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Resistance

Resistance 

The status quo is always difficult to alter. Resistance is a normal reaction to change.  The current theatrics in Washington, DC are especially revealing.

Donald Trump is many things to many people. His supporters believe him to be a savior of the American system and way of life. His opponents see him as a threat, Both views are correct. From the beginning, I viewed Mr. Trump as a wrecking ball:

… there has never been an inauguration speech like this one. Contrary to Pogo, Trump defined the enemy and it was not us. This wrecking ball clearly differentiated between the average man and the parasites who inhabit Washington.

The speech was populist all the way. It was anti-establishment all the way.  Clear demarcation lines were drawn. I sense that war was declared on Washington, DC today. There will be no compromise. Either Trump will be destroyed or he will dismantle much of the Washington establishment.

This assessment has been validated by subsequent events. The winner of this existential battle is still in doubt. That itself is rather remarkable. What appeared to be a quixotic crusade now takes on heroic aspects, at least for many outside Washington. What once seemed impossible no longer does.

Don Quixote Trump still may not be favored in his battle against Goliath but the odds have shifted. The American people have been awakened to how the elites have exploited them. Whether Trump wins this battle or not, the Deep State has lost the war. They have been exposed as ruthless, lying exploiters. Don Quixote has suddenly become Goliath.

The peasants have been enlightened. The true nature of current American government has been exposed. No amount of polished rhetoric can undo this knowledge. Attempts to do so will bring out the pitchforks.

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

The Empire Has No Clothes

The Empire Has No Clothes 

empire2Hans Christian Andersen told the story of “The Emperor’s New Clothes” as part of his  Fairy Tales Told for Children collection. The tale is almost two hundred years old. Most know how a little boy was the first to announce that the emperor had no clothes. Andersen’s tale is being re-written today and should be entitled “The Empire Has No Clothes.” This story is one occurring around the world.

Governments are in disrepair and disrepute everywhere. They are increasingly viewed as exploitive, ineffective and catering to privilege. Public interest, the idealistic goal of government, never was real in the sense that it overrode the private needs and wants of officeholders. “Public servants” were never better stewards of public interest than private citizens pursuing their own self-interest. Indeed, once the returns to power increased, self-selection made most politicians inferior in morality and public interest than the typical citizen.

The discomfort and turn against government occurs not because any of its behavior is new. Government has always been dishonest and a scam. What changed over time is the magnitude of government and its burden on citizens. The pain of tolerating it has apparently reached that threshold where people are no longer willing to ignore it.

Governments around the world have become leviathans, meddling in the most minute and personal decisions of its citizens. Supporting government in its infancy required no taxation. Today the average citizen pays more than 40% of his production as tribute and support to the empire. Few believe they get much of value in return.

Even with such confiscatory theft, governments are spending themselves and their citizens into bankruptcy. Capital that entrepreneurs need to start and grow businesses is now consumed by government vote-buying schemes and stupidity. As a result, economic growth cannot occur, jobs are lost and the standard of living declines.

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

Only The Date Is Unknown

Only The Date Is Unknown

apocalypses-begin

economy09-29-10outlookRGB20100929043641The US and world economies are frauds that are coming unraveled. The Greek bailout is the most recent example of “kick the can down the road” solutions. The US housing bubble was an attempt to cover up/recover from the dot-com bust. Now the US is in a financial bubble engineered to recover from the housing bubble debacle. Soon this bubble will burst. Only the date is unknown.

Two predictions can be made with reasonable confidence:

  • The stock market is likely to be halved and that might be optimistic. Only the date is unknown.
  • The economy will eventually resemble the Great Depression. Only the date is unknown.

Nothing is ever certain. An experienced CFO told me at the beginning of my career that “even the impossible has a 20% probability.” In deference to him and years of empirical evidence, I put the the above two events as virtually certain, i.e., an 80% probability.

The Current Problem

Phoenix Capital provided reasons to expect horrible outcomes:dow death cross

  • The REAL problem for the financial system is the bond bubble. In 2008 when the crisis hit it was $80 trillion. It has since grown to over $100 trillion.
  • The derivatives market that uses this bond bubble as collateral is over $555 trillion in size.

 

  • Many of the large multinational corporations, sovereign governments, and even municipalities have used derivatives to fake earnings and hide debt. NO ONE knows to what degree this has been the case, but given that 20% of corporate CFOs have admitted to faking earnings in the past, it’s likely a significant amount.
  • Corporations today are more leveraged than they were in 2007. As Stanley Druckenmiller noted recently, in 2007 corporate bonds were $3.5 trillion… today they are $7 trillion: an amount equal to nearly 50% of US GDP.

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

Olduvai IV: Courage
In progress...

Olduvai II: Exodus
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