.
To the status quo understanding of how our world works, this appraisal will be anything but “obvious.” (Sorting out what is “obvious” is a big part of the analysis which follows.)
once we understand the complex forces at work, then we can structure a response on all three levels: household/family, community and nation. For if there is anything we can confidently predict, it’s that the nation’s crumbling finances will drastically affect every family and every community.
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I will continue with extracts from this essay in several parts

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