No Middle Ground ~ The Risk Averse Alert

Monday, February 24, 2014

No Middle Ground

Today's vulnerable financial paradigm still offers no analytical middle ground worth hanging a hat on. "Hyperinflate or die" remains the global banking system's mantra. Institutional response to the 2008 financial crisis desperately seeking to sustain the post-Bretton Woods status quo serves nothing more than to extend a transitory illusion. The credit bubble maintaining the global banking system's solvency is fatally unsustainable. Extreme monetarism characterizing the post-Bretton Woods era dominated by the "best and the brightest"—captains of finance and self-appointed masters of the universe—is inexorably leading the world toward inevitable, all-inclusive doom.

Practically speaking, too, the means of forestalling overt hyperinflation rather forcibly imposes death. This is by design and a direct consequence of widespread adherence to a game of make believe sustained by institutions of questionable character exerting considerable influence in both the private and public sectors.

Consider dire conditions in the euro-zone periphery and the nuance of the same imposed in Ukraine at the hands of neo-Nazi gangs. These are echoes of things destined to become only more pervasive. The game of make believe serving to elevate finance capital to its present day, dominant position demands both scarcity and violence. This is the means by which power is maintained over people and, most emphatically, their representatives in government. Indeed, per violence, here in the United States we might instead consider November 22, 1963 rather than August 15, 1971 as the date from which our journey toward doom began with a bang. Ever since President Kennedy's assassination not only has the meaning behind "the home of the brave" gained increasing cause demanding the fruits of the American Revolution be asserted and secured by citizens of good will and their political representatives alike, but circumstance whose portent could effectively nullify Section 4 of the U.S. Constitution's 14th Amendment have been persistently cultivated with increasing intensity. This latter point is not yet given much consideration among thoughtful individuals. It's only a matter of time.

The problem of those inclined to discount conspiracy theories is that sometimes facts support the truth of a conspiracy's probability. Consider the parabolic growth of indebtedness in both private and public accounts. More critically, consider the means of repaying this debt. Just look at the coincident, parabolic increase in the United States' current account deficit over the last several decades. Once a nation of producers maintaining a current account surplus in our economic dealings with the rest of the world, we have become a nation of parasites exporting IOUs. What's more, the velocity of increase in our indebtedness must be feverishly sustained lest the mountain of IOUs be left to collapse. Look no further than the ongoing actions of global central banks to substantiate this truth.

Where, then, are captains of finance who should be leading the charge to secure the means of freeing central banks from the now permanent necessity of actively providing a backstop to a banking system obviously in grave peril? Still infected with the due diligence disease? This at the very least we are left to conclude.

How about actively subverting the national interest? There's no shortage of evidence to back this charge! Must we wait for the day when the full faith and credit of the U.S. Treasury, indeed, is called into question?

Who would we rightly blame should this day arrive sometime in the not-too-distant future? Bought-and-paid-for fools in Congress who took, hook, line and sinker, the claim made by the few and far between among beneficiaries of wildcat finance insisting markets are perfect regulators of rational behavior? Or will we rightly condemn those whose illegitimate cause not only widened the gulf between the haves and the have nots, but imposed death sentences on an increasing swath of humanity at every turn?

Peril evolving over decades has solidified since 2008 into a foundation upon which its driver now is set to move into high gear. Why is this risk being tolerated? Plainly, the so-called "magic of the market" has been shown to be the black kind. Five years plus flooding the global banking system with but more dollar-denominated IOUs only further proves that, perpetuation of a Ponzi scheme does not a solvent banking system make. Why is the inevitable day of reckoning being postponed? Is there meaningful coincidence to the fact that, a significant component of the game of make believe sustaining an unsustainable Ponzi scheme requires the manufacture of geopolitical conflict and a permanent state of war?

Hyperinflate or die is the paradigm we are ensnared by. Vain attempts at forestalling the effects of the former requires death be increasingly imposed on fellow human beings. Make no mistake, friend. Enemies to the constitutional republic of the United States are at work here. What's more, this lose-lose paradigm threatens to bankrupt the U.S. Treasury. You can say goodbye to any chance of a real recovery if that should happen.

A Ponzi scheme is staring everyone in the face, one whose likes is still met with a consensus in denial. Shall we tally one stroke to the value of public education, then, as time spent in youth developing capacity to understand truth is time not wasted as an adult indulging fantasy in a game of make believe, such as careless children are wont to play?

The longstanding call here that the U.S. federal government be possessed by persons of such moral and intellectual character as recognize the wisdom of seizing the Fed is once again reiterated. The Federal Reserve is a woefully underutilized weak flank made only more so by garbage it has willfully taken onto its balance sheet. A real recovery ending all grave threats such as we presently face will not occur until the credit-creating power of the nation's central bank is directed toward enterprises whose long-term consequence measurably increases the productivity of the nation's labor force. Today the Fed's credit-creating power is illegitimately directed toward enterprises that principally serve to marginalize and debase labor. As such, today's Federal Reserve is demonstrably unconstitutional.

You really have to wonder whether the Fed's present, hopelessly insolvent condition was in fact the very intention from the moment this institution was created a little over a century ago. Likewise, through its present day actions we might fathom how the 20th century's Great Depression remains a terrible curse in fact. Not because of what happened then, but rather because its worst consequence might yet be felt!

Risk of a Weimar Republic repeat sometime in the not-too-distant future is increasing with the spread of the due diligence disease to the very top of the capital structure—lenders of last resort. Our enslavement to the scourge of monetarism guided by belief free markets can do no wrong—a belief decidedly proven a delusion in 2008—rationalizes today's tsunami of misapplied (illegitimate) credit that, otherwise formalizes the Federal Reserve System's technical insolvency. This truth is made no less formidable by deception requiring Fed credit be backed by debt pouring from the U.S. Treasury, that today's confidence game be made to appear viable.

Momentary stabilization of a dying patient does not alter the patient's fate. Its doomed state under an ongoing and increasing starvation regime—further destroying the productive powers of labor—in fact is being purposely imposed for the sake of making the patient's grave condition nigh impossible to cure. Events in Ukraine warn that we have yet to see the worst state of this dying patient's spiral into the tomb. That the curse of the Great Depression is breeding insanity tempting a repeat of the Weimar Republic's hyperinflation vividly reveals the simple fact that, given our current paradigm, there is no middle ground.

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