Forward Observer: The Bubble of All Bubbles

Intelligence analyst Sam Culper at Forward Observer talks briefly about The Bubble of All Bubbles

In today’s Early Warning report, I discussed a number of prominent asset managers who are warning of another market bubble. (Get access to my daily Early Warning intel brief here.)

Federal Reserve Chairman Jay Powell brushed off a question about it during Congressional testimony this week, but it’s clear that the Fed’s easy money policies are inflating yet another financial bubble.

“It will end in tears,” says one investment manager.

But something else caught my attention…

Dr. Michael Burry — the trader who foresaw the 2008 financial meltdown, made famous in the book and movie The Big Short — is warning about the risk of hyperinflation.
He drew a number of comparisons between pre-collapse Wiemar Germany and the United States today.

We’ve heard these predictions of imminent collapse and hyperinflation for the past decade. I’ve been skeptical and doubtful that the threat was ever imminent, but here’s the thing…

THESE GUYS ARE EVENTUALLY GOING TO BE RIGHT.

The window for this happening is likely somewhere between 2024 and 2044, for reasons I described in this morning’s Early Warning brief.

But I want to draw your attention to what you can do to prepare.

I don’t know the exact solution yet, but I can tell you that I’m actively doing four things:

1. Growing my local community and fostering a culture of preparedness.

2. Getting plugged in with local farmers and ranchers, farmer’s markets, and agricultural co-ops, and thinking about how to foster a functioning local economy once the dollar goes.

3. Getting my home and family as self-sufficient and self-reliant as I possibly can.

4. Making sure that I develop contacts for local information-sharing in case the worst case scenario does happen.

Intelligence reduces uncertainty about the future and it fills in “blind spots” we’re going to have during an emergency, however brief or protracted it is. (And I do think we’re headed for multi-year, if not decade-long, emergency.)

Earlier this month, my new training company Gray Zone Activity went live. It’s the online platform where I’m teaching the intelligence and security skills required to navigate this country’s Gray Zone future.

I’m teaching in-person classes this weekend in Austin, Texas and another one next month in Salt Lake City, Utah.

Disaster/Tactical Intelligence classes are being scheduled for Nashville, Atlanta, Phoenix, Las Vegas, Tacoma, New Jersey (TBA), and several other locales.

If you want to schedule a 1-day Disaster Intelligence Course or 2-day Tactical Intelligence Course near you, then let me know by getting in touch. I’ll get as many classes on the books as I can.

And I’d like to invite you to sign up for the Gray Zone newsletter to stay aware of training opportunities. You can sign up at https://www.grayzoneactivity.com/training.

Until next time, be well.

Always Out Front,
Samuel Culper

ZeroHedge: Michael Burry Warns Weimar Hyperinflation Is Coming

ZeroHedge reports that Michael Burry Warns Weimar Hyperinflation Is Coming. Michael Burry is an investor, well-known for being one of the first to foresee the subprime mortgage crises of ~2007-2010.

One week ago, Bank of America hinted at the unthinkable: the tsunami of monetary and fiscal stimulus, coupled with the upcoming surge in monetary velocity as the world’s economy emerges from lockdowns, would lead to unprecedented economic overheating… or rather precedented as BofA’s CIO Michael Hartnett reflected back on the post-WW1 Germany which he said was the “most epic, extreme analog of surging velocity and inflation following end of war psychology, pent-up savings, lost confidence in currency & authorities” and specifically the Reichsbank’s monetization of debt, and extrapolated that this is similar to what is going on now.

There is, of course, another name for that period: Weimar Germany, and because we all know what happened then, it is understandable why BofA does not want to mention that particular name.

Of course, others have been less shy – in 1974, Jens Parsson wrote a fascinating, in-depth historical analysis of the hyperinflationary collapse of Weimar Germany under the original money printer, Rudy von Havenstein, “Dying of Money: Lessons of the Great German and American Inflations” one which we periodically remind readers is absolutely critical reading in preparation for what comes next.

Then overnight none other than the Big Short, Michael Burry, who has been rather busy making waves within the financial community with his hot takes (most recently, his slam of Robinhood and his bullish view on Uranium), picked up on the theme of Weimar Germany and specifically its hyperinflation, as the blueprint for what comes next in a lengthy tweetstorm cribbing generously from Parsson’s seminal work. And while the details are familiar to most monetary historians, the fact is that now none other than the man who was made famous in the Big Short is calling for Weimar-style hyperinflation in the US. Below is an easily digestible repost of Burry’s lengthy Saturday tweetstorm, which shows just how similar our world is to that prevalent in the years just before Weimar Germany saw the most explosive hyperinflation in history.

The US government is inviting inflation with its MMT-tinged policies. Brisk Debt/GDP, M2 increases while retail sales, PMI stage V recovery. Trillions more stimulus & re-opening to boost demand as employee and supply chain costs skyrocket. #ParadigmShift

“The life of the inflation in its ripening stage was a paradox which had its own unmistakable characteristics. One was the great wealth, at least of those favored by the boom..Many great fortunes sprang up overnight…The cities, had an aimless and wanton youth”

“Prices in Germany were steady, and both business and the stock market were booming. The exchange rate of the mark against the dollar and other currencies actually rose for a time, and the mark was momentarily the strongest currency in the world” on inflation’s eve.

“Side by side with the wealth were the pockets of poverty. Greater numbers of people remained on the outside of the easy money, looking in but not able to enter. The crime rate soared.”

“Accounts of the time tell of a progressive demoralization which crept over the common people, compounded of their weariness with the breakneck pace, to no visible purpose, and their fears from watching their own precarious positions slip while others grew so conspicuously rich.”

“Almost any kind of business could make money. Business failures and bankruptcies became few. The boom suspended the normal processes of natural selection by which the nonessential and ineffective otherwise would have been culled out.”

“Speculation alone, while adding nothing to Germany’s wealth, became one of its largest activities. The fever to join in turning a quick mark infected nearly all classes..Everyone from the elevator operator up was playing the market.”

“The volumes of turnover in securities on the Berlin Bourse became so high that the financial industry could not keep up with the paperwork…and the Bourse was obliged to close several days a week to work off the backlog” #robinhooddown

“all the marks that existed in the world in the summer of 1922 were not worth enough, by November of 1923, to buy a single  newspaper or a tram ticket. That was the spectacular part of the collapse, but most of the real loss in money wealth had been suffered much earlier.”

“Throughout these years the structure was quietly building itself up for the blow. Germany’s #inflationcycle ran not for a year but for nine years, representing eight years of gestation and only one year of #collapse.”

His punchline: the above was “written in 1974 re: 1914-1923” and then makes the ominous extrapolation that “2010-2021: Gestation” adding that “when dollars might as well be falling from the sky…management teams get creative and ultimately take more risk.. paying out debt-financed dividends to investors or investing in risky growth opportunities has beaten a frugal mentality hands down.”

We are there now. The only question is when do we enter the exponential currency collapse phase.

Update (1815 ET): one day after the Weimar tweetstorm below, and shortly after our article came out, Burry tweeted the following:

People say I didn’t warn last time. I did, but no one listened. So I warn this time. And still, no one listens. But I will have proof I warned.

Indeed he will.

Real Investment Advice: Millennials Are Mad As Hell.

Lance Roberts at Real Investment Advice talks about why Millennials Are Mad As Hell while explaining why financial markets don’t work the way the used to. The market is no longer about understanding the value of a company, but rather is a game of bets by major players — which means if you aren’t a major player, you lose.

The Occupy Wall Street movement that emerged in the financial crisis of 2008 was interesting because a general sense of discontent seemed to merge. Also interesting was the lack of consensus as to the causes of dissatisfaction. More recently, the trading mania surrounding Robinhood and Gamestop reflected many of the same dynamics. A broad sense of anger was channeled variously against Wall Street, “suits,” boomers, short-sellers, and a sundry list of other participants deemed to be bad actors.

One thing is clear: Just like in the 1976 movie, “Network,” a lot of people are “mad as hell.” That anger is a symptom of a bigger problem, however. Digging into its root causes reveals insights about society and how it can reshape and defuse anger and become more productive.

Roots Of Anger

It is not hard to understand some of the sources of anger. Perhaps one of the most revealing single indicators is the variance in wealth distribution over time. In the 1990s, when Baby Boomers were in their late 30s, just slightly older than Millennials’ age in 2020, they owned seven times the share of household wealth (21% vs. 3%). The opportunities for income and wealth accumulation were massively more significant for Baby Boomers than for Millennials.

Mad As Hell, David Robertson: Millennials Are Mad As Hell.

Mad As Hell, David Robertson: Millennials Are Mad As Hell.

Missing The Target

As a result, it isn’t too surprising to observe a fair amount of discontent directed at the Baby Boom generation, and it is clear from a number of the Reddit/wallstreetbets threads that this is happening. Further, any reader of The Fourth Turning by William Strauss and Neil Howe can come away with plenty of material for younger generations to incriminate the Baby Boom generation.

For example, Baby Boomers in the US grew up in an environment of enormous economic growth in one of the world’s wealthiest countries. Yet, those prodigious benefits seemed not to be enough; massive debts got used to boost consumption even further. From a historical perspective (and to younger generations), Baby Boomers’ generation appears rapacious in its consumption, like locusts stripping the country bare.

A Generalization

Of course, such a view is a generalization that belies the existence of countless individual Baby Boomers who act and behave in ways that are utterly antithetical to that characterization. It is not hard to find smart and talented individuals and are generous with their time, financial support, knowledge, and experience. As a result, it is hard to consider the entire generation of Baby Boomers an appropriate target of opprobrium.

There are other targets. For instance, short-sellers have received a great deal of anger following the Gamestop and Robinhood episode. Such too appears unjustified. For one, there are at least two sides to every story, and it is essential to hear both to get closer to the truth. Besides, given the upward bias of stocks, short-sellers must work even harder to make a living. Some of the most accomplished (and humble and generous) investors are short-sellers.

As a result, the targeting of outrage against groups such as Baby Boomers or short sellers is at best misguided. At worst, such efforts are both malicious and counterproductive. It only makes things worse by directing outrage in a general direction, including people sympathetic to the cause.

A Bad Game

Where should anger be directed then? Ben Hunt guides us to a better understanding by completely flipping the perspective. It is not a whodunit where the perpetrator needs catching. Instead, the problem is the economic, political, and financial system has become a destructive “game” for most participants. In other words, the odds stacked against us are such that there is little chance of success over time, regardless of performance.

To see this, we need to reconsider our assumptions and mental models. In his piece, “Hunger Games,” Hunt explains how things have changed in the markets:

“You have been told that you can be a PARTICIPANT in the game of markets, that you can storm the playing field of companies, that you can take matters into your own hands and rescue a promising company under unfair attack.”

In a world of entirely free markets, strong property protection, effective regulation, effective enforcement, and a level playing field, this might be true, as the Robinhood episode revealed. However, many of these assumptions are no longer valid:

“We all saw that the thing that determines whether or not our stock market bets pay off is … other bets. We all saw that there is no ‘game of companies’ taking place independently of our bets. We all saw that our bets, in and of themselves, can win the ‘game’, with absolutely zero input from the ‘team’ that is supposedly out on the ‘field’.”

Such is a very different concept of markets than what most of us have operated on. It boils down to two straightforward tenets:

“Everyone knows that everyone knows that 1) The bets ARE the market. 2) Market makers OWN the market.”

Mad As Hell, David Robertson: Millennials Are Mad As Hell.

Implications

The implications of this are huge. Success in investing in this context is not about researching and applying analytical skills and hanging in when it gets tough. Nope.

Being an investor today is more like being a gladiator. You might win some fights, even in glorious fashion, but the odds currently stacked against your long-term survival. You are mainly just an actor in a game designed to serve the ends of a select few.

“Both of these stories are narratives for our very own Hunger Game, a spectacle that chews up the participants in the arena while delivering enormous profits to the networks (media, financial and political) that put them on.”

The notion of participants getting chewed up in a contest that deliver enormous profits to others does seem to capture much of the environment – and therefore explains much of the anger if it feels like it’s not a fair game that’s because it isn’t.

Another Theory

Interestingly, Noam Chomsky’s presentation, Requiem for the American Dream, dovetails nicely with Hunt’s characterization of the higher-level structure of the social, political, and financial environment. According to Chomsky, the concentration of wealth and power is more than just an unpleasant outcome; instead, it is a distinct objective of the super-rich.

As he explains, the 1960s was an era of much greater wealth equality and was the backdrop for a substantial expansion of civil liberties. Increasingly too, young people were protesting against the government, against corporate leadership, against AUTHORITY, and it scared people in charge.

Mad As Hell, David Robertson: Millennials Are Mad As Hell.

Principles

As Chomsky tells it, “The 10 Principles Of Concentration Of Wealth & Power” (the subtitle of the presentation) were something of playbook devised by the super-rich to stem the tide of egalitarianism and to reverse it. While this hypothesis certainly rings with conspiratorial tones, the “principles” sure explain many things.

One set of principles prescribes reshaping the economy through financialization and offshoring. Together, these two efforts serve to increase the role of asset owners in the economy at the expense of reducing laborers’ role. Both have succeeded spectacularly.

Another principle is, “Marginalize the population.” Such gets accomplished by maintaining the veneer of democracy while at the same time eroding its power to be representative. Chomsky describes how most people do not have a voice that counts:

“In one study, together with another fine political scientist, Benjamin Page, [Martin] Gilens took about 1,700 policy decisions, and compared them with public attitudes and business interests. What they show, I think convincingly, is that policy is uncorrelated with public attitudes, and closely correlated with corporate interests. Elsewhere he showed that about 70 percent of the population has no influence on policy—they might as well be in some other country. And as you go up the income and wealth level, the impact on public policy is greater—the rich essentially get what they want.”

Hypothesis

Based on these principles, the hypothesis seems to fit pretty well, but principle #5, “Attack solidarity,” really stands out as having explanatory power. The idea that the potential of an extensive group of people to collaborate toward a common goal is a terrifying prospect for a small minority of super-rich people with different interests. The energy of the masses, however, also represents a force that can turn on itself:

SOLIDARITY IS quite dangerous. From the point of view of the masters, you’re only supposed to care about yourself, not about other people. This is quite different from the people they claim are their heroes, like Adam Smith, who based his whole approach to the economy on the principle that sympathy is a fundamental human trait—but that has to be driven out of people’s heads. You’ve got to be for yourself and follow the vile maxim—“don’t care about others”—which is okay for the rich and powerful, but devastating for everyone else.”

Wow, that puts a lot of things in a different context! Namely, when people fall prey to the maxim “don’t care about others,” they inadvertently advance the super-rich’s goals by disrupting the solidarity of everyone else. More specifically, when someone puts huge bets on Gamestop to stick it to the short sellers and rages about the boomers, they aren’t soldiers bravely fighting for a better system. They are pawns getting played.

Requiem

Such may get mistaken for a passing phase or a transient cultural phenomenon, but it seems like there is something far more substantive here. Chomsky hints at it with his introduction:

“DURING THE Great Depression, which I’m old enough to remember, it was bad—much worse objectively than today. But there was a sense that we’ll get out of this somehow, an expectation that things were going to get better, ‘maybe we don’t have jobs today, but they’ll be coming back tomorrow, and we can work together to create a brighter future’.”

Such highlights the problem. In the Great Depression, things were terrible, but there was a belief that things would get better. There was hope. Today, most people are far better off in terms of health and wealth, but the idea is that things are getting worse. The hope has faded.

For the first time in the country’s history, a generation has lost hope of things getting better. They have lost the American Dream. In a culture that highly values growth and competition, the fate of having less is an especially tough pill to swallow. It’s enough to make people angry.

Mad As Hell, David Robertson: Millennials Are Mad As Hell.

Actions

What can we do? Diagnosed as a conflict between the super-rich and everyone else, improving the situation will not be a battle to be won by a handful of brave “soldiers.” That effort will require broader participation and more collaboration. As a result, an excellent place to start is to stop attacking each other.

Beyond that, Hunt provides several high-level prescriptions. He recommends pressing for lower leverage in financial institutions at the policy level. He recommends focusing on real-world companies and cash flows at the investment level. At a personal level, he recommends “calling a thing by its proper name.” Collectively, he promotes efforts designed to “diminish Wall Street’s influence over our democracy.” Such is a useful framework from which to make plans.

Conclusion

The bad news is many people are “mad as hell, and they aren’t going to take it anymore.” It is also unfortunate that much of the anger gets channeled in a way that, at best, isn’t helpful, and at worst, is counterproductive. We don’t need to descend into a Hunger Game competition, but it is possible.

The good news is that anger is a form of energy. Further, anger represents a level of energy sufficient to effect change. Perhaps the knowledge that most other people are not part of the problem can harness that energy. Maybe that energy could get used to collaborating to tear down a system that doesn’t work very well for most people and build a new one that does. Perhaps.

Birch Gold Group: How to Protect Your Local Economy From the Great Reset

Brandon Smith, writing at Birch Gold Group, talks about How to Protect Your Local Economy From the Great Reset

Over the years, I have written extensively about the concept of economic “decentralization” and localization, but I think these ideas are difficult for some people to visualize without proper motivation. By that I mean, it’s not enough that the current centralized model is destructive and corrupt; it has to start breaking down or show its true totalitarian colors before anyone will do anything to protect themselves.

Sadly, the majority of people tend to take action only when they have hit rock bottom.

In recent months the pandemic lockdown situation has provided a sufficient wake up call to many conservatives and moderates. We have seen the financial effects of pandemic restrictions in blue states, with hundreds of thousands of small businesses closing, tax revenues imploding and millions of people relocating to red states just to escape the oppressive environment.

Luckily, conservative regions have been smart enough to prevent self destruction by staying mostly open. In fact, red states have been vastly outperforming blue states in terms of economic recovery exactly because they refuse to submit to medical tyranny.

I outlined this dynamic in detail recently in my article Blue State Economies Will Soon Crumble – But Will They Take Red States With Them?

The data is undeniable: the states and cities that enforce lockdown mandates are dying, the states that ignore mandates are surviving. However, with a Biden presidency there is a high probability that the federal government will now seek to force compliance from all states. In other words, lockdowns will become a national issue rather than a state issue.

For now, Biden is pretending as if reopening is right around the corner, but as I have noted in the past, the Reset agenda will never allow this. A reopening, if it happens at all, will be short and lockdowns will return. We are already seeing a new narrative being introduced to the public involving “COVID mutations”, which are supposedly “more deadly” than the original COVID-19 outbreak. So, there is a brand new and useful threat and the establishment will exploit it as a rationale for more lockdowns and restrictions.

Beyond the pandemic mandates, there are also numerous Reset agenda policies that will be implemented under the Biden administration, including insane Green New Deal, related executive orders and legislation claiming to reduce carbon emissions. What they will really do is annihilate resource production. Millions of jobs will be lost and entire industries will be erased unless conservatives act to stop Biden in his tracks.

This means doing far more than stalling through political maneuvers. We are going to have to use concrete strategies to retake control of resource management within the states. Pointless globalist carbon policies composed by entities like the UN have no place in American economic planning. A message needs to be sent that they will never be accepted here.

Time is running out to prepare. Lockdowns will return within a few months and this time they will be federally enforced. Conservatives must be ready to defy these orders if they have any hope of saving their local economies. This is going to take individual efforts to stock necessities and secure their finances, but ultimately wider organization is going to be needed to weather the storm.

Conservatives must establish coalitions of counties and states, and certain economic measures will have to be applied to insulate from damage. The federal government and Biden will attempt to punish red states for refusing to submit, and we need to be ready for that eventuality.

Here are some ways that conservative communities can stop the Reset agenda…

Localization

On a smaller scale, conservatives can accomplish a lot by simply changing their buying habits. If you do 80% of your retail spending with big box stores and online outlets like Amazon and only 20% at local small businesses, then try to switch that ratio. Spend 80% at local businesses and 20% at corporate outlets. Yes, small businesses tend to cost a little extra, but who do you really want your money going to? Do you want your money filling the pockets of international corporate moguls that are working to destroy your freedoms and undermine your economy? Or, do you want your cash to circulate locally?

Individuals can also start their own business from home focusing on production of necessities or necessary skill sets. They can establish a small business co-op and encourage the community to buy locally. Often, people just don’t know how many services are available from small businesses in their area, so they automatically go to big box providers. Small businesses must work together to change the dynamic.

This strategy also extends to local farms. Consumers and grocery stores need to buy more of their produce from farms in the area and less from chains which ship in produce from other countries. There are millions of acres of farmland in the U.S. that do not grow food at all because these farms are paid by the federal government not to. Encouraging local food production is paramount to remaining free from centralized control.

Organized refusal to comply

The problem with conservatives is that we tend to be so independent that we avoid organization. This is a problem because it leads to self-isolation. During the pandemic lockdowns in blue states, some conservative-owned businesses refused to comply, but they were left mostly to fend for themselves with no aid from the wider community. If more businesses were to ally with each other and protested in tandem, dozens or hundreds of defiant businesses working together would be a lot harder to shut down than just a few.

By extension, it’s not enough for conservatives to merely argue against the lockdowns and demand businesses stay open, we need to also defend those businesses that take action. We need to support them with our dollars and stand in the way of anyone trying to close them down. They are taking a big risk for us, so we need to be willing to take risks for them.

Imagine if Biden tried to assert a national lockdown order and more than half the businesses in the country ignored him? What if patrons refused to allow federal agencies to intimidate those businesses? The lockdowns would be nullified, and Biden would have little recourse.

Establish barter networks

In the event that the U.S. economy breaks down completely, we must create contingencies to prevent total trade disruption. Without trade, populations become desperate because no one has the ability to provide every necessity all the time. People have to be able to barter goods and services in an open market.

Barter networks are a base fundamental, the universal go-to solution during economic collapse. Every society in modern history has used barter markets to stay afloat during financial crisis and to bypass government economic controls. We must be willing to do the same.

Conservatives must start organizing barter networks within their communities now. It does not matter if you are trading with a couple of people or hundreds; the process needs to start somewhere.

Why is this so important? Because there is a very good chance that the federal government will try to fiscally punish any state or county that opposes lockdown measures and Reset policies. This means that the government will first seek to cut off federal funding to red states. In the midst of economic crisis, many regions have become reliant on federal stimulus as a crutch, and this dependency makes them vulnerable to control.

To truly rebel against the Reset, local economies need to be free from federal oversight or consequences. With barter networks in place along with possible local scrip and alternative currencies, the public will be less fearful of economic retaliation.

Take back management of local resources

We have already seen attempts by Biden to disrupt production of carbon based energy resources like oil and coal. Frankly, the time is long past due for states and counties to take back control of federal lands. The government has been stifling American production for decades and this has hurt rural communities in particular.

In my area, the EPA has essentially destroyed the timber harvesting industry through unfair regulations. This has led to federal mismanagement of forests to the point that fire hazard has become a major issue. All the young men in the county used work as lumberjacks to support their families; now they have to leave, or work as wildland firefighters. It’s completely backwards. And this is happening while U.S. lumber prices are skyrocketing.

Conservative counties and states need to take back land and resource management and allow reasonable production to return. Biden should have no say in whether or not oil wells in North Dakota stay operational, or coal mines in West Virginia stay open, or trees Montana are selectively harvested. As long as the bulk of wealth from the resource production stays within the state where the resources were harvested, I see no downside to this kind of response.

If the federal government tries to retaliate by cutting off federal funds, it won’t matter because the states will be producing jobs and wealth for themselves independently.

Immunity from cancel culture

In our current political environment, it is becoming a fact of life that the hard left can and will try to harm people that oppose their ideology. Big tech companies and government are helping them to do this. Now more than ever, conservatives that wish to remain free to voice their views and share facts that are contrary to the leftist narrative must seek protection from cancellation. But how do we do this?

For one, we can work for ourselves. Being self employed means never having to worry about being fired because of your political opinions. Or, conservatives need to work for conservatives. This means conservative companies need to focus on hiring conservative employees, and if the leftist mob tries to attack an individual, those companies can easily ignore them. Of course, this also means that conservative consumers need to start making a list of conservative companies that have proven themselves to be immune to leftist pressure. We need to support these companies.

Conservatives should also look into the possibility of campaigns to build more platform alternatives to Big Tech and social media. We need more web service providers that are owned by people who respect free speech rights. We may even need our own internet.

All of these things are possible, but it takes organization and effort. Conservative communities can become safe havens for civil liberties, but this means we cannot be isolated from each other anymore. We have to be connected by more than our principles, we must also be connected through actions.

Sovereign Man: Everything’s Fine, There’s Absolutely Nothing to See Here

This is fine.

Simon Black, the Sovereign Man, writes Everything’s fine, there’s absolutely nothing to see here about normalcy bias and the failure to see the oncoming truck.

In the darkest corners of our human instincts lies a psychological phenomenon that is the result of millions of years of evolutionary biology.

It’s called “tonic immobility”. And it refers to a form of paralysis that occurs when we’re terrified and facing extreme mental or emotional trauma.

Tonic immobility is common in nature. Animals in the wild will often freeze in place when confronted by a predator; the idea is that making no movement, and doing absolutely nothing, increases their chances of survival because the threat will simply go away.

But as anyone who has ever been on safari or seen a nature documentary knows, the danger seldom goes away on its own.

This instinct to ‘do nothing’ in the presence of danger runs very deep in our instincts; and it’s related to a cognitive quirk within our brains that psychologists call ‘normalcy bias’.

We’ve discussed this before. Normalcy bias is what causes human beings to believe, even in the face of obvious perils, that everything is going to be just fine.

Humans are creatures of habit. We easily fall into routines—waking up, going to work, stopping by the coffee shop on the way, spending time with the family in the evening, etc. And those routines define ‘normal’ for each and every one of us.

When the routine is disrupted, we often have a difficult time coping—even with little things. If the bakery down the street is out of the croissant flavor that we order every morning on the way to work, we’re irritated by it and don’t want to break routine by trying something new.

And major disruptions to our ‘normal’ are met by severe psychological backlash. Our brains simply refuse to acknowledge it.

This is normalcy bias. It’s one of the reasons why denial is the first stage of grief. We cannot accept the loss of a loved one who has been part of our routine– our brains won’t allow it.

Or occasionally we might find out someone has passed, and our first reaction is, “But I just saw them last week!” Again, our brains have an extremely difficult time grasping the concept that our deeply entrenched ‘normal’ is about to change.

And that’s why, when faced with something obvious that threatens our ‘normal’, it’s common for us to instinctively do nothing. Our brains are hard wired to believe that the danger will resolve itself and everything will go back to ‘normal’.

Many of us felt this way in 2020.

When the pandemic struck, it was terrifying. No one really understood anything about it; the media practically made it out to be a flesh-eating superbug that would vaporize everyone immediately.

And in the face of this threat, it was easy for politicians to convince people to literally do absolutely nothing: stay home, and shelter in place.

The idea was that if we waited long enough—if we froze in fear long enough—then the danger would pass.

And people maintained a belief throughout the year that life would eventually return to normal, no matter how crazy the world became.

When we were locked down in our homes, we believed that life would return to normal.

When mostly peaceful protestors were rioting and raging in the streets, torching private businesses that had absolutely nothing to do with their cause, we believed that life would return to normal.

When angry Marxists political candidates raged that they want to confiscate private property and nationalize entire industries, we believed that life would return to normal.

Today there are literally tanks lining in the streets of Washington DC and attack helicopters roaming the skies. A new US President is set to be inaugurated tomorrow with more than 20,000 troops guarding him.

They have already announced sweeping legislative and policy changes, ranging from substantially higher taxes to Green New nonsense to debilitating business regulations that will likely frustrate an already weakened economy.

There is absolutely zero fiscal or monetary restraint in government; there’s hardly a single policy initiative that doesn’t carry at least a trillion dollar price tag.

No one cares about the national debt—which is set to reach $30 trillion within the next few months, or the fact that the central bank balance sheet will likely pass $10 trillion this year.

Their solution to everything is to squash productivity and print money.

Yet still, countless people believe that life will return to normal. For them, part of their ‘normal’ is that America is safe, stable, and powerful… and always will be.

Their brains simply cannot accept a reality in which the country they love so dearly has changed. And it’s not going back.

This is normalcy bias, and it compels countless people to do absolutely nothing in the face of obvious threats.

When you see a government racking up trillions of dollars a year in wasteful new debt, and a central bank printing trillions of dollars of new money, a rational person would take steps to preserve his/her savings.

When the Treasury Secretary states in black and white that the Social Security trust funds will run out of money in a few years, a rational person would take steps to safeguard his/her retirement.

When the nation has become so fractured in conflict that it takes tanks and 20,000+ troops to hold a ceremony in the capital, a rational person would create a Plan B and have some backup options.

But normalcy bias makes us believe that everything is going to back to normal. So we freeze in place and do nothing.

There are plenty of solutions to mitigate these threats. But the most important thing to do right now is overcome normalcy bias.

FEE: Minimum Wage Hikes Kick in Across the Country—at the Worst Possible Time for Small Businesses

From the Foundation for Economic Education comes Minimum Wage Hikes Kick in Across the Country—at the Worst Possible Time for Small Businesses. Washington state’s minimum wage rose $0.19 per hour this year. Several states’ wage rose a full dollar, and New Mexico’s minimum wage rose $1.50/hr.

2020 was one of the worst years in modern American history for small businesses. And now, thanks to a wave of minimum wage legislation that kicked in on January 1, things are about to get even worse.

Make no mistake: small business owners are already seriously hurting.

When state and local governments responded to the outbreak of COVID-19 in the spring with harsh lockdowns and restrictions, businesses were forced to shutter. Many in the restaurant and hospitality industry remain shut down many months later, or were briefly allowed to reopen then shut down again this fall. Meanwhile, much of the taxpayer-financed aid meant to help these businesses was instead captured by big corporations or lost to fraud and waste.

To add insult to injury, thousands of small businesses were vandalized and looted during the summer unrest after the death of George Floyd. (No, insurance doesn’t eliminate the harm).

At least 100,000 small businesses that were forced to close in 2020 will not reopen, according to Yelp. In a recent survey, almost 60 percent of small business owners said that they don’t expect their enterprise to survive through June 2021.

Many of these same small businesses teetering on the brink of collapse are about to get slapped in the face with surging labor costs. A total of 20 states had minimum wage hikes take effect this month as part of scheduled ramp-ups.

“New Mexico will see the largest jump, adding $1.50 to its hourly minimum and bringing it up to $10.50,” the Hill reports. “Arkansas, California, Illinois and New Jersey will each increase their minimum wages by $1.”

Additionally, many localities have enacted area-specific minimum wage hikes. For example, Flagstaff, Arizona just raised its minimum wage to $15 an hour while Belmont, California just upped its rate to $15.90 an hour.

These might not sound like massive hikes in absolute terms, but you have to think of it like this. Payroll is often one of the largest expenses small businesses have—and it may have just arbitrarily spiked by 5 to 15 percent.

The timing here could not be worse.

“A dramatic increase in the minimum wage even in good economic times has been shown to be harmful,” Employment Policy Institute Managing Director Michael Saltsman said. “In the current climate, for many employers it could be the final nail in the coffin.”

And employees will suffer perhaps just as much as employers. Even though they’re ostensibly meant to uplift workers, increases in the minimum wage always and inevitably hurt more than they help.

Why? A wage is important for the living standards of the worker, but that isn’t its only important aspect. A wage is a price. Prices are essential for order in an economy, so price controls throw markets into chaos.

“By the simplest and most basic economics, a price artificially raised tends to cause more to be supplied and less to be demanded than when prices are left to be determined by supply and demand in a free market,” famed free-market economist Thomas Sowell explained in his book Basic Economics. “The result is a surplus, whether the price that is set artificially high is that of farm produce or labor.”

“Making it illegal to pay less than a given amount does not make a worker’s productivity worth that amount— and, if it is not, that worker is unlikely to be employed,” Sowell writes. “Unfortunately, the real minimum wage is always zero, regardless of the laws, and that is the wage that many workers receive in the wake of the creation or escalation of a government-mandated minimum wage, because they either lose their jobs or fail to find jobs when they enter the labor force.”

Thus, as free-market economist Murray Rothbard put it, the minimum wage amounts to outlawing jobs:

“In truth, there is only one way to regard a minimum wage law: it is compulsory unemployment, period. The law says: it is illegal, and therefore criminal, for anyone to hire anyone else below the level of X dollars an hour. This means, plainly and simply, that a large number of free and voluntary wage contracts are now outlawed and hence that there will be a large amount of unemployment. Remember that the minimum wage law provides no jobs; it only outlaws them; and outlawed jobs are the inevitable result.”

So, it’s no surprise that the nonpartisan Congressional Budget Office projects that a national $15 minimum wage would destroy up to 3.7 million jobs. Of course, these hikes aren’t nationwide, and many aren’t quite up to $15 yet. Nonetheless, struggling small businesses already have so little wiggle room in their budgets and are on the brink of collapse. Thus the negative effect minimum wage hikes have on local economies will be severe.

Of course, there’s little doubt that the legislators who enacted these pre-planned minimum wage hikes hoped to help workers, not put them out of work amid an economic crisis. But the laws of basic economics are unmoved by compassionate hand-wringing—and good intentions never guarantee good results.

Alt-Market: If You Thought 2020 Was Bad, Watch What Happens In 2021

Brandon Smith at Alt-Market makes his own predictions for the new year in If You Thought 2020 Was Bad, Watch What Happens In 2021

In terms of the economy and the American social situation, 2020 is definitely one of the ugliest years on record, there’s really no way around it. That said, I get the impression that many in the public are operating under the assumption that we are about to cross over the peak of the mountain and it will be all downhill from here on. Unfortunately, this is not the case.

All eyes have been focused on the pandemic event, and the thinking is that once the pandemic is “over”, the crisis will be over and everything will go back to normal. But, as the globalists have been telling us since the outbreak began, the world “will never go back to normal again”. It’s not because of the pandemic, mind you, it’s because THEY won’t allow things to go back to normal. The “great reset”, as the World Economic Forum calls it, is meant to go on for many years. And, the globalists intend that every aspect of our lives be changed into something almost unrecognizable.

First I want to make it clear that I don’t expect the reset agenda to be successful. In fact, I think it’s going to fail miserably. The globalists have reached too far too fast and exposed themselves, and millions upon millions of people around the world and in America are not buying the pandemic narrative. But here is the problem; the pandemic is a distraction from a much greater threat, namely the economic collapse that is developing right now.

The financial downturn has been created by international banks and central banks through massive debt creation and inflationary stimulus measures. The initial spark for the wildfire took place in 2008, the economic threat has been under the noses of the public for quite some time. Now, however, the establishment has some perfect scapegoats, including the Trump Administration as well as the coronavirus. The globalists are hoping that people will become so mesmerized by the pandemic crisis and the election fight that they will rest all blame for the collapse on those two ready-made targets.

Make no mistake, the economy was put on life support long before Trump ever entered office and long before anyone ever heard of COVID-19. The globalists are simply pulling the plug right now and letting it die.

Of course, stock markets remain high, but the stock market does NOT represent the economy. It does not reflect financial health or the stability on main street. The stock market is an artificially propped up Pavlovian bell designed to make the public salivate every time the tickers go green. A majority of people tend to associate stock prices with economic improvement (mainly people who know nothing about economics or stocks). The extent of their research is 15 minutes of mainstream news a day along with 30-second reports on the Dow rising or falling, that is all. A rising Dow is enough to keep a large percentage of the population believing that things are going to get better.

Eventually stocks will crash along with almost everything else, just as they did in the hyperinflated markets of Weimar, Germany. But, what the public should be focused on is small business closures, including U-6 measurements, retail spending while stimulus is cut off, eviction notices, etc. This will tell you what the actual story is behind the economy.

There are certain events that could also expedite the downturn, and we must be wary of black swans right now. The financial system has been made so fragile over the past decade that any single major shock could bring it down (remember 2008?). Let’s not mistake stimulus for resilience. Stimulus has its limits and I believe we are hitting those limits as we enter 2021.

Here are some of the events I predict will happen next year, along with the effects they will have on the stability of America and many other parts of the world…

Contested Election Continues into January

State electors are supposed to finalize the presidential election results a week from now, but I suspect legal battles may prevent the electoral college from completing the tally. This could lead to electoral college results being ignored, and the fight for the White House continuing into next year (unless the Supreme Court can hear all arguments and come to a decision in record time).

Growing evidence of election fraud specifically in Georgia, Pennsylvania, and Michigan has led many conservatives to question the outcome of the presidential election. I don’t think the majority of the doubters will accept a Biden presidency even if Trump decided to concede.

What I think is more likely is that Trump will stay in office beyond the January inauguration day, and that the political left will suddenly realize that the election was not as absolute as they originally assumed.

The contested election would not cause economic instability directly, but it would mean that the public will be knocked out of their stupor and that their faith in the future will be shaken. Overvalued, fragile financial systems rely on the “greater fool” to support prices and need the blind faith of the population in order to continue lurching forward. That faith is about to be tested.

Mass Protests, Riots, Possibly Armed Conflict

I have become rather suspicious of the behavior of the mainstream media these days, even more so than usual. Why? Well, every time a hard fact on election fraud is released, the media has chosen to lie outright about it. And I’m not talking about clever spin in an attempt to diminish the effect of the news, I’m talking about outright lying that could easily be checked and debunked by anyone.

This kind of disinformation would never convince conservatives or even intelligent moderates because we double-check the sources. People on the political left, though, are more inclined to believe whatever the MSM says without doing their own research. I’m beginning to wonder if the media is pulling the same stunt they did in 2016: giving leftists false hope through misinformation, so that when things don’t go their way, they will become enraged as if something was stolen from them.

Is the media setting up the left for an epic shock by refusing to report any of the legitimate election fraud evidence and making them think there is no case? Is the goal to hit leftists so hard with Trump staying in office that they riot viciously in response?

Maybe I’m wrong and Biden goes into office without any obstructions as many expect. Let’s be honest, though, there are only two ways the election situation can go at this point:

In light of election fraud evidence, Trump stays in office. Leftists riot en masse claiming the presidency has been stolen. Conservatives will be asked to support martial law measures to “stop the insanity.” By supporting martial law, conservatives would sacrifice the very constitutional protections and liberties they claim to defend.

Biden enters the White House under heavy suspicion of fraud. He then tries to institute a Level 4 national lockdown in the name of stopping the pandemic. With the death rate for the virus well under 1% for anyone not living in a nursing home with preexisting conditions, and no evidence that mask mandates do anything to stop the virus spread, millions of American refuse to comply. The states and communities that do comply will suffer even more small-business closures and unemployment.

Biden would then try to initiate martial law measures, erasing civil liberties and possibly triggering a civil war.

Medical Passports and Vaccination Blackmail

Government officials are constantly in the media these days claiming that vaccinations will not be made mandatory. What they don’t mention is that they are already trying to legislate that anyone without a vaccination or medical passport will be unable to participate in normal society or even be allowed to work in their job. This program is moving at an incredibly fast pace, which makes me think the globalists realize they are losing the battle for the minds of the citizenry and they need to rush their agenda before it’s too late.

Here is what will happen in 2021 in terms of the pandemic:

  1. The media and elitist organizations will continue to pump up the infection numbers to frighten the public, even though the death rate is so low it makes the infection rate meaningless.
  2. If Biden is in office, mandates will be made into a federal issue and will be federally enforced.
  3. If Trump is in office, state governments will try to enforce mandates and major corporations will help them.
  4. There will then be a major push to require medical passports proving a person is not infected to enter into any public place. This means submission to 24/7 contact tracing or getting a new vaccine whenever ordered to. Basically, your life will be under the total control of state or federal governments if you want to have any semblance of returning to your normal life.
  5. If this process does not work and does not intimidate enough people into compliance, governments will seek to offer stimulus checks or a form of Universal Basic Income, but only for those people who agree to tracking through their cell phones and to vaccination.
  6. New mutations of COVID-19 will be conveniently found every year from now on, meaning the public will have to get new vaccinations constantly, and medical tyranny will never go away unless people take an aggressive stand.

It Gets Worse From Here On…

2021 will be far worse that 2020, but at least the lines will be drawn and the fight will be more clear to everyone. The economic crisis is what concerns me the most. The events listed above will complete the final downturn in the global system and America in particular. Such a financial crash would cause far more chaos and death than the coronavirus ever could.

Ultimately, I believe the public will respond badly to pandemic mandates. Many conservative states and counties will simply refuse to enforce them. However, the question is, will people end up fighting each other and forget all about the globalists that created the problem in the first place? Will mass poverty succeed where the pandemic failed in convincing Americans to give up their liberties in exchange for some stability?

Distractions abound, and the reset agenda looms, but I don’t see the globalists coming out of this unscathed. Too many people now know who they are and what they are up to.

Mises Institute: New Lockdowns and More Regulations Are Disastrous for US Jobs

Economist and fund manager Dr. Daniel Lacalle at the Mises Institute writes New Lockdowns and More Regulations Are Disastrous for US Jobs

United States jobless claims have picked up, since the elections and the second wave of coronavirus have slowed down the economic recovery. Uncertainty about tax increases and changes in labor laws, including an increase in the minimum wage, add to the fear of new lockdowns, as employers see the devastating effects of these lockdowns in European employment.

While the United States has been able to recover fast and reduce unemployment to 6.8 percent, the eurozone jobless rate has risen to 8.3 percent before we consider the large number of furloughed employees who remain idle. The second wave of coronavirus in Europe has seen new government-imposed lockdowns and the impact on the economy is already severe. Estimates for the fourth-quarter gross domestic product assume a double-dip recession and another increase in unemployment.

Misguided lockdowns have created a deep and long-lasting impact on the economy and a dramatic social crisis, proving again that the response to the pandemic should have been similar that of Asian countries, which have successfully preserved health and the economy.

Employers all over the United States fear that a Biden administration will impose lockdowns, following the example of some European countries and thus generating a new decline in the economy and a wave of bankruptcies and job losses. Instead of giving simple and effective protocols for business to endure the crisis, some governments, whose members are completely disconnected from the day-to-day problems of small businesses and employers, resort to the drastic and ineffective measure of lockdowns, because it gives more power to governments and because the large corporations do not feel the impact as much as small enterprises. Governments like the idea of lockdowns, because it gives the impression of taking drastic measures to control the pandemic when, in reality, lockdowns simply destroy the business fabric and have proven to be extremely ineffective at reducing the mortality or hospitalization rates. The concerns about a Biden-enforced nationwide lockdown are not exaggerated. Dr. Michael Osterholm, a coronavirus advisor to Joe Biden, said a nationwide lockdown of four to six weeks would help bring the virus under control in the US and revive the economy. I am sorry to say that experience has shown us that none of those two things will happen. Massive lockdowns did not help European countries control the virus, rather the opposite, and have destroyed the economy with long-lasting implications for jobs, bankruptcies, and wages. Meanwhile, countries that have not implemented lockdowns and have provided simple and effective protocols have achieved better results in health and the economy.

Many citizens in the United States ask themselves if the country will recover its record level of employment and its low unemployment rate of 3.5 percent seen in March 2020, before the pandemic. Even if the United States avoids government-imposed lockdowns, which would delay the job recovery for at least another eighteen months, there is grave concern about the likelihood of more regulation, union control, and higher taxes that will make it more expensive to hire personnel and more burdensome both in terms of hiring as well as reducing payroll.

The United States has been an example of job creation during the growth period but, more importantly, rapid job recovery in a complex crisis like the covid-19 one. Adding rigidity to the labor market and increasing taxes will prove disastrous for small and newly created business, which are the largest job creators in the United States.

It is as simple as this. The United States cannot have the wage growth and low unemployment it deserves by copying the labor market legislation of Greece, Spain, or France, countries with extremely rigid job markets and high union intervention…and historically high unemployment.

The European Union used to have the same unemployment rate as the United States. Massive disincentives, a misguided excess of regulation, and heavy taxes have created a divergence by which unemployment in Europe stands at almost twice the rate as in the United States.

The fallacy of “protecting workers” with high taxes to employers and heavy intervention in the labor market only protects governments. Unemployment is higher, wage growth is weaker, and the flexibility loss means lower opportunities for youth employment. Youth unemployment in the eurozone and European Union is simply unacceptably high even in growth periods, and it is due to the barriers to employment created through aggressive intervention in the job market and government control. Incentives to hire are poor while disincentives to work are high.

If anything has been proven by the past two decades, it is that more government, higher taxes, and union intervention do not protect workers, they perpetuate unemployment and reduce wage growth and opportunities.

Lockdowns added to higher taxes and labor rigidity would likely prove very negative for the United States recovery. You cannot recover if you impose the burdens that some European countries have imposed. Labor market interventionism does not protect workers, it empowers politicians.

Alt-Market: America’s Economy Cannot Survive Another Lockdown

Brandon Smith at Alt-Market writes America’s Economy Cannot Survive Another Lockdown, And The Cult Of The Reset Knows It

The U.S. economy has been on the verge of collapse for at least a decade, ever since the crash of 2008 and the subsequent explosion in fiat stimulus from the Federal Reserve. While the mainstream media has always claimed that central bankers “saved” us from another Great Depression, what they actually did was set us up for a far worse scenario — a stagflationary implosion of our society.

Here is the primary problem: By injecting trillions of bailout dollars into the system, the Federal Reserve prevented the economy from going through its natural purging cycle. This cycle would have been painful for many, but survivable, and it would have removed large amounts of excess debt, parasitic corporations that produce little or nothing of use, as well as numerous toxic assets with no legitimate value. For a real free market to function, weak or corrupt elements must be allowed to fail and die. Instead, central banks around the world and most prominently the Fed kept all of those destructive elements on life support.

This has created what amounts to a “zombie economy:” a system that needs constant outside support (stimulus) in order to continue moving forward. In the process of keeping zombie corporations and other parts of the body alive, healthy parts of the economy, like the small business sector, get devoured.

The zombie economy is, however, highly fragile. All it takes is one or two major shocks to bring it down, and the moment this happens the whole facade will disintegrate, leaving the public in panic and disarray. This is what is happening right now in 2020, and it will get much worse in 2021.

Bailouts encourage and reward unhealthy financial behavior, and this is why national debt, corporate debt and consumer debt have recently hit historic highs. When every pillar of the economy is encumbered with the weight of debt, any instability has the possibility of bringing all those pillars down at once. The Federal Reserve turned the U.S. into an economic time bomb, and the Fed is itself more like a suicide bomber than some kind of fiscal savior.

The “Great Reset”

I first heard the term “global reset” or “great reset” back in 2014/2015. I wrote an article about how the reset was actually a long term process in my article The Global Economic Reset Has Begun. Christine Lagarde was the head of the IMF back then, and she mentioned it briefly in multiple interviews.

I made a mental note of it because it seemed planted into the discussion very awkwardly, as if it was scripted. I rarely heard it mentioned for years after that. In 2020, as we descend into social and economic chaos, I’m seeing the phrase used everywhere in the media and by globalists.

Over the past decade, globalist institutions have come up with numerous phrases that seem to refer to a worldwide planned and dramatic shift in human society sometime in the near future. The “great reset” is just another phrase for “the new world order.” It is important to understand that the reset these people are talking about has actually been engineered and staged for many years. This is not something that just popped up in 2020 — they have been talking about it since at least 2014. And before that, they talked about the new world order, and “multilateralism,” and the “multi-polar world order,” and Agenda 2030, etc.

The reset is the catalyst phase of an agenda that has been in the works for a long time now. The goal, as they have openly admitted many times, is to centralize the entire globe into one monetary structure, one highly interdependent and socialized economy, and eventually one faceless and unaccountable governing body.

One of the biggest obstacles to the finalization of the reset and the formation of the new world order has been liberty-minded populations across the planet — most of all, the liberty-minded people within America. The U.S. has to be destabilized or eliminated; the old world order has to be brought down before the new world order can be introduced. The people have to be beaten down and desperate, so that when the globalists offer their “reset” as the solution, the people will gladly accept it without question — simply because they want the economic pain and uncertainty to stop.

A common statement made by globalists from Klaus Shwab at the World Economic Forum to the current Prime Minister of Canada, Justin Trudeau, is that the coronavirus pandemic is the “perfect opportunity” to trigger the “great reset.” As globalist Rahm Emanuel is famous for admitting, in crisis there is opportunity to do things you were not able to do before.

In other words, when people panic in the face of crisis, they become easy to manipulate. And, if a crisis doesn’t happen naturally, then why not create a crisis from thin air and use that to cause panic?

Enter the economic lockdowns…

The lockdowns have not only been proven to do nothing to stop the spread of the coronavirus, but they are also a clear attack on what’s left of our economic system. The small business sector in particular is being gutted as more than 60% of those that shut down during the first lockdown were unable to reopen. Small businesses provide more than half of all employment in the U.S.. When they collapse, the U.S. economy will have nothing left except the big-box corporations that the Fed put on life support over a decade ago.

Real unemployment, which is already at 26%, will skyrocket even further if a second national lockdown is initiated. The speedy collapse of the U.S. economy will be assured, and the “great reset” can commence. At least, that is what the globalists want to happen…

With the U.S. presidential election currently being contested, it is hard to say how the next few months will play out in detail. As I have been pointing out since July, a contested election is the best possible scenario for the globalists because it creates a Catch-22 situation:

  1. If Trump stays in office, the political left will accuse him of usurping the presidency and there will be mass riots in the streets. Conservatives will be tempted with the idea of bringing in martial law to suppress rioters, and such measures will undermine the flow of the U.S. economy, causing its fragile structure to implode.
  2. If Biden enters the White House, then he will attempt a Level 4 lockdown similar to the lockdowns we have seen in Australia, France, Germany and the UK; perhaps even worse. Our economy will crumble, conservatives will revolt, and Biden will attempt martial law measures.

Either way, the globalists get their crisis, and therein their opportunity.

Surviving the lockdowns and deterring the globalists

But here is where things get less certain for the elites. If liberty-minded Americans organize immediately for security and mutual aid, we can defuse the Catch-22. If we provide for our own security within our own communities, there will be no rationale for Trump to institute martial law. Community security is an awesome deterrent against leftist rioting and looting, and basic economic trade can continue.

By extension, if we organize our own community security as well as localize our economies with barter and trade, we also act as a deterrent to Biden and any ideas he might have of enforcing national lockdowns. The point is, we can’t allow the globalists to dictate the terms of the crisis. We must act to change the rules of the game.

The reset is not a natural inevitability, it is a con, a trap. No matter how bad the crisis in our nation becomes, it is the people — namely the liberty-minded people — who will determine the future, not the globalists. Their plan relies on our panic. Instead of panic, let’s show them a unified front and a plan of our own.

Of Two Minds: Pandemic Accelerating Trends That Disrupt Foundations of Economy

From Charles Hugh Smith at the Of Two Minds blog, The Pandemic Is Accelerating Trends That Are Disrupting the Foundations of the Economy

The problem is the economy that’s left has no means of creating tens of millions of jobs to replace those lost as the 1959 economic model collapses.

Fundamentally, the economy of 2019 was not very different from the economy of 1959: people went shopping at retail stores, were educated at sprawling college campuses, went to work downtown, drove to the doctor’s office or hospital, caught a flight at the airport, and so on.

The daily routine of the vast majority of the workforce was no different from 1959. In 2019, the commutes were longer, white-collar workers stared at screens rather than typewriters, factory workers tended robots and so on, but the fundamentals of everyday life and the nature of work were pretty much the same.

Beneath the surface, the fundamental change in the economy was financialization, the commodification of everything into a financial asset or income stream that could then be leveraged, bundled and sold globally at an immense profit by Wall Street financiers.

This layer of speculative asset-income mining had no relation to the actual work being done; it existed in its own derealized realm.

For decades, these two realmsthe structure of everyday life (to borrow Braudel’s apt term) and the abstract, derealized but oh so profitable realm of financialization–co-existed in an uneasy state of loosely bound systems.

If you squinted hard enough and repeated the mantras often enough, you could persuade yourself there was still some connection between the everyday-life economy and the realm of financialization.

The two realms have now disconnected, and the real-world economy has been ripped from its moorings, as patterns of work and every-day life that stretch back 70 years to the emergence of the postwar era unravel and dissolve.

The trends that are currently fatally disrupting retail, education, office work and healthcare have been in place for years. When I wrote my 2013 book about the digitized future of higher education in a low-cost union of high-touch and low-touch learning, The Nearly Free University, all these trends were already clearly visible to those willing to look beyond the models embedded in the economy for decades or even centuries.

Visionaries like Peter Drucker foresaw the complete disruption of the education and healthcare sectors as far back as 1994. Post-Capitalist Society.

The problem with this disruption is it eliminates tens of millions of jobs–not just the low-paying jobs in retail and dining-out, but high-paying jobs in university administration, healthcare, and other core service sectors.

The last real-world connection between everyday life and financialization was the over-supply of everything that could be financialized: the way to reap the big profits was expand whatever could be leveraged and sold. So retail and commercial space ballooned, colleges proliferated, cafes sprang up on every corner, etc.

Meanwhile, financialization’s unquenchable thirst for higher profits stripped everything of the redundancy and buffers required to stabilize the system in times of crisis. So hospitals no longer kept inventory because by the logic of financialization, all that mattered was maximizing the return on capital–nothing else could possibly matter in the derealized realm of speculative profiteering.

Now healthcare finds itself trapped between the pincers of financialization’s stripmining and the collapse of retail in-person demand–the financial foundation of the entire system. Under the relentless pressure of financialization’s stripmining and profteering, healthcare only survives if it can bill somebody somewhere a staggering amount for everything from office visits to procedures to hospital stays to medications.

Once that avalanche of billing dries up, the entire sector implodes: a sector that accounts for almost 20% of the U.S. economy.

Higher education is also imploding, and for the same reason: its output no longer justified its enormous cost structure. The same can be said of overbuilt retail and commercial space: the financial justification for sky-high rents have imploded and will never come back. The over-supply is so monumental and the collapse of demand so permanent, the gigantic pyramid of debt and speculative excess piled on all these excesses is collapsing.

A bailout by the Federal Reserve won’t change the fundamentals of the collapse of financialization; all the Fed can do is reserve scarce lifeboat seats for its billionaire banker-financier pals. (Warren, you know Bill, have you met Jamie, Jeff, Tim and the rest of the Zillionaire Rat-Pack?)

Despite the record highs in the stock market–the ultimate expression of financialization disconnected from the real-world economy–financialization is also imploding. Financialization still claimed a connection to the real world of income streams and the value of the collateral underlying all the speculative profiteering: the high rents paid by the restaurants on the ground floor and the businesses for office space above justified the high value of the collateral, the commercial building.

Foundational swaths of the real-world economy have been swept away, and so the collateral is largely worthless. Lots of people want their employer to start paying for business-class airline seats again so they can jet around the country on somebody else’s dime, staying in pricey hotels and attending conferences, but these activities no longer have any financial justification.

The economy of 1959 is finally expiring. The enormous time and money sinks of transporting humans hither and yon no longer have any financial justification.

The problem is the economy that’s left has no means of creating tens of millions of jobs to replace those lost as the 1959 economic model collapses. We all know that automation is replacing human labor, but the real change is the collapse of the financial justification for the enormously costly systems we now depend on to generate jobs: healthcare, retail, tourism, dining out, education, working downtown, and all the professions dependent on managing all this complexity.

While the elimination of low-skill jobs–a longstanding trend–is attracting attention, the implosion of the 1959 economic model and financialization will soon sweep away millions of high-paying professional jobs that no longer have any financial justification.

As the 1959 economy implodes, so does the tax system based on payroll taxes and property taxes. This article sketches out the perverse incentives for employers to invest in automation rather than hire workers: Covid-19 Is Dividing the American Worker (WSJ.com)

There are alternatives, but they require accepting the implosion of both the 1959 economic model and its evil offspring, financialization.

I sketched out an alternative way of organizing work, everyday life and finance in my book A Radically Beneficial World. There are alternative ways of organizing civilization other than the insanely wasteful and exploitive system we now inhabit.

 

Alt-Market: The Delusion Of A Seamless Reopening Is About To Be Obliterated

From Brandon Smith at Alt-Market, The Delusion Of A Seamless Reopening Is About To Be Obliterated

During the first wave of pandemic lockdowns, America became a rather surreal place. The initial shock that I witnessed in average people in my area was disturbing. Half the businesses in the region closed and a third of the grocery store shelves were empty. The look in people’s faces was one of bewilderment and fear; their eyes were like saucers, no one was staring into their cell phones as they usually do, and people huddled over their shopping carts like wild dogs protecting a carcass.

Luckily, this tension has subsided, but only because the majority of Americans have been assuming for the past couple months that the pandemic was going to fade away in the summer and that the “reopening” was permanent. Sadly, this is a delusion that is going to bite people in the ass in the next month or two.

In “The Economic Reopening Is A Fake-Out”, published at the end of May, I stated:

“The restrictions will continue in major US population centers while rural areas have mostly opened with much fanfare. The end result of this will be a flood of city dwellers into rural towns looking for relief from more strict lockdown conditions. In about a month, we should expect new viral clusters in places where there was limited transmission. I suggest that before the 4th of July holiday, state governments and the Federal government will be talking about new lockdowns, using the predictable infection spike as an excuse.”

I also noted:

Certainly, it appears that most Americans hate the lockdowns. But will they be fooled by the “reopening” into complacency for the next several weeks while the government gets ready to hit them with the next round of restrictions? Will they be so caught off guard they won’t know how to react? Imagine the economic devastation of just one more nationwide lockdown event? It will be carnage, and a lot of hope within the population will be lost.

In “Pandemic And Economic Collapse: The Next 60 Days”, published in April, I predicted:

The extent of the crisis will become much more clear in the next two months to the majority. The result will be civil unrest in the summer, likely followed by extreme poverty levels in the winter. No measure of “reopening” is going to do much to stop the avalanche that has already been started.

My position at the time, on secondary infection spikes in the summer as well as renewed lockdown restrictions, appears to have proven correct. Currently, daily reported infections in the U.S. are at a record 50,000 per day or more and cases are rising in 40 out of 50 states. Many of the new infection clusters are in more rural areas and states that a lot of people thought had dodged the initial wave, including California. There has been a massive rush of home buyers moving to rural and suburban America away from the cities. The great migration has begun.

Subsequently, public anxiety is rising yet again. Protests such as those in Michigan over the lockdowns were overwhelmingly peaceful, yet liberty movement activists were demonized and accused of “inciting violence” and “spreading the virus”. Some groups with left-leaning political agendas used the death of George Floyd to create civil unrest. The mainstream media mostly lavished these groups with praise and refused to acknowledge that they might be spreading the virus.

The double standard is clear, but this is just the beginning.

As I have argued for the past few months, the REAL public crisis will strike when the secondary lockdowns are enforced, either by state governments or the federal government. Make no mistake, these orders are coming. We can already see restriction in some states being implemented, though they refuse yet to call the situation a “lockdown”.

California has recently added 24 counties to its “Covid watchlist”, and most of these counties have added new restrictions, including many non-essential businesses being ordered to remain closed.

The governor of Arizona announced statewide restrictions including business shutdowns, suggesting there may be a reopening at the end of July. If the previous lockdown is any indication, this means the next reopening will probably not happen until early September.

Similar restrictions have been announced in Texas, Florida, Georgia, etc. This is essentially a new shutdown that has not yet been officially labeled a “shutdown”.

So what does this mean for the U.S. economy going forward?

Well, the first lockdowns caused an explosion in unemployment, with 40 million jobs lost on top of around 11 million existing jobless. Beyond that, you can add the 95 million people without work that are no longer counted on the rolls by the Bureau of Labor Statistics. Only a portion of these jobs were regained when the reopening occurred. According to Shadowstats.com, the real unemployment rate including U-6 measurements is 31% – around the same level as it was during the Great Depression.

So far in 2020 there have been 4,300 major retail store closings, added onto the thousands of businesses already hit in 2019 in what many are calling “The Retail Apocalypse”. Small business closings are harder to gauge at this time, but according to Yelp, over 41% of their listed participants are announcing they are closing for good.

This outcome was easy to predict when it became clear that only 13% to 18% of businesses applying for the small business bailout loans received aid, and half of those businesses were actually large corporations

What happens next? The companies that did survive the first phase lockdowns are now going to get hit again, hard. I expect another 50% of small businesses to either close permanently or announce bankruptcy over this summer and fall. This means a second huge surge in job losses in the service sector.

It’s important to remember that the U.S. economy is 70% service based, and around 50% of total jobs are provided by small businesses. The lockdowns hit both these areas of our system mercilessly. And, with most of the aid from the government bailouts being diverted to major corporations, it’s as if someone was trying to deliberately crush the small business pillar of support for our economy. If you were attempting to drag the U.S. into an economic collapse, the Covid lockdowns are a perfect cover to make this happen.

Another economic threat is the slowdown in the supply chain. There will be renewed shortages in many goods. I have received numerous emails from readers who work in manufacturing, repair and acquisitions of vital parts for major companies who have told me that simple components, such as electronic and industrial parts that are required for factories to produce goods and repair goods, are almost gone. Meaning they are not being produced overseas in places like China, either due to the pandemic or geopolitical conflict. They tell me there is a maximum of two months before these components are completely gone.

The greater danger, however, is the higher likelihood of civil unrest. I’ve heard many people suggest that Americans will “never” put up with another round of shutdowns. I think it depends on the state you live in. If you live in places like California, Illinois, New York, or even Florida, the majority of people are going to conform to lockdowns even in the face of financial calamity. Interior states with more conservatives are not as certain. Regardless, I expect at least half the country to be shut down in the next few weeks, and those places that don’t shut down will be accused of “selfishly endangering others”.

As I have said many times since this crisis began, it does not matter how dangerous or deadly a virus is; shutting down the economy is assured destruction and is not an acceptable response.

Of course, certain special interest groups benefit greatly from the increased fear and chaos that economic instability brings. Right now, states like Georgia are pushing to stage the national guard to quell unrest, and I think this will spread to many places in the U.S. over the summer. They know what is coming, and they are worried about people hitting the wall of poverty that is ahead and reacting angrily.

As the globalist Imperial College of London published in March, the plan is for lockdowns to continue on and off for the next 18 months or more. This is not going away, and after the next wave of lockdowns, most Americans are finally going to realize it.

Rather than promoting localized production, independent economies and self-sufficiency, the establishment is going to suggest martial law and medical tyranny as the solution to the pandemic problem. In other words, they will demand total control over the population and the erasure of constitutional liberties in the name of “the greater good”.

These are the same people that downplayed the pandemic at the beginning of the year and refused to stop travel from China until it was too late. They are also the same people (including Dr. Anthony Fauci) who gave the Chinese millions of dollars to play around with the coronavirus at the Level 4 lab in Wuhan, which is the likely source of the current outbreak. I’m not sure why ANYONE would want to give more power to the people that caused the crisis in the first place.

Three factors are working hand-in-hand to undermine U.S. stability and create a rationale for totalitarian controls including the economic crash, civil unrest and the pandemic itself. Understand that preparations to protect yourself and your family must be finalized NOW. There will not be even a minor recovery after the next shutdown.

Mises Institute: COVID Lockdowns Crippled the Division of Labor, Setting the Stage for Civil Unrest

Photo courtesy Associated Press

Associate Professor Jonathan Newman of Bryan College writes for the Mises Institute about how the breakdown of voluntary participation in the economy created fuel for social disturbance in COVID Lockdowns Crippled the Division of Labor, Setting the Stage for Civil Unrest.

In his podcast, Dave Smith has likened the lockdowns to gasoline and the murder of George Floyd to a spark.

But why were the lockdowns fuel for social unrest? One of the reasons the lockdowns paved the way for social unrest is that they led to a widespread breakdown in the division of labor. This could only result in more conflict and social unrest.

Economist Ludwig von Mises has explained why this is so. In Human Action, Mises presents the division of labor as more than a purely economic concept. Although he certainly expounds the increased productivity attributable to the division of labor, he also heralds it as civilization itself. It is social cooperation and mutuality. He presents it in opposition to conflict and violence. The division of labor is predicated on and also results in peaceful relations between individuals.

Here, I want to discuss the gasoline, and not the spark. Mises.org writers have discussed the spark and the related issues of institutional problems with police departments, police brutality, a breakdown in trust in the police, and police militarization.

What Is the Division of Labor?

The division of labor is just what it sounds like: one person does one job while another person does a different job. In a market economy, these jobs are not assigned randomly, but are purposefully chosen by each individual according to his or her own skills and values. Instead of trying to produce everything we want to consume on our own, we produce one good and offer it in exchange for a variety of goods we prefer.

The ability to consume a larger variety of goods is not the only benefit of the division of labor. Total production increases enormously, such that each individual who participates in the division of labor enjoys a massive increase in his standard of living. The division of labor allows us to emerge from bare subsistence and flourish as a civilization, producing art, writing philosophy, celebrating holidays, and exploring space. These things are impossible for man in economic isolation.

One of the greatest laws of economics is the law of association, which Mises proves mathematically (uncharacteristically) in Human Action. The law of association shows that everyone who participates in the division of labor gains as a result. No one is excluded from this opportunity. Thus,

The law of association makes us comprehend the tendencies which resulted in the progressive intensification of human cooperation. We conceive what incentive induced people not to consider themselves simply as rivals in a struggle for the appropriation of the limited supply of means of subsistence made available by nature. We realize what has impelled them and permanently impels them to consort with one another for the sake of cooperation. Every step forward on the way to a more developed mode of the division of labor serves the interests of all participants. (p. 159)

Unraveling the Division of Labor

The undoing of the division of labor and the social cooperation that it both requires and entails is social conflict.

The market economy involves peaceful cooperation. It bursts asunder when the citizens turn into warriors and, instead of exchanging commodities and services, fight one another. (p. 817)

During the months of government-imposed lockdowns, everybody was prevented from participating in the division of labor as they were accustomed to. Even those who kept their jobs could not exchange goods with those who did not keep their jobs. The entire social nexus was reduced to a small list of government-defined “essential” services. The increase in unemployment is really only a part of the picture of the economic harm caused by the lockdowns. Everybody who relied on the goods and services produced by the so-called nonessential businesses was harmed: consumers, employees, and proximate businesses in the structure of production alike.

Man shall not live by government-defined essential services alone, however. For a short time, and where possible, citizens resorted to black markets and self-sufficiency (which, as we have seen, is hardly sufficient). But a spark and the cover of protests in the streets gave some a chance to acquire goods by theft. These opportunists are aided by additional mayhem like vandalism, violent assault, and arson. Unfortunately, both insufficient and over-the-top responses by police also add to the mayhem, giving violent rioters more opportunity and also poorly reasoned, two-wrongs-make-a-right self-justification for their aggression.

We only have three options for getting what we want: we can produce it, we can take from somebody who has produced it, or we can exchange peacefully with somebody who has produced it. The third option is the division of labor, and it is the only one that involves peaceful cooperation with others. It is also the only option that sustains civilization. Looting, vandalism, assault, and arson are regressive—they are not a means to advance society. They are the unraveling of society and the social harmony brought about by the division of labor…

Peace can only resume when entrepreneurs find it profitable to reopen their businesses. Government lockdowns and violent mobs are data for the entrepreneur’s decision-making process. Mises warns that it can get so bad that civilization crumbles…(continues)

SchiffGold: Nearly Half of Small Business Owners Expect to Close Down Permanently

An article at SchiffGold says that Nearly Half of Small Business Owners Expect to Close Down Permanently because of the pandemic shut down. This echoes previous studies. Datapro Research Company found that 43 percent of companies hit by a severe crisis never re-opened, and 29 percent more failed within two years. The American Red Cross has estimated that up to 40% of small businesses that experience a disaster never reopen. And a FEMA report after the 1992 Hurricane Andrew landing found that 80% of businesses which did not have a Business Continuity Plan failed within two years of the storm. We should expect similar numbers.

The economy was booming. The stock market was setting records. Then coronavirus came along and governments shut things down to minimize the pandemic. That led to massive layoffs and a nasty recession. But once states open up, things will spring back to life and the economy will go back to being great again.

That’s the mainstream narrative. But it’s not based on reality.

In truth, the economy was a Fed-induced bubble before the pandemic. The central bank has managed to reinflate the stock market bubble despite the economic destruction, but it is nothing but a Fed-induced sugar high. And the economy won’t likely rebound quickly, even after things open up.

There are all kinds of reasons to doubt the quick economic recovery narrative. We’ve reported on the number of over-leveraged zombie companies, skyrocketing household debt, the battered labor market, and a potential cash-flow crisis even after the economy gets moving.

Now we have another sign of long-term economic trouble. A survey conducted by financial services company Azlo found that nearly half of small business owners think they will eventually have to close their businesses for good.

Forty-seven percent of the small business owners surveyed said they anticipate shutting down, and 41% said they are looking for full-time work elsewhere.

This is on top of the small businesses that have already shut down and will never reopen.

The survey also asked questions about the Paycheck Protection Program (PPP) instituted through the CARES Act. The results were less than stellar, as Newsweek reports.

Less than half of participants—38 percent—involved in Azlo’s recent survey applied for PPP loans. Of those who did apply, 37% said the program was slow to distribute funds and 20% described the process as ‘painful,’ the company reported.”

It’s absurd to think the economy is going to come roaring back when nearly half of small business owners expect to shut down. Small businesses employ 58.9 million Americans, making up 47.5% of the country’s total employee workforce.

The economy would struggle to recover from the shutdown even if it was healthy before the pandemic. And it wasn’t.

Our Finite World: Economies Won’t Be Able to Recover After Shutdowns

Gail Tverberg of Our Finite World writes about the difficulties of recovering our businesses in Economies Won’t Be Able to Recover After Shutdowns. It’s much easier to close businesses than to start them up again.

Citizens seem to be clamoring for shutdowns to prevent the spread of COVID-19. There is one major difficulty, however. Once an economy has been shut down, it is extremely difficult for the economy to recover back to the level it had reached previously. In fact, the longer the shutdown lasts, the more critical the problem is likely to be. China can shut down its economy for two weeks over the Chinese New Year, each year, without much damage. But, if the outage is longer and more widespread, damaging effects are likely.

A major reason why economies around the world will have difficulty restarting is because the world economy was in very poor shape before COVID-19 hit; shutting down major parts of the economy for a time leads to even more people with low wages or without any job. It will be very difficult and time-consuming to replace the failed businesses that provided these jobs.

When an outbreak of COVID-19 hit, epidemiologists recommended social distancing approaches that seemed to be helpful back in 1918-1919. The issue, however, is that the world economy has changed. Social distancing rules have a much more adverse impact on today’s economy than on the economy of 100 years ago.

Governments that wanted to push back found themselves up against a wall of citizen expectations. A common belief, even among economists, was that any shutdown would be short, and the recovery would be V-shaped. False information (really propaganda) published by China tended to reinforce the expectation that shutdowns could truly be helpful. But if we look at the real situation, Chinese workers are finding themselves newly laid off as they attempt to return to work. This is leading to protests in the Hubei area.

My analysis indicates that now, in 2020, the world economy cannot withstand long shutdowns. One very serious problem is the fact that the prices of many commodities (including oil, copper and lithium) will fall far too low for producers, leading to disruption in supplies. Broken supply chains can be expected to lead to the loss of many products previously available. Ultimately, the world economy may be headed for collapse.

In this post, I explain some of the reasons for my concerns.

[1] An economy is a self-organizing system that can grow only under the right conditions. Removing a large number of businesses and the corresponding jobs for an extended shutdown will clearly have a detrimental effect on the economy. 

Figure 1. Chart by author, using photo of building toy “Leonardo Sticks,” with notes showing a few types of elements the world economy.

An economy is a self-organizing networked system that grows, under the right circumstances. I have attempted to give an idea of how this happens in Figure 1. This is an image of a child’s building toy. The growth of an economy is somewhat like building a structure with many layers using such a toy…

Click here to read the entire article at Our Finite World.

 

FFF: Republicans Are Now Good for Exactly…Nothing!

The Future of Freedom Foundation writes about how the Republicans no longer understand the economy in Republicans Are Now Good for Exactly…Nothing!

Nancy Pelosi, Chuckles Schumer and the rest of the Dem wrecking crew surely have the Trumpified GOP by the short hairs.

The latter are clueless about the real imperative, which is to halt the senseless shutdown of the US economy ASAP. So like deer caught in the headlights of public fear, outrage and hurt by the Covid Quarantines, they have blindly succumbed to bailing out one and all; and that, in turn, has opened the US Treasury to a congressional feeding frenzy that would make the New Deal porkers, the LBJ spenders and the Obama shovel-ready folks green with envy.

In less than a month, they have passed the $8.3 billion vaccine bill, the $100 billion relief and paid leave package and the $2.2 trillion Everything Bailout, and are now racing toward another $1.0 trillion interim CARES 2 funding bill to essentially double- down on all the outrageous pork and Free Stuff that was contained in CARES 1, which the House did not bother to even debate or approve by recorded vote.

And, alas, all of this is preliminary to the impending “stimulus/infrastructure” bill where the bidding starts at $2 trillion, meaning that the Imperial City is in the throes of a fiscal bacchanalia that defies imagination. It will leave America with unspeakable debts, political dysfunction and economic debilitation for years, if not decades, to come.

And exactly what is being loaded on the budgetary wagon while the denizens of the political party which is supposed to be the watchdog of the Treasury have their collective snouts buried in the public trough so deep that they too will need a respirator before long?

Well, it’s bad enough that Republicans voted for $1200 per person for upwards of 130 million workers who have not and will not loose their jobs and incomes owing to the covid shutdown, even if an unfortunate 30 million do become unemployed for a few weeks at the peak of the shutdown.

But if you ask what possible reason of policy or equity could justify this $300 billion eruption of Free Stuff, the best you can get is some kind of convoluted Keynesian asininity that is even more absurd than the old standby of hiring people to dig holes with teaspoons and then fill them back up with the same tools.

To wit, we are apparently giving the 130 million workers who are and will still be earning the same paycheck but spending far less because everything is closed (you can only spend about $25 per day on Netflix even if you watch movies dawn till dusk) another $1200 to spend on top of their normal income. Then, assuming they can find a place which is open to spend their extra loot, it is hoped such places will hire the 30 million covoid-layoffs so that they too will get back to living hand-to-mouth just like before.

Folks, once upon a time—even in the 1970’s when your editor arrived bright-eyed and bushy tailed on Capitol Hill—Republicans understood fundamental capitalist economics. They did not even have to be told there are no free lunches and that Uncle Sam cannot create production and income (i.e. wealth), but only shuffle it among citizens by taxation currently or by extracting it in the bye-and-bye from future taxpayers via piling up the public debt.

Click here to read the entire article at FFF.org.

See also Mises Institute: Why Keynesians Don’t Want You to Save Your Money