“These two spiral galaxies make a photogenic pair, found within the boundaries of the northern constellation Draco. Contrasting in color and orientation, NGC 5965 is nearly edge-on to our line of sight and dominated by yellow hues, while bluish NGC 5963 is closer to face-on. Of course, even in this well-framed cosmic snapshot the scene is invaded by other galaxies, including small elliptical NGC 5969 at the lower left.
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Brighter, spiky stars in our own Milky Way are scattered through the foreground. Though they seem to be close and of similar size, galaxies NGC 5965 and NGC 5963 are far apart and unrelated, by chance appearing close on the sky. NGC 5965 is about 150 million light-years distant and over 200,000 light-years across. Much smaller, NGC 5963 is a mere 40 million light-years away and so is not associated with the edge-on spiral. Difficult to follow, NGC 5963's extraordinarily faint blue spiral arms mark it as a low surface brightness galaxy.”
“For some years this William Blake watercolor hung in my living room, blown up photographically to enormous size (that was back in my darkroom days). An illustration from The Book of Job: "When the morning stars sang together..." The original watercolor is small, not a lot larger than what you will get if you click on the image here...
Click image for larger size.
That's Job and his family at the bottom, enclosed by the thickest clouds, representing the flesh. Under the Lord's left arm is the Moon goddess Diana, the heart or feeling, delicately holding the passions in check. Under his right arm is the Sun god Apollo, the intellect, pushing back clouds of ignorance. Above the thinnest wisps of cloud, a choir of singing angels, representing the imagination. Here, then, is Blake's vision of fourfold human nature, as imagined in his mystic dreams, and which Job presumably encountered in the whirlwind. Binding all together is the Divine Imagination.
When I was young I took this image as a guiding icon, a promise to myself to keep flesh, intellect, heart and imagination in balance, and to always aspire to the stars. At some point, early in the fuss of marriage and family, the big photographic reproduction of Blake's watercolor got shifted to the attic, where presumably it still resides amid dust and cobwebs and the discarded detritus of a lifetime.
Has my understanding of the human self changed in the fifty intervening years? I have more respect for the flesh now than then. I cannot think of the unceasing activity of the DNA in every cell of my body without esteeming those trillions of tiny whirlwinds. I am less confident than in my idealist youth that Apollo can hold back the clouds of unknowing and that Diana can keep human passions in check. But I still choose optimism. That at least has remained constant since this, one of Blake's most optimistic images, hung on my wall.
Blake roiled between optimism and pessimism, shaken by his visions (oh, the mystery of that unquiet mind), steadied by his art (he died with a pencil in his hand), and bouyed by his beloved wife Catherine (imagine being married to such a soul on fire?).”
Rocky Balboa, “Let Me Tell You Something You Already Know”
“Let me tell you something you already know. The world ain't all sunshine and rainbows. It's a very mean and nasty place and I don't care how tough you are it will beat you to your knees and keep you there permanently if you let it. You, me, or nobody is gonna hit as hard as life. But it ain't about how hard ya hit. It's about how hard you can get it and keep moving forward. How much you can take and keep moving forward. That's how winning is done! Now if you know what you're worth then go out and get what you're worth. But ya gotta be willing to take the hits, and not pointing fingers saying you ain't where you wanna be because of him, or her, or anybody! Cowards do that and that ain't you! You're better than that!”
Do What You've Been Resisting" by Robert Pagliarini
“Whose permission do you need? Really, it's not a trick question. Who needs to give you the nod of approval before you can start a business, start dating after a bitter divorce, or write the book you've been talking about for the past nine years? Whose approval are you desperately seeking? Your spouse, a boss, friend, or expert in your field? Unless you're six years old, you don't need anyone's permission to create a better, fuller, richer life for yourself. Of course, it doesn't always feel that way. Someone has to tell you you're good enough and smart enough, right?
Well, no actually. We cling to the (irrational) belief that we require approval before we can achieve because it's safe. It gives you a fabulous excuse. You can tell others, and more importantly, yourself, that it's out of your hands. It can help you sleep because it gives you the illusion that you're not in control. And if you're not in control, it's not your fault. But if you want to do more than sleep well and want to start living well, you need to make a decision. Are you going to put your success and happiness in your hands or someone else's?
This message hit home for me when I presented to a roomful of actors and artists at a Screen Actors Guild event. Talk about an industry built on the need for approval. If you're an actor, you need a casting director to tell you you're good enough. If you're a musician, you need a record label to give you their seal of approval. And if you're a writer, you need an agent or publisher to recognize your genius. This is true for all actors, musicians, and writers, except those that have decided they don't need to wait for anyone to tell them their art is worthy. These are the artists that don't wait, they create.
Not an artist? Not a problem. It doesn't matter what you do for a living. The freedom that comes from discovering you don't need anyone's permission is yours for the taking. But how can you break free from this destructive and limiting belief? Get conscious. It's time to name names. List a goal or aspiration and write down next to it all of the people for whom you are secretly waiting approval. If you're having trouble, ask yourself this: who needs to tell me that I am old enough, young enough, experienced enough, smart enough, attractive enough, thin enough, funny enough, or creative enough? Maybe you've been waiting to get a boyfriend before you travel across Europe. Why can't you go alone? Whose permission are you seeking? What about dropping your current job and switching to a career that inspires you?
There are two truths. The first is that nobody will ever give you permission. The second is that you don't need anyone's permission. Success doesn't come to those who wait for it. Success doesn't even come to those who ask for it. Success comes to those who fight off the naysayers and push forward without a permission slip.
It can be incredibly scary (and life changing) once you realize it's up to you. Regardless of the story you sell yourself, it always has been up to you, and it always will be. What would happen if you woke up tomorrow and decided you didn't need anyone to give you permission? What's the first thing you would start? Really, it's not a trick question."
"Young men, not knowing what to remember, Come to this hiding place of the moons and years, To this Old Man. Old Man, they say, where should we go? Where did you find what you remember? Was it perched in a tree? Did it hover deep in the white water? Was it covered over With dead stalks in the grass? Will we taste it If our mouths have long lain empty? Will we feel it between our eyes if we face the wind All night, and turn the color of earth? If we lie down in the rain, can we remember sunlight? He answers, I have become the best and worst I dreamed. When I move my feet, the ground moves under them. When I lie down, I fit the earth too well. Stones long underwater will burst in the fire, but stones Long in the sun and under the dry night Will ring when you strike them. Or break in two. There were always many places to beg for answers: Now the places themselves have come in close to be told. I have called even my voice in close to whisper with it: Every secret is as near as your fingers. If your heart stutters with pain and hope, Bend forward over it like a man at a small campfire.”
"Maybe we're not supposed to be happy. Maybe gratitude has nothing to do with joy. Maybe being grateful means recognizing what you have for what it is. Appreciating small victories. Admiring the struggle it takes to simply be a human. Maybe, we're thankful for the familiar things we know. And maybe, we're thankful for the things we'll never know. At the end of the day, the fact that we have the courage to still be standing is reason enough to celebrate."
"The president has redrawn his March 1 line in the sand. “Substantial progress” in trade talks with China is the reason he cited. But another March 1 deadline menaces the United States… like a creeping shadow, dark, broad and doomy. And Mr. Trump cannot push it back. Details shortly.
First to the shadows hanging over the world… Nuclear rivals India and Pakistan are playing with matches in perhaps the world’s largest powder keg - Kashmir. A terrorist bomb killed 42 Indian paramilitary personnel in Kashmir earlier this month. Yesterday, India airstruck what it claims to be a training facility of the group responsible. At least one Indian warbird was downed and one pilot captured. Early today, Pakistan unleashed a retaliatory airstrike against Indian targets in Kashmir. And so the Hatfields and McCoys are once again at each other’s throats - only these feuding clans wield nuclear muskets.
Skittish markets sold off this morning before making good some of their losses. The Dow Jones closed 72 points lower. The S&P lost a mere point, while the Nasdaq clawed a five-point gain. But to return to our looming March 1 deadline…
Last February’s “bipartisan” spending bill suspended the debt ceiling - then at $20.5 trillion - until March 1, 2019. March 1, 2019, falls this Friday. Friday’s deadline would pass harmlessly if the debt had remained at $20.5 trillion. But it has not. Today’s federal debt exceeds $22 trillion.
And after Friday, the United States government cannot legally borrow additional funds - unless Congress raises the debt ceiling to present levels. Of course… the government runs under perpetual deficit. And it cannot meet existing commitments without ongoing resort to the credit markets. The Treasury can take to accounting gimmicks or “extraordinary measures” to keep the government in funds. But only for a time.
The Congressional Budget Office (CBO) estimates the cupboards would be empty by September - unless the debt ceiling is raised beforehand. If it is not, the United States government will default on its obligations… and its creditors will go scratching. Before the U.S. Senate Finance Committee yesterday, Jerome Powell attested “it would be a very big deal,” adding: "It’s beyond even consideration. The idea that the U.S. would not honor all of its obligations and pay them when due is something that can’t even be considered."
But we would advise Mr. Powell to sleep well. Of course Congress will raise the debt ceiling. We will eat these words if wrong - without salt, without butter, without chaser. Would an addict cut himself off from his dealer? Would a hopeless drunkard willingly throw himself upon the wagon? Would a crook lock himself up... and toss the key?
The prior two debt ceiling “crises” fell in 2011 and 2013. Republicans sobbed their crocodile tears about Obama and the spendthrift Democrats. The debt ceiling must not be raised without spending cuts to match, they raged. But now one of their own occupies the White House - or at least a fellow with an “R” after his name. And they themselves have spent like ship-bound sailors turned loose ashore.
The federal government has assumed over $2 trillion alone since Mr. Trump swore the oath. How could they possibly take their stand now? What about the Democrats? Might they try to use the debt ceiling for political advantage, to dig a thumb in Trump’s eye? Not without being laughed off the floor. Have you seen some of their spending proposals?
And House Democrats have recently introduced legislation to abolish the debt ceiling entirely. The new credit card would come without a limit. And so today we suffer an acute pang of what the Germans call fremdschämen - embarrassment for those incapable of feeling embarrassment.
Each raising of the debt ceiling represents another sad congressional admission: We cannot control ourselves. We are incapable of living within our means. We are wastrels. But rather than lower their heads... they extend their hands. Fremdschämen…
But perhaps we should be kinder. The entire system rests upon greater and greater infusions of debt. It would seem somehow inappropriate to stop now. What else can they do? As our co-founder Bill Bonner has said: "People think what they must think when they must think it."
Meantime, debt is expanding 6% per year - far greater than growth. As it stands today, the nation’s debt-to-GDP ratio rises above a perilous 106%. Evidence - though inconclusive - suggests the red zone begins at 90%. And growth is trending in the wrong direction. Our crystal ball turns up no reason why it will return to historical levels anytime soon. But slow-motion disasters are rarely halted before they reach their ultimate conclusion. Meantime, the can will go kicking down the road… until the day it stops.
Below, Jim Rickards spells out how the United States is going broke. What can be done? Read on."
"The United States Is Going Broke"
By Jim Rickards
"The U.S. is nearing another debt ceiling deadline. Those who focus on the U.S. national debt (and I’m one of them) keep wondering how long this debt levitation act can go on. The U.S. debt-to-GDP ratio is at the highest level in history (106%), with the exception of the immediate aftermath of the Second World War. At least in 1945, the U.S. had won the war and our economy dominated world output and production. Today, we have the debt without the global dominance.
The U.S. has always been willing to increase debt to fight and win a war, but the debt was promptly scaled down and contained once the war was over. Today, there is no war comparable to the great wars of American history, and yet the debt keeps growing.
In a recent article, the celebrated James Grant of 'Grant’s Interest Rate Observer' reviewed not only the current debt and deficit situation but provides an overview of the U.S. national debt since George Washington and Alexander Hamilton. Grant made the point that the debt has been increased and decreased on a regular basis but never until today was there a view that the deficit didn’t matter and could be increased indefinitely. The United States required 193 years to accumulate its first trillion dollars of federal debt. Amazingly, it will add that much in the current fiscal year alone.
In his piece Grant also describes how these historic debt management efforts have been bipartisan. Republicans Harding and Coolidge reduced the debt; the Democrat Andrew Jackson actually eliminated the debt in 1836. Today there is bipartisan profligacy. Republicans like to talk about fiscal responsibility, but whenever they’re in power they spend about as much as Democrats. There’s no substantial difference.
The U.S. budget deficit under Trump is expected to reach $1 trillion this year and for years after, similar to what we saw in 2010 and 2011 under Obama. This is the result of tax cuts (that don’t “pay for themselves”), removal of spending caps, snowballing student loan defaults and defective growth estimates by the Office of Management and Budget, or OMB. With growth now fading after the Trump tax cut boost (there will be no tax cuts this year), the debt-to-GDP ratio is now up to 106%, since debt is growing faster than GDP. As Grant points out, the national debt has registered compound annual growth of 8.8%, but only 6.3% for GDP. That’s not a sustainable situation. And it’s not at all clear that GDP will close the gap.
Basically, the United States is going broke.
I don’t say that to be hyperbolic. I’m not looking to scare people. It’s just an honest assessment, based on the numbers. Right now, the United States is over $22 trillion in debt. Now, a $22 trillion debt would be fine if we had a $50 trillion economy. The debt-to-GDP ratio in that example would be about 40%. But we don’t have a $50 trillion economy. We have about a $20 trillion economy, which means our debt is bigger than our economy.
When is the debt-to-GDP ratio too high? When does a country reach the point that it either turns things around or ends up like Greece?
Economists Ken Rogoff and Carmen Reinhart carried out a long historical survey going back 800 years, looking at individual countries, or empires in some cases, that have gone broke or defaulted on their debt. They put the danger zone at a debt-to-GDP ratio of 90%. Once it reaches 90%, they found, a turning point arrives. At that point, a dollar of debt yields less than a dollar of output. Debt becomes an actual drag on growth.
Again the current U.S. debt-to-GDP ratio is 106%. We are deep into the red zone, that is. And we’re only going deeper. The U.S. has a 106% debt to GDP ratio, trillion dollar deficits on the way, more spending on the way. And real U.S. GDP annual growth since the recession ended in 2009 has averaged out to about 2.16%. We’re still waiting on Q4 2018 numbers, so the final numbers aren’t in. But there’s no reason to expect much improvement.
How did we get here? Over the past decade, major central banks have created over $15 trillion of new money, mostly through purchases of government bonds. These money printing and bond purchase programs have been called QE1, QE2 and QE3 in the U.S., Euro-QE in Europe and QQE (quantitative and qualitative easing) in Japan. All of these programs and exotic variations such as “Operation Twist” failed to achieve self-sustaining growth anywhere near former trends, and have failed to achieve the 2% inflation targets of those central banks.
We have not had much consumer price inflation, but we have had huge asset price inflation. The printed money has to go somewhere. Instead of chasing goods, investors have been chasing yield. The inability of central banks to deal with crisis and the complete loss of confidence by investors in the efficacy of central bank policy.
The last two global liquidity panics were 1998 (caused by emerging markets currencies, Russia, and Long-Term Capital Management) and 2008 (caused by sub-prime mortgages, Lehman Brothers and AIG). Another smaller liquidity panic arose in 2010 due to problems in Middle Eastern and European sovereign debt (caused by Dubai, Greece, Cyprus and the European periphery). In all three cases, central bank money printing combined with government and IMF bail-outs were enough to restore calm.
But these bailouts came at a high cost. Central banks have little room to cut rates or print money in a future crisis, even with the Fed’s recent hikes. (Now it’s backing away from additional rate hikes). That’s why the Fed has been so determined to raise rates, so it can cut them again when it needs to. Of course by raising rates into a weakening economy, the Fed likely contributed to the very crisis it’s been trying to avoid. The strategy might sound nuts, but that’s how they think.
Meanwhile, taxpayers have no tolerance for more bailouts. And governments around the world are experiencing political polarization. It’s not just here in the U.S. There is simply no will and no ability to deal with the next panic or recession when it hits. We’re getting more and more like Greece. We’re heading for a sovereign debt crisis. That’s not an opinion; it’s based on the numbers.
How do we get out of it? For elites, there is really only one way out at this point is, and that’s inflation. Inflation would help diminish the real value of the debt. And they’re right on one point. Tax cuts won’t do it, structural changes to the economy wouldn’t do it. Both would help if done properly, but the problem is simply far too large. Growth would have to greatly exceed current levels, and that’s just not in the cards. But central banks have obviously proved impotent at generating inflation. Now central banks face the prospect of recession and more deflation with few policy options to fight it."
"The Doomsday Scenario For The Stock And Housing Bubbles"
by Charles Hugh Smith
"The Doomsday Scenario for the stock and housing bubbles is simple: the Fed's magic fails. When dropping interest rates to zero and flooding the financial sector with loose money fail to ignite the economy and reflate the deflating bubbles, punters will realize the Fed's magic only worked the first three times: three bubbles and the game is over.
So what happens when punters realize there won't be a fourth bubble? They sell. Bids disappear because who's dumb enough to bet (with Japan and Europe as lessons) that more liquidity and negative interest rates will magically work when zero interest rates didn't move the needle? Who's foolish enough to catch the falling knife (i.e. buying plummeting assets on the way down) on the unsupported assumption that the next dose of Fed magic will reverse a bidless market?
And should the Fed start buying stocks, mortgages, housing and bonds to prop up those bidless markets, what's the message it will be sending? Desperation. If the only buyer is the money-printing central bank, that's pretty good evidence that your economy and markets are in free-fall.
The loss of faith in central bank magic will be gradual at first, as magical thinking dies hard. It's oh so comforting to believe the central bank will rescue every over-leveraged mal-investment and bail out every high-risk speculation, but the funny thing about the Fed's magic is it only works in liquidity crises - in every other condition, it only makes matters worse.
Does making it cheap to borrow improve the productivity of capital investments? You must be joking. The poster child of Fed magic is corporate buybacks, which 1) create no goods 2) create no services 3) do nothing to improve real wealth creation, i.e. higher productivity and 4) burden the company with higher debt loads, inhibiting future capital investment in actual productive capacity.
The only thing stock buybacks accomplish is to enrich shareholders and top managers with stock options. Rather than fix what's broken in the economy, the Fed's plan of "make the already-wealthy even wealthier" has created a new and monstrous problem: soaring wealth inequality. The Fed's idea of a solution was to triple the value of a small bungalow from $150,000 in the late 90s to $450,000 in 2007. When that bubble burst, the Fed's solution was to double the bungalow's value to $900,000 today.
The structural problems of the U.S. economy cannot be solved by inflating asset bubbles, but that's all the Fed can do. Ironically, everyone cheering on Fed dovishness today is writing the obituary of Fed influence going forward because the masses have awakening to the Fed's role and the political blowback against enriching the already-rich is going to blow away the Fed's political leeway to further enrich the already-rich.
Since the Fed has lost the political permission to further increase wealth inequality, it won't be able to inflate another asset bubble. But even if the Fed was able to bamboozle the populace into allowing it to inflate another asset bubble, the mechanisms no longer have the desired effect: what worked to inflate the prior three bubbles no longer has the power to inflate a fourth bubble.
Those who are confident that there's nothing standing in the way of a fourth asset bubble need to back up their faith with some historical examples of bubble economies running past the third bubble. This will lead to a sudden realization that the Fed has failed and can't possibly succeed in inflating a fourth asset bubble. This will unleash a phase shift in the market's belief system that will lead to a conclusion that the only rational strategy is to sell now before the bid disappears entirely. But by then, of course, it's too late, because everyone else will be hitting the "sell" button at the same time.
It was always folly to believe that inflating asset bubbles could solve the structural problems of a post-industrial economy in the throes of profound demographic and technological change. The Fed has pursued the folly for 25 long years to the cheers of the class that has seen their wealth soar but reality is about to play Godzilla to the Fed's Bambi.
This is the Doomsday Scenario for those who believed $900,000 bungalows were going to $1.8 million and the S&P 500 was going from 2,800 to 5,600., but for those who understand the mortal danger of relying on asset bubbles to prop up a failing status quo, it will be a welcome reset that will enable desperately needed structural changes."
By Joe Withrow, Head of Research, Bonner & Partners
"The Doom Index is heating back up… As regular readers know, the Doom Index is our proprietary system designed to alert us when stresses are mounting within the credit markets, the stock market, and the Main Street economy. We use it as a big-picture tool for measuring tension in the system to get a better idea of when a stock market crash is likely to come.
The index is made up of 11 key indicators, which feed into a scoring model scaled 1-10. When the Doom Index is within the 1-5 range, that means we expect smooth sailing in the stock market. When the index is within the 6-7 range, that’s a signal that we should be cautious with our stock investments. And when the index hits 8 or higher, that’s when we will raise the tattered Crash Flag.
As you can see, the Doom Index hit 7 this quarter – up from a 6 during the previous quarter. There were several reasons for this move… For one, corporate bond downgrades accelerated to close out 2018, and junk bonds cracked… Though they have caught a bid during this snap-back rally we have seen in recent weeks. Remember, corporate debt tends to be a leading indicator for the stock market. If corporate bonds are falling, it doesn’t bode well for U.S. stocks.
And, as we suspected would happen, manufacturing numbers fell hard in the fourth quarter after Trump’s tariffs took effect. This lends credence to our idea that the relatively strong manufacturing numbers we saw during the previous quarter were inflated by businesses front-loading orders to beat the trade war. As evidence, the ISM Manufacturing Index fell 10% – its largest quarterly drop since the end of 2014. And railcar utilization fell 6%, which was its largest quarterly fall since early 2017. Remember, we monitor railcar utilization and manufacturing activity as a proxy for Main Street economic health. A fall in these indicators could eventually translate to lower stock prices.
What’s especially interesting is that, even with these indicators falling, we saw the largest quarterly expansion of credit since 2015. Credit growth is an important indicator of modern economic health. A big spike in credit growth is typically viewed as beneficial for economic growth… and stock prices. There are many moving parts in the credit growth number… But the cynic has to look at that suspiciously. Given Fed Chair Jerome Powell’s recent about-face on the Fed’s tightening policies, it appears the big bump in credit expansion was reactionary in the face of falling stock prices and a slowing economy.
Lastly, what kept the Crash Flag in storage for another quarter was the delayed data on U.S. building permits that just came out. We saw a 3% uptick in private building permits – suggesting that things are still moving in the housing market. Given where our other indicators stand, a poor reading here would have triggered our crash alert.
To sum up, the Doom Index isn’t saying a crash is imminent… But we are getting closer. We continue to advise caution in the market."
GUALFIN, ARGENTINA – "We made two bold predictions, about a year ago. Today, we make another one.
The Flood: Our first prediction was that the Fed would never normalize interest-rate policies, allowing the free market to set short-term rates, rather than the Fed itself. Our second was that Donald J. Trump would never follow through on his threat of a Full Retard trade war with China.
The two are related in an important way. Fed policies, and the fake money system behind them – not tariffs – caused the trade deficit with China. Prior to the introduction of fake money, not connected to gold, in 1971, the U.S. ran a trade surplus, the biggest in the world. Now it runs the world’s biggest deficit. Why the difference? Because now it can simply print the money to pay its foreign creditors.
Before 1971, trade imbalances never got too far out of whack. They were reconciled by shifting gold from the deficit country to the surplus country. Gold is limited, so it had the effect of lowering the money supply in the deficit country, forcing up interest rates, and reducing spending on imports. That is, the feds – and their money system – created the world that we live in… with $250 trillion of debt… and some of the lowest interest rates since The Flood.
Had America stuck with real, gold-backed money… and/or had the Fed not supported Wall Street with ultra-low interest rates and $4 trillion of new money… the situation would be much different. There would be no trade deficit with China. There would be no $250 trillion in debt. An F-150 would probably cost less than it did in 1971, not more. The working class would have nothing to grumble about… And Donald Trump would not be president. The Fed would not be “normalizing,” because it never would have un-normalized. The rich would not be so rich. The Dow would not be over 25,000. The government would not have $22 trillion of debt itself. And we wouldn’t be up at 6 a.m. writing this Diary.
All of these things, of course, are going away. But not soon. And not without even more outrageous and lunatic efforts to keep the jig up. Which is where our third prediction comes in.
Common Sense Substitute: On Tuesday, Jerome Powell pronounced judgment on MMT (Modern Monetary Theory). Recall that MMT has become very popular after AOC (Alexandria Ocasio-Cortez) proposed it as a substitute for common sense. While logically coherent, the theory suggests that governments can – and perhaps should – print as much money as they want, until something bad happens. Since a government can print the money to pay its debts, it never has to go broke. Therefore, the idea goes, debt doesn’t matter.
Powell, in Tuesday’s testimony, said the idea was “just wrong.” We predict he – or his successor – will change his mind. People come to think what they need to think when they need to think it. Right now, Mr. Powell is doing just fine. With such low rates, unemployment supposedly at its lowest level since the 1950s, and the stock market near its all-time high, he can afford to tell the truth… at least about MMT.
But the whole shebang rests on lies. Fake money. Fake interest rates. Fake “us vs. them” battles. Tax cuts without spending cuts. Social programs that we can’t afford. Military adventures that make us less safe. In Warren Buffett’s latest letter to shareholders, for example, he described the stock market’s run-up over the last 77 years as the result of “American mettle.” That was a lie too. American entrepreneurial mettle is measured in GDP figures, not the S&P 500. And GDP growth has been running at only 2%-3% for decades, while Buffett’s portfolio was compounding about six times that rate.
How come? It was a meddle, not mettle. The aforementioned meddling by the feds twisted the world’s finances into a grotesque shape, making the rich richer than ever… and making the common man howl. And it is that shape that the insiders are desperate to preserve. Which is why neither the trade deficits, nor the policies that brought them about, are going away anytime soon.
Know why? Simple. It’s “us versus them.” There are those who go through life honestly – voluntarily giving and taking as best they can… and there are those who cheat and steal, or use the muscle of the government to get something for nothing. That’s the “us vs. them” fight that really matters.
Greenspan Put: The elite began to rely on the Fed to boost its asset prices in 1987, when Alan Greenspan first rushed to counter a correction (the Crash of 1987) with a sharp cut in interest rates. The “Greenspan put” assured investors that the stock market had been tamed. Since then, they’ve counted on the Fed to keep moving wealth from Main Street to Wall Street. (The value of stocks went up, while the working man’s time did not.)
But it’s getting harder and harder to do. Stocks are already at the top of their range. And the debt burden is so heavy, it is cracking the pavement on Main Street. Consumers and businesses cannot borrow more. That leaves only the federal government, whose credit is, according to MMT theorists, almost unlimited.
But the federal government is already adding $100 billion a month to its debt – and we’re still in a boom. And it won’t be long before the boom ends, interest rates rise, tax receipts fall… and the feds can’t pay the interest on their existing debt, let alone add more.
What are the PhDs… cronies… and hustlers to do? Admit defeat? Let asset prices collapse… dragging down their wealth and reputations? Let the stock market correct? Let the economy go into recession… or even depression… as it cleans out the mistakes built up by 30 years of phony, EZ money policies?
Imagine Mr. Powell explaining his new “hands off” policy to the hinds in Congress: “You know,” begins Mr. Powell, “we can’t really tell you what interest rates should be. Or what stocks should sell for. And all that fake money… and that 2% inflation target… well… it was all nonsense, wasn’t it?”
Nope. We can’t imagine it either. Instead, we see Mr. Powell changing his mind about MMT. Maybe the government should borrow and spend more, he begins to think. And then, under a dense smokescreen of theoretical MMT claptrap, the Fed will follow Japan’s central bank, buying U.S. bonds by the trillions."
"What passes for serious effort in this country is very often nothing more than the inability to take anything very seriously. We have the world's highest standard of living and what is probably the world's most bewilderingly empty way of life. The trouble is that serious things are handled (and received) with the same essential lack of seriousness. "
- James Baldwin
The economy? Meh, too complicated... Politics, who cares? Crime, drug overdoses, wars, genocides, pandemics, so what, what else is new? It's true, Americans really don't care about such things. But when something really serious happens, something that truly matters to them, brave Americans determined to defend their rights take action! One must have priorities, after all!
"Buffet Erupts in Brawl Over Crab Legs"
By Rob Quinn
"Two people were arrested after diners at a buffet restaurant in Alabama got extremely crabby. Huntsville police officer Gerald Johnson says he had just gotten his food at the Meteor Buffet when a brawl erupted among diners who had been waiting for crab legs. "There's a woman who's beating a man. People are moving around, plates are shattering everywhere," Johnson tells WHNT. He says some diners, who accused each other of cutting in line after waiting up to 20 minutes for the next tray of crab legs to come out, ended up fencing with serving tongs. Two customers were charged with misdemeanors. Chequita Jenkins was charged with third-degree assault on John Chapman, who suffered a cut to his head, and Chapman was charged with disorderly conduct."
“According to Chapman University’s Survey of American Fears, more than 20 percent of Americans believe Bigfoot is real, the same number who believe the Big Bang actually happened. More startling is that the belief is spreading: ‘Americans have become seven percent more likely to believe in Bigfoot in only two years,’ the survey reports.
Throughout myth and folklore, many monsters are part human, because in life, many humans are part monster - violent ones with the wish of ruin, sociopaths who will club you for gain or fun or some mad want of blood. We think that if our heroes can venture forth to vanquish or tame the beast - Heracles and his labors with the lion, the hydra, the boar; St. George and the dragon - we might gain control over our own societies and lives; we might be free from a hamstringing fear.
But no: The true monsters dwell inside us, and there’s often no clear demarcation between the heroic and the monstrous. This is the lesson of Bigfoot in America. All monsters mean what we need them to mean at the time and place that we need it. The obsolete symbols are forever finding new garb to don; the ancient monsterizing impulse is forever finding new delegates to circulate its paranoia. Imaginary monsters might be necessary for our psyches, but our current troubles remind us that the true monsters are pure hell on our society."
Please enjoy this outstanding article in its entirety here:
“Stars are forming in dark, dusty molecular cloud LDN 988. Seen near picture center some 2,000 light-years distant, LDN 988 and other nearby dark nebulae were cataloged by Beverly T. Lynds in 1962 using Palomar Observatory Sky Survey plates.
Click image for larger size.
Narrowband and near-infrared explorations of the dark nebula reveal energetic shocks and outflows light-years across associated with dozens of newborn stars. But in this sharp optical telescopic view, the irregular outlines of LDN 988 and friends look like dancing stick figures eclipsing the rich starfields of the constellation Cygnus. From dark sky sites the region can be identified by eye alone. It's part of the Great Rift of dark nebulae along the plane of the Milky Way galaxy known as the Northern Coalsack.”
"It’s as reasonable an explanation as any you’re likely to hear from Bubblevision, so here goes…Markets sagged early today, as Michael Cohen, the Donald’s ex-consigliere, testified before the House Oversight and Reform Committee. Like most of the nonsense served up by CNBC and Fox Business as well as Bubblevision’s political organs, there is some measure of plausibility to that explanation. Indeed, Imperial Washington is Wall Street’s keeper. And the Donald has taken that particular oath very personally; you can use his Twitter feed to monitor the major stock indexes.
So, when the folks we elect to represent us in Congress allow spectacles such as we saw today, there’s reason to question the long-term viability of the American Empire. This hearing was about “power” and “not power,” just another indication that this ain’t no constitutional democracy anymore. Leviathan has been unchained. And there are virtually no checks left on the growth of the State and the abuse of its powers for self-serving political purposes.
For decades and decades, Republicans and Democrats have taken turns milking the Imperial Presidency for partisan ends under the cover of promoting the public good. So, they’ve taken off their masks of concern and their patriotic costumes. It’s “anything goes” when it comes to the abusive appropriation of the agencies and powers of the State in behalf of reelection. And they threaten to bring the house down on their own heads. They picked the wrong circumstances and the wrong moment in history to stage their naked, unconstitutional battle for political power.
This weak and old “recovery” – and the massive financial bubble surfing on top of it – is a function of misguided State intervention. It’s a product of unending “stimulus” via soaring public debt and massive money-printing. Yet, as we’ve often discussed, no one has outlawed the business cycle. So, it’s certain this “recovery” will end, and this bubble will burst. That’s notwithstanding the coddling and capitulation that may issue from the Eccles Building when the end comes.
This time, the inevitable financial crash and Main Street recession won’t be short-circuited by the bailout brigades. That’s because the Fed is out of conventional ammunition, while even its unconventional weapons are of dubious effectiveness. And Imperial Washington will continue to devolve into bitter partisan warfare, dysfunction, and paralysis.
This time, you won’t hear about Donald Trump bending the knee to ask Nancy Pelosi for a $700 billion Wall Street bailout. This time, there will be no V-shaped rebound. The Tweeter-in-Chief will face a vicious political assault for failed economic policies. A recession-bloated federal deficit will be plunging toward the $2 trillion annual rate. We’ll need a partisan support for the painful measures needed to stem the red ink. But there will be no bipartisan consensus for anything – neither to curtail the exploding national debt nor to stimulate the sinking national economy.
Fear and loathing will prevail. Traders and speculators on Wall Street will be helpless, as grifters and carnival-barkers battle in Imperial Washington. Remember, the Donald is a megalomaniacal street fighter like no other. It’s fair enough to assume that today’s sh*tshow is just a warm-up round for what’s coming…"
"When life itself seems lunatic, who knows where madness lies? Perhaps to be too practical is madness. To surrender dreams - this may be madness. To seek treasure where there is only trash. Too much sanity may be madness - and maddest of all: to see life as it is, and not as it should be!"
"My suspicion is that the universe is not only queerer than we suppose,
but queerer than we can suppose."
- J. B. S. Haldane
“Legend has it that after reciting his official recantation, kneeling on the floor of the Holy Office in Rome before assembled officials of the Inquisition, Galileo whispered, "And yet it moves." To save his life, or at least to avoid some dank dungeon and perhaps torture, the old man had publicly denied that he ever believed or taught that the Earth orbits the Sun, rather than the other way around. The public recantation was real enough. Whether Galileo whispered the private qualification we'll never know. It makes a lovely story. In any case, he was allowed to go back to Florence under house arrest and in the final years of his life invented (I will dare to assert) mathematical physics.
And yet it moves. The Earth goes spinning around the Sun with its sister planets. The Sun whirls with its neighboring stars around the center of the Milky Way Galaxy. The Milky Way drifts with its attendant galaxies toward the Andromeda cluster. The Milky Way Galaxy, the Great Andromeda Galaxy, and their lesser galactic companions, the so-called Local Group, dance somewhere near the outer edge of the Local Supercluster of galaxies. Which are but the tiniest swarm of galaxies in the whole outward-racing shebang.
It moves. Oh, yes, it moves, and Galileo didn't know the half of it. His inquisitors didn't know any of it, but they thought they knew all of it. And their descendants still claim infallibility. But let me not beat up on the dogmatists. We should all whisper to ourselves now and then, "And yet, and yet." Our descendants may be surprised at our own naivety. Wholly new paradigms may be required before we understand the origin of the universe or the mysteries of biological development and consciousness.
Such a little word, "yet." Maybe the most significant word in our vocabulary.”
"In the last days of the fourth world I wished to make a map for those who would climb through the hole in the sky. My only tools were the desires of humans as they emerged from the killing fields, from the bedrooms and the kitchens. For the soul is a wanderer with many hands and feet.
The map must be of sand and can't be read by ordinary light. It must carry fire to the next tribal town, for renewal of spirit. In the legend are instructions on the language of the land, how it was we forgot to acknowledge the gift, as if we were not in it or of it. Take note of the proliferation of supermarkets and malls, the altars of money. They best describe the detour from grace.
Keep track of the errors of our forgetfulness; a fog steals our children while we sleep. Flowers of rage spring up in the depression, the monsters are born there of nuclear anger. Trees of ashes wave good-bye to good-bye and the map appears to disappear. We no longer know the names of the birds here, how to speak to them by their personal names. Once we knew everything in this lush promise.
What I am telling you is real and is printed in a warning on the map. Our forgetfulness stalks us, walks the earth behind us, leaving a trail of paper diapers, needles and wasted blood.
An imperfect map will have to do, little one. The place of entry is the sea of your mother's blood, your father's small death as he longs to know himself in another. There is no exit.
The map can be interpreted through the wall of the intestine- a spiral on the road of knowledge. You will travel through the membrane of death, smell cooking from the encampment where our relatives make a feast of fresh deer meat and corn soup, in the Milky Way. They have never left us; we abandoned them for science.
And when you take your next breath as we enter the fifth world there will be no X, no guide book with words you can carry. You will have to navigate by your mother's voice, renew the song she is singing. Fresh courage glimmers from planets. And lights the map printed with the blood of history, a map you will have to know by your intention, by the language of suns.
When you emerge note the tracks of the monster slayers where they entered the cities of artificial light and killed what was killing us. You will see red cliffs. They are the heart, contain the ladder.
A white deer will come to greet you when the last human climbs from the destruction. Remember the hole of our shame marking the act of abandoning our tribal grounds.
We were never perfect. Yet, the journey we make together is perfect on this earth who was once a star and made the same mistakes as humans. We might make them again, she said. Crucial to finding the way is this: there is no beginning or end. You must make your own map."
“For some time, it’s been apparent that the former “free world” countries (the US, EU, Canada, Australia, Japan, etc.) have been on a downward progression – socially, politically and economically. But, in the last ten years, the awareness of this has become increasingly pronounced. With each successive year, more and more people recognize that all facets of life in these formerly great countries are heading in a decidedly negative direction.
At this point, even those who don’t understand the decline intellectually, feel in their gut that this is not going to end well. Further, they feel it all around them and sense that when the condition becomes critical, it won’t just affect others. When it reaches the crisis stage, they’ll find it right on their own doorstep. The average person in each of these jurisdictions already no longer trusts either the media, big business or the government and feels that, somehow, they’re all in this together and that they, the electorate, will be the ones who will be the ultimate victims.
So, is this a question of “collective imagination” gone haywire? Not at all, I’m afraid. Their instincts are quite correct. Governments and big business alike have sold out the populace, regarding them as mere fodder in their pursuit of increased power and wealth. Governments in the former “Free World” have for decades become increasingly collectivist, promising ever-greater largesse to the hoi polloi, and the majority of voters, sad to say, have eaten it up.
Yet, as the electorate becomes more worried, they don’t ask the government to go into reverse and stop the economically illogical largesse. Quite the opposite. As their fears grow, they demand more largesse. And so, it shouldn’t be surprising that, as we get closer to the collapse of this house of cards, new candidates arrive on the scene, offering to take entitlements to Never-never land, promising universal free health care, free education through university and a guaranteed income without the need to earn it in any way.
Of course, when this happens, those who understand that 2 + 2 = 4, not 8 or 12, recognize that any government that attempts to deliver on such promises will cause the collapse of the system – not just the economic system, but also the social and political systems.
And, so those people who do understand that the numbers simply won’t work, ask themselves where it will all end. Typically they wring their hands, aware that their concern is the minority view. They recognize that they can no longer discuss their concerns freely, as their country is moving in the opposite direction – embracing the new, empty promises, with ever-more determination.
They search around for some form of hope and, in the majority of cases, whether they like to admit it to themselves or not, their hopes fix on the Freedom Fairy. They vainly hope that somehow, the average voter will “wake up,” or that sitting politicians will come before the press to reverse the stance that they’ve always maintained – that big government will provide for all.
Unfortunately, that’s a vain hope, isn’t it? Deep in our hearts, we know that sitting politicians are not going to collectively say, “Whoops, we goofed. We’re sending the country into ruin. We’re going to downsize the government, introduce a free market system and then resign and get out of the way.”
Since that won’t happen, the only hope is that a Freedom Fairy will come along – someone who has never held public office before, who says, “You know what? I’m going to buck the system. If I’m elected, I’m just going to jolly well tell Congress that they’re to stop all this collectivist nonsense, stop borrowing money, and turn their backs on all the corrupt deals they’ve made over their political lives.”
Yet, as obvious as it should be that no Freedom Fairy is going to come along, let alone succeed, with each successive election cycle, the more “enlightened” portion of the electorate start to imagine, “Maybe this time it will be different. Maybe we can turn this thing around.” And, there, in that last sentence, is the key word as to the futility of this wishful thinking – the word, ‘we.’
It seems to be human nature to imagine that if a group of us – maybe even a large group – believe that something is a good idea, it will somehow happen. Worse, the ‘we’ suggests that the person in question actually believes that his vote has some sort of significance. As Mark Twain famously said, “If voting made any difference, they wouldn’t let us do it.” Quite so.
In good times, the electorate gets to vote for the lesser of two evils. In the end, whichever one wins, the running of the country remains as previously planned. There may be changes in the style of the leader, but the same playbook is followed, just as before. But in volatile times, such as we now face, the electorate gets to vote for the lesser of two nightmares. In the end, whichever one wins, the running of the country will remain as previously planned, but the electorate will be even more polarized than before and the eventual outcome will be that much worse.
And so, for the more ‘advanced’ voter – the one who understands that the political, economic and social system are spiraling downward, the most natural tendency seems to be to irrationally hope that the Freedom Fairy will come along, wave the magic wand, and send the country back to a time when most everyone worked for a living, took responsibility for themselves, paid their own way and built a strong, productive society.
It’s rare indeed for anyone who finds himself in that situation to honestly say to himself, “I don’t think we’re in Kansas anymore, Toto.” And that’s the tragic truth. The former free, productive society has been whittled away. It no longer exists and it’s not coming back.
Unfortunately, there is no Freedom Fairy, nor is there a Wizard of Oz, any more than there’s an Easter Bunny or a Santa Claus. When empires collapse, the worst thing that a voter can do is to vainly mark down on the ballot card the name of whoever he thinks the latest Freedom Fairy might be. He should, instead, toss his ballot in the dustbin and leave the polling place, in the knowledge that Mark Twain was absolutely correct.
And what, then? Well, that’s an even tougher question to deal with. Because, at that point, he must accept that if, a) his country has reached its sell-by date and, b) it’s going to take him down with it, his only hope is to bow out of the system that he realizes is on the verge of swallowing him up. If he doesn’t wish to become collateral damage, his only choice is to pursue the freedom he cherishes in a location where it still exists. Just as the more enlightened German Jews found in 1938; just as savvy Cuban business owners did in 1959, the last opportunity to pursue freedom is just before it ends where you presently reside.”