Survival__ Structuring Prosperity for Yourself and the Nation - Charles George Smith [212]
This edifice of exponentially rising credit is fundamentally a fraud. Regardless of whether you applaud or decry the Federal government's skyrocketing obligations and promises of future value, it is guaranteed to collapse in insolvency.
History suggests there are two paths to this end-point, and obsessing over which path we will ultimately take is less important than the end-state. Either a profligate nation's currency falls to near-zero value (also called hyperinflation) or the State runs out of the ability to borrow enough money to fulfill its expanding obligations. It then defaults on its debts and other obligations.
We in the U.S. have lived like every day is Christmas for years; whatever excesses are desired, we have purchased them by creating money/credit out of thin air. More MRI machines in Western Pennsylvania than in the entire nation of Canada? Yes, it's our "right" to have as many MRI tests as we desire.
$300 million for each fighter aircraft? Yes, it's our "right" to "the best." Granite counters, snowmobiles, luxury cruises--all of these have also been our "right." Cheap, abundant oil is also our "right," even if it costs thousands of American lives and trillions of dollars in (borrowed) money to enforce that "right" on distant shores.
The ability to create and spend "free money" has distorted reality for so long that we as nation now consider this magical ability to save little and create no surplus and yet spend as freely as we desire as our "right."
We have repealed reality with a gigantic con--the exponential rise of credit and debt--but reality cannot be completely replaced by magical thinking forever. Thus we can foresee the financial collapse of the Federal government within the next decade (by 2021). The mighty engines of credit creation, market manipulation and propaganda are straining at maximum RPM, and they may yet create one more asset bubble which will extend the con for one more cycle.
Or they may fail to inflate yet another asset bubble, in which case the devolution will begin sooner rather than later.
It is important to note once again the ad hoc nature of the Power Elites' and the State's response to the unprecedented challenge of maintaining exponential credit expansion.
Perhaps some of the players actually believe that infantile incantations and magical thinking will enable infinite credit bubbles into the future, but it is more likely that they are reacting in ad hoc fashion, hoping that their propaganda, credit expansion and massive State giveaways of "free money" via deficit spending will stave off disaster long enough for them to contrive a sustainable Plan B.
Alas, that hope is pure fantasy. Exponential credit and deficit expansion is not sustainable.
Many observers look ahead and see a future in which the U.S. Federal government has dissolved, and the 50 states of the Union break into small city-states or natural units of governance. Some see this as inevitable, others as preferable.
I have tried to explain that there is no "either-or" choice to the State, Elites and markets. The citizenry have no feedback into global capital except to opt out wherever possible from feeding the Beasts (cartels and oligopolies). But the citizenry do have feedback into the State--even if it has withered, it can be strengthened, or a new citizen feedback loop can be added to the governance system.
Global capital has no concern for the well-being of the citizenry of any landscape, town, city, state or nation; their concern is simple: dominate markets and States sufficiently to eliminate or bypass competition, and exploit all available windfalls to the fullest. Thus slavery and its modern equivalent, serfdom in the developing world and debt-serfdom in the developed world, are the ideal (lowest-risk, highest profit) ecologies for concentrated global capital.
But global capital