Fresco by Johann Michael Rottmayr
"Gods, Demons and Politicians"
And between them all, ordinary, hard-working people...
By Bill Bonner
"We have come to tell you that not only are
the politicians not God; they are the cause of our problems."
~ Javier Milei, Argentine President, yesterday.
Baltimore, Maryland - "On Monday and again on Tuesday, stocks hit new highs. On Wednesday, they were still in the green until late in the day. Then, suddenly, they began to go straight down. Markets insider: "Dow tumbles 476 points as recession fears snap the stock market's winning streak. US stocks plunged on Wednesday as investors weighed the odds of recession and reined in their enthusiasm for expected rate cuts."
Forbes adds: "Shares of FedEx tanked Wednesday after a declining sales forecast delivered during the firm’s earnings report disappointed investors, causing red-hot stock indexes to slide as FedEx’s results revealed potentially worrisome signs for broader consumer spending habits. Investors may have been expecting clear sailing, after the Fed announced its ‘sort of’ pivot. They should look out the window."
An Ugly Vista: More and more student loans are falling into arrears…more Americans say they skip meals to keep up with bills…credit card debt hit a new $1.3 trillion high (with 20% interest!)…Car payment defaults haven’t been this high since the last century; more and more people are working two jobs to keep up with the cost of living.
And Fedex is not just another company. It’s the company that delivers the goods. If its sales and profits are going down, it means that there are fewer goods being delivered…which means, the economy is slowing down.
In the meantime, the risk of a crisis is high. There is more than $300 trillion of debt outstanding in the world…now being rolled over at rates that are 2 to 5 times higher than they were a couple years ago.
Here’s Harry Dent: "Since 2009, this has been 100% artificial, unprecedented money printing and deficits; $27 trillion over 15 years, to be exact. This is off the charts, 100% artificial, which means we're in a dangerous state…I think 2024 is going to be the biggest single crash year we'll see in our lifetimes."
Maybe. Only the gods know. And they’re not talking. In today’s $107 trillion world economy, nobody can predict or control what will happen. All we can do is to study the patterns of history….and guess. But let us try to dive down…beneath the surface chop…to the deep currents below. We have promised to explore the dark regions of ‘megapoiltics’ to find out what is really going on. So, we put on our facemask and flippers…and plunge into the cold water.
The Pretense of Knowledge: The US Federal Reserve pretends to know exactly – within a quarter of a point – what the nation’s key lending rate should be…and is even able to tell us what future rate moves will be necessary to get there. And though it has demonstrated over and over that it is operating far above its pay grade, it keeps at it. The problem, as Milei puts it, is not the chef. Fed governors are not dumb. It’s the recipe. ‘It’s the idea that a group of bureaucrats in an office can plan the lives of millions of human beings,’ Milei explained yesterday.
And the remarkable thing is that no one seems to question it. Why do we have a Fed? Why does it prefer rates that turn out to be too low rather than too high? Nor does anyone particularly care that these geniuses are managing trillions of dollars’ worth of money that is not their own…and that this self-same money is fraudulent. While it is impossible to know exactly ‘why’ any of these things are so, down in megapolitics we find ‘reasons’ that at least sound plausible.
Every society, since the days of the Sumerians and human sacrifices, sorts itself into an elite – an aristocracy, a priesthood, a ruling class – and everyone else. As time goes by these elites – almost by definition; they are capable, well-informed and intelligent – find ways to improve their status and add to their wealth. That’s the process that Milei is trying to unwind in Argentina. The ‘political caste,’ as he calls it, has strangled the real economy in order to give itself special privileges and benefits. Here, you can watch the opening to his speech, yesterday, in which he strikes at the root of the problem. (Click here to view video.)
Show Us The Money: Voters don’t like taxes. Investors don’t like lending to a bankrupt government. So, the simplest way for an elite to take power and money from ‘the people,’ in a modern democracy, is to diddle the money. “I don’t care who makes the laws,” said a shrewd Rothschild,” just give me control of the money.”
In that regard, America’s post-1971 money system was a big step forward – for the elites. Thenceforth, the wages of ‘The People’ remained stable. But the wealth of the upper classes – those who owned the ‘means of production’ – rose steeply. The Wilshire 5000 stock index, for example, of which the common man owned little, rose about 20 times. (The Wall Street Journal reports that equity ownership in the US is at an all-time high. Still, for the average person stock market gains are dwarfed by income from working.)
For the average working man, almost everything went up in price – except the real value of his major asset: his time. So, he had to spend more time to get the basics in life. Before the money switcheroo, he had to labor for about 4 years to buy a house, for example. Today, it will cost him more than 8 years of labor. House prices have gone way up over the last 50 years – gaining more than $30 trillion in value. ‘The People’ may not own stocks, but they own houses. Alas, most of that gain too – about ¾ of it – went to the elites.
In other words, the ‘recipe’ worked for some…but not for all. The ‘political caste,’ got fat and happy. Milei is trying to put them on a diet. But for America’s elite, it’s still ‘all you can eat’... 24/7. More to come…"
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