Friday, March 14, 2014
Terminal Economic Cancer
Barry, My Liege :
The Economic National Security of the United States of America is dangerously weakened by three distinct cancer-like developments. These developments are like cancer in that they are growing while diverting resources to their maintenance and away from healthy economic growth.
First, there exists a trend toward extreme income and wealth disparities which you have referred to previously as the weakening of the Middle Class. We are now a third world nation with regard to the inequalities of income and wealth. As a result of the decline in Middle Class purchasing power, our economy can grow only slowly, if at all, since our most numerous class of people finds it difficult to buy anything beyond the bare necessities of food, clothing, shelter and transportation. The result of this development is that our economy is now more brittle and than it has been for many years. By brittle, I mean that a small shock today may be enough to tip the economy into recession whereas it would not have happened before.
Second, our financial system managers, derisively called 'Banksters' practising 'Bankery', have escaped meaningful punishment for the chaos they created in 2007 and 2008. Many accused felons walk the street and continue to manage large sums of money. Since the same people are managing the same system, we will have another financial crisis in the United States, soon. Banksters are motivated by simple greed- they can make money in chaotic conditions, so they will engineer more chaotic conditions in the near future. But, the result of the next chaos will be a massive recession that will destroy a large share of our total wealth, put many families on the street and eviscerate our social safety net of Social Security, Food Stamps, Medicare, AFDC, etc., etc.
Third, our National Security System - CIA, NSA, etc., etc. - has gone rogue. It is now officially beyond the control of elected representatives. Once employees realize that they answer to no one, they will be tempted to accept offers of money to act in favor of special interests. There have been convictions of CIA officials for corruption already. Then we will see disappearances, unexplained plane crashes, mysterious deaths and a climate of fear unlike anything we have seen before, but exactly like many other countries. In Chile or Argentina, the Security folks dumped the bodies of political critics out of airplanes over the Atlantic Ocean while their mothers picketed the government HQ.
When we combine a rogue security apparatus with the wealth concentrations and criminalized financial system we have today, the result is a weak economy with no ability to adapt to change. To see this in action, simply read about Egypt, Syria, Iran, Russia in the 1990's and so forth ad infinitum.
However, the real difficulty lies in the brittleness and not the criminality, My Liege. The criminality is bad enough, but the brittleness can be fatal when our country is faced with the choice to change or die.
Sadly our probable reaction to any crisis will be a reaction of force - the Oligarchs and Banksters will call out the security apparatus and the police, mobilize the national Guard and place protestors in the numerous 'secret' prisons we have erected already around the country. This reaction will make things worse. Force will be used to protect the current situation instead of making changes the situation demands.
In order to comprehend what may occur, it is instructive to read about the 1998 Russian financial crisis here : http://en.wikipedia.org/wiki/1998_Russian_financial_crisis
In that event, we may follow the Russian example and install a dictator with a mandate to calm the crisis and form a new government with a new Constitution.
And, My Liege, we will be faced with this choice in this century. It will come from one or more of at least three sources.
A newly published study by NASA confirms this : http://www.theguardian.com/environment/earth-insight/2014/mar/14/nasa-civilisation-irreversible-collapse-study-scientists
END OF GROWTH
In her short paper 'Limits to Growth–At our doorstep, but not recognized,' February 6, 2014 by Gail Tverberg, Ms Tverberg suggests that the capital needed to fund further economic growth in our oil based economy will disappear soon. It will disappear since the price of oil today is not enough to finance the creation of new oil supplies.
The United States depends on economic growth to manage our debt and the federal deficits we create by paying more for entitlements, interest and federal government purchases than we collect in tax revenue.
If we have no growth, then we will find it difficult and expensive to borrow funds by selling T-bills. When that happens, then we will be forced to raise taxes and cut entitlements. However, our political system appears to be incapable of managing those changes.
In that event, we will see massive unemployment, deflation and hunger. In Russia in 1998, one could buy food - if one had any cash - ONLY in Moscow.
Our Federal Reserve Bank has created several Trillions of new dollars while attempting to counter the recent Recession, but that action has so far failed to stimulate economic growth of sufficient magnitude. And, that overhang of dollars has the possibility of creating, or contributing to, a massive hyper-inflation similar to the Russian experience of the 1990's. Our saving grace here MAY be that our FED has more skills than did the Russian central bank. We pray.
Climate change will continue. While we could reduce its effects by making changes in our habits, as a species we do not have the collective will to overcome the Oligarchs and force change into our system.
Many writers have addressed this issue; suffice it to say that our population will look to our government for relief when the effects become more severe. We pray that you My Liege can answer the call.
Population growth seems to be outstripping the planet's ability to provide. Some of the revolutions, riots and terrorism we see today are a result of that.
It will get worse.
While there are specific actions we can take now to moderate these scenarios, IMHO we do not have the ability to take those actions; the specific actions are listed here : http://www.mkeever.com/owsplaneleven.doc
In conclusion, My Liege, please join me in offering my sincere apologies to yours and to my four grandchildren. Please know that we wish with all our hearts that we could have done better.