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The Fed Detests Free Markets

The Fed Detests Free Markets

Paul Gauguin Tahitians at rest (unfinished) 1891

To be completely honest, I wrote -most of- the second part of this a while ago, and then I was thinking this first part should be part of the second, if you can still follow me. But it doesn’t really, it’s fine. I wanted to write something to address how little people know and acknowledge about how disastrous central bank policies have been for our societies and economies.

Because they don’t, and they have no clue, largely and simply because of the way central banks are presented both by themselves and by the financial press that covers them. Make that “covers”. Still, going forward, we will have no way to ignore the damage done. All the QE and ZIRP and NIRP will turn out to be so destructive for us all they will rival climate change or actual warfare. That’s what I wanted to talk about.

You see, free markets are a great idea in theory. Or you can call it “capitalism”, or combine the two and say “free market capitalism”. There’s very little wrong with it in theory. You have an enormous multitude of participants in an utterly complex web of transitions, too complex for the human mind to comprehend, and in the end that web figures out what values all sorts of things, and actions etc., have.

I don’t think capitalism in itself is a bad thing; what people don’t like is when it veers into neo-liberalism, when everything is for sale, when communities or their governments no longer own anything, when roads and hospitals and public services and everything that holds people together in a given setting is being sold off to the highest bidder. There are many things that have values other than monetary ones, and neo-liberalism denies that. Capitalism in itself, not so much.

…click on the above link to read the rest of the article…

We Can Only Choose One: Our National Economy or Globalization

We Can Only Choose One: Our National Economy or Globalization

The servitude of society to a globalized economy is generating extremes of insecurity, powerlessness and inequality. 

Does our economy serve our society, or does our society serve our economy, and by extension, those few who extract most of the economic benefits? It’s a question worth asking, as beneath the political churn around the globe, the issues raised by this question are driving the frustration and anger that’s manifesting in social and political disorder.

A recent essay examines these issues in light of Brexit, which the author sees as a manifestation of dramatic but poorly understood changes in Britain’s economy over the past 60 years:

How Britain was sold: Why we need to rethink the case for a national capitalism in the age of uncertainty.

“One of the reasons Brexit has become unstuck is that the changing nature of the British economy since the 1970s and 1980s has made it hard to identify what the economic interests of the nation really are.

If nothing else, Brexit has been a long overdue education in the realities of Britain’s economy.

While both liberals and Marxists argue that the nationality of capitalism does not matter, there is a need to rethink the case for a national capitalism in this age of economic inequality, political fracture and geopolitical uncertainty. If nothing else, by embedding the economy more deeply into the nation and the daily lives of its citizens, and by directing itself towards national purposes and having a greater stake in developing national skills and innovations, a national capitalism would underline and reinforce that lost idea of the common good.”

It’s shocking to recall that Britain had a large and vibrant domestically owned auto industry in the 1960s, and remained a major industrial power / exporter.

…click on the above link to read the rest of the article…

The Green New Deal and Accursed Wealth

The Green New Deal and Accursed Wealth

Pulp mills, Longview, Washington. Photo: Jeffrey St. Clair.

Accursed Wealth! O’er bounding human laws,
Of every evil thou remains’t the cause:
Victims of want, those wretches such as me,
Too truly lay their wretchedness to thee:
Thou art the bar that keeps from being fed,
And thine our loss of labour and of bread.

Al Gore missed this memo, written at some time between 1809 and 1813, by the poet John Clare in Norhamptonshire, England. However, in his latest op-ed, It’s Not too Late – The climate crisis is the battle of our time and we can win, in the New York Times, September 22, 2019, the former Vice President helpfully notes that the fastest-growing occupation in the United States is solar installer and the second fastest- growing is wind turbine service technician. The loss of Clare’s world is un-remediated. The loss of our world, apparently, is salved by the growth of mostly low-wage ‘green-tech’ jobs. Clare, at least, identifies the cause of his loss – Accursed Wealth, or, as we might call it today, capitalism.

Gore, in his best, ever youthful, Gee-Wiz journalese proclaims that, “…we are in the early stages of a sustainable revolution that will achieve the magnitude of the Industrial Revolution and the speed of the digital revolution, made possible by new digital tools”. John Clare’s erstwhile bucolic freedom had been proscribed by the British parliament’s Enclosure Acts early in the nineteenth century, under which he lost his rights to the common lands that were seized for the benefit of proto-capitalist land-owners newly cognizant of the wealth generated by grazing sheep. Wool, like cotton, was a fiber fundamental to the modern capitalist ethos whereby the acquisition of wealth transcended the interests of both humanity and the natural world.

 …click on the above link to read the rest of the article…

A globalised solar-powered future is wholly unrealistic – and our economy is the reason why

A globalised solar-powered future is wholly unrealistic – and our economy is the reason why

Over the past two centuries, millions of dedicated people – revolutionaries, activists, politicians, and theorists – have been unable to curb the disastrous and increasingly globalised trajectory of economic polarisation and ecological degradation. This is perhaps because we are utterly trapped in flawed ways of thinking about technology and economy – as the current discourse on climate change shows.

Rising greenhouse gas emissions are not just generating climate change. They are giving more and more of us climate anxiety. Doomsday scenarios are capturing the headlines at an accelerating rate. Scientists from all over the world tell us that emissions in ten years must be half of what they were ten years ago, or we face apocalypse. School children like Greta Thunberg and activist movements like Extinction Rebellion are demanding that we panic. And rightly so. But what should we do to avoid disaster?

Most scientists, politicians, and business leaders tend to put their hope in technological progress. Regardless of ideology, there is a widespread expectation that new technologies will replace fossil fuels by harnessing renewable energy such as solar and wind. Many also trust that there will be technologies for removing carbon dioxide from the atmosphere and for “geoengineering” the Earth’s climate. The common denominator in these visions is the faith that we can save modern civilisation if we shift to new technologies. But “technology” is not a magic wand. It requires a lot of money, which means claims on labour and resources from other areas. We tend to forget this crucial fact.

I would argue that the way we take conventional “all-purpose” money for granted is the main reason why we have not understood how advanced technologies are dependent on the appropriation of labour and resources from elsewhere.

 …click on the above link to read the rest of the article…

Neoliberalism and Environmental Calamity

Neoliberalism and Environmental Calamity

Photograph by Nathaniel St. Clair

Current conditions represent a political emergency of sorts, meaning that ways of solving environmental and social problems will either be worked out or circumstances, led by the environment, will assume a life of their own. Given that these conditions are the result of historical processes that were decades and centuries in the making, understanding how we got here is crucial to resolving them.

The relevant ‘we’ here is being redefined through the relation of late-stage capitalism to the world. Climate change and species loss are shifting boundaries, shrinking the universe of arable land, breathable air and drinkable water. Fortress America, previously a conflation of place with one’s status in the imperial order, is largely the source of this vengeful gravity. Political geography is about to get interesting.

In this regard, the IPCC just won’t quit issuing proclamations. Joining climate change and mass extinction is dead and dying land. It seems that you can’t just denude a few hundred million acres of arable land, destroying the ecosystems to which it belongs, without consequences. What mystical clairvoyance could have imagined such an outcome? And more to the point, what can be done about it?

With updates on the breadth and depth of environmental calamity coming fast and furious, still missing is the political path to salvation. The only certainty— as offered by the authors of said calamity, is that we, the little people who add up to 90% or thereabouts of the demos, want— nay demand, calamity. The proof: we still eat, live indoors, wear clothing and find our way to and from work.

However, this is but mere paraphrase. The direct proof is that we consume. And we do so through the social mechanisms— stores, the internet, etc., that have been provided. From this slim foundation the certainty is built that we ‘demanded’ state corporatism, a/k/a neoliberalism, a/k/a rule from above. Markets are the transfer mechanism through which the purchase of a bag of rice becomes support for industrial agriculture.

 …click on the above link to read the rest of the article…

Doubling Down: The Military, Big Bankers and Big Oil Are Not In Climate Denial, They Are in Control and Plan to Keep It That Way.

Doubling Down: The Military, Big Bankers and Big Oil Are Not In Climate Denial, They Are in Control and Plan to Keep It That Way.

Drawing by Nathaniel St. Clair

“Capitalism, militarism and imperialism are disastrously intertwined with the fossil fuel economy….A globalized economy predicated on growth at any social or environmental costs, carbon dependent international trade, the limitless extraction of natural resources, and a view of citizens as nothing more than consumers cannot be the basis…for tackling climate change….Little wonder then that the elites have nothing to offer beyond continued militarisation and trust in techno-fixes.”

— Nick Buxton and Ben Hayes [1]

The ruling class may be an utter failure but that is not stopping them taking aggressive action on climate change. Their chief concern: maintaining power, control and profits at all costs.

The plan is well underway and it sure ain’t the Green New Deal. Just imagine a more extreme version of the world that already exists: where healthcare is rationed; where wealth inequality strangles democracy; where austerity is a weapon of class warfare; where millions die prematurely from toxins in air and water; where war and incarceration is the solution of choice; where people are rounded up in concentration camps; where corporations rule unchallenged; where extreme weather wrecks havoc in an expanding circle of misery. The only new thing about their solution is the stench of fascism that grows ever stronger and more odious.

The Bosses Want More of the Same

When Trump and the Republicans deny climate change, when Pelosi, Pallone, Perez, Biden and Obama join with Trump in sabotaging the Green New Deal or dismissing climate action as too expensive, too dreamy, not practical or too pure — they are all bold-faced liars and frauds.

 …click on the above link to read the rest of the article…

Can Humanity and Nature Co-Exist Under Capitalism?

Can Humanity and Nature Co-Exist Under Capitalism?

Two new documentaries tackle the all-important question of our age, namely how humanity and nature can co-exist in a period of insurmountable capitalist contradiction, especially when humanity takes the form of small businesspeople hoping to exploit natural resources under duress.

Opening at The Landmark at 57 West on May 10th, “The Biggest Little Farm” is a stunningly dramatic portrait of a husband and wife trying to create an ecotopian Garden of Eden forty miles north of Los Angeles. (Nationwide screening info is here.)

Idealist to a fault but utterly inexperienced as farmers, they encounter one obstacle after another in the hope of doing well by doing good. Essentially, they discover that by creating a bounteous yield of edibles destined for the organic foods market, they also attract a plague of gophers, coyotes, starlings and snails that see their farm as a dinner plate. Trying to balance their ecotopian values with the appetites of the animal kingdom becomes an ordeal they never anticipated.

Utterly indifferent to ecological values, the lobster fishermen depicted in Bullfrog Film’s “Lobster War: The Fight Over the World’s Richest Fishing Grounds” are family and village-oriented. As long as they can haul in the valuable crustaceans and keep themselves and their respective towns in Maine and Canada prosperous, nothing much else matters. Not being able to see outside the box, they symbolize the short-term mindset of the ruling class. If lobsters become extinct because of unsustainable practices, the fishermen might turn to other profitable marine life. But when all animals become extinct except for rodents, pigeons and cockroaches, homo sapiens will be next in line.

 …click on the above link to read the rest of the article…

Market Commentary: Faux Statesmanship

Market Commentary: Faux Statesmanship

April 5 – New York Times (Dealbook): “’It doesn’t take a genius’ to know capitalism needs fixing. Capitalism helped Ray Dalio build his investment empire. But in a lengthy LinkedIn post, the Bridgewater Associates founder says that it isn’t working anymore. Mr. Dalio writes that he has seen capitalism ‘evolve in a way that it is not working well for the majority of Americans because it’s producing self-reinforcing spirals up for the haves and down for the have-nots.’ ‘Disparity in wealth, especially when accompanied by disparity in values, leads to increasing conflict and, in the government, that manifests itself in the form of populism of the left and populism of the right and often in revolutions of one sort or another.’ ‘The problem is that capitalists typically don’t know how to divide the pie well and socialists typically don’t know how to grow it well.’ ‘We are now seeing conflicts between populists of the left and populists of the right increasing around the world in much the same way as they did in the 1930s when the income and wealth gaps were comparably large.’ ‘It doesn’t take a genius to know that when a system is producing outcomes that are so inconsistent with its goals, it needs to be reformed.’ Stay tuned: Mr. Dalio says that he’ll offer his solutions in another essay.”

I’m reminded of back in 2007 when Pimco’s Paul McCulley coined the term “shadow banking” – and the world finally began taking notice of the dangerous new financial structure that had over years come to dominate system Credit. Okay, but by then the damage was done. As someone that began posting the “Credit Bubble Bulletin” in 1999 and had chronicled the prevailing role of non-bank Credit in fueling the “mortgage finance Bubble” fiasco (on a weekly basis), it was all frustrating.  

 …click on the above link to read the rest of the article…

The Reasons Behind The Relentless Ideological Onslaught Against Free Markets

The Reasons Behind The Relentless Ideological Onslaught Against Free Markets

I sometimes think that the free market concept is treated like The Hunchback of Notre-Dame’s Quasimodo in the long novel of global economic history. It is considered ugly and undesirable by most people who judge it at a mere glance without bothering to understand it. It is a bogeyman; a scapegoat for numerous societal problems that it has nothing to do with. In reality, the only time free markets do cause trouble is when they are manipulated or misused by elitists seeking to turn them into something other than free markets. And, even when free markets display their great value and internal beauty, many still prefer other systems that are intrinsically corrupt but flashier on the surface.

There are many reasons behind this persistent attitude. However, they are not coincidental or natural. Human beings actually tend to gravitate toward free markets over and over again in history, and away from centralized government interference and dominance in economic trade. But whenever they do, they get hammered down by the-powers-that-be. In our modern era, establishment elites have chosen to be more subtle (for now) and dissuade people from free markets through disinformation and propaganda.

To break it all down to a simple observation – Whenever disaster strikes economically, free markets are blamed. Whenever something is fixed, even if that fix is a temporary band-aid on a sucking chest wound, government involvement and socialism are applauded. And so the cycle continues until free markets become a pariah with no place in our world and centralization becomes the prevailing answer to everything.

Free market trade is ever present at a local level and always has been. But, those who favor globalism are hell-bent on putting an end to any and all private unregulated commerce forever.

 …click on the above link to read the rest of the article…

Rare: The High-Stakes Race to Satisfy Our Need for the Scarcest Metals on Earth by Keith Veronese

Rare: The High-Stakes Race to Satisfy Our Need for the Scarcest Metals on Earth by Keith Veronese

Preface.  Capitalism believes there’s a solution for everything due to Man’s Inventive Brain, but when it comes to getting metals out of the earth, there are some very serious limitations.  In parts per billion, there’s only 4 of platinum, 20 of silver, and less than 1 part for many important metals. Yet they are essential for cars, wind turbines, electronics, military weapons, oil refining, and dozens of other uses listed below.

China controls 97% of rare earth metals.   Uh-oh.

The overwhelming majority of Earth’s crust is made of hydrogen and oxygen. The only metals present in large amounts within the crust are aluminum and iron, with the latter also dominating the planetary core. These four elements make up about 90% of the mass of the crust, with silicon, nickel, magnesium, sulfur, and calcium rounding out another 9% of the planet’s mass.

Our civilization is far more dependent on very rare elements than I’d realized, which are extremely scarce and being dissipated since so few are recycled (it’s almost impossible to recycle them though, the cost is too high, and many elements are hard to separate from one another).

So in addition to peak oil, add in peak metals to the great tidal wave of collapse on the horizon.

What follows are my kindle notes.

Alice Friedemann   www.energyskeptic.com  author of “When Trucks Stop Running: Energy and the Future of Transportation”, 2015, Springer and “Crunch! Whole Grain Artisan Chips and Crackers”. Podcasts: Practical PreppingKunstlerCast 253KunstlerCast278Peak Prosperity , XX2 report

***

Keith Veronese. 2015. Rare: The High-Stakes Race to Satisfy Our Need for the Scarcest Metals on Earth. Prometheus books.

Scientifically, metals are known for a common set of properties. Almost all metals have the ability to transmit electricity and heat—very useful properties in the world of electronics.

 …click on the above link to read the rest of the article…

Barry Lopez on Hope, Capitalism and Environmental Disaster

Barry Lopez on Hope, Capitalism and Environmental Disaster

‘The only thing you can’t do in public is to destroy people’s sense of hope.’

BarryLopez.jpg
‘People have a need to put food on the table and make their car payments and you can’t be angry about that. And if you are, they can’t comprehend your rage. Still, there is a catastrophe right in front of us that’s about to explode.’ Photo from Steven Barclay Agency.

 The Tyee: In Orion magazine, Rebecca Solnit once quoted the poet and bioregionalist Gary Snyder who said, “The most radical thing you can do is stay home.” She wrote that “in the bioregional 1970s, going back to the land and consuming less was how the task was framed… The task has only become more urgent as climate change in particular underscores that we need to consume a lot less… We are going to have to stay home a lot more in the future.” Is she right? Was Gary Snyder right?

Barry Lopez: They are both right in a sense. It’s important to maintain an international awareness of global problems like methane gas releases and climate change. It’s hard as an American now that we’ve pulled out of the Paris accords not to be embarrassed abroad. But it’s important to get outside the bounds of your own nation state, to see what people are experiencing, and to report on what they are doing about it. If you are not in the Arctic, you simply cannot understand the staggering change that we are experiencing through climate change.

…click on the above link to read the rest of the article…

How the Concentration of Wealth is Driving a New Global Imperialism 

Shell Protest Philippines

How the Concentration of Wealth is Driving a New Global Imperialism 

Corporate media today is highly concentrated and fully international. Their primary goal is the promotion of product sales and pro-capitalist propaganda through the psychological control of human desires, emotions, beliefs, fears, and values. 

Regime changes in Iraq and Libya, Syria’s war, Venezuela’s crisis, sanctions on Cuba, Iran, Russia, and North Korea are all reflections of a new global imperialism imposed by a core of capitalist nations in support of trillions of dollars of concentrated investment wealth. This new world order of mass capital has become a totalitarian empire of inequality and repression.

The global 1%, comprised of over 36-million millionaires and 2,400 billionaires, employ their excess capital with investment management firms like BlackRock and J.P Morgan Chase. The top seventeen of these trillion-dollar investment management firms controlled $41.1 trillion dollars in 2017. These firms are all directly invested in each other and managed by only 199 people who decide how and where global capital will be invested. Their biggest problem is they have more capital than there are safe investment opportunities, which leads to risky speculative investments, increased war spending, privatization of the public domain, and pressures to open new capital investment opportunities through political regime changes.

Power elites in support of capital investment are collectively embedded in a system of mandatory growth. Failure for capital to achieve continuing expansion leads to economic stagnation, which can result in depression, bank failures, currency collapses, and mass unemployment.  Capitalism is an economic system that inevitably adjusts itself via contractions, recessions, and depressions. Power elites are entrapped in a web of enforced growth that requires ongoing global management and the formation of new and ever-expanding capital investment opportunities. This forced expansion becomes a worldwide manifest destiny that seeks total capital domination in all regions of the earth and beyond.

 …click on the above link to read the rest of the article…

The Experiment

The Experiment

How much longer will the middle class politely tolerate its own destruction?

A middle class that outnumbers the combined poor and aristocracy is a relatively new phenomenon, dating back to around 1900. The rise of the middle class was the result of Industrial Revolution capitalism. It has been one of the most significant and epochal developments in history, yet the intellectual reaction for the most part has been to either ignore it or treat it with disdain. Now the project to destroy the middle class is well under way, with unpredictable and uncontrollable consequences that promise to be just as epochal as its creation.

Intellectual condescension towards the middle class is so common it’s a cliché. What’s rare are attempts to go back in history and see things through the perspectives of that despised group and its progenitors, the poor.

In 1800, virtually everyone was poor, living under conditions of deprivation and grinding poverty. Even being wealthy was no picnic; present-day poverty-line Americans live better. Life expectancy was an estimated twenty-nine years. Farming, the occupation of most, was dangerous, backbreaking labor from dawn to dusk. Most of those so engaged eked out a tenuous subsistence. There was no electricity, no running water, primitive sanitation and health care, and none of the machinery, gadgets, and appliances we take for granted. Only a few wealthy poets who didn’t have to wrest a living from nature waxed euphoric about its “joys.”

As the nineteenth century progressed, primitive factories, mostly in cities, began producing goods of better quality, in more quantity, and at lower cost than had been possible by artisans handcrafting their wares. No doubt conditions in those factories were abysmal—long hours, pittance pay, child labor, dangerous and filthy conditions, and horrible accidents and injuries. All that has been well-chronicled and dramatized, but an important point gets overlooked. 

 …click on the above link to read the rest of the article…

The Psychological Warfare Behind Economic Collapse

The Psychological Warfare Behind Economic Collapse

The concept of using the economy as a weapon is not an alien one to most people. Generally, we understand the nature of feudalism and how various groups can be herded onto centralized plantations to be exploited for their labor. Some people see this as a consequence of “capitalism,” and others see it as an extension of socialism/communism. Sadly, many people wrongly assume that one is a solution to the other — meaning they think that crony capitalism is a solution to communist centralization or that communism is a solution to the corruption of crony capitalism. The reality is that this is just another false paradigm.

What is most disturbing is that the majority of the public have no grasp whatsoever of the true solution to the problem of corrupt or totalitarian economies: free markets.

Free markets have not existed within the global economy on a large scale for at least the past 100 years. The rise of central banking has eroded all vestiges of freedom in production and trade. Crony capitalism with its focus on corporate power and monopoly has nothing to do with free markets, despite the arguments of rather naive socialists who blame “free markets” for the problems of the world. If you ever hear anyone making this claim, I suggest you remind them that corporations and their advantages are a creation of governments.

The protections of corporate personhood, limited liability, unfair taxation of small business competition and legislation shielding corporations from civil lawsuits are all generated by government. Therefore, corporations and crony capitalism are much more a product of socialist-style systems, not free markets.

…click on the above link to read the rest of the article…

How Faux Capitalism Works in America

How Faux Capitalism Works in America

Stars in the Night Sky

The U.S. stock market’s recent zigs and zags have provoked much squawking and screeching.  Wall Street pros, private money managers, and Millennial index fund enthusiasts all find themselves on the wrong side of the market’s swift movements.  Even the best and brightest can’t escape President Trump’s tweet precipitated short squeezes.

The Donald mercilessly hits the shorts with a well-timed tweet. But as it turns out, this market is in a really bad mood at the moment. [PT]

The short-term significance of the DJIA’s 8 percent decline since early-October is uncertain.  For all we know, stocks could run up through the end of the year.  Stranger things have happened.

What is also uncertain is the nature of this purge: Is this another soft decline like that of mid-2015 to early-2016, when the DJIA fell 12 percent before quickly resuming its uptrend?  Or is this the start of a brutal bear market – the kind that wipes out portfolios and blows up investment funds?

The stars in the night sky tell us this is the latter.  For example, when peering out into the night sky even the most untrained eye can identify the three ominous stars that are lining up with mechanical precision.

These stars include a stock market top, followed by a monster corporate debt buildup, and a fading economy.  In short, the stock market’s latest break is presaging a corporate credit crisis and global recession.

 

BofA/Merrill Lynch US high yield Master II Index yield – this looks like a quite convincing breakout, impossible to tweet down. In other words, the corporate debt build-up is beginning to bite back – and rather bigly, if we may say so (ed note, in case you’re wondering: the little poems are from a Spectator competition in which people used phrases from actual tweets to put together Donald haikus and poems). [PT]

…click on the above link to read the rest of the article…

Olduvai IV: Courage
In progress...

Olduvai II: Exodus
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