Reading time: 10 pages, 3,920 words, 9 to 15 minutes.

As a political science major, you’d think I would use some official definition of ‘politics’. Wikipedia says, “Politics (from Greek politikos “of, for, or relating to citizens”) is the art or science of influencing people on a civic, or individual level…”

However, I won’t do that. I’m a simple fellow so I like to think that politics is simply the way a society organizes itself. It’s not rocket science but it only tells half the story. There are two sides to every coin. Once upon a time, there was something called ‘political economy’. You can’t really understand politics without understanding economics and economics doesn’t make sense if you don’t understand politics.

Unfortunately, in today’s hyper-specialized world we have economists who don’t know jack-shit and we have political scientists who also don’t know jack-shit. That’s the downside of specialization; we have more and more people who know more and more about less and less. Before too long we’ll have specialists who know everything about nothing. No wonder economics and politics don’t make sense.

I’ve also studied economics in University but I’ll be damned if I could understand it. So, as a simple fellow, I like to think that economics is simply about ‘who gets what’. Therefore to understand our society, we need to go back to old-fashioned “political economy” which is how a society organizes itself to determine who gets what. Everything else is just commentary.

Here I focus on Socialism for several reasons. First, it is a path of least resistance so it appeals to people who are intellectually, spiritually and physically LAZY. Second, it appeals to nosy busy-bodies who can’t mind their own business and, being incapable of organizing their own sordid lives, would rather to tell you how to run your life. Third, and most important, we as a society; our politics and economies are becoming more Socialist. It is a slippery slope. We are slouching toward Socialism.

Without writing a text book, let’s piss off everyone and briefly define left-of-center political ideology so it makes sense. Ideology is simply a way of looking at things; an idea or vision. There are many leftish political ideologies but the amazing thing is their similarities. Marxism, communism, socialism, progressivism and liberalism are ALL the same. The only difference is degree and speed. Marxists want everyone to be equally poor and they want it NOW. Progressives and communists are just watered-down Marxists (they’d never admit it, of course) but they too want to meddle and interfere in your life except they’re willing to wait a bit longer to impoverish you. Socialists are simply are fence-sitting Marxists and liberals don’t know what they are although they like to think they’re in the middle so that makes them dangerous, wishy-washy nothings. Like I said, the only difference is degree and speed.

Let’s keep this simple and for purposes of this discussion I’ll lump all these leftish ideologies under the Socialist banner. That should piss off the communists, Marxists, progressives and liberals but, that’s their problem, not mine.

What makes all these ideologies dangerous is their complete inability to understand human nature. They are based on wishful thinking. What makes them even more dangerous is their appeal. They sound wonderful. The Constitution of the former Society Union was a thing of immaculate beauty. It sounded wonderful. All these ideologies sound wonderful except they don’t work in the real world. Why don’t they work? Human nature.

Long-time readers may remember a radio interview I transcribed. A communist was being interviewed. It went like this.

“So, you believe in share and share alike?”
“Yes I do.”
“So, if you had more than one house; you’d give them all up and keep just one for yourself?
“Yes I would.”
“And if you had more than one car, you’d give them all up and keep just one for yourself?”
“Yes I would.”
“And if you had more than one shirt …”
“Oh, wait a minute! I’ve got more than one shirt.”

You see, sharing is wonderful if you’re receiving stuff. Sharing takes on a whole new meaning if you actually have to give up stuff. Wanting stuff you haven’t earned is called greed. Wanting other people’s stuff is called envy. Socialists are also guilty of pandering to another vice. It’s called sloth.

Suppose you and I worked in a mine. Suppose the average miner could produce 30 tons of ore a day. Suppose you’re young, single and healthy and you could produce 50 tons a day. Suppose, I’m old and lazy with a wife and four kids and I pretend I have a bad back so I can produce only 10 tons a day.

A wonderful Socialist notion is, “from each according to his ability, to each according to his needs.” You can produce 5 times as much ore as I can. However, you have only one mouth to feed and I have six. According to this wonderful Socialist notion you should be happy to work your butt off and produce five times as much as me and I should get paid six times as much as you. “From each according to his ability (50 tons VS 10) and to each according to his need (one mouth VS six)”.

How long are you going to bust your butt producing five times as much as me if I get paid six times as much as you for doing a lot less work? According to Socialist ideology, you should be happy with this arrangement. According to human nature, you’d be stupid if you weren’t pissed off with it. In the real world, you’d stop busting you butt. You’d start producing less. In fact, as long as you produce more than me, the boss couldn’t get angry with you. The ‘average’ would come down from 30 tons to a lot less.

In the Soviet Union, the currency, the ruble was practically worthless because the store shelves were empty; nobody produce much and there was little to buy. There was a joke going around the Soviet Union before it collapsed, “We pretend to work and the bosses pretend to pay us”.

Wonderful ideology but, it didn’t work. Ideologies don’t work because they ignore human nature.

Ok, I’ve pissed off enough lefties. Let’s get current but before we do, let’s make sure you don’t mistake my own political ideology as either conservative or Republican or even libertarian. I don’t believe in less government. I believe in NO government. Governments are inherently evil. The bigger they are, the more evil they are. There are few things governments do that cannot be done better, cheaper and faster by private enterprise. That makes me an anarchist. If you have 3 to 5 minutes, read why I Am an Anarchist.

Nowadays, slouching toward Socialism is built into the system and perhaps even hard-wired into our brains as explained above. Both economic as well as political systems encourage Socialism. As times get tough, more Socialist politicians get elected; Obama in the U.S., Hollande in France, Julia Gillard in Australia and so on. The timing couldn’t be worse. The global economic crisis was caused by excessive debt, its recovery is hampered by deleveraging (paying down debt) and now we elect Socialists who know nothing except spending, spending and more spending thus further increasing the debt that caused this crisis to begin with. Do you see the insanity here?

Sticking their noses into other people’s business is typical of well-meaning but misguided Socialists. The over-regulation of small businesses in the U.S. is killing the main job creation component of the U.S. economy. Contrary to popular opinion (which is almost always wrong) it’s not large corporations that create most jobs nor is it governments; governments kill productive jobs. Traditionally, most jobs are created by small businesses, which, faced with onerous regulation, paperwork and now Obama-care, are laying off employees, turning them into part-time workers to avoid paying for Obama-care or just refusing to hire.

One example is the trucking industry. American Shipper magazine, on Feb. 27 reports, “A bevy of regulations is due to hit the trucking industry just as the carriers are finding it more difficult to find and retain qualified drivers.” The result will be higher freight costs and freight costs already account for 8% of every dollar spent in Europe, 10% in the U.S. and 12% in Canada.

In the words of Doug Casey, “These people are truly stupid, in the clinical sense of that word. No matter how badly their meddling backfires, their answer is always more meddling.” If insanity is doing the same thing over and over and expecting a different result then the insanity of Socialist governments is boundless.

This encroaching Socialism is one more reason the global economy will NOT improve but will continue to deteriorate regardless how much the oligarchic power elites and the ass media pretend otherwise. Another reason we’re doomed is brainless Socialist politicians who believe the slowdown is matter of economic cycles and that growth will soon return. Such idiocy fails to understand that it takes financial and banking crises a long time to recover and this ignorance prevents the enactment of policies that might actually help.

Italy, having just guaranteed political gridlock with the election of a comedian convicted of manslaughter and the raunchy criminal billionaire Berlusconi, sees its 10 year Treasury bond interest rate rising and further increasing government debt.

All actions have consequences yet the deluded Italians haven’t a clue how precarious their future is. They’re laughing because they think the rest of Europe is scared of them. Insanity is no laughing matter.

There’s no limit to Socialist stupidity. John Rubino, writing about French President Hollande explains in Why We’re Ungovernable, Part 4: Hollande’s Short Honeymoon “… after inheriting a heavily indebted economy with the second highest labor costs in the Eurozone (4 euros an hour higher than Germany’s), he chose from the standard socialist menu, raising taxes on the rich, promising to increase the government’s overall tax take from 45% of the economy to 47%, and lowering the retirement age for many workers from 62 years to 60. This of course failed to produce a burst of new hiring, and now, six months in, he’s already changing course and cutting taxes.”

Alas, it’s too late. They’re beyond the point of no return. In Socialist France, the government accounts for 56% of the economy. Even Germany, the economic engine of Europe is slowing. The Eurozone is the world’s largest economic bloc and it is sinking back into recession. And, this time there’s no more ammunition. Governments have spent themselves into a debt spiral. Yet, they have to keep bailing everyone out. Global economies have become so interconnected that the failure of even a small country like Greece will start the dominos falling.

Voters become accustomed to an easy life based on other people’s money. I know a family of three generations of welfare recipients living under one roof. None are physically or mentally disabled. All are capable of gainful employment. Yet, the system and our misguided, bleeding-heart Socialist sentimentality encourage such parasitic behavior.

Please don’t misunderstand. I’m quite aware some people need and deserve welfare but when more than 10% of Americans are on disability payments and half of all households receive government assistance, things have gotten out of hand.

The trouble with Socialism is it impoverishes everyone because neither the welfare recipient nor the working taxpayer who funds this welfare enjoys the better standard of living they could have had without Socialism. To see that, takes a degree of imagination most people don’t have.

Speaking about the recent G-20 meeting, Doug Casey says, “… people apparently think somebody actually can and should try to control the economy.” If you think governments can and should control the economy, you’re a Socialist.

I’m not going to argue. The time for debate is long past. Now is the time to prepare. If you aren’t preparing; then at least spare me your whining when the SHTF. I’ll be busy biting my tongue to avoid saying I told you so.

One of the deficiencies of our thinking (or lack of thinking) is most people don’t have the imagination to understand what could be. Heck, most people can’t even understand what is, let alone what could be or could have been. As close as they get is some inane slogan like, “well, it could have been worse.”

Misguided Socialist thinking is largely responsible for politicians’ and the oligarchs’ underestimating the depth of the current economic crisis. We’ve all seen the brilliant quotes from elites during the Depression of the 1930’s downplaying the depth of the downturn and heralding a so-called recovery that took the better part of a generation and scarred it for life. Now we’ve seen five years of the same idiocy. Expect that idiocy to continue for a long time because there’s no cure for stupidity. The last two Great Depressions lasted an average of 19 years and we’re only five years into this one.

Yeah, yeah, nobody except the tin-foil-hats are calling it a depression. It’ll be decades before the historians call it what it is and they’ll likely be writing in another language. If this isn’t a depression then why is U.S. median income been falling since 2000 and is almost back to 1980 levels?

In fairness, the Conservatives such as the Amerikan Republicans and their Tea Party spawn are as much to blame for our current economic mess as the Socialists. The conservative may once have had the right ideas but entirely the wrong timing. It’s too late to cut taxes and government spending. That should have been done decades ago. It would have prevented this economic crisis. Cutting taxes now will only further reduce government revenue and increase debt during a crisis caused by too much debt in the first place. And cutting government spending at a time of reduced consumer spending (which accounts for 70% of the economy) will only exacerbate the downturn. The graph below shows how little deleveraging (paying off debt) is actually taking place.

Nothing will work to remedy this downturn. Repeat: NOTHING. It’s too late. I’ve said it before, I’ll say it again: we are past the point of no return. We’ll continue blindly muddling along until the SHTF. Then we’ll hear the anguished cry, “Who could have seen this coming?” Who indeed?

There has never been a fiat currency that did not collapse. According to Reinhart and Rogoff, who studied eight centuries of financial folly, there has never been one single nation in history that ever recovered from a debt to GDP ratio in excess of 90%. The U.S. is over 100%, Japan over 200% and most other nations are somewhere in between. The few that are less than 90% (Canada is 88%) will be dragged down with the rest when the SHTF.

All this government spending is producing less and less bang for the buck. Look at the chart below for an example of futility. Today, every dollar spent has almost no effect.

Japan’s newly elected Prime Minister Abe promises to cure their two decade Depression by doing more of the same: keep borrowing and spending, only SPEND MORE! Let me know how that works. It hasn’t worked for 23 years. Once again, we see insanity in action.

With our fiat currency and central banks, continual economic growth is necessary to maintain political stability, enrich the predatory banksters and pay interest on the debt. Once debt reaches that crucial 90% level, increasing interest payments makes further growth impossible and our Ponzi scheme house of cards starts to collapse. Consequently, central banks have enacted price controls on money (interest is the price of money and, in the long term, price controls do NOT work).They’re desperately trying to keep interest rates near zero to avoid increasing interest payments. This punishes savers and retirees living on fixed incomes, further reducing consumer spending and actually increasing unemployment (see chart below).

If interest rates were to rise, the increase in interest payments would cause government default and economic collapse. Eventually, central banks will lose control of interest rates as bond buyers demand higher rates to offset increasing risk. We just don’t know when. You’ll know once interest rates start to rise that it’s time to head for the bunker because the next step is a sudden currency collapse and financial implosion.

Japan is a prime example of what NOT to do and they’ve now shown us more than twenty years of failure with a depressed economy exacerbated by the demographics of retiring boomers. When their real estate and stock market bubble burst in the early 1990’s, rather than let bankruptcy and failure cleanse the system, they borrowed insane amounts of money to prop up their banks, real estate and construction companies.

At the same time, Sweden, and more recently, Iceland showed us what TO DO; what works. Both let their banks fail and feisty Iceland is actually prosecuting their banksters. Both recovered within a couple of years unlike Japan’s 23 year Depression.

Never one to learn from history, the U.S. has decided to follow the failed Japanese model by borrowing insane amounts of money, propping up their predator banksters and, unlike Iceland, not one single Wall Street bankster has been prosecuted or jailed, let alone indicted for their role in the financial crisis. It’s obvious the oligarchs own Wall Street as well as Amerikan politicians and U.S. government regulators. Such corruption hastened the end of the Roman Empire.

Socialist spending of other people’s money is also hastening the end of the American Empire. As British Prime Minister Margaret Thatcher once said, Socialism works until you run out of other people’s money. And that’s the path most nations are taking. Collapse is inevitable. Repeat: INEVITABLE. The only thing we cannot predict is the timing. My guess is we may have another year or two at the most. There may still be enough momentum to carry on longer but, there are many potential ‘black swans’ (unexpected events) looming on the horizon that could hasten the inevitable.

You can safely ignore the looming U.S. “Sequestration” political theatre (think fart in a windstorm) along with the Debt Ceiling circus (already raised dozens of times before, of course it will be raised again) and the recent Fiscal Cliff soap opera that turned a mountain into a molehill. That’s the way governments work. They can’t solve the real problems they created (governments ARE the problem) so they invent make-believe problems and pretend to fix them. The graphs below show how pathetic the 2% budget cuts are to the rest of the bloated U.S. budget.

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Not to put too fine a point on it, the U.S. budget is NOT being cut. It’s merely a slight decrease in the never-ending increase.

Expect to be massively manipulated. A business, when forced to cut expenses, tries it’s best to minimize their customer’s pain. Governments, being inherently evil, do the opposite. They try to maximize the taxpayers’ pain. A school board, when cutting spending; will cut busing and sports programs because that has the most emotional impact and causes the most pain.

Federal governments do the same. Agora’s Jeffrey Tucker explains. “Within the [Washington] Beltway, this is known as the Washington Monument Ploy. It’s the most popular attraction in the nation’s capital. The White House loves to close it up at the smallest excuse, leaving people who have traveled for days stuck in long lines. The goal is to impart this lesson: Pay your taxes and shut up, else we will take from you lots of things you love.” It’s how governments justify their perverted existence.

Notice the size of sequester cuts in the bottom right.

Failure to do the right things always results in unintended consequences. Bailing out the banksters and artificially inflating stock markets has allowed corporations to hoard cash. Without customers they can’t create jobs. The Fed’s zero interest rate policy discourages saving so all they can do are mergers and acquisitions like Buffet recently buying Heinz. Mergers and acquisitions do not create jobs; they cut jobs. So the Fed prints more money out of thin air to create jobs which keeps bailing out the banksters and propping up stock markets encouraging more corporate mergers and acquisitions and more job cuts. And, round and round it goes in this death spiral.

This is the way we’ve organized our society to determine who gets what. The least deserving, get the most. What are banksters but middle-men? They produce nothing but they own the politicians and the debt slaves. If the politicians want the funding to get re-elected, they have to keep giving the banksters free money extracted from the few working taxpayers in the form of hidden inflation resulting from all this money printing. Socialist welfare parasites vote for the politicians who promise them something for nothing. And, round and round we go in this death spiral.

Expect to see “QE to infinity” as Jim Sinclair calls it because all they can do is print more and more money out of thin air (increased debt) until it all collapses and saddles future generations with the bill and an abiding hatred for the Boomers who impoverished them.

That’s also the way evil governments work: divide and conquer by creating class warfare to divert our attention from real problems. In this case, the real problems are central banks, fiat currency and Nixon’s closing the gold window (convertibility) in 1971; none of which are the Boomer’s responsibility.

But, as I said, I’m not going to argue. The time for debate is long past. Now is the time to prepare. If you aren’t doing the things I’ve set out over the past five years – eliminate debt, stockpile essentials, distance yourself from government, buy gold and/or silver, etc. etc. then you will be a victim with no one to blame but yourself. Except we know people don’t blame themselves, do they? It’s always someone else’s fault even though I’ve been sounding the alarm for more than five years now.

For millennia, in our futile quest to prove mankind’s superiority, philosophers have debated what distinguishes us from the rest of the animal kingdom. One by one, so-called unique human attributes have been discovered among other animals; opposable thumb, tool use, complex societies, cooperation, communication and language (Apes have learned 300 words in ASL), etc.

Perhaps someday we’ll finally admit the only unique human attribute is self-deception. A monkey might fool another monkey but, a monkey won’t fool itself. Only humans do that. The power elites and their ass media propagandists know how prone we are to self-deception and wishful thinking. It’s sad to see how much better we could have done. It’s sadder still to watch the continuing decline. We can’t stop it. All we can do is prepare.

Do you believe the ass media’s stories of economic recovery? Do you believe the U.S. housing market is recovering and Canada’s real estate bubble won’t burst? Do you believe we can keep spending other people’s money forever; that we can indenture future generations with our debt without repercussions; that actions do not have consequences; that there really is such a thing as a free lunch? If you believe that, then you’re a Socialist and your own worst enemy because you’re tacitly supporting your own slavemasters. This is the way we’ve organized our society; the least deserving get the most and the most productive get less and less.

I’ve said it before but, no one was listening so I’ll repeat the mantra again:
a) We can’t borrow our way out of debt.
b) We can’t spend our way to prosperity.
c) We can’t pretend our way out of trouble.

We’re trying to do all three. They don’t work.

Are you prepared?

Gerold
March 2, 2013

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