Canadian Jet Doing COVID 'Flyover Tribute' In Fiery Crash Onto Residence, Killing One
Canadian Jet Doing COVID 'Flyover Tribute' In Fiery Crash Onto Residence, Killing One
Mon, 05/18/2020 - 19:05
Published:5/18/2020 6:12:49 PM
“We live six or seven miles away from the crash and we heard a really loud boom,” a local eyewitness said of a horrific military plane crash in British Columbia. “You could see the smoke so we decided to walk toward it. The smell was really strong. You could start to smell the burning fuel.”
Over the weekend a Canadian Air Force jet crashed into a residential neighborhood in an area 220 miles northeast of Vancouver just before noon. The jet was part of Canadian Forces Snowbirds, an aerial demonstration team akin to America's 'Blue Angels', and was in the midst of performing a flyover of cities as a tribute frontline coronavirus health workers and other virus responders.
The event typically features nine jets flying in tight formation with white smoke trailing, but quickly turned tragic after one aircraft veered off and spiraled down, ending in a massive boom. Capt. Jenn Casey, a spokeswoman for the Canadian Forces Snowbirds, died in the crash while her copilot survived with serious injuries after parachuting out.
The New York Times describes of the crash that happened just after a pair of jets took off from Kamloops Airport:
The white and red jet took off alongside another and did a wide turn once in flight, according to a video posted on Twitter. Shortly after, the plane could be seen heading downward.
It appeared that two people ejected from the plane in a plume of dark smoke before the aircraft nose-dived into a house in the Brocklehurst neighborhood of Kamloops, which is about 220 miles northeast of Vancouver.
The Canadian Forces Snowbirds last month announced Operation Inspiration. The mission consisted of the squadron flying over cities across Canada in a nine-jet formation with trailing white smoke. The Snowbirds were scheduled to start in Nova Scotia and work their way west throughout the week.
Shocking video recorded by onlookers showed the plane attempted to gain altitude before entering a dramatic nosedive — all which took a mere seconds.
The two pilots were then seen ejecting already perilously close to the ground — so close that it was unclear whether the parachutes even opened.
The flame-engulfed jet reportedly landed directly on a residential house, but there were no reports of injuries or deaths on the ground, with an elderly couple surviving — one had been in the basement at the moment of impact, with another in the backyard.
Debris was seen scattered across lawns and the neighborhood as firefighters responded.
Local eyewitnesses in the residential area said they were shocked and didn't initially know what had happened:
Kerri Turatus, 30, who lives in the neighborhood where the plane went down, said the aircraft hit a house, engulfing it in flames.
It "sounded like a gunshot outside my window," Turatus said.
She saw a "big black circle ring of smoke" in the sky, she said, adding that part of the plane's wreckage was in the street and that she could see a wing sticking out of a neighbor's garage.
Parts of the aircraft could be seen scattered and in flames across a neighborhood block, with a parachute being found on the roof of a house. It seems a miracle that the copilot survived.
Another eyewitness, Rose Miller, told the AP: “It looked to me like it was mostly on the road, but it just exploded. It went everywhere.” She added, “In fact, I got a big, huge piece in my backyard. The cops said it was the ejection seat.”
The tragedy brings up serious questions of safety as well as how necessary such high-risk, high-cost endeavors are as well as their frequency.
Ongoing campaigns in the United States involving major flyovers of cities by The Blue Angels and Thunderbirds as "tribute" and "inspiration" amid COVID-19 lockdowns have grown increasingly controversial given the huge expense to taxpayers, at $500,000 per flyover, according to some estimates.
Some doctors and health workers have even joined the chorus of those saying "it's a shameful waste of money".
The weekend tragedy in British Columbia presents another criticism: the unnecessary dangers both the pilots and on the ground spectators are subject to in what remains fundamentally high-risk aerial demonstrations and maneuvers.
Amid Plague, Press Takes a Powder On Religious Liberty
A Worcester, Massachusetts, pastor, Kristopher Casey, will be punished with a 300 civil fine for convening more than 10 people at his Sunday church service. If he does it again, the fine will increase to 500, and he could face criminal charges, Masslive.com reports. Where has the press been in the face of what seems, on its face, to be an egregious violation of the First Amendment's protections of peaceable assembly and the free exercise of religion? The newspapers have been basicall...
Published:5/6/2020 7:49:36 AM
David Stockman On The Fed's Destruction Of Financial Markets & What It Means For You
David Stockman On The Fed's Destruction Of Financial Markets & What It Means For You
Sat, 05/02/2020 - 15:30
Published:5/2/2020 2:53:04 PM
Decades of money printing have created enormous distortions in the market. It seems that the coronavirus popped the Everything Bubble. Where do you see the stock market going?
I’d say it’s going in a new direction, and it’s not up year after year, month after month, day after day.
It’s not going to be a world where buying the dip is a no-brainer thing to do.
I think the stock market was insanely valued when the S&P 500 peaked at 3,380 on February 19th.
It has got a long way yet to correct.
Who knows what earnings are going to be?
No one knows how long these lockdowns will last.
You look at the news flow every day, and it’s like a massive political arm-wrestling match between the White House and the Democratic governors and mayors.
I’m sure in their minds, these local and state politicians, think they’re serving the public good and protecting the safety and lives of their citizens. But, the fact is, back in the unstated regions of their brains, they’re focused on taking down the US economy, which was Trump’s only claim to reelection.
I think when push comes to shove in the great human struggle of things in our political system, this lockdown lunacy is going to be prolonged far longer than you can imagine, and the economic loss is going to be staggering.
Even the Wall Street brokers now—Goldman Sachs and the rest of them—are projecting a 25 to 30% GDP collapse on an annualized basis in Q2.
Just a few days ago, they were all expecting this to be one and done, and that in the next quarter it’ll level out—but that view is fading very fast.
We have a hand-to-mouth economy. By that, I mean no business could afford cashflow interruption because they had levered their balance sheet to the hilt or had spent most of their cashflow available to buy back their stock.
So, once you start these chain reactions, you have incredibly vulnerable business balance sheets in America that collectively have $16 trillion of debt.
I’m not talking about banks or financial institutions now—just operating businesses.
That’s not to mention American households—half of them don’t even have $300 to last a week or two.
Overwhelmingly, 90% of the households in America have been told that they’re the Energizer spending bunny of American economics, and if you don’t have enough wages this week, borrow some money on your credit card and just keep on spending.
This has created a hand-to-mouth economy that has no immunities—if you want to use that metaphor in an economic sense. It cannot cope, and it has no antibodies to fight back against the interruption of paychecks and cash flow.
There is going to be broken furniture everywhere as it filters through an economy that is sitting with $74 trillion of public and private debt on its back. That’s how much we have today.
People need to focus on this fact, that we thought we had a warning back when the great financial crisis occurred in 2008 when Lehman Brothers went bankrupt, the Great Recession, all that.
At the time, there was $52 trillion of debt in the economy, and people said that we’re living beyond our means—we need to learn some lessons here and repair the excesses.
Well, that never happened. We’ve added $22–23 trillion of debt since then. Therefore, the economy is now even more fragile, even more vulnerable to any kind of dislocation.
Now, what we’re getting is the mother of all dislocations. It’s happening so fast and severely that it’s off the charts.
You can look at any of the so-called incoming indicators that everybody constantly jaws about on bubble vision on CNBC, and you will see that the last two data points are literally off the charts. The Empire State Index was out recently, and it’s down to -70, against a base of zero, and it usually says +20, 30, or 40.
Never has anything like this been recorded. We have an economy that’s going to implode in the next four or five months. Earnings are going to drop tremendously.
It’s going to be a question of whether the markets can convince themselves to “do the Rip Van Winkle thing, go to sleep on earnings for the next year, and start discounting 2022 earnings,” or something.
I don’t think that’s going to work this time. I believe there is going to be a real loss of confidence because the Fed has no dry powder.
The market will likely work its way down in irregular, violent, volatile moves. It will go up for a few days and then experience a big correction, and up for a few more days, another big correction.
The S&P 500 ought to be valued at 1,500 or 1,600, which is way the hell below where it is today—and far below where it was at the peak of almost 3,400.
What I’m saying is, the market that never stops rising has finally met its match.
The patented “buy the dip” mantra is going to keep the thing alive for a few more months until the last robo-machine and day trader has his brains blown out after they bought the dip one more time and then got monkey-hammered by another reversal.
That’s where I think we’re heading.
The Federal Reserve’s unprecedented bailout of everyone and everything seems to have no end. What do you think the consequences of this will be?
I think what people must get their minds around is that this is happening with such warp speed: job losses, cash flow, GDP, the federal budget.
What the Fed has done is more off the charts than anything we’ve seen yet.
In early March, the balance sheet of the Fed was at $4.2 trillion—after they gave up on quantitative tightening (QT) and normalizing the balance sheet—which they promised to do when Ben Bernanke took it to these high levels after the great recession.
Recently, that number was $6.2 trillion.
In merely 30 days, they printed $2 trillion of additional balance sheet or doubled the first trillion. That’s the level first achieved in September 2008—and had taken the Fed 94 years to create from the days that it opened its doors.
I calculated it: that’s about 35,000 days it took the Fed to get the first $1 trillion of balance sheet.
These madmen and women in the Eccles Building, it took them 30 days to create twice the amount of balance sheet that it took during those first 95 years of the Fed.
What does this mean?
It means that they’re destroying the financial markets as we know them.
There’s no interest rate left. They’re pushing everything close to zero through this massive intervention and buying everything in sight directly or indirectly. That includes commercial paper, municipal bonds, investment-grade corporates, fallen angels, so to speak—that’s just a backdoor way into junk. They’re buying ETFs—the bond ETFs.
It’s only a matter of time before they’re going to be in there, hand over fist, buying stocks.
Janet Yellen and all the rest of them are saying, “Well, maybe they need that additional power.”
How can you have capitalism when you have no capital markets?
It’s that simple. The Fed destroyed it.
The consequence will be massive speculation, malinvestment, and keeping all the zombies alive.
For instance, the high yield market had a significant dislocation recently—where yields soared from 5% to 10% or more—which was an effort by Mr. Market to say that there are a lot of borrowers out there that aren’t solvent. They’re going to have to meet their maker in Chapter 11.
So, what is the Fed trying to do?
It’s trying to prevent any of that from happening. The Fed wants to keep everybody that has borrowed up to their eyeballs alive.
Therefore, it means that the economy will become weaker, more stagnant, and more inefficiency-ridden with time.
If you don’t have the cleansing process of creative disruption, if you don’t allow the price of capital to reflect risk and reward, if you don’t permit failures to be eliminated and liquidated, you’re going to have either a sclerotic economy like Italy or England or even worse, a Soviet economy, if you carry this far enough.
Frankly, I think the right phrase for the Eccles Building and the twelve people on the FOMC is the “Monetary Politburo.” They’re trying to control every movement in the entire economic system through the domination of financial asset prices and pegging of interest rates across the whole yield curve.
It is madness.
Where it will lead is very hard to say. Obviously, not to anything good.
It is so off the charts, and ludicrous relative to anything anybody thought even ten years ago, certainly twenty or thirty years ago. It’s difficult to imagine how bad it is going to get, but it’s going to get pretty bad.
Those are some great points. Where do you see the future of the US dollar?
To paraphrase Winston Churchill about democracy, the US dollar is the worst currency imaginable—except for all the other currencies in the world.
In other words, all the central banks are doing the same thing the Fed is doing, only worse. It’s a race to the bottom.
The European Central Bank cut its policy rate to even deeper subzero, which is just crazy.
The Bank of Japan might as well just buy a paper mill and print paper until there are no trees left in Japan.
In the case of the US dollar, the traditional idea is that we’re going to destroy the currency. That’s true if the rest of the world is prudent.
We don’t have a Weimar Republic 1923 situation where they were trying, in the UK and certainly in New York, and the Bank of France, to restore sound money—prewar money. They failed, but they were attempting to restore sound money and a gold standard currency.
Germany was a basket case economically; they were paying reparations and started up their printing press. There was massive capital outflow, they imported inflation, which then fed upon itself, and the whole wheelbarrow full of money thing happened.
That was inflation in one country when the rest of the world was trying to pursue relatively sound money.
By contrast, today, we have monetary inflation in all countries. So you look at the dollar, and you look at what the other central banks are doing, the dollar is the cleanest dirty shirt in the laundry. It’s probably going to get stronger, not weaker in the FX markets.
But that doesn’t mean that we’re out of the woods.
It only means that the central banks of the world collectively—which have already taken their balance sheets from $2 trillion in the late 1990s to over $25 trillion—are printing money at such a rate that they’re likely to bring down the entire world monetary system. Not simply the US dollar.
How will the Fed’s actions affect savers and retirees?
The essence of it is that the Fed policy is criminal—just flat out criminal—in terms of its impact on savers and retirees on a fixed income.
There is no interest rate left unless you want to speculate in junk bonds. Why should a 78-year-old be speculating in junk bonds to pay for rent or put food on the table?
It is criminal.
That’s what this whole financial repression, zero interest rate, or subzero interest rate policy is doing. It’s hurting tens of millions of people who’ve tried to save and be prudent and not live hand to mouth.
If something like COVID-19 comes along, or an earthquake depending on where you live, or just a bad spell of health affecting your family, you need something to fall back on.
How can people save today when you get nothing?
Take somebody who worked in the steel mill 40 years, who was able to scratch and save and defer gratification. Let’s just say he came up with $300,000 of lifetime savings. He’s now retired. He needs to keep it liquid, but he’s earning less interest income per week than one cappuccino at Starbucks on a lifetime worth of savings.
That’s so evil.
You may ask these central bankers, “Well, what about the savers?” These idiots say that there is too much in savings.
Well, let’s look around right now.
Why do we have a $2.3 trillion bailout? Why are we giving helicopter money to upwards of 180 million people—who are going to get that $1,200 check?
Why are we bailing out small businesses left and right to have them preserve jobs?
Why are we doing all of that if there’s an excess of savings in the world?
In reality, there is no excess. It’s complete nonsense.
The idea that the central bank is there to subsidize, coddle, and bail out the borrower and savage the saver is just fundamentally wrong and goes right to the heart of why we’re in such big trouble.
* * *
The amount of money the that is being pumped into every corner of the economy by the Federal Reserve is unprecedented. The consequences of which could be crippling to the the average person. That’s precisely why NY Times best-selling author Doug Casey and his team just released a free PDF report on how to survive and thrive an economic collapse. It reveals how it will all play out and what you can do about it. Click here to download it now.
Costs of the Shutdown, Quantified
(John Hinderaker) Casey Mulligan is an economist at the University of Chicago. Per his web site, he has served as Chief Economist of the White House Council of Economic Advisers and as a visiting professor teaching public economics at Harvard and Clemson. He is affiliated with the National Bureau of Economic Research, the George J. Stigler Center for the Study of the Economy and the State, and the Population Research Center. Mulligan
Published:4/25/2020 5:13:00 PM
"The Ripple-Effects Of The Government Lockdown Are Only Starting To Take Shape..."
"The Ripple-Effects Of The Government Lockdown Are Only Starting To Take Shape..."
Fri, 04/24/2020 - 21:55
Published:4/24/2020 9:06:08 PM
Via Doug Casey's InternationalMan.com,
David Stockman on the Real Reason Why the Government Shutdown Caused an Economic Collapse
International Man: Is the government’s reaction to COVID-19 worse than the virus itself? What are your thoughts?
David Stockman: I think for once, Donald Trump was right when he worried out loud the other day that the cure may be far worse than the disease.
Governors - mostly Democratic governors and mayors of major areas of the country - have imposed Lockdown Nation. It's a complete economic disaster.
It's a wrong policy from a public health point of view and an economic point of view.
It is hitting, like a ton of bricks, a highly fragile and vulnerable economy that was living hand to mouth anyway because of the kind of highly counterproductive monetary and fiscal policies and debt build-up we've had over the last 30 years.
If you look at the data for New York—which is the epicenter of the whole COVID-19 pandemic—it is abundantly clear that COVID is not some kind of latter-day Black Death plague that takes down the young, the old, the healthy, the sick, and everyone in between.
It is a kind of super winter flu that strikes fatally, almost entirely, the elderly population that is already afflicted with many life-threatening medical conditions—or what the technicians call comorbidities.
The shutdown, which I call the "plenary lockdown policy," is wrong. Closing all the businesses except a tiny, arbitrary set of essential operations is courting disaster for no good reason.
Here's what the New York data showed us recently.
New York is ground zero and the epicenter. But if you look at the breakdown of that number by age and by medical condition, it's startling.
For those under 50 years of age in the state of New York, the death rate is slightly under 5 per 100,000.
That isn't a disaster. That isn't a plague or a calamity.
Five per 100,000 is half the rate of suicides per 100,000 annually among the 50 and under population. It is a small fraction of the 90 deaths per 100,000 annually that occur for all kinds of reasons: accidents and illnesses—including suicide.
You would not, in the slightest, in any kind of sane world, shut down an entire economy and lock down everything when you have a 5 per 100,000 death rate for the overwhelming share of the population.
On the other hand, if you look at the population 80 years and older in New York state—the death rate is 1,086 deaths per 100,000. In other words, it's night and day.
The virus is not a fatal problem for the overwhelming share of the population.
Lots of people get infected. Most are asymptomatic. Some get sick and stay in bed for a couple of days, and they recover. A tiny fraction of the under-50-years population gets seriously ill and is hospitalized for treatment, and an infinitesimal number end up as fatalities. That's the case for the healthy population under 50.
It's in the over-70 age group, and especially in the over-80 age group, that the overwhelming share of these severe cases has developed.
The strategy shouldn't be a plenary lockdown. The right approach is to trace, identify, isolate, support, and treat the vulnerable population that already has many illnesses.
If we look at New York again, of those deaths among the elderly population, 60% had hypertension or high blood pressure, 31% had diabetes, etc. All of them, almost overwhelmingly, had one, two, or three comorbidities.
We don’t need Governor Cuomo to shut down the state. We need Governor Cuomo to tell the health department to mobilize the doctors and the healthcare apparatus of New York to identify the vulnerable elderly population. This population is already being treated in many cases for serious respiratory problems, heart ailments, and other diseases—and we are making sure that they’re as isolated and protected from this bad winter flu as they possibly can be.
It’s not merely a matter of degree. It’s that they’ve got it ass-backward.
You don’t lock down the population. You target the sub-population, the small minority of very vulnerable people, and do everything you can to shield them from this virus until it passes into the summer temperatures and the normal herd immunity that eventually will make it go away.
International Man: Those are excellent points. That’s not to mention that in the US, two out of three Americans are overweight or obese and have a pre-chronic or chronic condition. And of those people, the risk goes up substantially for those who have two or more conditions. It puts them at higher risk for something like COVID-19 to take them down.
David Stockman: I think that’s true, but even if you look at the New York data, again, it’s startling.
For the under-50-year-old population, I can’t emphasize it enough—it’s 5 per 100,000. That’s a rounding error in the scheme of things.
You can’t run a society based on the risk of 5 out of 100,000 people.
So, I think you’re hitting it right on the head.
What we need to think about is how much longer—and we’re not talking about months and quarters, we’re talking about days and weeks—we can possibly stand a shutdown that has already put 22 million people on unemployment claims in four weeks.
Let’s compare this to the worst four weeks of the Great Recession, which is the worst economic calamity that we’ve had since the Great Depression.
During the worst three-week period in the winter of 2008/2009, the cumulative new unemployment claims were 2.7 million, not 22 million. So, this is eight times worse.
We might add that it’s going to be 30 million, or close to that, very soon.
We have an economy that’s in free fall, unlike anything we’ve ever seen before, and we have a government that’s in total hysteria, trying to compensate for the economic collapse that is being ordered by the government itself.
What I’m talking about is the Everything Bailout that was signed without a record vote in the house, with no hearings—$2.2 trillion, on top of two or three other bills that had passed earlier. There’s another trillion that they’re talking about in the pipeline as a sort of a replenishment bill.
Even beyond that, then they’re talking about a stimulus and infrastructure bill, where the bidding starts at $2 billion. It is insanity.
Let’s just look at what’s happening in the here and now.
What the government is trying to do is hold everyone in America harmless, and every business in America harmless, for the massive dislocation, disruption of business cash flow, and interruption of paychecks that have resulted from these lockdown orders.
Where is it taking us?
This year alone—and these are not my numbers; they come from the most credible Washington DC agency, which I’m a part of, The Committee for a Responsible Federal Budget. That’s kind of an oxymoron, but it exists.
They had projected that during the fiscal year underway—which was half over before the whole COVID lockdown even got started—that the deficit is going to total $3.8 trillion.
I’m not talking about total spending. I’m talking about just the deficit. It’s roughly 19% of GDP.
It’s a deficit in the same order of magnitude as we had during the darkest days of World War II. During that time, the whole economy was producing military material and weapons, and nobody could spend any money on anything except necessities because everything else was rationed or wasn’t being produced. So they bought a lot of government war bonds.
So where we are right now, suddenly, overnight, is in a disastrous fiscal situation.
This self-inflicted shock has transformed the Trump-Republican trillion dollar per year deficits at the top of the business cycle.
It has transformed a terrible situation into a catastrophic situation, where they’re going to borrow $3.8 trillion this year alone. The number for fiscal 2021—which starts in October—is going to be another $2.5 trillion at minimum, or probably more.
Now the reason I bring this up is because we’re looking at a two-year period in which the combined deficits are likely to exceed $6 trillion in two years. These numbers are so humongous that they’re almost impossible for ordinary people—or even people who study this subject regularly—to grasp.
I think the best way to look at it is to see that $6 trillion of new debt in two years is equivalent to what it took 213 years and 43 presidents to produce—that’s how long it took to get to the first $6 trillion of public debt.
That’s how bad this has gotten, and it will destroy any remaining semblance of market capitalism we have in this country.
When you have a coast-to-coast soup line, with the government underwriting 100% of what everybody was getting in January 2020 by merely piling it onto the public debt, and then having the Fed printing money to fund it, you’re asking for a calamity—a financial and economic disaster of biblical proportions.
* * *
The ripple effects of the government lock down are only stating to take shape. That's not to mention the unprecedented amount of money the that is being pumped into every corner of the economy by the Federal Reserve. The consequences of which could be crippling to the the average person. That's exactly why Legendary speculator Doug Casey and David Stockman have just released this urgent new video which outlines exactly what's happening and how it will impact retirees, savers, and investors. It reveals what you could do to prevent becoming financial roadkill. Click here to watch it now.
Performers are among the most vulnerable victims of our newly shuttered world
“This came out of nowhere and it came quickly,” says local actor Evan Casey.
Published:4/2/2020 2:13:09 PM
Nine Meals From Anarchy...
Nine Meals From Anarchy...
Tue, 03/17/2020 - 22:30
Published:3/17/2020 9:35:55 PM
Authored by Jeff Thomas via Doug Casey's InternationalMan.com,
In 1906, Alfred Henry Lewis stated, "There are only nine meals between mankind and anarchy." Since then, his observation has been echoed by people as disparate as Robert Heinlein and Leon Trotsky.
The key here is that, unlike all other commodities, food is the one essential that cannot be postponed. If there were a shortage of, say, shoes, we could make do for months or even years. A shortage of gasoline would be worse, but we could survive it, through mass transport or even walking, if necessary.
But food is different. If there were an interruption in the supply of food, fear would set in immediately. And, if the resumption of the food supply were uncertain, the fear would become pronounced. After only nine missed meals, it’s not unlikely that we’d panic and be prepared to commit a crime to acquire food. If we were to see our neighbour with a loaf of bread, and we owned a gun, we might well say, "I’m sorry, you’re a good neighbour and we’ve been friends for years, but my children haven’t eaten today – I have to have that bread – even if I have to shoot you."
But surely, there’s no need to speculate on this concern. There’s nothing on the evening news to suggest that such a problem even might be on the horizon. So, let’s have a closer look at the actual food distribution industry, compare it to the present direction of the economy, and see whether there might be reason for concern.
The food industry typically operates on very small margins – often below 2%. Traditionally, wholesalers and retailers have relied on a two-week turnaround of supply and anywhere up to a 30-day payment plan. But an increasing tightening of the economic system for the last eight years has resulted in a turnaround time of just three days for both supply and payment for many in the industry. This a system that’s still fully operative, but with no further wiggle room, should it take a significant further hit.
If there were a month where significant inflation took place (say, 3%), all profits would be lost for the month for both suppliers and retailers, but goods could still be replaced and sold for a higher price next month. But, if there were three or more consecutive months of inflation, the industry would be unable to bridge the gap, even if better conditions were expected to develop in future months. A failure to pay in full for several months would mean smaller orders by those who could not pay. That would mean fewer goods on the shelves. The longer the inflationary trend continued, the more quickly prices would rise to hopefully offset the inflation. And ever-fewer items on the shelves.
From Germany in 1922, to Argentina in 2000, and to Venezuela in 2016, this has been the pattern whenever inflation has become systemic, rather than sporadic. Each month, some stores close, beginning with those that are the most poorly capitalised.
In good economic times, this would mean more business for those stores that were still solvent, but in an inflationary situation, they would be in no position to take on more unprofitable business. The result is that the volume of food on offer at retailers would decrease at a pace with the severity of the inflation.
However, the demand for food would not decrease by a single loaf of bread. Store closings would be felt most immediately in inner cities, when one closing would send customers to the next neighbourhood seeking food. The real danger would come when that store also closes and both neighbourhoods descended on a third store in yet another neighbourhood. That’s when one loaf of bread for every three potential purchasers would become worth killing over. Virtually no one would long tolerate seeing his children go without food because others had "invaded" his local supermarket.
In addition to retailers, the entire industry would be impacted and, as retailers disappeared, so would suppliers, and so on, up the food chain. This would not occur in an orderly fashion, or in one specific area. The problem would be a national one. Closures would be all over the map, seemingly at random, affecting all areas. Food riots would take place, first in the inner cities then spread to other communities. Buyers, fearful of shortages, would clean out the shelves.
Importantly, it’s the very unpredictability of food delivery that increases fear, creating panic and violence. And, again, none of the above is speculation; it’s a historical pattern – a reaction based upon human nature whenever systemic inflation occurs.
Then … unfortunately … the cavalry arrives
At that point, it would be very likely that the central government would step in and issue controls to the food industry that served political needs rather than business needs, greatly exacerbating the problem. Suppliers would be ordered to deliver to those neighbourhoods where the riots are the worst, even if those retailers are unable to pay. This would increase the number of closings of suppliers.
Along the way, truckers would begin to refuse to enter troubled neighbourhoods, and the military might well be brought in to force deliveries to take place.
But why worry about the above? After all, inflation is contained at present and, although governments fudge the numbers, the present level of inflation is not sufficient to create the above scenario, as it has in so many other countries.
So, what would it take for the above to occur? Well, historically, it has always begun with excessive debt. We know that the debt level is now the highest it has ever been in world history. In addition, the stock and bond markets are in bubbles of historic proportions. They will most certainly pop.
With a crash in the markets, deflation always follows as people try to unload assets to cover for their losses. The Federal Reserve (and other central banks) has stated that it will unquestionably print as much money as it takes to counter deflation. Unfortunately, inflation has a far greater effect on the price of commodities than assets. Therefore, the prices of commodities will rise dramatically, further squeezing the purchasing power of the consumer, thereby decreasing the likelihood that he will buy assets, even if they’re bargain priced. Therefore, asset holders will drop their prices repeatedly as they become more desperate. The Fed then prints more to counter the deeper deflation and we enter a period when deflation and inflation are increasing concurrently.
Historically, when this point has been reached, no government has ever done the right thing. They have, instead, done the very opposite – keep printing. A by-product of this conundrum is reflected in the photo above. Food still exists, but retailers shut down because they cannot pay for goods. Suppliers shut down because they’re not receiving payments from retailers. Producers cut production because sales are plummeting.
In every country that has passed through such a period, the government has eventually gotten out of the way and the free market has prevailed, re-energizing the industry and creating a return to normal. The question is not whether civilization will come to an end. (It will not.) The question is the liveability of a society that is experiencing a food crisis, as even the best of people are likely to panic and become a potential threat to anyone who is known to store a case of soup in his cellar.
Fear of starvation is fundamentally different from other fears of shortages. Even good people panic. In such times, it’s advantageous to be living in a rural setting, as far from the centre of panic as possible. It’s also advantageous to store food in advance that will last for several months, if necessary. However, even these measures are no guarantee, as, today, modern highways and efficient cars make it easy for anyone to travel quickly to where the goods are. The ideal is to be prepared to sit out the crisis in a country that will be less likely to be impacted by dramatic inflation – where the likelihood of a food crisis is low and basic safety is more assured.
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In the days ahead, there will likely be much less stability of any kind. With so many momentous events unfolding—including the crashing stock market, domestic political turmoil, rising tensions with China, a potential geopolitical shock in the Middle East, the coronavirus, and many others—it's absolutely crucial to act right NOW. That's precisely why, Doug Casey just released an urgent new report on how to can play your cards—both for prudence and profit. Click here for all the details.
Doug Casey: The "Greater Depression" Is Coming
Doug Casey: The "Greater Depression" Is Coming
Sat, 03/14/2020 - 20:10
Published:3/14/2020 7:14:17 PM
You’ve no doubt seen the headlines on CNN and Bloomberg.
“Coronavirus Pandemic Could Spark a Global Depression.”
“Will China Virus Trigger New Great Depression?”
There’s plenty of concern that the coronavirus outbreak is pushing us toward a crash. And after the market’s recent dive, the panic is only growing.
Regular readers know Casey Research founder Doug Casey sees the next depression around the corner. But as he explains below, “government coercion” planted the seeds for a downturn long before the coronavirus appeared.
And Doug’s predicting this “Greater Depression” will break records...
Authored by Doug Casey via CaseyResearch.com,
Just because society experiences turmoil doesn’t mean your personal life has to. And a depression doesn’t have to be depressing. Most of the real wealth in the world will still exist – it will just change ownership.
What is a depression?
We’re now at the tail end of a very long, but in many ways a very weak and artificial, economic expansion. At the same time, we’ve had one of the strongest securities bull markets in history. Both are the result of trillions of new dollars created over the last decade. Right now, very few people are willing to consider the possibility of tough times – let alone The Greater Depression.
But, perverse though it may seem, this is the very best time to think about it. The U.S. economy is a house of cards, built on quicksand, with a tsunami on the way. I urge everyone to read up on the topic. For now, I’ll only briefly touch on the nature of depressions. There are at least three good definitions of the term:
A period of time when most people’s standard of living drops significantly.
A period of time when distortions and misallocations of capital are liquidated.
A period of time when the business cycle climaxes.
Using the first definition, any natural disaster can cause a depression. So can living above your means for long enough. But the worst kind of depression has not just economic effects, but economic causes. That’s where definitions two and three come in.
What can cause distortions in the way the market operates, causing people to do things they’d otherwise consider unreasonable or uneconomic? Only government action, i.e., coercion. This takes the form of regulation, taxes, and currency inflation.
Always under noble pretexts, government is constantly directly and indirectly inducing people to buy and sell things they otherwise wouldn’t, to do things they’d prefer not to, and to invest in things that make no sense.
These misallocations of capital subtly reduce a society’s general standard of living, but the serious trouble happens when such misallocations build up to an unsustainable degree and reality forces them into liquidation. The result is bankrupted companies, defaulted debt, and unemployed workers.
The business cycle is caused mainly by currency inflation, which is accomplished today by the monetization of government debt through the banking system; essentially, when the government runs a deficit, the Federal Reserve buys its debt, and credits the government’s account at a commercial bank with dollars. Using the printing press to create new money is largely passé in today’s electronic world.
Either way, inflation sends false signals to businessmen (especially those who get the money early on, as it filters through the economy), making them overestimate demand for their products. That causes them to hire more workers and make capital investments – often with borrowed money. This is called “stimulating the economy.”
Inflating the currency can actually drive down interest rates for a while, because the price of money (interest) is lowered by the increased supply of money. This causes people to save less and borrow more, just as Americans have been doing for years. A lot of that newly created money goes into the stock market, driving it higher.
It all looks pretty good, until retail prices start rising as a delayed consequence of the increased money supply, and interest rates skyrocket to reflect the depreciation of the currency.
That’s when businesses start failing. Stocks fall. Bond prices collapse. Large numbers of workers lose employment.
Rather than let the market adjust itself, government typically starts the process all over again with a new and larger “stimulus package.” The more often this happens, the more ingrained become the distortions in the way people consume and invest, and the nastier the eventual depression.
This is why I predict the Greater Depression will be… well… greater. This is going to be one for the record books. Much different, much longer lasting, and much worse than the unpleasantness of 1929-1946.
* * *
As Doug said, the Greater Depression is on the horizon. Smart investors should start preparing now… and gold offers one of the best ways to protect your portfolio. That’s why you need to watch this short video, where Doug lays out exactly what’s happening in the gold market right now. And a shocking new rule – the first of its kind in 45 years – that’s putting gold back in international headlines. It’s already setting off a buying frenzy… a “gold panic” unlike anything we’ve seen since the early 1970s. Go here for the full story… including details on the five explosive gold stocks that are the best way to play this boom.
Today's deep question: Did Schumer "threaten" conservative Supreme Court justices with rally rant?
Published:3/4/2020 3:17:02 PM
AFPAC speech: The Charge of the America First Brigade
This weekend, the inaugural America First Political Action Conference was held in the D.C. area. I was honored to speak alongside Patrick Casey, Scott Greer, and Nick Fuentes. It was hands-down one of the most heartening–and FUN– events at which I’ve ever spoken. These are serious young men who never take themselves too seriously in […]
Published:3/2/2020 12:58:23 AM
Red Gold: China's Stealth Plan To Use Precious Metals For World Domination
Red Gold: China's Stealth Plan To Use Precious Metals For World Domination
Tue, 02/25/2020 - 05:00
Published:2/25/2020 4:28:13 AM
Authored by Marin Katusa via InternationalMan.com,
Gold used to be important.
During and after World War II, every major developed country amassed as much physical gold as they could. It stabilized currencies and signaled independence.
But with the end of the gold standard in 1971, most countries began to sell off their reserves.
So much so that in 1999, an agreement was formed to limit the amount of gold that central banks could sell. Fast forward to today, and Canada’s central bank owns ZERO gold.
Despite the agreement, most countries continued to shed their gold reserves as fast as possible.
That is until a few years ago, when a handful of countries reversed course. Central Banks started buying gold with fury, and they haven’t let up since.
In the final quarter of 2018, central banks purchased more gold than in any other quarter on record.
By the end of the year, central banks collectively held around 1.064 billion ounces of gold (equivalent to 33,200 tons).
That’s about one-fifth of all the gold ever mined.
In the first half of 2019, central banks purchased 11.97 million ounces of gold (374 tons). Once again, that was far more than ever before. And it’s equivalent to one-sixth of total gold demand in that period.
And total central bank gold purchases for 2019 were the second highest they’ve been in the last 50 years (2018 being the first).
The Unusual Suspects in Central Bank Gold Purchases
And the Keyser Söze of gold is Vladimir Putin.
I’ve been very quiet about Russia and Putin the last few years as I’ve been swamped with media requests following the success of my NY Times Bestseller The Colder War.
Don’t underestimate what the Russians are doing, as others are starting to follow…
While the world focuses on China, Russia has positioned itself at the center of the global political chessboard.
Here’s what’s interesting about the recent central bank gold purchases: the vast majority of that unprecedented purchasing came from just four countries.
These are places you’d never expect.
One of those countries is Kazakhstan, whose GDP is smaller than Kansas’s. Kazakhstan grew their reserves from 2.4 million ounces (75 tons) in 2011 to 12 million ounces (375 tons) in 2020 — A 400% increase.
Turkey moved far faster. In 2017, they had 3.71 million ounces (116 tons). Now, they have 12.32 million ounces (385 tons) of gold. That’s a 232% increase in just the last two years.
In 2018 alone, Russia bought 8.78 million ounces (274.3 tons). That’s the most it’s ever purchased in one year, and its fourth year above 6.4 million (200 tons) ounces of gold. For reference, that’s $15.7 billion worth of gold.
Putin is undertaking what’s called a “de-dollarization.” Aware of sanctions from the United States, Russia is positioning itself to not be dependent on U.S. Dollar holdings.
So, the central bank in Russia has sold nearly all of their U.S. Treasury notes. And it’s used the proceeds to buy gold.
Like I said, the Keyser Söze of gold is Vladimir Putin.
Pay attention to the world’s master strategist. This is very bullish for gold.
You might be wondering why Russia doesn’t buy a yielding investment with the cash.
The problem is that other reserve currencies, like the euro or the yen, are extraordinarily weak against the dollar and Putin knows this will continue.
Russia bought $100 billion worth of euros, yuan, and yen in 2018… the Keyser Söze of gold won’t make that mistake again.
And over eleven trillion U.S. dollars’ worth of global investment opportunities have a negative yield. So Russia would end up paying money to hold them.
Gold, on the other hand, has paid off handsomely for Putin.
In 2019, the value of Russian-held gold has increased from $86 billion to more than $112 billion. The rising gold price has generated a windfall for the Russians of nearly $20 billion that the Russians can leverage.
That’s providing plenty of incentive to keep Russia buying in the long run, stoking further demand.
The problem is that Russia’s buying is fairly well-known. Unless it continues to step up gold purchases, its effect on gold prices has mostly already been taken into account.
China’s New Golden Rule
With WuFlu (the Coronavirus) now having infected more people than SARS did in 2003, will China continue their gold purchases?
China stockpiled huge amounts of gold every single month last year.
You’re probably wondering why…
Well, you’ve probably heard the saying, “He who has the gold, makes the rules.” Xi Jinping, President of China, agrees with Putin’s strategy.
WuFlu no doubt has sidetracked China here in the near term, but it’s been proven that the gold insurance strategy is a very wise one.
The Chinese elite are aware of their aging demographics and high debt loads.
The gold will be valuable to potentially backstop any shortfalls without being overly dependent on their foreign exchange reserves.
China is diversifying its foreign exchange reserves away from the USD and towards gold. This will take many years, but it’s a sound strategy.
The major Western countries hold upwards of 60 percent of their foreign exchange reserves in gold.
China is currently at just 2.9%. Russia is currently at 20%.
China knows it has to pick up its gold to reserves ratio and WuFlu will accelerate this belief.
The chart below shows where Russia and China will want to be at—with the western superpowers. They will get there. And the price of gold will be positively impacted as a result.
Of course, China has much larger foreign exchange reserves than most other countries. So its gold holdings represent a lower percentage of its total reserves.
But even when looking at actual gold holdings, you can see that China and Russia have long lagged behind the west. Only now are they catching up.
If – and it’s a big if – China were to shoot for the same gold-to-forex reserve ratio as the United States, that would take 1.98 billion ounces of gold (62,000 tons) of gold off the market—or fourteen years’ worth of 100% of the world’s gold demand.
The subsequent rise in the price of gold would be unlike anything the world has ever seen. But it seems impossible… right?
Here’s the thing: Russia’s own gold-to-forex reserve ratio fell below 2.5 percent in 2007. Now it’s at 20 percent—and climbing.
Not only that, but China has a much longer-term vision in mind with their gold purchases.
According to one of my favorite people to debate on stage at conferences, Euro Pacific Capital CEO Peter Schiff, Russia and China are “preparing for the world where the dollar is no longer the reserve currency.”
China can’t do this, and they know it. Peter knows it too, until China’s reserves grow 10-fold.
In short, China and Russia want a world where the U.S. dollar is no longer the reserve currency.
To do that, both Russia and China (specifically China) have a lot of gold buying to do before they can realistically back up their currency.
It won’t be a return to the gold standard, certainly. It will be more of a “gold support.”
The Angry Dragon
So here are the trillion-dollar questions: exactly how much gold is China planning to buy?
And what will it do to the price of gold?
The problem with China is that it doesn’t update its gold reserve numbers very often. When the numbers are updated, their accuracy is impossible to verify.
Few believe the official WuFlu numbers, never mind gold numbers.
China lacks global trust.
Real gold reserves are one step towards building that trust.
China buys its gold extremely quietly via back channels to avoid running up the price via its purchases. (Remember Kazakhstan’s huge gold buys? Guess who they share a border with…)
From 2009 to 2015, the Chinese government didn’t provide any updates about its gold holdings. Then it suddenly announced a massive 57 percent jump in its reserves.
What we do know is that China purchased nearly 3.2 million ounces (100 tons) of gold in the past year. But, they need to buy 1.9 billion ounces to be on par with America. 3.2 million ounces is a lot of gold, but relative to where they need to be—it’s not.
Moving forward, that’s set to rise—dramatically.
Zhang Bingnan, vice president of the China Gold Association, forecasted the optimal gold reserve capacity for China for the next two decades…
He found that in 2020, China’s optimal gold reserves should be between 185.6 million ounces and 217.6 million ounces (5,800 and 6,800 tons) of gold.
Remember, China’s gold reserves currently sit around 58.94 million ounces (1,842 tons).
That means it would need to buy 128 million ounces (4,000 tons) at a minimum, this year, to meet Zhang Bingnan’s optimal rate.
But even that would be short by 1.77 billion ounces to meet the ratio that U.S. reserves are at.
Another way to look at it is, even if China doubles their gold reserves, they’re still short of meeting the same ratio as the United States by 93%.
A Dragon’s Appetite for Gold
According to a precious metals analyst at Standard Chartered Bank…
Just to achieve the diversification it’s looking for, China would need to buy two years of global gold production.
In short, when China really starts buying, it’s not going to be able to disguise it any longer. And that could cause a run on gold like the world has never seen before.
Central reserve banks are already snatching gold up at record levels… when prices are at record levels. These central banks themselves anticipate prices going much, much higher.
When central reserve banks begin to see gold both as diversification, insurance and leverage there will never be enough of it to go around.
I wouldn’t want to bet against them. I’d never bet against the Keyser Söze of gold, Vladimir Putin.
Because gold still matters—a lot.
And with any shakiness in the global economy, it’s going to matter a lot more.
* * *
In this shaky economic environment, big buyers like China and Russia, are accumulating as much gold as possible. It’s no question that negative interest rates and the devaluation of currencies will only put fuel on the fire. In a newly released video, legendary speculator Doug Casey and resource expert Marin Katusa breakdown exactly what is coming, and exactly how you can profit from the rally in gold. Click here to watch it now.
Doug Casey: How To Survive The "Deep State"
Doug Casey: How To Survive The "Deep State"
Thu, 02/13/2020 - 22:05
Published:2/13/2020 9:16:27 PM
Authored by Doug Casey via InternationalMan.com,
Almost everyone looks for a political solution to problems. However, once a Deep State situation has taken over, only a revolution or a dictatorship can turn it around, and probably only in a small country.
Maybe you’re thinking you should get behind somebody like Ron Paul (I didn’t say Rand Paul), should such a person materialize. That would be futile.
Here’s what would happen in the totally impossible scenario that this person was elected and tried to act like a Lee Kuan Yew or an Augusto Pinochet against the Deep State:
First, there would be a “sit-down” with the top dogs of the Praetorian agencies and a bunch of Pentagon officers to explain the way things work.
Then, should he survive, he would be impeached by the running dogs of Congress.
Then, should he survive, whipped dog Americans would revolt at the prospect of having their doggy dishes broken.
Remember, your fellow Americans not only elected Obama, but re-elected him. Do you expect they’ll be more rational as the Greater Depression deepens? Maybe you think the police and the military will somehow help. Forget it…they’re part of the problem. They’re here to protect and serve their colleagues first, then their employer (the State), and only then the public. But the whipped dog likes to parrot: “Thank you for your service.” Which is further proof that there’s no hope.
So what should you do, based on all this? For one thing, don’t waste your time and money trying to change the course of history. Trying to stop the little snowball rolling down the mountainside might have worked many decades ago, but now it’s turned into a gigantic avalanche that’s going to smash the village at the bottom of the valley. I suggest you get out of the way.
What, you may ask, would I do if I were dictator of the U.S. and had absolutely no regard for my personal safety? Here’s a seven-part program, for entertainment purposes only:
Allow the collapse of all zombie corporations – banks, brokers, insurers, and government contractors. The real wealth they supposedly own will still exist.
Abolish all regulatory agencies. Although Boobus americanus believes they exist to protect him, and that may have been an intention when they were created, they, at best, serve the industries they regulate. The U.S. Food and Drug Administration, for instance, kills more Americans every year than does the Department of Defense in a typical decade. The SEC, the Swindlers Encouragement Consortium, lulls the average investor into thinking he’s protected. They, and other agencies, extract scores of billions out of the economy to feed useless mouths in return for throwing sand in the gears of the economy.
Abolish the Fed…you need a strong currency to encourage saving. Actually, you don’t need a currency at all. Gold is vastly better as money.
Cut the size of the military by 90% and abolish the Praetorian agencies. In addition to bankrupting the U.S., the military is now a huge domestic danger, even while it’s mainly an instrument for creating enemies abroad.
Sell essentially all U.S. government assets. Although some actually have value, they are all a drain on the economy. For instance, the U.S. Postal Service loses $5 billion a year; Amtrak loses another billion or so per year. The Interstate Highway System, airports and the air-traffic-control system, the 650 million acres of U.S. government land, and many thousands of other assets should all be distributed in shares or sold. This would liberate an immense amount of dead capital. The proceeds could be used to partially satisfy some government obligations.
Eliminate the income tax, as a start, which will be possible if the other six things are done. The economy would boom.
Default on the national debt and contingent liabilities. That’s somewhere between $23 trillion and $200 trillion. There are at least three reasons for that. First is to avoid turning future generations into serfs. Second is to punish those who have enabled the State by lending it money. Third is to make it impossible for the State to borrow in the future, at least for a while.
I like this program from a practical point of view, because when a structure is about to collapse, it’s much wiser to conduct a controlled demolition than to just let it fall when no one expects it.
But I also like it from a philosophical point of view because, as Nietzsche observed, that which is falling deserves to be pushed.
There are, however, two very important reasons for optimism: science and savings.
Science: Science and technology are the mainsprings of progress, and there are more scientists and engineers alive today than have lived in all previous history put together. Unfortunately for Western civilization however, most of them are Asians. Most American PhDs aren’t in Rocket Science but Political Science, or maybe Gender Studies. Nonetheless, the advancement of science offers some reason to believe that not only is all this gloom and doom poppycock, but that the future will not only be better than you imagine, but, hopefully, better than you can imagine.
Savings: Things can recover quickly because technology and skills don’t vanish overnight. Everybody but university economists knows that if you want to avoid starving to death, you have to produce more than you consume and save the difference. The problem is twofold, however. Most Americans have no savings. To the contrary, they have lots of debt. And debt means you’re either consuming someone else’s savings or mortgaging your own future.
Worse, science today is capital intensive. With no capital, you’ve got no science. Worse yet, if the U.S. actually destroys the dollar, it will wipe out the capital of prudent savers and reward society’s grasshoppers. Until they starve.
Of course, as Adam Smith said, there’s a lot of ruin in a nation. It took Rome several centuries to collapse. And look at how quickly China recovered from decades of truly criminal mismanagement.
On the other hand, Americans love their military, and this heavily armed version of the post office seems like the only part of the government that works, kind of. So maybe the U.S. will start something like World War III. Then, the whole world can see a real-life zombie apocalypse. Talk about free entertainment…
But let’s return to the real world. What should you do? And how will this all end?
From a personal standpoint, you should preserve capital by owning significant assets outside your native country, because as severe as market risks are, your political risks are much greater.
I suggest foreign real estate in a country where you’re viewed as an investor to be courted, rather than a milk cow. Or maybe a beef cow.
Look for depressed speculations. At the moment, my favorites are resource companies, which are down more than 90% as a group. And look to go long on commodities in general. Soybeans, wheat, corn, sugar, coffee, copper, and silver are historically undervalued.
Short bubbles that are about to burst, like bonds in general, and Japanese bonds denominated in yen, in particular. If you have a collectible car from the ‘60s that you hold as a financial asset, hit the bid tomorrow morning. Same if you have expensive property in London, New York, Sydney, Auckland, Hong Kong, or Shanghai, among other places.
The Second Law to the Rescue
From a macro standpoint, don’t worry too much. The planet has been here for 4.5 billion years and it has a life of its own. You don’t have to do anything to save the world. Instead, rely on the Second Law of Thermodynamics.
There are very few laws I believe in, but this is one of them. There are many ways of stating the law, and its corollaries, but this isn’t an essay on physics. In essence, it states that all systems wind down over time. Entropy conquers all. That all systems collapse without constant new inputs of energy. And that the larger and more complex a system becomes, the more energy it requires. The Second Law is why nothing lasts forever.
In human affairs, you can say stupidity is a corollary to the Second Law, in that it throws sand in the gears of society and accelerates the tendency of things to collapse. But stupidity doesn’t always mean low intelligence…most of the destructive sociopaths acting as top dogs have very high IQs. I want to draw your attention to more useful definitions of stupidity.
One definition of stupidity is an inability to predict not just the immediate and direct consequences of an action (which a typical six-year-old can do) but also to fail to predict the indirect and delayed consequences.
An even more helpful definition is: Stupidity is an unwitting tendency towards self-destruction. It’s why operations run by bad people always go bad. And why, since the Deep State is run by bad people – the sociopaths who are actively drawn to it – it will necessarily collapse.
The Second Law not only assures that the Deep State will collapse but, given enough time, that all “End of the World” predictions will eventually be right, up to the heat death of the universe itself. It applies to all things at all levels…including, unfortunately, Western civilization and the idea of America. As for Western civilization, it’s had a fantastic run. Claims of the politically correct and multiculturalists aside, it’s really the only civilization that amounts to a hill of beans.
Now, it’s even riskier calling a top in a civilization than the top of a stock or bond market. But I’d say Western civilization peaked just before World War I. In the future, it will be a prestige item for Chinese families to have European maids and houseboys.
As for America, it was an idea – and a very good one – but it’s already vanished, replaced by the United States, which is just one of 200 other nation-states covering the face of the Earth like a skin disease. That said, the U.S. peaked in the mid ’50s and has gone down decisively since 1971. It’s living on stored momentum, memories, and borrowed Chinese money.
Let me bring this gloomy Spenglerian view of the world to a close with some happy thoughts. You want to leave them laughing. Not everybody went down with the Titanic.
Looking further at the bright side: Just being born in America in the 20th century amounted to winning the cosmic lottery…an accident of birth could have placed us in Guinea or Zimbabwe. On the other hand, if I wanted to make a fortune in today’s world, I’d definitely head to Africa.
But just as the Second Law dictates that all good things, like America, must come to an end, so must all bad things, like the Deep State in particular. That’s a cosmic certainty. We all love the idea of justice, even if most people neither understand what it is, nor like its reality.
Finally, it occurs to me that, while I hope I’ve explained why the Second Law will vanquish the Deep State, I’ve neglected to explain how whipped dogs can profit from the collapse of Western civilization.
The answer is that they can’t.
Fortunately, parasites can only exist as long as their host. Which is actually a final piece of good news I want to leave you with.
* * *
Unfortunately there’s little any individual can practically do to change the trajectory of this trend in motion. That’s precisely why bestselling author Doug Casey just released an urgent new report with his top seven predictions for what comes next. Click here to download the PDF now.
The Height Of Idiocy
The Height Of Idiocy
Thu, 02/06/2020 - 21:55
Published:2/6/2020 9:08:27 PM
Authored by Doug Casey via InternationalMan.com,
“The only element in the universe more common than hydrogen is stupidity.”
I’m not a fortune teller. In fact, the only things anybody knows about predicting – even if you gussy the concept up by calling it “forecasting” – are 1.) Predict often and 2.) Never give both the time and the event.
The worst offenders are those who pretend they know where the economy’s headed.
Statistics – so often the basis of conjecture with regard to the economy – are so subject to interpretation, and so easy to take out of context, that most of the time they’re best used as fodder for cocktail party conversations.
Still, as potentially wrong-headed and tendentious as the subject is, “the economy” is occasionally worth talking about simply to establish a clear point of view.
In fact, I place the phrase “the economy” in quotes because I don’t even accept the validity of the concept, nor that of “the GDP”; they’re both chimeras.
The idea of GDP gives the impression that it is not individuals that produce goods and services, but rather a machine called “the economy.” This leaves the door open to all manner of nonsense, like the assertion that what may be good for individuals may not be good for the economy, and vice-versa.
For instance, an advance in the GDP doesn’t necessarily mean increased prosperity: What if the government embarked on a massive pyramid building program, an archetypical example of public works? GDP might rise, but it would add absolutely nothing to the well-being of individuals. To the contrary, the building of the pyramid would only divert capital from wealth-generating activities.
On the other hand, if a scientific breakthrough was made which cut energy consumption by 80% for the same net output, or magically eliminated all disease, the GDP would collapse because it would bankrupt the energy and health industries.
But people would be vastly better off.
Entirely apart from that, the whole idea of GDP gives the impression that there actually is such a thing as the national output.
In the real world, however, wealth is produced by someone and belongs to somebody. We’re not ants or bees working for the hive. The whole idea of a GDP just allows the “authorities” to bamboozle people into believing they can actually control “the economy,” as if it were some giant machine.
The officials pretend to be the Wizard of Oz, and Boobus americanus is trained to think they’re omniscient. Thus whenever the rate of growth slips “too low,” officials are expected to give “the economy” a suitable push. Conversely, whenever “the economy” is growing too fast, the officials are supposed to step in to “cool” it.
It’s all an embarrassing and destructive charade.
I remain of the opinion that we’re headed into the biggest economic smashup in history.
That’s an outrageous statement, and it’s always dangerous to say something like that. After all, the longest trend in motion is the Ascent of Man, and that trend is unlikely to change; indeed, it’s likely to accelerate. And it’s usually a mistake to bet against an established trend.
Furthermore, science and technology will continue advancing, people will continue working and saving, entrepreneurs will continue to create. And downturns in the economy have always been brief. There’s a good case for staying bullish.
Even most of those who talk of a recession tend to write it off as either a simple reversal of recent “irrational exuberance,” or a passing change in people’s psychology, or a temporary shock. Unfortunately, it goes much deeper than that. Those things have very little to do with what recessions are all about.
A recession, according to the conventional parlance, is a period when economic activity declines for two or more quarters. That’s a description of what happens, but it’s really not very helpful, much like saying a fever is a period during which your temperature is above 98.6 F. A better definition of a fever might be a period when the body’s temperature is elevated as a consequence of fighting an infection, in that it gives you some insight into the cause as well as the effect.
That’s why I prefer to say a recession is “a period of time when distortions and misallocations of capital caused by the business cycle are liquidated.”
What causes the business cycle? Excess creation of credit by a central bank (e.g., the Fed). The injection of artificially created money and credit into a country’s economy gives both producers and consumers false signals, causing them to do things which they otherwise would not do. The longer the upswing of a business cycle continues, the longer and more severe the down cycle will be.
A depression is just a really bad recession.
One thing that – contrary to popular opinion – can help get an economy out of a recession is a large pool of savings; savings give people the money to invest in new production, as well as the money to buy that production.
That’s why it’s the height of idiocy for pundits to talk about how patriotic it is to go out and shop. It can only deplete the capital that will be needed in the future, and deepen the bottom with more bankruptcies, stealing consumption from the future.
That’s why the Fed’s artificially low interest rates is such a bad idea; it encourages people to save less and borrow more. This engineered decline may well, after a certain lag time, cause a cyclical upturn – but it will only aggravate the underlying problem, guaranteeing yet a bigger bust.
This isn’t just an American problem, because the U.S. is truly the engine of the world’s economy. But a lot of the drive behind the engine is the gigantic trade deficit. The hundreds of billions the U.S. sent abroad in the last year alone, after over a decade of increasing deficits, has caused a lot of capital investment that will become uneconomic, and created a lot of economic activity that will come to a screeching halt when that deficit inevitably reverses.
The whole world is levered on what happens in the U.S.
The effect in economies around the world will be devastating. The Smoot Hawley tariff of 1930, which acted to collapse world trade, greatly exacerbated the last depression. It could be that economic conditions in the U.S. alone could do it this time, without the overt “assistance” of the government.
I don’t believe we’re looking at just another cyclical downturn this time. We could be – but I don’t think so.
Of course, since the dollar is by far the biggest market in the world, constituting the reserves of almost every government on the planet, the de facto currency of probably 50 countries, and the savings of hundreds of millions of people around the world, when it collapses, it will cause a financial earthquake, Magnitude 10.
Use any rallies as selling opportunities. Diversify your assets out of the U.S. Build a good position in gold. Buy gold stocks with speculative capital. Get your debt, if any, down to comfortable levels.
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Unfortunately there’s little any individual can practically do to change the trajectory of this trend in motion. The best you can and should do is to stay informed so that you can protect yourself in the best way possible, and even profit from the situation. That’s exactly why New York Times bestselling author Doug Casey and his team just released an urgent new report titled Doug Casey’s Top 7 Predictions for the Raging 2020s.
Click here to download the free PDF now.
Laura Ingraham: I might have to move to Utah to primary Mitt Romney
Published:2/6/2020 12:59:26 PM
Deciphering Davos: What The International Ruling Class Have Planned For You
Deciphering Davos: What The International Ruling Class Have Planned For You
Fri, 01/31/2020 - 19:50
Published:1/31/2020 6:57:00 PM
Authored by Doug Casey via InternationalMan.com,
International Man: No matter the problem, the prescription of the Davos crowd is always more welfare, more warfare, more money printing, more taxes, and of course, more centralization of power into global institutions.
What’s your take?
Doug Casey: The people who attend Davos are all welfare statists. They’re not necessarily socialists, insofar as they don’t want to see government nationalize industries. Most understand how totally dysfunctional that is and that they don’t really benefit from it. Strict socialism, defined as State ownership of the means of production, is off the table. They prefer economic fascism, where a powerful State can funnel wealth to the corporations the elite own or control. They’re happy to throw some table scraps to the unwashed masses, of course. Modern Monetary Theory (MMT) is the best way to do that.
Again, they’re not socialists. They’re welfare statists. Completely opportunistic and absolutely unprincipled. Despicable people, actually. Few are entrepreneurial, independent thinkers or free-market oriented. Those types would be disruptive at Davos, and if they’re ever invited, it would be only once.
Other than celebrities, court intellectuals, and publicity-oriented multibillionaires, the attendees are almost all bureaucrats and politicians who thrive on stolen money. But it’s no longer easily visible briefcases full of cash. That’s quaint in today’s world. They steal indirectly, by making sure they benefit from state regulations, state favors, and the inflation of the currency.
Bribes are in the form of tax-deducible donations to charitable foundations and nongovernmental organizations (NGOs). That’s not only much safer, but the money is vastly bigger, and the way it’s rigged adds to their prestige. Both making and taking a bribe disguises the miscreants as philanthropists and do-gooders when they use an NGO as a funnel.
But getting back to their economic views, they’re all for “quantitative easing.” Printing money—MMT—directly benefits the stock market. It raises corporate earnings, and much of the newly created cash directly boosts the prices of shares. It’s really sweet, if you’re an insider.
International Man: At this year’s event, climate change appears to be a big focus.
What are your thoughts on this?
Doug Casey: These fools love to talk about global warming, which they attribute to carbon dioxide. Their jets and limos are a small price to pay for the invaluable moral hectoring they give to the billions of hoi polloi.
Davos people see the common man as the real problem. And perversely, the common man believes what he’s told in the media—namely, that he is the problem. Pseudo science has become a new religion. It’s become a moral crusade against carbon, the one element that’s basic to all life; it’s now more hated than uranium, plutonium, or gold. Carbon is being pursued by a lynch mob of angry chimpanzees.
And leading the charge is Davos attendee Greta Thunberg. She’s emblematic of how thoroughly degraded this has become. Greta is a manufactured celebrity. She came out of nowhere last year; massive but completely undeserved media attention made her into one of the planet’s most famous people. It’s not just laughable, but amazing, that a high school sophomore—with no knowledge or experience—has become a world opinion leader. You may have heard her famous deranged rant, but just in case, here it is:
She has absolutely nothing going for her but things like anger, resentment, hatred, and fanaticism. No matter. The Masters of the Universe sit there as she scolds them for their evil in destroying the world and ruining her youth.
The silly little bitch is a frothing-at-the-mouth fanatic and suffers from several really severe psychological aberrations. She is to the world what Alexandria Ocasio-Cortez is to the United States. She will undoubtedly go into some multi-billion dollar NGO, where she can do a maximum of damage.
People value urgency, sincerity, and passion. Like Hitler, Mussolini, Lenin, Castro, and the like, she’s got plenty. And nobody dares say a word about it, because she’s been granted the moral high ground. This augurs very poorly for the future.
Probably the only intelligent words spoken at Davos this year came from Donald Trump, of all people, when he decried “prophets of doom,” referring to the global warming crowd.
Climate change has been around for about four billion years. And the biggest driver of it, by far, is the sun. Not carbon dioxide, a trace gas. There’s 20 times more argon, in the atmosphere. Without the sun, earth would be a ball frozen at about two degrees above absolute zero. Not counting the effects of cosmic rays, the planet’s changes in orbit and tilt, the solar system’s rotation around the galaxy, and a score of other critical factors. But these people don’t talk about that, because those things are totally and obviously beyond our control. Best to stick with carbon, which is proving helpful in controlling the masses.
International Man: Given the disastrous policies the Davos crowd has in the pipeline, what should the average person do?
Doug Casey: Treat these people with the respect they deserve—which is to say, treat them like drunks discussing the weather at a cocktail party. Davos is just a social gathering for people who have a busybody streak. It would be completely unimportant except for the fact the media says it’s important.
The only thing that surprises me about Davos is that the hustler who runs it hasn’t yet invited the Kardashians.
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There’s no question the elite are eager to promote policies like negative interest rates, the abolition of cash, and mass migration. These trends are in motion, and are accelerating at a rapid rate. It’s all shaping up to be a world-class disaster... That’s exactly why New York Times bestselling author Doug Casey and his team just released an urgent new report with Doug’s top 7 predictions—including how to survive and thrive in turbulent times. Click here to download the free PDF now.
Dem Bob Casey: Trump Trial Needs Witnesses for Whole Picture
There are still some "missing pieces" in the House Democrats' impeachment case against President Donald Trump, and that's why witnesses are needed, Sen. Bob Casey said Thursday.
Published:1/23/2020 11:36:19 AM
An Empire Self-Destructs
An Empire Self-Destructs
Sat, 01/11/2020 - 23:30
Published:1/11/2020 11:43:52 PM
Authored by Jeff Thomas via InternationalMan.com,
Empires are built through the creation or acquisition of wealth.
The Roman Empire came about through the productivity of its people and its subsequent acquisition of wealth from those that it invaded.
The Spanish Empire began with productivity and expanded through the use of its large armada of ships, looting the New World of its gold.
The British Empire began through localized productivity and grew through its creation of colonies worldwide - colonies that it exploited, bringing the wealth back to England to make it the wealthiest country in the world.
In the Victorian Age, we Brits were proud to say, “There will always be an England,” and “The sun never sets on the British Empire.”
So, where did we go wrong? Why are we no longer the world’s foremost empire? Why have we lost not only the majority of our colonies, but also the majority of our wealth?
Well, first, let’s take a peek back at the other aforementioned empires and see how they fared. Rome was arguably the greatest empire the world has ever seen. Industrious Romans organized large armies that went to other parts of the world, subjugating them and seizing the wealth that they had built up over generations. And as long as there were further conquerable lands just over the next hill, this approach was very effective. However, once Rome faced diminishing returns on new lands to conquer, it became evident that those lands it had conquered had to be maintained and defended, even though there was little further wealth that could be confiscated.
The conquered lands needed costly militaries and bureaucracies in place to keep them subjugated but were no longer paying for themselves. The “colonies” were running at a loss. Meanwhile, Rome itself had become very spoiled. Its politicians kept promising more in the way of “bread and circuses” to the voters, in order to maintain their political office. So, the coffers were being drained by both the colonies and at home. Finally, in a bid to keep from losing their power, Roman leaders entered into highly expensive wars. This was the final economic crippler and the empire self-destructed.
Spain was a highly productive nation that attacked its neighbours successfully and built up its wealth, then became far wealthier when it sailed west, raiding the Americas of the silver and gold that they had spent hundreds of years accumulating. The sudden addition of this wealth allowed the Spanish kings to be lavish to the people and, as in Rome, the Spanish became very spoiled indeed. But once the gold and silver that was coming out of the New World was down to a trickle, the funding for maintaining the empire began to dry up. Worse, old enemies from Europe were knocking at the door, hoping to even old scores. In a bid to retain the empire, the king entered into extensive warfare in Europe, rapidly draining the royal purse and, like Rome, the Spanish Empire self-destructed.
In the Victorian era, the British Empire was unmatched in the world. It entered the industrial revolution and was highly productive. In addition, it was pulling wealth from its colonies in the form of mining, farming and industry. But, like other countries in Europe, it dove into World War I quickly and, since warfare always diminishes productivity at home whilst it demands major expense abroad, the British Empire was knocked down to one knee by the end of the war.
Then, in 1939, the game was afoot again and Britain was drawn into a second world war. By the end of the war, it could still be said that there would always be an England, but its wealth had been drained off and, one by one, its colonies jumped ship. The days of empire were gone.
Into the breach stepped the US. At the beginning of World War I, the US took no part in the fighting, but, as it had experienced its own industrial revolution, it supplied goods, food, and armaments to Britain and her allies. Because the pound and other European currencies could not be trusted not to inflate, payment was made in gold and silver. So the US was expanding its productivity into a guaranteed market, selling at top dollar, using the profits to create larger, more efficient factories, and getting paid in gold.
Then, in 1939, it all happened again. Although the US eventually joined both wars, they did so much later than Britain and her allies. At the end of World War II, the US had a lively young workforce, as they had lost fewer men to the war. They also had modern factories, which had been paid for by other nations, that could now be used to produce peacetime goods for themselves and the rest of the world more efficiently than anyone else.
And (and this is a very big “and”) by 1945 they owned or controlled three quarters of the world’s gold, as they’d drained it away from the warring nations in the early days of the war. This allowed the US to invite the post-war leaders to Bretton Woods to explain that, as the holders of the world’s wealth, they’d dictate what the world’s default currency would be: the dollar.
But this was all threatened by the fact that, when the now-poorer nations of the world sold their goods to the US, they, too, beginning with the French, wished to be paid in gold.
And so, in the subsequent years, the gold in Fort Knox was beginning to travel back to the east, from whence it had come in previous years. In 1971, this flow was shut off, as the US, still the foremost empire, had the power to simply remove all intrinsic value from the dollar and turn it into a fiat currency. Payment in gold ended.
Fast-forward to the post-millennium era and we see that America, like the previous empires, ended its acquisition of gold after World War II, yet its people became spoiled by political leaders who promised ever-increasing bread and circuses. The productivity that led to its initial strength was dying off, and it was spending more than it was bringing in. Finally, it sought to maintain its hegemony through warfare, thereby creating a dramatic drain to its wealth.
Like other empires before it, the US is now on the verge of relinquishing the crown of empire. If there’s any difference this time around, it’s that its collapse will very likely be far more spectacular than that of previous empires. However, just as in previous collapses, those who least understand that the collapse is around the corner are those who are closest to its centre. Clearly, the majority of Americans are worried about their future yet cannot conceive of their country as a second-rate power. And those who hold the reins of that power tend to be the most deluded, delving ever-deeper into debt at an ever-faster rate, whilst expanding welfare and warfare without any concept of how it might all be paid for.
It’s understandable, therefore, that those of us who are on the outside looking in find it easier to observe objectively from afar and see the coming self-destruction of yet another empire.
As stated in the first line of this essay, “empires are built through the creation or acquisition of wealth.” They tend to end through the gradual elimination of the free-market system, the metamorphosis to a welfare state, and, finally, through the destruction of wealth through costly warfare.
Does this indicate the “end of the world”? Not at all. The world did not end with the fall of Rome, Spain, England, or any one of the many other empires. The productive people simply moved to a different geographical location—one that encourages free-market opportunity. The wealth moved with them, then grew, as the free market allowed productive people to make it grow.
Freedom and opportunity still exist and indeed flourish. All that’s changing is the locations where they are to be found.
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