"Intentional Inflation and Perpetual War"
Large scale democracy is a scam. People never know what
is going on... and, in effect, leave the governing to the elites -
who can’t seem to resist ripping them off.
by Bill Bonner
Poitou, France - "What was it that made ‘The West’ triumphant? Rivers (making commerce easy). A fighting spirit (ready to go to war with others). Diversity (plenty of different peoples to go to war with.) The longbow? The long rifle? Artillery? Energy? The Industrial Revolution? The rule of law? Democracy?
All of these ‘reasons’ - and more - have been proposed. And who knows? Maybe it was a confluence of factors. But for whatever reasons, Europeans conquered Africa, the Americas, India, Australia and much of the rest of the world... not the other way around. But of course, the long sweep of history has its own patterns. We do not design them or control them. We just play our roles. We think what we need to think and do what we need to do. And like a big, lazy ol’ river... the currents of time just keep rollin’ along. However robust the empire of The West may have been in its early days, in its modern form it has some obvious infirmities.
The Business of Empire: While the early European imperialists - especially the Spanish conquistadors - made it pay, the US never really got the hang of the empire business. It conquered, but got nothing much from it. It brought back no treasure... nor, after 1807, even any slaves to sell on the open market.
America’s ‘empire budget’ was always almost 100% debit and no credit. Most empire schemes are ways to steal wealth from victim nations for the benefit of the victors. But America’s model was different, more swindle than outright theft. With no net gain coming from the enterprise itself, it was just a way to take wealth from America’s middle classes and redistribute it to the military/industrial/surveillance/thinktank/WallStreet/university elites. The rich got richer, thanks... at least in part... to the empire.
Rather than raise taxes, however, the feds borrowed. And as the costs rose, so did the debt. This week, it passed the $35 trillion mark. Like a ball and chain, the heavy weight of debt now reduces America’s freedom of movement. It can cut its interest rates to fight recession... but it cannot raise them to fight inflation.
And it gets worse. Currently, US debt grows at about 7% of GDP, or more than 3 times faster than GDP itself. It’s not hard to see where this leads. Marketwise: "‘America is going bankrupt’ Elon Musk issues a warning as interest on US debt was equal to 76% of income tax collected in June - and is expected to exceed $1.14 trillion this year Add the cost of interest to the ‘empire budget’ itself and the toll for 2024 is over $3 trillion — or more than 10% of the nation’s entire GDP.
Ultimately, the scale of the debt will force a policy of intentional inflation, in which the feds try to reduce the value of the debt by lowering the value of the currency in which it is calibrated - the dollar. At the current conditions, they will need inflation at about 7% per year just to keep even.
The other thing that doomed the Western Empire was its political system. Democracy is all well and good, but not when it is fake. And it is only real when ordinary citizens know what is going on and have some control over it. That is, effectively, what Aristotle said 2,300 years ago. When you get ‘beyond the herald’s cry,’ he said - that is, beyond the size of a small city - democracy turns into some form or tyranny.
Members of a family may vote, for example, on where to go for their vacation. They will have their own preferences... and some idea of what they might have to give up to finance it. But almost nobody - including members of Congress themselves - knows what is actually hidden in the laws they pass. Nor do they have any idea of the real costs. Instead, they imagine (correctly) that the obligation will be shoved along somewhere into the future... onto the shoulders of some unknown people... who don’t vote now and will never actually understand why their prices are rising.
Sooner or later, ‘The People’ realize that the elites despise them... and are taking advantage of them. They turn to anti-Establishment politicians... ’populists’ and tyrants. They want a ‘strongman’ who promises to save them from the know-it-alls.
European governments try to placate the mobs by delivering education, medical care, and pension benefits; they operate almost like vast compulsory social insurance programs. The US, meanwhile, the leader of The West, tries to rally its people behind a program of perpetual war. Around every corner and behind every tree, Americans see their great empire being challenged by evil spirits. They must meet the challenge with ever more sanctions, bombs, guns... Homeland Security, the NSA, FBI, CIA, Seals, snipers... a $2 trillion F-35 fighter plane, and most important, more money.
Of course, they don’t have any money, so the extra spending must be done on credit... and added to the national debt... speeding up the rate of decline. Stay tuned."
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