"The Age of Lies"
by Jeffrey Tucker
“Filling my car used to cost $33,” came a text from a friend to my phone. “Now it costs $70. What gives?” My unhelpful answer: “Very bad things.” In a few months or sooner, it could be closer to $100. No one knows for sure. Madness seems to have broken out on all fronts and in ways that have shaken even the most pessimistic prognosticator.
The spokesperson for the U.S. president says it is all due to the Russia/Ukraine war, which in fact can only account in part for the latest spikes. But, hey, anything to deflect from the reality that the Biden administration’s campaign against fossil fuels, the spending program, the prolonged economic controls, all backed by an easy-money policy pushed by the Fed, all bear a good deal of the responsibility.
Presidential spokespeople rather amaze me. I get that their job necessarily involves some misdirection, obfuscation and spin. But should it really require daily, constant, unrelenting and very obvious lies? I have this fantasy that one day, one of them on live TV will suddenly stop and then break the silence with the words: “I can’t lie anymore. I quit,” and then walk away.
Age of Lies: Yep, it’s fantasy. The reality is that we live in the Age of Lies. All the subjects that have consumed my intellectual interests since my teen years have now swept the interests of the world. No one is exempt from the forces of chaos today. Not blue states. Not red states. Not neutral countries. Not tax havens. Not faraway islands.
This crisis is global and affects everyone on the planet. No one alive today has seen anything like it. The crisis globally is characterized by violence, irrationalism, nihilism, a segregationist ethos, hate, tribalism, state glorification, growing poverty, ill health, inflation and wars cold and hot and small and big.
Each of these seems to be getting worse by the day. No one is powerful enough to stop it. No one knows where it ends. Truly, anything is possible. The barriers are gone. There seem to be no limits remaining. The institutions that once protected the world from chaos have broken. It’s not just that the trust is gone; also gone seems to be basic moral clarity.
Hell to Pay: There will be hell to pay for what the U.S. has done to Russia’s so-called oligarchs. The “West” is confiscating yachts, homes, bank accounts and more, thus guaranteeing a tightening of alliances between Russia and China. This alliance is economic, political and technological. What unites them is hate of the U.S. and its dying empire.
The dollar-based banking system has been fully weaponized against every manner of political enemy, domestic and foreign. It is no longer trustworthy. No wonder why Russia, China and many other nations want an alternative to the dollar. This decision, which seems to have been driven by a hysterical social media campaign plus a desire to test some new track-trace-and-isolate tools, marks a turning point in the global monetary system. Changes that would normally take years to develop have happened within months.
What are the possibilities? I’m open to any amount of speculation. Among the dangers we must include an aggressive invasion of Taiwan by China (what can the U.S. do?) and even the deployment of nuclear weapons. All this alongside the kind of inflation that we’ve never seen since the American revolution.
Pandora’s Box: All of which reminds us of the ancient Greek myth of Pandora and the clay pot (later rendered as a box) that her husband Epimetheus (brother of Prometheus) left in her care. The pot contained poverty, sickness, chaos, death and a host of other evils. The story sticks with us because evil does seem to come in these waves. Once it begins, it feels unstoppable.
Another metaphor concerns the biblical plagues on the land that God sent Egypt as punishment for keeping Israel captive. Floods, horrors, sickness and death took away all the comforts and peace and no one was in a position to stop the unfolding disaster.
The news of the spike in wheat prices (bread!) conjured up other literary metaphors, such as in Les Misérables when bread was so precious that stealing a loaf would mean that you were hunted for life. The same weekend that gave us that news also produced news from the FAO Food Price Index (FFP). This clocks food prices around the world, and is extremely important for assessing global poverty and health. It just hit record highs. Record highs! This means millions more in hunger, and millions dying from it too.
Oil recently fell to under $100 per barrel for the first time in months. It wasn’t too long ago it hit an unthinkable $136 per barrel. That’s a price that has already fundamentally shifted oil production markets. The scramble is on for new sources. Fracking is back alive. There won’t be a word from the White House anytime soon about the need to get rid of fossil fuels. Indeed the Biden administration is panicked and has no idea what to do.
Look at Biden’s inflation advice: “Cut your costs.” It’s now a meme on Twitter and elsewhere. This is how the great man is going to solve the problem, by merely announcing to everyone or no one just to cut your costs!
Think of this too: Two of the greatest achievements of modernity were the mass availability of food and the near-universal distribution of affordable sources of energy. Both of those are in the process of slipping away.
Money, Money, Money: I spent some time this weekend examining money supply data to observe to what extent the incredible inflation we are experiencing. I had a look at M1 and observed some very weird-looking charts. I played with them a bit to understand what precisely happened in 2020–22. Then I suddenly remembered: They changed the definition of M1 in May of 2020. Changed it! And then did not backdate the data with the new definition for easy access.
In other words, it is now very difficult to use existing data channels to understand what happened to a core definition of the money supply over the last two years as compared with previous decades. It can be done but not easily. So it is better just to look at M2. Here we see 26% increases in 2020 to be dialed back but still running at 12% increases. This is for a Fed that claims to seek a 2% inflation target. They are either lying or have been suddenly affiliated with a bad case of inumerancy.
It’s remarkable to think of it, just how more or less normal life seemed only 2 ½ years ago. Few had any idea that we were on the precipice of total disaster. It began and seems not to end. Our lives will never be the same."
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