Posts Tagged ‘unemployment’

Event horizon approaching

March 24, 2011

The smell of criticality is becoming… well…. critical. Take your pick:

Monetary policy

Gold and silver availability

Geopolitcal turmoil

Nuclear disaster

Political crisis in Europe

Sovereign bankruptcy in the West

Unemployment in the West

Homelessnes in the West

Peak oil

Blatant and overt corruption in the West

Fascism in the West



What you can do

January 16, 2011

If you like many today, feel the Western democratic political process has failed you. If you, like many others, feel you have been taken advantage of by your leaders. If you, like many others, feel you are enslaved by an economic system that exploits you and gives nothing back. If you, like many others, feel there must be an alternative.

Here is what you can do and it won’t cost you any more than US$50. Not only that but it is also legal and safe. No need to take to the streets and risk being shot by an increasingly detached, tetchy and arrogant government.

Read on.

If you follow this blog you know I contend the monetary system is upstream of all human dynamics. Thus our entire socio/economic construct inscribes itself within our monetary system. Similarly, you will also know that the choice and management of the monetary system falls outside of the democratic process. Ergo, not only do politicians impose the system upon society but they also retain the right to manage it by decree.

So much for capitalism or, indeed, for our “open” societies based on democratic principles.

Western politicians have imposed a debt based fiat monetary system upon our societies. In the USA it started in 1913 and then from 1971 it gradually spread to all other countries.

The problem is that debt based fiat money is predicated on inflation. But inflation is a dynamic that conforms to the law of diminishing marginal utility so that greater degrees of inflation are progressively required in order to obtain the same result. In this case the “result” we seek is GDP expansion. So that in  order to keep GDP on a positive trajectory in a debt based fiat monetary system, government must necessarily induce progressively greater degrees of inflation in the economy.

But since inflation conforms to the law of diminishing marginal utility, it follows that the effect of inflation on GDP expansion must inherently be limited mathematically.

As the effect of inflation gradually wanes as it is mathematically true it will, government must necessarily intervene in the economy directly and at progressively greater and deeper degrees till government becomes the largest actor in the economy. This dynamic is accompanied by increasingly more severe and pervasive political crisis that is necessarily always accompanied by expedient politics, aberrant economic regulation and increasing degrees of corruption. As this dynamic evolves, social unrest becomes more pervasive and increasingly violent until it morphs into organized social unrest i.e. revolution.

History is replete with examples of what happens when a sovereign currency is debased.

The clearest indication that our current monetary system is pushing the mathematical limits is the endemic and pervasive corruption that permeates Western governments and institutions. It is clear today that the civic and political mechanisms that have made the West the envy of developing societies around the world have lost their intended function. Western governing elites no longer represent the aspirations and the hopes of their people and are instead beholden to select banks, corporations and unions in an attempt at maintaining the spending power of their office and that of their cronies in an attempt at perpetuating their own personal self interest.

I suppose that one of the clearest and most glaring examples of the incestuous and self serving nature of Western governments is given to us by none other than current US President Barak Hussein Obama whom, despite his pledge of change that carried him to the White House, just nominated another bank executive to the position of White House Staff thus not only reinforcing but also confirming and shouting it out loud from the roof tops that it is the banks that today pull the strings of puppet politicians.

But enough ranting.

Democratic politics is no longer a viable option for the common people. So, other than a violent uprising a la Tunisia, what can everyday folks do?

The easiest, most effective and devastating way to affect the political dynamic today LEGALLY is to exploit the weakness of the monetary system.

I say “legal” because it is still legal to suggest what I am about to suggest. However, beware! In Holland for example, a law is being debated that would criminalize the mere act of suggesting something similar to what I am about to suggest.


Debt based fiat money is predicated on the constant expansion of inflation. Inflation can only be expanded if the credit markets can be expanded.

You want to bring down currently sitting politicians and institutions?

Then you can prevent the expansion of the credit markets.

The easiest way to do that is to start accumulating gold and silver ingots or coins. We are not talking large sums here. If every person on earth acquired one silver ingot/coin and one gold ingot/coin that would suffice to bring the whole house of cards down. We are talking of an investment of US$50 per person at the most. Fifty Dollars!!!

If every single citizen in the West were to purchase one ingot or coin in silver and/or gold, that would deal a very serious blow to the major global banks. Take down the banks and you’ve paralyzed the political process.

If you really wanted to push the boat out there are other things you could do. Once again. These are so far all absolutely legal ways to put a very quick stop to the entire farce that is our political process.

Withdraw all your savings from the major global banks. Open accounts in smaller banks or cooperatives or just hold on to the cash. By withdrawing your savings you force banks !

to curtail their leveraged exposure.


These are very simple but lethally effective ways to put a stop to our governments and their shenanigans. But like everything in life, each action has an equal reaction.

Taking down the banks and paralyzing the political process is easy. In fact it is so easy most people cannot believe it is possible. But it is.

The downside of taking down the banks is that we’ll create dislocations in a myriad sectors of the economy and life in general. Things like public transport or trash collection might be terminated for example. Fuel deliveries might be disrupted. Road and bridge maintenance could be adversely affected. Pension funds might blow up.

Any of the above is possible and more.

However, there is a rationale for taking bitter medicine now rather than letting things plod along as they are.

By letting things plod along, not only are our social services and social safety nets already compromised but there is a more than reasonable certainty that our “leaders” are going to plunge us into a world war.

Essentially, as the monetary system is hitting the buffers and politics have become incestuous and corrupt, social expenditure must be curtailed. Curtailing social expenditure at the same time that the governing elite is caught neck deep in corruption will lead to social unrest and eventually to revolution.

But I guarantee that our “leaders” will not let revolution happen in the “developed civilized” West. Before social unrest morphs into revolution, our leaders will have packaged a nice war somewhere to fight an evil empire that ostensibly threatens our way of life.

The choice today is: bring down the political system legally and lets take the consequences of the subsequent dislocation that is sure to follow … or … plod along as we are doing today and let our “leaders” send our children to the slaughter along with countless and nameless children of parents in faraway lands.

A bon entendeur…

Deflation watch

January 12, 2011

I am enjoying a period of apathy where I can no longer be bothered to point out the pervasive and glaring self serving hypocrisy that is dished out daily from Western authorities in guise of policy. A number of things have happened since the last post but, by and large, none good.

I think that in coming days I’ll just post press articles that I find interesting and/or that highlight any of the themes this blog suggests will characterize our immediate future.

This next press article could go either under any of my previous “tic, toc…” or “deflation” posts.

Downturn’s Ugly Trademark: Steep, Lasting Drop in Wages

Count down to global war

November 25, 2010

Sir Paul Stephenson said his officers had failed to predict the change in mood among demonstrators before the Millbank riot two weeks ago.

Britain’s most senior police officer said the violence, which saw anarchists and students run amok through buildings housing the Conservative Party headquarters illustrated that “the game has changed”.

This is exactly what will lead us into a global war.

As monetary policy has lost traction, social expenditure is being cut right at the time that social costs are rising. Across the West, students, pensioners, the unemployed, the marginally employed and, eventually, even the employed will not be happy with their situation and with the outlook life is presenting them with.

Demonstrations will become gradually more intense and large. Soon, as mobs will be looking for politicians and bankers to lynch, our virtuous leaders will plunge us into a world war.The reason is simple. The West cannot contemplate a revolution in the purportedly civilized and industrialized world. So that when sufficient numbers of people will be angry, hungry and homeless and, simultaneously, the elite will be caught-up in scandal after scandal, revolution is sure to follow.

At that point. We’ll have us a war on our hands.

One more nail in the coffin of government forecasting…

August 13, 2010

By now there are so many nails in this coffin that one wonders where the coffin might be. But, nonetheless, for some reason people still seem, by and large, to have faith in government propaganda.

With thanks to Zero Hedge

And just because I can; some more gloating.

Sovereign bankruptcy reason for war

May 22, 2010

Up till today, my posts were generally titled “Curtailing public spending as precursor to war”.

Today, we can graduate to “Sovereign bankruptcy reason for war”.

Courtesy of Economic Policy Journal we now know that the majority of American states are currently insolvent, and that the US Treasury has been conducting a shadow bailout of at least 32 US states. Over 60% of Americans receiving state unemployment benefits are getting these directly from the US government, as 32 states have now borrowed $37.8 billion from Uncle Sam to fund unemployment insurance.”

Prepare to be dazzled by a new impetus in aggressive political posturing overseas and be prepared for tragic events to unfold in coming weeks that will make you believe that evil foreign forces are threatening our way of life. When the inevitable game of sovereign scape goating begins, keep in mind there is nothing left to threaten in our way of life; it’s all been threatened and devastated by our own leaders already.

Think about that when you turn in at night.

Unusual troop movements

April 22, 2010

If you followed my rants on Facebook many moons ago, you will remember I had posted a note regarding a US Army brigade that had been sent home from Iraq to train for “civilian” operations. The article appeared in the Army Times sometime in October 2008.

The question at the time was why even think of using the Army for civilian operations? It is not like we don’t have numerous entities and agencies that are supposed to cover what the 3rd infantry, 1st brigade Combat Team is sent home to do ostensibly. The army is a fairly blunt tool and not at all adapted to operate in a civilian, urban environment in the West.

Here is an opinion as to why we should be weary of using the Army in developed societies:

Anyway, since then, that tidbit of information lay dormant … till now…

Now, I can’t find an actual official source other than a rumor or hearsay if you will. However, I’ve come across this article today:

The rumor has it that: “This afternoon a local radio talk show host reported that he had been in contact with a member of the military.  This military source stated that the armed forces have been alerted to the strong possibility that civil unrest may occur in the United States this summer, prior to the midterm elections of 2010.

The source described this as ‘our long, hot summer of discontent’ that could be eerily reminiscent of the summer of 1968 when riots broke out in many of our largest cities.

If you follow this blog, you know I contend we’ve reached the end of the inflationary cycle. If I am right, this means that by now government is the single largest actor in the economy (check), that profits are concentrated in the finance industry (check), tax revenue at state and federal level is waning (check), social expenditure is curtailed (check), scandals will come to light on a monthly basis (check) and unemployment keeps rising (check).

So that if I am right, civil unrest is not at all an impossibility and revolution moves up the scale of probabilities.

If I am right and we have reached the end of the inflationary cycle, then obviously some other officials know this too and have known for at the very least as long as I have known; that would be about five years. In this case, advance preparation is exactly what I too would do.

The thing is that the inflationary dynamic moves over very long periods of time. Since we are all on a US$ fiat monetary system based on floating exchange rates, we must all contend with an inflationary dynamic that goes back to the inception of the modern Dollar in 1913. That’s just shy of 100 years ago.

If indeed this is the end of our ability to induce inflation into the monetary system, then the break-down of society is guaranteed and, following through this line of thought, so is a great dislocation of global proportions that this time around, in my opinion, will take the form of a global conflict.

So that if I am right and if I were in the shoes of the leadership, I too would be preparing well in advance by small increments so as not to make a big splash in the media. I mean, you don’t just redeploy a brigade without anyone noticing and if you do so in a hurry then people panic. This is may very well be the application of the principle of the boiling frog at work here.

And here you go… (curtailing public spending as precursor to war)

April 9, 2010

As the now famous series of Curtailing Public Spending as Precursor to War on this blog progresses, poster “Eldorado” on the VOY forum brings this nugget to our attention:

Excerpt (emphasis added):

JEFFERSON — In the ongoing financial crisis in Ashtabula County, the Sheriff’s Department has been cut from 112 to 49 deputies.  With deputies assigned to transport prisoners, serve warrants and other duties, only one patrol car is assigned to patrrol the entire county of 720 square miles. […] Ashtabula County Common Pleas Judge Alfred Mackey was asked what residents should do to protect themselves and their families with the severe cutback in law enforcement. “Arm themselves,” the judge said. “Be very careful, be vigilant, get in touch with your neighbors, because we’re going to have to look after each other.

And that’s exactly the type of thing you don’t want to do when a crisis is developing. That’s because if the “authorities” should not be able to pull us out of this crisis anytime soon, not only will you have a lot of angry people on your hands but you’ll have a lot of angry people that are armed… not a good thing…

Now read the following article:


PHOENIX – The Arizona House voted Thursday to make the state the third in the nation to allow people to carry concealed weapons without a permit, sending the governor a bill that would allow Arizonans to forego background checks and classes that are now required.”

See! This is the thing. Events rarely happen in isolation. Rather, what happens is that a series of seemingly unrelated occurrences eventually coalesce into something greater than the sum of its parts.

As the economic crisis develops, tax revenue declines just at the time that social costs are rising. If at the same time the monetary authorities find it difficult to induce inflation into the system as is the case today then government has no choice but to curtail public services and, eventually, terminate some programs.

However, as the inevitable abuse of power, scandals and malfeasance gradually come to light (i.e. AIG, Goldman Sachs, Fannie Mae, Lehman…) students, the unemployed, the destitute, the marginalized and then, eventually, the employed, the retired and the elderly will not take kindly to the new juncture.

So, before mobs start roaming the streets looking for some politician or banker to lynch, we’ll have us our war… the global one this one…because I can guarantee that no main stream politician in the West can ever even countenance the idea to take responsibility for what is happening. Much better to build straw men of evil foreigners and religious nuts that ostensibly threaten our liberty… so that when the shit hits the fan, we can just whip the mobs up into a murderous frenzy and pack them off to the front to fight for their presumably desirable way of life…

… and so the wheel turns…

Gold looking awfully alluring still and ever more…

A bon entendeur…

Eh! No sooner am I finished typing the above that AP reports the following:

I wish I was wrong but I have to tell you guys this. You better brush up on your self sufficiency skills… sooner rather than later…

No joy in confirmation…

February 25, 2010

Greece, Spain, Latvia, California, the UK, Italy… it could be anyone.  It really does not matter. What matters is that this is the clearest indication yet that our monetary system has hit a brick wall; a mathematical brick wall that is enshrined in a monetary logic predicated on accelerating credit and money creation at rates that far exceed the rate of growth of the economy.

The rationale for the use of an unchecked fiat monetary system is well established. Fine. Now we have to deal with the political and social consequences of said system. Namely, when the monetary system hits the wall as it did in the 30s and again in the late 60s and again today, the result is always the same i.e. excess debt, gross industrial overcapacity thus rising unemployment, declining purchasing power,  implosion of asset values with the direct result of a collapse of state tax revenues.

Under these circumstances, rolling over debt becomes increasingly difficult till the moment it becomes impossible. Try this for size. Just in the current year 2010 the USA will have to roll over something in the region of US$450Billion. That’s just the USA.

If you cannot spot the problem, here it is. In a US$ based fiat monetary system predicated on floating exchange rates as we have today globally, sovereign currencies derive their value from the value of other currencies. Hence, sovereign currencies derive their value from other sovereigns buying each other’s sovereign debt.

$450Billion is pretty much a whole chunk of the entire global sovereign ability to buy debt. This means that in order to succeed, the US government must attract virtually the entirety of budgets of most sovereigns thus leaving no funds available for countries to buy any other country’s debt…. ergo… the floating exchange rate mechanism as contemplated by our current monetary system is broken…. kaput; dead; it is no more; it is pushing up daisies;

Where do we go from here?

If our politicians were a sober well meaning bunch, I’d say we have nothing to worry about. A bit of austerity for a few years and we’ll be on our way again.

But politicians being what they are and operating in a legal and political environment that is geared towards ensuring expediency over efficiency or intrinsic value, I say a world war is a lock-in.

The problem starts with the inability of government to finance its requirements via tax revenue.  Thus government increasingly relies on the capital markets. As even the capital markets begin to show the strain, governments must curtail public spending.

Curtailing public spending brings you this:

As you curtail public spending and as public anger rises, and as the shenanigans of the power elite keep coming to light(

the public is sure to turn violent.

As the public turns violent, governments take the brunt of the violence and political control may be lost and anarchy and/or revolution ensue.

That’s the point at which governments must have done their homework well in advance and prepared a bogeyman somewhere off their shores so as to be able to, the moment come, turn the attention of the masses away from their own failings and the failings or our entire economic/social/political models.

The crux of the problem

February 23, 2010

Zero Hedge reports what in my opinion crystallizes the count-down to a global war as a means to get out of a funding jam that, despite the several dozen Trillion Dollars our governments have shoveled into bank coffers, is clearly not solvable with the traditional policy tool of excess spending.

That graph is the breakdown of government income.

In the following article linked in the ZH piece above, you are presented with the reality of the situation. That is, state revenue is dwindling and unemployment figures are massaged by gargantuan borrowing to pay for unemployment insurance.

Here is a peek at state revenue expressed in % change yoy

FRED Graph
The question in my opinion is this. If unemployment keeps rising and tax revenue therefore keeps declining, what happens when states will no longer be able to borrow more in order to pay for unemployment insurance?
Banks are making obscene profits not two years after they willingly and deliberately brought themselves to the brink of extinction and had to be saved for the good of humanity. If banks are so healthy why are our governments still allowing them to disregard mark to market rules? If the health of banks is so paramount to the well being of society, why is unemployment still rising? And why is state revenue still declining? And why is the Money Multiplier at multi decades lows?