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EDITORIAL
The Inevitable Collapse of the World's Economic System – It's Coming
By Anthony Wile - November 07, 2015

The world's economic implosion is getting closer. It's not something that is a staple on the nightly news, but it is taking place.

Because it is not commonly reported, investors may not understand fully how debased the economic environment has become. Japan, Russia, China and Brazil as well as the West are all plunging economically and thus interest rates – one sign of distress – may be going lower not higher.

The European Union doesn't anticipate growth and the Fed anticipates but doesn't act as if it believes it. And now Bank of England's Mark Carney has weighed in with his own negative forecast.

From the BBC:

Forecasts for the first change in interest rates since 2009 have been pushed further into the future following the latest reports from the Bank of England. The Bank said that the outlook for global growth had weakened, which was depressing the risk of inflation. Economists think that indicates rates will not rise until the second quarter of next year and perhaps later.

The Bank once again held UK interest rates at the record low of 0.5%. The Bank's Monetary Policy Committee, led by governor Mark Carney, voted 8-1 to keep rates unchanged. UK interest rates have now remained on hold for six-and-a-half years.

We went through a period when the Bank of England in aggregate burbled happily about an ongoing "recovery." But recovery has been flushed down the so-called memory hole. Remember the "green shoots" of yore? It is all fiction, gas-baggery, monetary propaganda. There is no recovery. If the Fed raises rates it will be a tiny move upwards. But frankly, I'd be surprised even by that.

Just a few days ago, Yellen was quoted as saying the Fed would consider negative rates if the economy soured. Here, from Reuters:

The Federal Reserve would consider pushing interest rates below zero if the U.S. economy took a serious turn for the worse, Fed Chair Janet Yellen said on Wednesday. "Potentially anything – including negative interest rates – would be on the table."

Yellen said the idea would have to be carefully studied but indicated that banks might be apt to lend more money if they were receiving payment for money stored with them.

It is really incredible that people can put credence in this kind of economic mumbo-jumbo. The point of negative interest rates is that the bank is enriched by its savers and investors. But no matter what moves are made to support banks, it is the health of the economy that will drive the demand for money and thus for lending.

Central bankers are extraordinarily powerful in the modern era. And for central bankers every recession is a monetary problem and every answer involves the hammer of financialization.

They never call it debasement, of course, because that's a blunt term not used in the polite society of high finance. But one way or another the knee-jerk financial solution is to add to the money supply. When the business cycle is at its nadir, this solution is often described as pushing on a string.

The other problem that modern central banking faces is one having to do with forecasting. Central banking and much else in modern society as regards industry and economics is built on the superstition that backward-looking data can produce forward-looking, accurate predictions.

But this is impossible. An individual may possess several impressive degrees, may have a high IQ and a great industrial pedigree, but it will make no difference, as is shown over and over again.

Central bankers, among others, have nonetheless raised the cult of the "expert" to an extraordinarily high place in modern society. This is part of the larger technocratic impulse. The idea is that only the most formidably intelligent and well-educated people can be entrusted with the reins of society.

These individuals are commonly held to be able to make better decisions than those of us with less intelligence and education. This is the myth but it is not the reality.

Decision-making involves choosing directions that an institution may adopt in order to have more success. Again, the use of backwards-looking data to make predictions about the future in any detail is not a logical exercise.

Society has been poisoned by "experts" and the enormous power they wield. Nowhere are experts more entrenched or celebrated than in money business. Central bank predictions are constantly touted and celebrated, though they are almost never correct.

The larger issue regarding expert edicts of any sort is that they have the force of law and amount to price fixing. Price fixing inevitably generates scarcity, over-abundance, queues, etc.

Only the competitive market can generate a valid price because the participants are acting of their own free will. But capitalism itself, as we have learned, is riddled with large facilities that are propped up by judicial power. Inevitably the decisions that issue out of these entities distort the economic fabric in big and little ways.

Multi-nationals, large corporations, central banks, money center banks and the vast panoply of vendors that populate the military-industrial complex derive at least part of their profitability and authority through the monopoly power of state force.

The current environment of state-supported bigness may be among the most extreme that the world has ever seen. After 100 years of distortion, manipulation and mercantilism, this chapter of "capitalism" is coming to a close.

And the close will not be quiet or calm.

When this blowoff comes it will hit very hard because the fantastical jumble of mercantilist "capitalism" is delicately balanced and piled very high. When the supports finally crumble, the system will surely collapse with catastrophic totality.

For those who see clearly how such a collapse can occur (without knowing the exact timeline), there are numerous avenues to choose from when it comes to safety and wealth preservation. The world's prognosis may seem grim, but that doesn't need to hold true for yourself and your family. Introducing readers to these solutions is one of the objectives of The Daily Bell.

We will continue down this path, noting solutions as they arise and discussing reasons they ought to be implemented. We recently presented the innovative mining firm Seabridge to our readers because at this point in the business cycle, junior miners may start to see at least modest appreciation. Seabridge is well-positioned to take advantage of what may soon occur.

Seabridge has the added advantage of retaining much of its gold production in the ground. This may prove to be an extremely prescient decision. If the price of gold goes up relative to the dollar, Seabridge and its shareholders may reap the benefits of extraordinary leverage.

The system of financialization that has been inflicted on the West and the world over the past 100 years or more is coming to an end. Trees do not grow to the sky and neither do quadrillion-dollar derivatives markets.

Here at The Daily Bell, we'll continue to sound the alarm about this corrupt and ruinous system while suggesting potential solutions that people can examine and perhaps adopt. Seabridge is just one of a number of such presentations and we look forward to providing additional ideas as they come to our attention.

Posted in EDITORIAL
  • Donna Matrix

    Why don’t they do a redenomination? Take off two zeros and thereby deflate the money supply. $25 would become 25 cents. People would buy, buy, buy…..

    • Guy Christopher

      The easiest, fastest, most efficient way to ‘devalue’ the dollar is for the government to become a public market maker in gold. Buying at one price, like $5000 per troy oz, and selling at a slightly higher price, like $5100. Pick a number that pries gold loose from strong hands. The Fed can print enough to pay for all the gold in the US next Monday morning. FDR did that in ’33-34, raising the price of gold by 70% and devaluing the dollar by same. The government may very well have to do that again.

      • Randy

        Guy, you’re talking like the USD actually has some value to it, other than what the next schlub down the street or around the next corner THINKS it has! Can you please explain to a dummy like me, how you can make a valid comparison between something which has NO inherent value to it (USD) and something that has a great deal of value to it (PM)? Maybe you could do that if there was a rational, logical explanation to be given, but alas, there is none to be found for that purpose.
        We are forced to live under a world wide fiat paper currency/electronic bookkeeping entry financial system, something that is based completely upon lies and fraud, and it IS coming to an end very soon. I do not know the exact date, even the ones who control the machine do not know it, but it is coming, make no mistake about that at all.

        Randy

        • Guy Christopher

          Randy, I have no idea what you’re complaining about. Absolutely none. I made no such comparison of dollars to gold in the comment you refer to. On the other hand, I’ve studied gold and silver since I was 8 years old, I’ve been buying gold and silver with US dollars since the ’80s shortly after it became legal to own gold, (and still have it), and I regularly write about gold, silver, money and the politics of money for a publisher who took international honors as the bullion marketer of the year. If a mistake was made, I think it was yours, but I also believe you were just expressing your frustration with the monetary system, which I find understandable and with which I agree. I’m usually on the lookout for cyber-bots and computer code comments designed to obfuscate the discussion, but in this case, I believe you’re a real person just frustrated with the system.

          • Randy

            What the heck do you mean, Guy, that you didn’t make a comparison of dollars to gold?!?! Didn’t you write that line about $5,000 USD for an ounce of gold? Doesn’t that mean you are equating $5,000 with an ounce of gold? Aren’t you comparing a weight of gold with a numerical value of some fiat paper currency there? How can something with absolutely NO inherent value in it (USD), be legitimately compared to something that DOES have an inherent value to it? Have you ever heard the expression “Worth its weight in gold” before? Do you know what that means or where it came from? It came from a time way before we had refrigeration, and so to preserve meats, they were treated with spices and salt and dried in the sun or in a smoke house so they wouldn’t rot. Spices were difficult to collect, and the amount of human labor required to get an ounce of spice from plants was about equal to what it took to collect an ounce of gold, so they traded straight across the boards with each other, weight for weight! An ounce of gold equaled an ounce of spice in terms of value.
            If you go into a grocery store, and look at the prices of various items there, and then make a judgment as to what is a better buy in terms of USD, isn’t that making a comparison? I think that you’re suffering from a mental disconnect when it comes to monetary systems and how they actually work. Do you even get the concept of what money is? Maybe you need to read my treatise What is Money? sometime. Or The Scam of the Financial System.
            If you’ve really been studying PM and their relationship to fiat paper currency, you certainly have not learned much of a lesson there! PM are for holding on to for when the fiat paper currency system collapses, so you will have a medium of exchange to use while there are still a few people around who are willing to make a trade with you. And it’s always a very small window of opportunity, relatively speaking. At some point, no one will want to give up a few cans of beans for even a pound of gold! The inherent value of the cans of beans will far exceed that of the gold.
            Whom do you write for? Can you get me a gig there, writing for them as well? I’m not asking for a steady job or collecting any kind of a fee, I just want to find a good venue with which to educate people through my papers and analyses.

            Randy

          • You write, ” At some point, no one will want to give up a few cans of beans for even a pound of gold! The inherent value of the cans of beans will far exceed that of the gold.”

            Sorry, Randy, this does not correspond to the economic history of the world as we know it. Gold and silver tend to retain value and in the West anyway have often been perceived as repositories of value when more debased, statist currencies fail

          • Randy

            Which economic history are you referring to here? The real one, or the made up one that is put in the books? When you are personally in the position of having to make a decision to give up a few food items which you can eat or drink, and taking in some gold or silver in exchange, which by the way comes with no guarantee that someone else nearby will want to then take in trade that gold or silver for THEIR consumables, you let me know, if you can, which one you’d rather have in your hands. Hunger can overtake the desire to have some metal to facilitate trades with VERY quickly! Stop eating for a week or two, and then think about how much of your gold and silver you’d want to trade for a nice meal of what ever it is that you like to eat. Emotion will over come reason, and you’ll be very wiling to give up a pound of gold for a nice, juicy burger.
            We are on the same page here when it comes to fiat paper currencies failing, I’ve been writing about it since 1996 or thereabouts. It’s NOT just in the West where PM outlast fiat paper, it’s true in every nation that a fiat paper currency system has been tried, just like socialism and communism, they ALWAYS fail because they go against human nature. Even PM have a limit to their acceptance as a storehouse of value in a failed society.

            Randy

          • alaska3636

            Randy,

            There seems to be a false equivalent thing going on here. When people are living at subsistence, the value of gold may drop to zero. However, there is evidence that even during times of great hardship, during the worst ice ages that earth has thrown at people, that cooperation and the division of labor has created environments with a surplus of capital.

            It does not appear that people with the capacity for rational thought hunt and gather for extended periods of time. Namely, people take human action almost by instinct as much as wolves hunt in packs. In the case of surplus capital, people need stores of value and gold is historically a very popular metal. Commodity paper has also played a significant role in undeveloped economies as people have used receipts for stored tobacco and grain to engage in trade. Economies develop pretty quickly is what I’m saying and it seems that gold, silver and, probably some form of paper money would come back into circulation pretty quickly following an economic calamity.

            However, in the moments following a terrible flood, if someone asked me to trade my can of beans for all the gold (supposedly) in Fort Knox, I would probably tell them about this dark place in which they could place their head.

          • Guy Christopher

            That’s an interesting strategy, Randy. Rewrite history, hurl insults, and then ask for a job recommendation. I like that. I never thought that might work for me, but then, I’m a product of a different era. My generation’s concerns were the same as today’s – economically, morally and spiritually – but our solutions seemed different, somehow than stream of consciousness ranting on SpaceBook, MyFace or comment-friendly sites like DB here, who kindly put up with all of us.

            May I offer this strategy to get your view out there: politely contact editors around the globe, arrange to send your best work to them and cross your fingers. If nothing happens, a backup plan would be to start your own magazine, or your own website, or even publish a mimeographed broadsheet out of the garage. Then sell space to advertisers and others to defray costs and produce a profit. I admit that’s old fashioned, but it’s been known to work from time to time. The key is that if you have something interesting to say, people will pay to hear it. In all cases, though, the guy writing the check gets to decide what’s interesting. I wish you good fortune, and I’m sure others do as well.

          • Randy

            I didn’t rewrite any history, it’s right there in your posting about how the price of gold in terms of a fiat paper currency (USD) should be set at some arbitrary number, and then another arbitrary number be set up in an attempt to circumvent a bad situation, namely the failing of our fiat paper currency system! Why don’t you give us a straight up answer to my questions instead of trying to divert them onto something else? I encounter this phenomena all of the time, even with the “editors” and moderators of various sites. My request was tongue in cheek, because virtually no one wants to hear the brass tacks truth as it is too much for them to confront. It’s too painful for them to wake all the way up, because then they’d have to DO something about it, so they roll over and go back to sleep. And since I am out of the system, I cannot accept any payments except in kind or by some cash. When the ATMs are shut down and the EBT cards no longer work, then we will see how quickly people will also shun fiat paper of EVERY nation.
            If you pick up something in one hand, and something else in the other, then put them side by side and look at each one in turn, aren’t you making comparisons there? When you say that the gold in your left hand should be in some ratio to something else in your right hand, isn’t that arrived at by comparing the two things?
            I highly suggest that you bone up on the subject of logic and learn how to use it in your daily life.

            Randy

          • And we highly suggest if you are going to engage in conversation here you drop the personal attacks and just make your points. There’s absolutely no need for that last sentence.

          • Randy

            WHY would someone prefer to engage in knee jerk reactions to life’s situations, instead of using some logic to figure stuff out and resolve any problems?
            I make my points quite well, I think, but because they’re too unpopular, people try to dissuade me from making them. Here’s my challenge to all; just show me with real facts or logic where I am wrong in anything that I may say or write. Please don’t give out pablum in place of truth. We already get enough of that from the politicians and other liars.

            Randy

  • Dimitri Ledkovsky

    Has Seabridge has found a way to function apart from “the system of financialization that has been inflicted on the West”? Otherwise why would somebody who is apprehensive about this 100 year old system (that is “coming to an end”) be interested in participating in its collapse?

    I like the article. It’s theme has morphed into a pervasive meme. Everybody is shouting the same warnings from whatever rooftop they happen to be on: Stockman, Snyder, Roberts, Schiff, Gross are names that come to mind for augmented recent collapse predictions. The consensus seems to be that 2016 is “going to be a very interesting year”.

  • esqualido

    “Potentially anything – including negative interest rates – would be on the table.” Yellen said the idea would have to be carefully studied but indicated that banks might be apt to lend more money if they were receiving payment for money stored with them.”
    Well, at least, bank robbers now have a plausible defense strategy.

  • jim

    Good summary, thanks.
    Straightforward analysis indicates a 99.9% probability that the current global, debt-based “money” system will collapse.
    Practically speaking, it is inevitable and, as Anthony said, the “economic implosion is getting closer”.
    The good news is that this monetary wipe-out may radically reduce the Ruling Class’ ability to fund the military and other madness it inflicts on mankind.
    The implosion cometh; maybe some good things will come out of it.

  • esqualido

    Only a central banker could argue that national debt expansion is necessary in order to “maintain the full faith and credit of the United States,” knowing that it means handing the bondholder a piece of ever-more- watered-down paper.

  • Guy Christopher

    Negative interest rates — still one more default of the US government currency and debt load looming. Much better if we ‘shut down the government.’
    Anthony Wile writes: “It is really incredible that people can put credence in this kind of economic mumbo-jumbo.”
    No one should kid himself — 8 out of 10 people you meet everyday are sleep walking morons. And most of the others are not paying attention.

    • Reflections…

      Doesn’t TPP etc effectively shut down the government? (What’s left of it) – leaving the other parts effectively acting out a movie script of no real consequence after financial constraints and regulatory capture have left only a show of distraction from intolerable denials?

      Is the purpose or device of ‘kidding oneself’ not something expressed in as many ways as people? Perhaps that is the function assigned mind when the heart has effectively collapsed; to assert some means of justifying the fragments of self that survive.

      The whole idea of elitism is to create dependence on systems of control that present themselves in respectable or acceptable forms whilst effectively operating control of the many by the very few.

      I don’t know what anyone else believes about mumbo jumbo – but I sense believing in it is offered as the only option in a narrative that is not allowed to be seriously challenged or questioned without meeting penalty.

      I agree that the capacity to think – or the quality of life presence and attention free for the movement of purposeful focused desire – has been replaced by forms of denial in trapped attention.

      I have the sense we meet our reflection – but that this is often of an unconscious aspect of our life of which we are as aware or as caring for as the elite are to humanity at large. That is – I sense the patterning of an ‘elitism’ within our own consciousness is reflected in the world – and that the status quo is therefore “justified”.

      Trying to put the truly positive into ideas is not always helpful – one because it gives target and ammunition to the intent to deny life. But perhaps also because it has to be first uncovered within oneself as a result of withdrawal of allegiance from the purpose or mentality of denial.

      The exposure of what has been believed to be our self – or our reality – as some kind of sham, also reveals what it was working to protect against awareness of.

      Disturbance at the deepest level is associated with terror and paralysis – and the perpetuation of fragmentation in conflict is both a result and a believed defence – albeit temporarily for the ‘winner’ or indeed the preoccupation with not being the loser…

      Perhaps one reason for the abundance of moronic outer presentation is an almost total lack of trust in anything offered by any kind of promise or idea by ‘clever’ people – and so there is a pattern of survival within victimhood that cannot and does not challenge its own premise – excepting perhaps in movie mode – of presented identity in substitute realities – and indeed virtual realities.

      This is not because humankind is not creatively endowed but because that capacity has been heavily denied and controlled and indeed usurped by template conditionings.

      • asadstate

        I think that the 80% sheeple that you speak of know in their subconsciounous that they are living a lie, but are too afraid to open the smallest crack in their façade, for fear that their whole lives will be shown as un-real.

        • Ah but is that not what we use the ‘subconscious’ or unconscious’ FOR? To keep what we are not ready to face, tolerate of feel – split off from the fragments that then can at least seem to prevail or ‘be in control’.
          One of the ways that can support transformation is to offer real support for transformation rather than persist in the denial/control mode that judges and separates off rather than listening and feeling with.
          Such is the nature of self righteous ‘control’ that it is oblivious to either self-righteousness or the acts of judging, blaming, rejecting and denying that persist and maintain a divide and rule or coercive society. Indeed it is simply believed that that is the only way for humanity to organize itself and the more others are seen as sheepie the more shepherding is brought into play.

  • I debated with myself whether your opinions were worth responding to. IMO, in this article you continue to babble on, superficially and blindly. You continue to support the historical
    worship of precious metals, gold and silver as if this worship will solve
    anything. You rightly criticize the
    “experts” but can’t think outside the
    box enough to support the non experts.
    Anyone discussing improving the financial situation without considering
    the unfairness of the fractional reserve banking doesn’t know what he is talking about. Fractional reserve banking creates money
    out of thin air and then loans money out at interest. Thus all money ;in circulation is borrowed
    money accumulating compound interest.
    When the money is paid back there is no money left to pay the
    interest. Therefore, more money has to
    be borrowed at interest to pay the previous interest, on and on, and on
    forever. Then we wonder why we cannot
    seem ever to get out debt. A typical ponzi scheme but supposedly legal or at least being allowed. Any money created out of thin should be shared equally with every adult in order to have a just world. Of course this idea is considered some kind of ism so as to automatically discount it.

    • ron17571

      I see a scenario where people are left holding a shiny object that they can’t eat and nobody wants. Or having gold just gets you killed by others who value this metal. Silver at least in small amounts.Makes sense as something to buy food or supplies with. Paper money could be used to wipe with,If crinkled up enough times to make it soft.(not my choice)
      Our government’s continued support for using cheap overseas labor over having jobs in our own country is strange to say the least. Common sense tells you that there is no way for us to match such cheap labor countries. Also that they can’t afford our products.
      I think we are already in the middle of a collapse.Covered up by massive debt and money printing.

      • jsmith

        You are onto something that I figured out back in 1972 when Japanese imported cars began their massive invasion. Sure, they were better built, but it began the loss of jobs here in the automobile industry trickling down to steel, etc. And yes, how can this country compete with Asian wages even if they go up to $5.00 or $6.00 an hour. Who cares if they can’t afford our products, the important thing here is to protect American jobs and increase them by taxing foreign products, just like they do to us. Tit for tat, tough if they don’t like it. Sounds like a trade war, which in any even Asia is winning, and if nothing is done further loses will take place. Secondly, it amazes me that neither administrations presently and in the past wants to tackle illegal immigration. You would think that with our high unemployment, at least the minimum would be to stop all immigration now. Something tells me that the termites in Washington have become our enemies. Perhaps our only hope, and I say this wearily, is to vote for Trump. After our experience with our latest imperial presidents, can it get any worst?

        • Samarami

          “…After our experience with our latest imperial presidents, can it get any worst?…”

          You have your finger on the pulse. Now if you can eliminate use of the term “our” you will be on your way to helping all of us come up with a cure.

          Sam

      • Bruce C.

        The fact that most “experts” agree that had the Fed and other CBs not backstopped the financial system back in 2008 “there would have been martial law all in America” sort of “proves” that – assuming the experts were right. The financial and monetary systems have hardly changed since then so without continual unprecedented support by the CBs they would resume their collapse. Until then things are in suspension.

    • Samarami

      “…Then we wonder why we cannot
      seem ever to get out debt…”

      I am out of debt. I can’t speak for you. Nor “we”.

      I do not disagree with your premise of “…the unfairness of the fractional reserve banking…” “It” is definitely unfair. Criminal, in fact. You outlined banking succinctly.

      But monopoly state is unfair. Do you support monopoly state? As long as you have a state, you will have the likes of fractional reserve banking. Read this: http://www.ozarkia.net/bill/anarchism/library/DemystState.html A “state” or “nation” or “country” can only exist when a sufficient number of the serfs residing therein support it. Once that support is withdrawn, the state cannot survive.

      The parasite must keep its host alive.

      First things first. Let’s encourage — urge — each other to abstain from beans:

      http://www.anarchism.net/anarchism_abstainfrombeans.htm

      Once enough folks come to see voting as a criminal act, and cease doing it, “we” might witness some success in ending fractional reserve banking. Central banking will dissolve. Sam

      • As long as you use money, you are in debt because all money is borrowed money demanding to be paid back with compound interest, I know it doesn’t make sense, but that is the setup. This confusion IMO keeps the Ponzi scheme afloat because it is difficult to understand and realize what to object to and the need to correct the problem.

        • Samarami

          It is not that I don’t understand what you are saying, Elhughman. Psychopaths (read this: http://www.agoracosmopolitan.com/home/Frontpage/2008/01/02/02073.html ) have befuzzled the hoi polloi into being forced (for their own good, of course) to use fiat but counterfeit media of exchange — which, by its nature, is debt. It is part of the religion, or science, of rulership. Because it (fiat “money”) is worthless. Backed only by religious faith in a mindless abstraction called “the state”, or “government”.

          That’s not the argument — or the question.

          The question is: do you support monopoly state? If so, you in fact do support fractional reserve “banking” — and all the other scams that are concomitant with monopoly government. And you should probably register with these lunatics and “vote” in their upcoming bread-and-circus event they’re calling “the election”. It might do you some good to feel like you are “…participating in your civic duty…”

          If you do not (support the state), I urge you to abstain from beans.

          http://www.anarchism.net/anarchism_abstainfrombeans.htm

          Your abstinence — or mine — will not by themselves solve the problem of fractional reserve banking. If say 90% of those who would normally plan to participate would abruptly see the light and abstain, that would be a start in ending the scam called “rulership”. Rulership remains in place 100% through a phenomenon called “consent”.

          Read this: https://mises.org/library/consent-governed

          Tomes and tomes — thousands of scholarly writings — have been devoted to this topic (although few authors indeed appear to have the wherewithal to simply end their treatise with, “don’t vote — be free”). And I’m not saying that by all the serfs coming to see the light and cease “consenting” (voting) the problem will end, although the only thing that keeps it in place is consent — “voluntary compliance”.

          For the first time in the history of mankind virtually all government-issued media of exchange are fiat — backed by nothing of value. Debt. And all that debt is set to inevitably implode. It can’t perform in any other manner. That is what will end fractional reserve banking. It won’t be yours or my whining about it.

          The thrust of daily news (“history”) is the spectacle of various units
          of government (“finance”) jockeying to see whose indebtedness will cave
          in first.

          As I so often say: a fun time to be alive. Sam

          • Obviously, Sam does not understand what I am saying, if he still questions whether I support monopoly state whatever that could mean!

          • Really excellent explanation, Sam. Thank you.

    • Your solution to crime of monopoly fiat money is to suggest that this ruinous system be expanded so that its destruction becomes even more widespread. We’d rather do away with it than expand it.

  • Bruce C.

    A technical point: “Yellen said…banks might be more apt to lend more money if they were receiving payment for money stored with them.”

    I think that’s a typo. It should read “…if they were [not] receiving payment for the money stored with them.”

    The Fed now pays the banks about 0.13% on the money stored with the Fed (which is about 30 billion per year) literally for doing nothing. If the Fed sets “negative” interest rates it means the “federal funds rate” would be negative which means the amount of bank reserves held at the Fed (currently about $2.4 trillion) would slowly decrease instead of increase, which is mathematically the same as the banks losing money to the Fed. Since all other rates are keyed off of the fed funds rate all other interest rates would drop too, specifically interest paid by the banks to its depositors. Since they are essentially zero already they would also go negative which means the depositors would pay the bank for holding their money. One would expect people to take their money out of banks at that point but the question becomes where to put it (HINT: Gold and silver). Some interest rates on government bonds (like Germany’s) are already slightly negative but people still buy them or keep them because they don’t know what else to do (AFLAC!!!: Gold and silver). The same may apply to ordinary bank deposits if the fed funds rate goes negative. In any case, the idea is that banks should “be more apt” to lend money if they will simply lose it if they don’t. Of course, that is totally bass-ackwards, as Wile points out, because if the economy doesn’t justify borrowing then people won’t borrow, unless the banks begin paying people to borrow. Stay tuned.

    One thing no central banker has mentioned yet is the disbursement of “helicopter” money. “Money” could simply be given to people directly by, say, adding a few zeros onto the account balances of all bank deposits. A “debt jubilee” of some kind is also theoretically possible. This is why timing is so difficult because the CBs still have several increasingly absurd options that we’re bound to see eventually. Negative interest rates could last for years before the next tranche of debasement is unleashed.

    Japan is considering the monetization of all of its government debt. If the BOJ increases its QE by the amount being considered, it will own all JGBs by 2026, which means the Japanese government/people will have no more interest payments on its national debt. (CBs refund all interest they accrue to the governments they “work for.”) Bernanke considered raising the Fed balance sheet to $9 trillion (instead of stopping at $4.5 trillion, so far) to halve the debt servicing costs of the US Treasury. All western industrialized countries are following Japan’s lead down the rat hole, so the Fed may be next.

    • No, it’s not a typo. Here, from the Reuters article, quoting Yellen:

      This would happen if the economy were to “deteriorate in a significant way,” she said, adding that she believed negative rates “would have some at least modest favorable effect on banks’ incentives to lend.”

      • Bruce C.

        Yes, that’s “true”, but that means the banks would have to start paying the Fed for keeping its reserves with the Fed. It might spur lending for that reason (lend it or lose it). Problem is, for every $100 a bank “lends” only about $3 are debited from its reserves (the remaining $97 are fabricated electronically). That means the US banks would have to lend about $2.4 trilllion/.03 = $80 trillion to consume all of its Fed reserves. That’s a lot by today’s standards.

  • alaska3636

    In the not-so-distant past, the environment accepted a level of organic life that we consider enormous today: mega-flora and mega-fauna. The evidence points to a cataclysmic event that struck more than 12,000 years ago and the environment changed: Siberia, a formerly lush region, froze almost overnight, as the remnants of human predecessors are found in the ice next to mammoths and other long-extinct animals with the food in their stomachs preserved so quickly by the cold that they hadn’t undergone digestion.

    It appears that the event that precipitated the delay of a burgeoning ice age was a meteor which struck one of the Earth’s ice caps sending literal waves of destruction across the globe. I am still trying to wrap my head around it, but it appears that the destruction of an ice cap by a meteor coincided with a tumultuous period of volcanic activity which erupted hundreds of thousands of square miles of soot into the upper atmosphere. So, an enormous flood was followed by conditions that would have, apparently, flash-frozen immense portions of formerly habitable areas of the globe.

    If I have it right, the effects of the flash freeze had a short duration. The cycle of the developing ice age was set back thousands of years by the destruction of a giant ice cap which after a short period of extreme cold, began a centuries long period of irregular warmth. This is the Holocene period in which we find ourselves today where, in the present, a short-term trend of increasing warmth is most likely to be supplanted by the longer-term trend of increasing cold as the ice continues to build up around the poles. The mechanism proposed which seems most likely is the accumulation of ice during periods of low solar activity, but that is perhaps another discussion.

    My point is this: perhaps the environment of our current age may be considered in the future as one that was acceptable for a previously unseen kind of mega-finance in the same way the Earth once accommodated giant sloths and enormous trees. In that sense, all the world is waiting for is a cataclysmic ideological meteor to destroy the edifice of false presumptions upon which the last several thousands years of civilizations have been built and upon which we operate in the world of artificial interest rates, fiat currency and leveraged finance that we see today. If so, the Daily Bell provides the corollary to the flood myths which advise the remnants to seek the highest ground until the cataclysm fades and the time becomes once again ripe to sow the seeds of the future.

    There will be a myth in the future, contained in several esoteric and geographically distinct versions, that will all essentially say the same thing: there was a time when the best of life could be had by simply reaching up to grab the leaves of a tree or even the dirt on the ground; the people grew slovenly and arrogant and, as the gods grew angry, the trees went barren and the dirt fell into the ocean; destruction wracked the land; but, one god took pity on the people and led a few to safety; the people followed the sound of a bell that rang daily and in following it, they survived.

    • I see a kind of ‘rationality’ operating within the illusion of a steady state universe – of a gradualism that actively denies or distances from any ‘God’ associated cataclysm – or indeed direct interventions. But substitutes for all and any such so as to become engaged in self illusion of control over life. Which actually operates as the invalidation and denial of what life is, in exchange for life in image and form.

      Such ‘life’ in image and form may become extremely dissociated from and out of kilter with the actual movement of being – but cannot actually exist or function without the underlying support of the very thing it presumes to be in control of. It’s victory can only be death – yet in its own terms it cant see that – and thinks itself on the verge of a great discovery or achievement – at least in that part which is most focused in the idea of domination and superiority. As with any obsessive fixation – the body and relational context is denied or overridden as if its only function is to serve a mad agenda. The followers of such mad kings and prophets are like the blood supply to cancer cells – depriving the body of its nutrition while feeding ever more to the cells that refuse to die – because perhaps they are hacked from within by viral agencies to which persistent imbalance of deprivation or inflammation opened them.

      The myths that most everyone dismisses as childish or archaic may contain some of the deepest and most practical information triggers available. It all depends on the context of willingness to receive. Locked into self-certainties is no message received that illuminates those who seek to be a light unto themselves alone. Only the Barbarians at the gate.

      Perhaps there is no ‘one size fits all’ reality with its one ruler to hold dominion – and we each experience and in a sense manifest unique pathways among infinite probabilities. Rationality divorced from Heart cannot cope with multidimensionality where Everything happens at Once yet the focus within Everything is the attraction and acceptance of those ideas and experiences that most correspond to the active desire. The desire to ‘get rid of’ parts of who we are can only cause them to temporarily seem to disappear and support self-illusion that can only temporarily prevail. But the original definitions by which the mind split off into control mode are not the only way to see or receive what is here to be, and so the breakdowns of an apparent order also represent the opportunities of a reintegration at a much deeper level than such ‘order’ could ever allow. However, this is a result of expressing and accepting who we truly feel and know ourselves to be and not the attempt to assertions or manipulations of self-image… of what we think ourselves to be. Inner transformational adjustments can reflect in many different outer forms, including cataclysm. The refusal to address the inner gives power to the inevitable crisis of such neglect via outer reality reflection.

      A lack of wholeness cannot manifest integrity, but it can manifest a willingness for reintegration within wholeness. Need met is not a private get. I recall Jesus said that one who sought to save their own life shall lose it – and one who would lose it to the nature of a wholeness of being would find not merely survival – but the timeless and deathless. Everything can be fearfully misinterpreted – but I feel our most primary resource is within – for want of a better word. Not within our inwardness of taking thought but an inner connectedness or communication that outer fixations deny.

      • alaska3636

        Correct me if my interpretation is incorrect: you are making a point about reconciling a nature of infinite, quantum energetic states with a material existence as perceived through the senses and interpreted by a consciousness whose intangibility is equaled only by its tangible effects on the material world. Thus, in perceiving materiality as truth, a person is in a sense providing the negation for the entirety of their being: namely, that what makes finite materiality possible is an infinite, possibly quantum, underlying nature. Yin with out the yang; PB without the J.

        Continuing: by rejecting the nature of duality (itself an extension of a singular nature), a person’s thoughts can effectively manifest their false presumptions in a self-reinforcing feedback loop – a false confirmation of a false presumption further distancing the observer from the nature of observing i.e. lack of “connectedness”. A so-called “obsessive fixation” actually manifests evidence of the observer’s false beliefs due to a false illusion of control and a failure to understand that our illusion of control can effectively be controlled (more like manipulated) by better aligning our understanding of “the nature of things”.

        Beyond a certain point, it becomes very difficult to describe nature or our perceptions of it, so I will leave it at that, in case somebody else wants to chime in before the rabbit hole goes too deep and the Red Queen demands that all our heads be removed.

        • I cannot know if your interpretation is correct for you. I wouldn’t recognize that I said it!
          I referred to an anti-cataclysmic view of the Universe – which has associations with ‘angry punishing God and sinful or failing creatures’.
          Institutional science has a strong bias against even looking into anything that might let all that back in (though with the climate change scenario it is running the same old script anyway – and the cataclysmic and apocalyptic is very much active in collective imaginations or expectancy in various kinds of scenario.
          I spoke of a rationalising mentality that I do not equate with Reason – but with the justification of insanity. Denied or hidden fears and guilts operate a coercively controlled mentality – which s not going to be understood within its own terms.
          But I don’t care to labour a point of not meeting. best to alight in what resonates and leave what does not.
          Harmony within wholeness is of a different order than a sense of fragmentation in which a control is exerted as if upon the whole or part from a presumption of being outside life.

          But yes there have been ages or epochs – and I believe many that are discounted or unaccounted for in conventional history and some of which have traces in our mythic records. They are also ‘written into a collective psycho-emotional imprint that is part of our self definition – regardless whether they are consciously so or not.

    • EDD

      Upon my first reading of your post, I thought that your post was without substance in regard to this article. Then, upon reflection, I began to see a parallel. The Master once stated: “And as it was in the days of Noe, so shall it be also in the days of the Son of man.” (Found in both Matthew and Luke.) This man was a highly evolved soul who had the ability to see into Akasha, which is describe in Hindu though as a substrate from which all things material has it’s existence. Your comments gave me a new insight into the days of Noah. Heretofore, I had always considered this as a reference to man’s inhumanity to his fellows from merely a physical phenomenon. But your comments made me realize that the monetary order in those days was probably very similar to today’s circumstances.

      I have found that Otto Muck’s book, ‘The Secret of Atlantis’, to be one of the most influential sources contributing to my world-view outlook. He examines many of the world’s cultural myths to support his thesis. The term ‘myth’ is one which historians often dismiss as being figments of imagination. The problem with a myth being a fabrication is this: ‘how is it that a myth is generated in the mind of a historical uneducated, by today’s standards, man?’ It is my belief that there is contained within every so called myth, a grain of truth.

      Some 12,000 years ago, according to Muck and other contributors, there was a planetary cataclysm which has been encapsulated in the Hebrew traditions as well as other cultures in the Mediterranean area. Each of these cultures have their version of Noah and the flood. So I believe your post to be well substantiated.

      Referring to my quote from above, the second part of the statement by my analysis carries a deeper meaning than many people realize. The ‘days of the Son of man’ for me represents an awakening to a spiritual existence which many are just beginning to realize and that our physical appearance on this plain of existence is temporal. Shakespeare’s reference to the world as a stage where we play our parts is an interesting idea which brings us back to the developing financial cataclysm as portrayed by the DB. TPTB are masters of promoting fear. When an individual researches the present world order, it becomes inevitable to thought processes that the financial system will fail. It isn’t in my capacity to project what exactly will replace the present system. However, all the world’s major philosophies do point to a projection where we could have a ‘golden age’, a world where each person does to another as he would have it done to him. The new financial system will reflect this premise. Will we be in embodiment to see these changes? My hope is that any kind of economic catastrophe will extend only to those who are the false Shepards. And that ‘We the People’ can regain the vision that the founders’ of our nation gave to us.

  • PAUL H

    Relax – We are simply transiting from a Sabbatean Debt-Slave Based Global Economy into a Sabbatean Engineered Global Economy Based on Necklaces made from Human Ears

  • Praetor

    Excellent article. We are living in a finalization world, not the great present and future, but the past glory of feudalism, where economic rent and the elimination of competition, with unearned profit and revenue as the goal. Crime Inc. is the corporate structure of the one state, extortion and the protection racket if the financial tools it employees. If we the people wish for only peace and harmony on this world we the people will be required to pay the tribute to the crime bosses of the one state. If we the people chose to defy the crime bosses order to pay for peace and harmony, their underbosses of the nation states will enforce the order to pay from their feudalistic overlords at the headquarters of Crime Inc. the one state. Crime Incorporated is the nature of the one state ‘NWO’, and nothing from this day forward will be peace nor harmony, that is not the nature of a criminal organization. The present is the past and the feudal overlords are in a battle for domination over the one state, and we the people are in the middle. As always the enemy of the feudal overlords, ‘ time, age and death’, and competition from underlings. Natural law always has the last laugh on these sociopaths from the past!!!

  • Jim Johnson

    Up until now we have played semantics with what we call our money as being truly “American”. I was, not too long ago, certain we ‘the People’ would not stand for an outright allegiance to global SDR’s, as it would be too huge an insult to the Constitution. My optimism wavers now that nothing short of an abrupt cessation of this convoluted (yet surprising resilient) system will wake WTP up. No amount of even screaming the concerns seems to have any effect whatsoever. Numb dumb or blind. Choose your adjectives. No Bang. Just Fizzle. Sad.

  • Samarami

    “…Central banking and much else in modern society as regards
    industry and economics is built on the superstition that backward-
    looking data can produce forward-looking, accurate predictions….
    When the supports finally crumble, the system will surely
    collapse with catastrophic totality…”

    Very perceptive. Key word here, I believe, is “superstition”. Virtually all economic belief thus far appears to be based upon superstition — religion — the testimony of “experts”. Thanks, Mr. Wile.

    I have a suspicion. The final collapse will not be one of exceptional food or water or shelter shortages (although there will obviously be substantial starvation and catastrophic trauma where these commodities do not find their way in time to alleviate disaster). The collapse will be in the disappearance of “value” as we know it.

    Just to use an example, the “experts” who attempt to teach Bitcoin to dummies like me usually always revert to the use of “dollar” comparisons. As of now, most of us in the place they’re calling “U.S.” can only think and make value comparisons in terms of “dollars”. Increasingly, anarchistic religionists are calling this slice of turf “the USSA” in their angst over the police state phenomenon; but they still have faith in “money’.

    Dollars = value, an abstraction we can mostly all comprehend. Individuals residing on the section of the earth we’ve come to call “Europe” over the centuries have had to assimilate “The Euro” in recent years. Superstition:

    http://www.mensenrechten.org/wp-content/uploads/2014/05/the-most-dangerous-superstition-larken-rose-20111.pdf

    Value comparisons are made with units of religious faith. Slips of worthless paper emblazoned with images of religious icons —
    dead governmentalists on US dollars, live ones in other parts of the world. The Hebrew book promulgated by religionists uses “Caesar” to define the superstition of rulership that is cast upon a “penny”.

    Even precious metals such as gold and/or silver are a sort of religion. You can’t eat, clothe or shelter yourself with metal. And they, also, have been usurped by religious icons called “rulers” (presidents, prime ministers, senators, et al.), with their images cast thereon. Those who believe in the science of rulership will not tolerate private (non-state) minting of gold or silver coin. Read this:

    http://www.thedailybell.com/editorials/28240/Anthony-Wile-The-Dilemma-of-False-Terrorism/

    I choose to stay alive to see the economic collapse. It will be interesting, ‘though not pleasant. There will be few gurus who will “call” (what a weird term of financial braggadocio) the final collapse accurately. I believe the disappearance of value as we know it (and its accompanying religion) will baffle all the “experts”.

    Sam

  • alaska3636

    DB,

    New moderation really impedes conversation. As always, I appreciate the forum – unfortunately, I’m getting old enough to fondly remember them good ole’ days 🙂

  • alaska3636

    If it’s any consolation, I suggested below that future generations would mythologize your work.

  • Johan Rebel

    Superstition is the operative word. The financial establishment is like the rain priests of yore, trying to turn around the arrow of causation.

    When the economy is in stress [earthquakes, few bulldozers left over] interest rates will go up, when the economy is humming along and there is prosperity, interest rates will be subdued [there is economic surplus to sink into making plenty of capital goods].

    The thinking is, that if you lower interest rates, you can bring back prosperity. It is the exact equivalent to using your last stores of water during a drought to make the streets wet because wet streets mean it is raining.

  • Randy

    Interest rates, schminterest rates, it’s ALL just a bunch of phony numbers conjured up out of thin air any way you look at it!! I have yet to hear anyone at all explain to me where the bookkeeping entries actually come from to pay any amount of “interest” on even a legitimate loan!! Since the banksters are the only ones who are allowed by the political/legal system to create fictitious bookkeeping entries (making money out of thin air!!), then how can a society pay an interest rate without going into even MORE debt than they were in before? Or do I need to shut the eff up and sit back down because I’m making too much sense here?
    When you have a fiat paper currency/electronic bookkeeping entry financial system in place, it’s all just a big web of lies that need even more lies piled on every day week after week to keep the scam going! Doesn’t anybody else see this?
    The banksters have a con game going, and in order for it to succeed, it requires the majority of the public to be totally in the dark about how it all works, ergo the statement from Henry Ford about how it’s a good thing that the American public doesn’t understand how our banking system works, because if they did, there would be a revolution before the next morning! But like all Ponzi Schemes, this world wide one will fall apart too. In fact, it IS falling apart as I write these words here! No amount of capital controls or negative interest rates will replace lost confidence in the system.
    These egg heads who like to pontificate about things of which they have no comprehension at all, will try to place the blame anywhere else but on themselves. “No one could have possibly seen this coming!” will be heard far and wide from all of these pundits when just the opposite is true. Many people (especially me!) have seen how all of this would wind up as a train wreck, and did their best to jump off before it happened. But the idiots and fools who stayed on this train in the hope that it would somehow be stopped before the wreck happened, will find out much to their chagrin that they were as wrong as they could be.
    The modern day banking system is totally dependent upon copious amounts of electricity flowing down the wires, as does every other business. When the hyperinflation of the fiat paper currency/electronic bookkeeping entries shifts into high gear, and the electrical utilities cannot afford to pay their fuel bills because there are not enough rate payers sending in their checks, or pay the workers enough to do their dangerous jobs, the lights will have to go off and they will stay off for a very long time. Without electricity available for everyone, no one will be able to pay for anything and so the society will suddenly stop like it hit a ten foot thick brick wall. Doesn’t anybody else realize that you need to burn a fuel of some kind to make electricity? If you take it back far enough, fire is what starts the whole process of electrical system generation. Even down to the burning of fuel in your body to be able to do the work of mining iron and copper, if you can look that far back.

    Randy

  • Alex

    Russia and China are plunging economically? With all that gold in reserves? This is an impossible event. Gold is base money therefore the issue of debasement doesn/t concern these countries at all. Imagine the following – China sets a new price on gold, say a $100000, and what do you think is going to happen in the West whose vaults are literally empty? This is a very gloomy scenario which is very likely to happen. Trust in paper (fiat) currencies will vanish overnight resulting in total chaos. That is what we have to be concerned at the moment.

  • Danny B

    Keynesian economics demands un-ending growth. Our core population is falling. (America). Our wages are falling towards a global mean. The forces that create a global-mean price for commodities AND money (ZIRP) are creating a global price for labor. Automation means that the manufacturing sector needs fewer workers and they will be the lowest paid. This creates a spiral of falling wages–falling consumption. There is no escape from efficiency.
    ALL governments eventually default. The too-big-to-fail banks are also the primary dealers. Instead of TBTF, it should be, too important to regulate / curtail. These TBTF banks have just been downgraded. This is an enormous psychological step. They must be in extrem(is)ely bad shape for S&P to downgrade. The primary dealers are in such bad shape that they are desperately raising cash; http://www.zerohedge.com/news/2015-11-06/what-do-they-know-primary-dealers-are-liquidating-corporate-bonds-unprecedented-pace

    The FED has no army and has been commandeered to be a money-machine for runaway socialism. http://www.forbes.com/2009/07/31/bernanke-volcker-greenspan-fed-independence-opinions-columnists-john-tamny.html
    S&P is warning about GOV defaults; http://thehill.com/policy/healthcare/259337-obamacare-risk-fund-nearly-depleted-sp-warns

    ZH, ” Social Security’s various trust funds currently hold about $2.7 trillion in total assets; yet the government itself estimates the program’s liabilities to exceed $40 trillion. And Social Security’s second biggest trust fund, the Disability Insurance fund, will be fully depleted in a matter of weeks.”
    As wealth creation left the scene, poverty moved in; http://theeconomiccollapseblog.com/archives/21-facts-about-the-explosive-growth-of-poverty-in-america-that-will-blow-your-mind

    Armstrong; “The question how do empires die is absolutely critical to surviving the Sovereign Debt Crisis.”
    “Empires do not die by HYPERINFLATION – that is reserved for the fringe. When an empire dies, it historically has ALWAYS been by DEFLATION/STAGFLATION. How? Real wealth is driven from the ABOVEGROUND economy into the UNDERGROUND economy where it is hoarded and tucked away. This is why we find hoards of Roman coins. This reduces the VELOCITY of money and commerce collapses. This is ALWAYS AND WITHOUT EXCEPTION how empires die. ”
    http://www.armstrongeconomics.com/693-2/2012-2/where-do-empires-go-to-die-and-when-they-do-die-how-do-empires-die
    OK, so wealth is driven underground. GOV has a solution for that; http://www.businessinsider.com/how-negative-interest-rates-would-work-2015-11

    Armstrong; “What Destroyed Rome was its Unfunded Government Employee Pensions” http://s3.amazonaws.com/armstrongeconomics-wp/2011/05/armstrongeconomics-rome-unfunded-pensions-051811.pdf
    Kotlikoff; “$205 Trillion in Unfunded Liabilities” http://dailyreckoning.com/205-trillion-in-unfunded-liabilities/

    Armstrong, as usual, goes on to denigrate gold,,, and other commodities. He just doesn’t get it,,, or maybe THAT was the price he paid to get out of the pokey. He talks about GOV going after all wealth and people taking it out of the economy. Obviously, if you are going to hide wealth for the future, you want whatever is accepted by the largest number of people.
    Here is an EXCELLENT article on the pathology of bureaucracy. It fits us to a T. http://www.oftwominds.com/blognov15/collapse-cheap11-15.html
    Here is a link with more details; http://www.energeticforum.com/general-discussion/13014-economic-pressures-37.html

  • Danny B

    Socialism requires a command economy but, a command economy has never worked. The more that the PTB push for a centralized economy, the more things go wrong.
    Jim Grant;”We are in a regime of price administration. Price control is a policy that has failed for millennia. ” ” We are under the governance of former tenured economics professors who think they know more than they could possibly know.”
    http://www.zerohedge.com/news/2015-11-07/2008-crisis-didnt-come-nowhere-jim-grant-slams-feds-utopian-world-economic-sleepwalk
    As if it wasn’t bad enough with economics professors running the show, We have idiot lawyers too.
    “Then the central banks have the bonds, which they could never sell again, and as debt rises, the central banks go belly up. Honestly, this is what we deserve for electing lawyers who think they can just write a law and make the impossible happen.”
    Armstrong also has a very good explanation for the 3 types of inflation;
    “If we follow the logic here, QE is supposed to “stimulate” the economy by reinventing inflation. But does this only create cost-push inflation or asset/currency-inflation rather than demand-inflation that marks economic growth? The first two forms of inflation reduce the living standard as net disposable income shrinks. Demand inflation requires confidence as people invest expecting to make more in a boom, not punishment. This type of stimulus will widen the gap the socialists talk about between rich and poor for it will only create asset inflation. So it is hard to follow the logic that QE alone, while hunting money for taxation, will have any stimulus impact other than eroding the economic base.”
    http://www.armstrongeconomics.com/archives/38997
    OK, so QE erodes the economic base. Ending QE wipes out almost everything. 1/2 the pundits are convinced that the FED will raise rates. 1/2 the pundits are sure that they won’t. The economists have been seriously wrong every time for the last 5 years so, it is anybody’s guess. Either path is destructive.
    The FED is stuck with $ trillions in bonds that it can never sell. I suppose that U.S. GOV will default to the FED when times get tight.
    When speaking about price inflation, you must recognize the difference between the 3 types. Demand inflation is when prices go up because the economy is honestly growing. There is no possibility of demand inflation when wages are falling. So, all price inflation that we see is spill-over from money supply inflation.
    One write claims that GOV will try very hard to juice the economy for the upcoming election year. They are out of bullets AND juice. http://mobile.fuw.ch/article/recession-created-by-central-banks/

    OK, that is a summation of the good news. The bad news is; after we crash, we will never escape.
    Robots Will Change World Beyond Recognition Says BoA
    The Telegraph comments on the viewpoint of Bank of America in Robots May Shatter the Global Economic Order Within a Decade.
    “Robots will take over 45pc of all jobs in manufacturing and shave $9 trillion off labour costs within a decade, leaving great swathes of the global society on the historical scrap heap.”Shaving $ 9 trillion off labor costs is also shaving $ 9 trillion off of wages.
    “In a sweeping 300-page report, Bank of America predicts that robots and other forms of artificial intelligence will transform the world beyond recognition as soon as 2025, shattering old business models in a whirlwind of “creative disruption”, with transformation effects ultimately amounting to $30 trillion or more each year.”
    “We are coming close to the crucial “inflexion point” when it is 15pc cheaper to use a robot than to employ a human worker.”
    “The social effect is to squeeze out those at the bottom of the employment ladder, rendering them almost unemployable without re-education. Bank of America describes this as the “displacement of human labour”, estimating that almost half of US jobs could be at risk.”
    What if they are too stupid to educate? Re-educate for what. We just don’t need them in the labor force.
    “Productivity will soar but wages will not rise at the same pace, if at all. The owners of capital will take an even bigger slice of global income, pushing inequality to yet greater extremes. Labour’s share of the pie peaked at 65pc in 1975 in the rich countries and has already dropped to 58pc.”
    Right, capital will take a bigger share. No it won’t. Lacking wages, there won’t be any buyers.
    “not to mention the 800m illiterates in the world. It is easy to imagine the explosive political consequences if governments fail to take action to mitigate the effects,” How do you mitigate stupidity?
    “We may achieve the dream of prosperity without toil as robots take over, but find ourselves living in a jobless dystopia.”
    “The higher the wage inflation, the greater the incentive to replace workers with robots.”
    Read more at http://globaleconomicanalysis.blogspot.com/2015/11/robots-will-change-world-beyond.html#DfK7gmIhkmVSpDYw.99
    MANY politicians see socialism as the only cure for runaway automation. The mass murderer (vaccinator ) Bill Gates says that only socialism can stop global warming. http://i100.independent.co.uk/article/bill-gates-says-that-capitalism-cannot-save-us-from-climate-change–b1xNpbL8O_x

    Mother Nature always allows “superior” species to overtake “inferior” species. What if the superior species is a robot?
    Labor’s share of income continues to drop. if capital owns all the robots, the income from the labor of the robots will accrue to them. Capital just grows and grows. Aggregate human wages just continue to shrink. IT’S ALREADY HAPPENING. Manufacturing and capital are pushing things like the TPP and the TTIP. This would give all control of commerce to supra-national companies and take it away from GOV. They can’t make a profit because our wages are shrinking. They count on more control to make up for lost earnings.
    Do you think that they will drive UP wages? ALL the Western trade agreements are attempts to lower costs to meet lower consumptive power. Capital is hard at work trying to create price deflation. If they accomplish this by creating wage deflation (aggregate), it will be a zero-sum game.

    • Bruce C.

      It’s an interesting conundrum. If one abstracts away the distinction between humans and machines and just considers the costs of production (whether by humans or machines) then the only jobs “available” (or economic) for humans will be those that machines can’t do. That means that fewer and fewer jobs for humans will be available as machines steadily increase in capability. So what of the unemployed/unemployable humans during all this? In theory they would have no money/income and so would “starve”, but then so would the “demand” (i.e., monetary ability and willingness to pay) for the machines’ production. There has to be some equilibrium point in which the relatively few employed humans (including the owners of the capital/machines) would “have to” subsidize the unemployed so they can survive. There could even develop a vested interest by all humans to slow or cease the development of machines/capital for their own collective survival. Perhaps we are reaching that point already.

      That said, I don’t think this line of reasoning/development is inevitable, but something like it is clearly beginning to occur.

      Great post. Thanks.

      • Danny B

        You’re welcome. Bruce, you don’t seem to be boxed in thought-wise. I read a VERY interesting story some years ago. Somewhere in the not-so-far future, 3d printing and robots have progressed to the point where they can make and do anything. The only thing that they can’t make is a baby. All currency is backed by babies (numerical) because anything else can be turned out in infinite number. Production is relative to consumption and consumption is relative to population. All currency is denominated in a fraction of a “baby”.

        I forget the details of the story but, it was an interesting thought experiment.

  • Ansen

    The current environment is reminiscent of the “I Love Lucy” episode where she is on a production line trying to manage an increasing amount of product and finally collapsing. That is how the monetary controllers must be feeling. The problem with the system is that savers can vote with their feet when they feel the rape coming and pull their currency out of the bank. This modern bank run must be stopped by making those who hold and use currency criminal. What amazing time we live in.

  • Many arrows

    Sounds like you have read his work, but if not, you would enjoy Nassim Taleb

  • Hankster

    Heads up! All of us need to stop calling the current financial system Capitalism. It is NOT Capitalism……..IT IS DEBTISM!!! Come on think about it.

    • A good point, which Gerald Celente made (again) in his last interview at The Daily Bell

  • alohajim

    My three cents : DB has got the best commentators, always offers level headed, whacko free analysis, and Mr. Wile is exceedingly polite and restrained when referring to the people and the system that have enslaved humanity for far too long. How one can write such an article and not use more appropriate language such as ‘psychopathic’, or ‘evil’ is remarkable. Please keep up the good work focusing on, without exception, the one and only real issue of importance in our world : bankers owning the earth by creating fiat currencies from nothing. They’ve set up an elaborate matrix across all aspects of society to hide the hoax and the giant con from us. They will fail, humanity will triumph, and DB and like minded voices are helping this process.

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