Archive for January, 2016

The Whiplash Plateau


My interview on the final weekly C-Realm Podcast. KMO is moving on, so am I (in various ways) and so we took some time to recap and draw some conclusions. It\’s the end of an era. Please have a listen.

The Future is Blivets


[Die Zukunft heißt Blivet]
[Il futuro è nel Blivet]
[L’avenir est aux blivets]

If you have been paying attention, you may have noticed that the global financial markets are currently in meltdown mode. Apparently, the world has hit diminishing returns on making stuff. There is simply too much of everything, be it oil wells, container ships, skyscrapers, cars or houses. Because of this, the world has also hit diminishing returns on borrowing money to build and sell more stuff, because the stuff we build doesn\’t sell. And because it doesn\’t sell, the price of stuff that\’s already been made keeps going down, lowering its value as loan collateral and making the problem worse.

One solution that\’s been proposed is to convert from a products economy to a services economy. For instance, instead of making widgets, everybody gives each other backrubs. This works great in theory. The backrub industry doesn\’t generate an ever-expanding inventory of backrubs that then have to be unloaded. But there are some problems with this plan. The first problem is that too few people have enough money saved up to spend on backrubs, so they would have to get the backrubs on credit. Another problem is that, unlike a widget, a backrub is not a productive asset, and doesn\’t help you pay off the money you had to borrow to pay for the backrub. Lastly, a backrub, once you have received it, isn\’t worth very much. You can\’t auction it off, and you can\’t use it as collateral for a loan.

These are big problems, and one proposed solution is to create good, well-paying jobs that put money in people\’s pockets—money that they can then spent on backrubs. This is best done by investing in productivity improvements: send people to school, invest in high tech and so on. It\’s an intuitively obvious idea: productive workers are easier to employ than unproductive workers, because the stuff they make ends up cheaper, and people can afford to buy more of it. Whether they do buy more of it is debatable, especially if there is more than enough of it already and nobody has any extra money saved. Still, the theory makes sense.

But this theory doesn\’t seem to be working all that well: no matter how much money we put into automation—robotic assembly lines, internet-based virtualization, what have you—the number of unemployed workers isn\’t going down at all. And it\’s even worse with driverless cars. In theory, they are great: if the driver doesn\’t have to do the driving, then she can spend the time giving her passengers backrubs. But no matter how much money we throw at driverless cars, the number of unemplyed drivers, or unemployed massage therapists, isn\’t going down.

But even if we give up on trying to stimulate demand through job creation and just let everyone starve, we can still put our faith in rich people. There are people who are as rich as entire countries! Surely they can spend and consume on everyone else\’s behalf, and make the economy boom. But it turns out that it\’s very hard for just one person to consume as much as an entire country. To make that happen, it\’s necessary to pay people to consume on one\’s behalf. But if other people can spend your money just like you, then that defeats the purpose of being wealthier than everyone else, and all that hard work of swindling people and of gaming the markets would turn out to have been in vain.

* * *

But here is a solution that is so stunningly simple and elegant that somebody must have thought of it already. Alas, make a note: I am the first!

A Blivet

The solution is this: sell everything and go long blivets. Blivets are geometrically impossible objects: they can be drawn, but, by their nature, they cannot be manufactured. This solves a major problem with the futures markets, which is that people can actually take delivery of their futures contracts. This means that the stuff being speculated on actually has to exist. And this means that what some people have the audacity to call “the real economy” actually has to exist. What a nuisance!

For example, the gold futures market trades 300 times more gold than physically exists. [Update: the number just went up to 542.] This means that if just 0.3% [Update: 0.18%] of futures contracts resulted in deliveries, the vaults would be empty and there would be nothing to trade. The horrible thing is, unreasonable people, who take delivery of their gold, do exist: the Chinese, the Russians and various other nations with cash on hand or US Treasuries to liquidate keep doing this. Promoting “regime change” and looting various countries\’ gold reserves helps a bit (Iraq, Libya and Ukraine have been looted already; Syria should have been looted by now if it weren\’t for those pesky Russians!). But the eventual outcome of all this is force majeur: somebody wants to take delivery, but the vaults are empty.

Source: Zerohedge

A similar problem exists with the biggest futures market in the world: in crude oil. Here, traders have been having a merry old time taking advantage of a notional glut, driving the price of crude lower and lower. They could drive it as low as $1 a barrel, but then what? The problem is, nobody on earth can produce oil that cheaply, and so a day will come when somebody will demand delivery on their $1/bbl crude contract, and the only response will be an echo, as tumbleweeds blow across the abandoned oil fields.

You should have guessed the moral of the story by now: if you are going to “ephemeralize” the entire economy—the workers/consumers along with their productive capacity—you better switch to trading in things that are ephemeral too, or you\’ll risk a market implosion, deflation, deleveraging and financial collapse followed by poltitical, commercial, social and cultural collapse in four-part cacophony with many screaming refrains and a shrieking, tumultous coda. I am not kidding. I wrote the book on that.

This is where blivets would be such a great help. A blivet is by definition a “paper blivet” because a “physical blivet” is a physical impossibility. If you demanded physical delivery of your blivets, people would simply laugh at you, twirl their fingers around their temples and roll their eyes. That would be cra-cra, like demanding your rights under the US constitution, or pretending that climate change is a conspiracy theory.

Blivets are composed of the purest financial ether—even more ethereal than Bitcoins (those long strings of magical digits that get their value from an algorithm, a block chain, and a “coolness factor”). Bitcoins are ethereal too, but they have to be physically mined by burning lots of electricity in running big computer farms, and this causes a big problem: Bitcoins are scarce.

Now, some people claim that scarcity is what gives things value, but that\’s clearly nonsense. Look at the US dollar: the number of dollars has been expanding out of all proportion to the growth of the US economy, but has there been any hyperinflation? Of course not! The problem isn\’t with printing money; the problem is with giving it to regular people, who don\’t know that they should only invest it in blivets. Instead, they do economically destructive things—like buying food for their children and heating their houses during winter. That\’s what causes hyperinflation, not the money-printing! There are only two potential problems with money-printing: not printing enough money, and not printing it fast enough.

There are still a couple of problems with my proposed blivetization of the global economy, but these too can be solved by dint of financial innovation.

First, there is the problem of the blivet futures market potentially going down instead of up. We don\’t like it when markets go down; so how do we prevent that from ever happening? Here\’s an idea: introduce the so-called Schrödinger\’s Blivet: if you are short blivets, then, when your contract expires, the clearing house may demand that you deliver on it, in which case a simple rule applies: based on a flip of a coin, it is determined whether your blivets exist or not. This requires those who are shorting blivets to maintain a rather large reserve, and would make them a lot less interested in wrecking the market. Because of this, blivet prices may stagnate sometimes, but over time they should go up monotonically.

Second, there is the problem of where to get additional capital to sink into blivets. You\’ve liquidated all your other holdings, you are long blivets, but how is the blivet market supposed to expand? If it doesn\’t expand, then that means a lack of growth, and we don\’t like it when there isn\’t growth. With all other productive capacities idled and no wealth generation occurring outside the blivet market, where is that new investment capital going to come from? Here\’s an idea: it\’s called Auto-Rehypothecation. Whenever you pledge blivets as collateral for a loan (which you invest in blivets, of course) the loan itself automatically becomes available to be used as collateral for another loan.

Thanks to these financial innovations, blivet valuations should go through the roof in no time, and keep going. In fact, they may go up so high that it may become necessary to start quoting blivets in scientific notation instead of simple decimals. Eventually it may even make sense to drop the mantissa and just quote the exponent. Why, with all physical constraints removed, the number of blivets being traded will be set free to exceed the number of atoms in the observable universe!

Problem solved! I\’ll take 1082 blivets, please!

QUIDNON Assembly: Stuff and Glue


When building a boat, no matter what technique is used, most of the time goes into making the parts. Much of the quality of the resulting hull has to do with the quality of the pieces—the precision with which they are fitted together. Much time is squandered grinding and trimming them to achieve a tight fit. All of this work requires some level of expertise, plus a well-equipped workshop.

This won\’t work for QUIDNON, which is to be assembled barn-raising style on some sheltered bit of coastline in a few summer weekends by people who have never built a boat before, and, if all goes well, never will build a boat again, boatbuilding being entirely incidental to the far more interesting activities of living aboard a boat and sailing it around.

Therefore, QUIDNON will arrive at the construction site in the form of a set of shipping pallets loaded with all of the parts pre-made. The kit of parts from which the hull is assembled will consist of a large set of plywood panels, milled out using an excessively precise numerically controlled machine. Each piece will be numbered, and each assembly step documented in a printed assembly manual.


Defeat is Victory

John Holcroft

[Niederlage ist Sieg]
[La défaite, c’est la victoire]
[Sconfitta è Vittoria]

On the wall of George Orwell\’s Ministry of Truth from his novel 1984 there were three slogans:


It occurred to me that these apply just a little bit too well to the way the Washington, DC establishment operates.

War certainly is peace: just look at how peaceful Iraq, Afghanistan, Yemen, Libya, Syria and the Ukraine have become thanks to their peacemaking efforts. The only departures from absolute peacefulness which might be taking place there have to do with the fact that there are some people still alive there. This should resolve itself on its own, especially in the Ukraine, where the people now face the prospect of surviving a cold winter without heat or electricity.

Freedom is indeed slavery: to enjoy their “freedom,” Americans spend most of their lives working off debt, be it a mortgage, medical debt incurred due to an illness, or student loans. Alternatively, they can also enjoy it by rotting in jail. They also work longer hours with less time off and worse benefits than in any other developed country, and their wages haven\’t increased in two generations.

And what keeps it all happening is the fact that ignorance is indeed strength; if it wasn\’t for the Americans\’ overwhelming, willful ignorance of both their own affairs and the world at large, they would have rebelled by now, and the whole house of cards would have come tumbling down.

But there is a fourth slogan they need to add to the wall of Washington\’s Ministry of Truth. It is this:


The preposterous nature of the first three slogans can be finessed away in various ways. It\’s awkward to claim that American involvements in Iraq, Afghanistan, Yemen, Libya, Syria or the Ukraine have produced “peace,” exactly, but various lying officials and assorted national teletubbies still find it possible to claim that they somehow averted worse (totally made-up) dangers like Iraqi/Syrian “weapons of mass destruction.” What they have produced is endless war financed by runaway debt which is leading to economic ruin. But ignorance helps a lot here.

Likewise, it is possible, though a bit awkward, to claim that slavery is freedom—because, you see, once you have discharged your duties as a slave, can go home and read whatever crazy nonsense you want on some blog or other. This is of course silly; you can stuff your head with whatever “knowledge” you like, but if you try acting on it you will quickly discover that you aren\’t allowed to. “Back in line, slave!” You can also take the opposite tack and claim that freedom is for layabouts while we the productive people have to rush from one scheduled activity to another, and herd our children around in the same manner, avoiding “unstructured time” like a plague, and that this is not at all like slavery. Not at all. Not even close. Nobody tells me what to do! (Looks down at smartphone to see what\’s next on today\’s to-do list).

With ignorance, you don\’t even have to make the case: ignorant people are some of the most knowledgeable people on earth—according to them. I see that all the time in the hundreds of blog comments I delete; ones that start with “Surely you must know that [something I don\’t know]” or “By now it should be clear to everyone that [something unclear]” are particularly amusing. On some days I find such ignorance almost overpowering, and so ignorance is indeed strength.

But it is very hard to claim that defeat is victory, and herein lies a great challenge for the Washington, DC establishment. When they are victorious, your leaders get to have their way with the world; when they are defeated, the world has its way with them. This is something that is hard to hide: your leaders say what it is they want to do; and then they either succeed at it or fail. When they fail, they still try to call it a success, but if you look at their original statements of purpose, and then the results, and the two don\’t match at all, then it looks just a bit like a defeat-ish sort of thingy no matter how they writhe and squirm and twist. This is a good thing, because with all the propaganda the Ministry of Truth puts out, it is hard for the average person to ascertain the nature of the “facts on the ground.” But when it comes to victory vs. defeat, you can usually take it straight from the horse\’s rectum. Yes, the Ministry\’s public relations consultants can still claim that “we forced the enemy to give us a free deep-tissue massage of our glutei maximi,” but a precocious 8th-grader can still decode that to “We got our asses kicked.”

So, allow me to enumerate some American victories. Or should I say defeats? Your choice; the two are the same.

• Thanks to the trillion or so spent on the war effort, the 1.5 million Iraqi casualties, and the 5,000 dead US soldiers, there is no longer any al Qaeda in Iraq now (just like there was under Saddam Hussein) and the country is free and democratic.
• Thanks to many years of continuous effort which cost well over half a trillion dollars and the lives of 3500 or so coalition soldiers, the Taleban in Afghanistan have been vanquished and the country is now at peace.
• The Syrian regime has been overthrown and Syria is now peaceful and democratic, and not at all a war-torn basket case that has produced over a million refugees, a large part of it ruled by Islamic militants that are too radical even for al Qaeda.
• Overall, the problem of Islamic extremism has been dealt with once for all, and George W. Bush\’s “Islamofascists” (remember that term?) are but a vague memory. ISIS or ISIL or the Islamic State are something else entirely, plus us bombing them sporadically at great expense has “degraded” them a tiny bit… maybe.
• Thanks to a perfectly legal and very necessary US-managed coup, Ukraine is on its way to being a stable and prosperous member of the EU and NATO, and the freedom-loving Ukrainians are no longer at all dependent on Russian gas, coal and nuclear fuel for being able to merely survive the winter of 2014-15, or on Russian good will to send in humanitarian relief convoys, house and feed the refugees from their civil war, or broker their peace agreements with each other.
• In accordance with our grand geopolitical strategy for eternal world domination, we successfully kicked Russia out of Crimea and are busy building a huge NATO military base there to make sure that Russia never becomes a great world power again but is forced to comply with our every whim.
• Thanks to our relentless diplomatic efforts, Russia is now completely isolated, which is why it can\’t be constantly signing gigantic trade agreements with countries around the world or championing the cause of non-western nations who don\’t like being pushed around by the west and have no desire to westernize.
• Our sanctions have really hurt Russia, and not at all the EU which didn\’t lose a huge export market and is not at all at risk of losing access to Russia\’s natural gas which it doesn\’t need anyway. Nor did they provide any sort of a huge protectionist benefit to Russia\’s domestic producers, or a big new export market to our economic rivals.
• Regime change in Moscow is a white ribbon\’s throw away, and our expensively nurtured political pets inside Russia are more popular than ever and are feeling all sorts of love from the Russian people. After all, fewer than 90% of Russians respect and support Putin for the great things he has achieved for them, so our stooges like Khodorkovsky or Kasparov should have no problem getting at least 1% in the next presidential elections, sending them straight into the Kremlin.
• Thanks to our relentless political pressure, Putin is now a chastised man, ready to be reasonable and bend to our will, and not at all saying things like “This will never happen!” in an internationally televised annual address to his nation\’s elected leaders. In any case, nobody listens to his speeches because our national media doesn\’t need cover them because they are so long and boring.

…and, last but not least…

• America is the world\’s indispensable nation, world\’s (second) greatest economic power (but rising fast), and American leadership is respected throughout the world. When President Obama said so in a recent speech he gave in China, the audience did not at all laugh out loud right in his face, roll their eyes, make faces or move their heads side to side slowly while frowning.

How can you avoid recognizing the importance of such things, and the fact that they spell DEFEAT? Easy! Ignorance to the rescue! Ignorance is not just strength—it is the most awesome force in the universe. Consider this: knowledge is always limited and specific, but ignorance is infinite and completely general; knowledge is hard to convey, and travels no faster than the speed of light, but ignorance is instantaneous at all points in the known and unknown universe, including alternate universes and dimensions of whose existence we are entirely ignorant. In short, there is a limit to how much you can know, but there is no limit at all to how much you don\’t know but think you do!

Here is something that you probably think you know. The American empire is an “empire of chaos.” Yes, it sort of fails somehow to achieve peace, prosperity, democracy, stability, avert humanitarian crises, or stop lots of horrible crimes. But it does achieve chaos. What\’s more, it achieves a wunnerful new type of chaos just invented, called “controlled chaos.” It\’s much better than the old kind; sort of like “clean coal”—which you can rub all over yourself, go ahead, try it! Yes, there are naysayers out there that say things like “You reap what you sow, and if you sow chaos, you shall reap chaos.” I guess they just don\’t like chaos. To each his own. Whatever. 

Want more? Consider this. If you live in the US, you probably celebrated Thanksgiving a little while ago, by gorging yourself on turkey and stuffing with cranberry sauce, and maybe some pumpkin pie. You think you know that this holiday is related to the Pilgrims, who first celebrated Thanksgiving at Plymouth, Massachusetts, but I am sure you don\’t remember the exact year. But I am sure you think that these Pilgrims celebrated Thanksgiving by feasting with the natives. You might even tell your children this story, and think that you are teaching them a bit of history rather than expanding their field of ignorance.

Now, here are some points of fact. The Pilgrims weren\’t Pilgrims at all, but colonists. They were re-branded as “Pilgrims” in the 19th century. Believe me, nobody ever went on a pilgrimage to Plymouth, Massachusetts! These colonists ended up there because, being incompetent sailors, they missed Boston Harbor by half a day\’s sail, and ended up in Plymouth Harbor, which is as exposed, shoal and as useless today as it was then. They did not celebrate Thanksgiving; being weird religious zealots, they didn\’t even celebrate Christmas. Despite fake “evidence” from “social media” of the period, they certainly didn\’t feast with the locals, who by that time spoke pretty good English and traded with the world. The locals thought these colonists were a bizarre religious cult (which indeed they were), that they were lousy and smelly (they never washed and had no idea about saunas or sweat lodges) and had repulsive personal habits (such as carrying their snot around with them wrapped in a rag). They were also quite hopeless at hunting or fishing, and survived by plundering the locals\’ kitchen gardens, then starved. To top it off, the “national” holiday was first created by Abraham Lincoln during the height of the Civil War, which (this you must surely know!) was much, much later. And he didn\’t call it “Thanksgiving”; he called it “Day of Atonement” for the horrible crimes Americans were committing against each other at the time.

But that\’s before the Frozen Turkey Marketing Association had a go at adjusting that story. It was a plan as simple as it is brilliant: they overdose you on Tryptophan, then, next day, while you are still groggy, they send you out into an over-hyped shopping frenzy and, sure enough,  you will be rack up some high-interest debt, which it will take you well into the next year to pay off. Plow some of that interest back into turkeys and holiday hype, and you have a national industry—one that drives people into debt buying imported products they don\’t need (remember, if doesn\’t say “Made in China” then it\’s probably fake) until everybody is broke.

With a history that fake, the American Ministry of Truth may yet manage to project it into the future as well. They may produce a level of ignorance so astonishingly high that Americans at large won\’t know that they have been defeated, thinking that the torrential downpour of the world\’s rancid slops raining down on their heads is God\’s rain, and being thankful for it. Unless, that is, enough Americans wake up and start making the word DEFEAT part of the national vocabulary. This is not a exceptional nation, not an indispensable nation, but a defeated one. Defeated by their own hands, mind you, because nobody particularly went out of their way to defeat them. They showed up to get beaten, over and over again, until they got what they came for.

Now, defeat has proven to be a great learning experience to many countries that then went on to be quite successful: Germany (on second try), Japan, Russia after the Cold War… Of course, the first step in that learning process is to admit defeat. But if you don\’t want to do that, that\’s OK, because there is always ignorance to give you all the strength you need.

Sailing through a Meltwater Pulse


It\’s January, and the Greenland ice sheet is melting. There was recently a winter hurricane in the North Atlantic, and another in the Pacific. On New Year\’s day there was a thaw at the North Pole. Greenand is melting; when it melts, the ocean level will go up 20 feet (6m). This will be enough to flood all the coastal cities—permanently. So far, predictions as to how fast this melting will occur have proven to be worthless, with the actual melting rate outpacing them by a huge margin. And although many people still believe that the effect will be gradual—less than an inch a year—another view on the matter is that at some point there will be an avalanche-like collapse of the Greenalnd ice sheet, which will generate a meltwater pulse, sending ocean levels up many feet in a single step.

And there are all those who, whenever I publish something that mentions climate change, crawl out of the woodwork and gnash their exoskeletal mandibles at me, to the effect that climate=weather, and it\’s all a conspiracy theory. They are idiots and deserve a boathook in the eye. Sailing on… [UPdate: if you think that calling idiots idiots and saying that they deserve a boathook in the eye would dissuade them from posting comments for me to delete, you\’d be wrong. That\’s not how idiots\’ minds (don\’t) work. Mention catastrophic climate change, and idiots come running.]

For the sake of this discussion, I will assume a meltwater pulse of 10 feet (3m). What will it mean for those of us who live on the water and sail along the coastline? And, more specifically, what will be the impacts for the sailboat design I have been working on for about a year now—QUIDNON, the houseboat that sails?

Read more…

Financial collapse leads to war


[Финансовый крах приводит к войне]
[Les US échoueront même à échouer]
[Il crollo finanziario che conduce alla guerra]
[Finanz-Kollaps führt zum Krieg]

[This is a rerun from March of last year, whose time has finally come. With the new year, a sea change seems to have occurred in the financial markets: instead of “melting up,” the way they used to, they have started “melting down.” My original prediction is that this will lead to more armed conflict. Let\’s see if I was right.]

Scanning the headlines in the western mainstream press, and then peering behind the one-way mirror to compare that to the actual goings-on, one can\’t but get the impression that America\’s propagandists, and all those who follow in their wake, are struggling with all their might to concoct rationales for military action of one sort or another, be it supplying weapons to the largely defunct Ukrainian military, or staging parades of US military hardware and troops in the almost completely Russian town of Narva, in Estonia, a few hundred meters away from the Russian border, or putting US “advisers” in harm\’s way in parts of Iraq mostly controlled by Islamic militants.

The strenuous efforts to whip up Cold War-like hysteria in the face of an otherwise preoccupied and essentially passive Russia seems out of all proportion to the actual military threat Russia poses. (Yes, volunteers and ammo do filter into Ukraine across the Russian border, but that\’s about it.) Further south, the efforts to topple the government of Syria by aiding and arming Islamist radicals seem to be backfiring nicely. But that\’s the pattern, isn\’t it? What US military involvement in recent memory hasn\’t resulted in a fiasco? Maybe failure is not just an option, but more of a requirement?

Let\’s review. Afghanistan, after the longest military campaign in US history, is being handed back to the Taliban. Iraq no longer exists as a sovereign nation, but has fractured into three pieces, one of them controlled by radical Islamists. Egypt has been democratically reformed into a military dictatorship. Libya is a defunct state in the middle of a civil war. The Ukraine will soon be in a similar state; it has been reduced to pauper status in record time—less than a year. A recent government overthrow has caused Yemen to stop being US-friendly. Closer to home, things are going so well in the US-dominated Central American countries of Guatemala, Honduras and El Salvador that they have produced a flood of refugees, all trying to get into the US in the hopes of finding any sort of sanctuary.

Looking at this broad landscape of failure, there are two ways to interpret it. One is that the US officialdom is the most incompetent one imaginable, and can\’t ever get anything right. But another is that they do not succeed for a distinctly different reason: they don\’t succeed because results don\’t matter. You see, if failure were a problem, then there would be some sort of pressure coming from somewhere or other within the establishment, and that pressure to succeed might sporadically give rise to improved performance, leading to at least a few instances of success. But if in fact failure is no problem at all, and if instead there was some sort of pressure to fail, then we would see exactly what we do see.

In fact, a point can be made that it is the limited scope of failure that is the problem. This would explain the recent saber-rattling in the direction of Russia, accusing it of imperial ambitions (Russia is not interested in territorial gains), demonizing Vladimir Putin (who is effective and popular) and behaving provocatively along Russia\’s various borders (leaving Russia vaguely insulted but generally unconcerned). It can be argued that all the previous victims of US foreign policy—Afghanistan, Iraq, Libya, Syria, even the Ukraine—are too small to produce failure writ large enough to satisfy America\’s appetite for failure. Russia, on the other hand, especially when incentivized by thinking that it is standing up to some sort of new, American-style fascism, has the ability to deliver to the US a foreign policy failure that will dwarf all the previous ones.

Analysts have proposed a variety of explanations for America\’s hyperactive, oversized militarism. Here are the top three:

1. The US government has been captured by the military-industrial complex, which demands to be financed lavishly. Rationales are created artificially to achieve that result. But there does seem to be some sort of pressure to actually make weapons and field armies, because wouldn\’t it be far more cost-effective to achieve full-spectrum failure simply by stealing all the money and skip building the weapons systems altogether? So something else must be going on.

2. The US military posture is designed to assure Americans of their imagined “full-spectrum dominance” over the entire planet. But “full-spectrum dominance” sounds a little bit like “success,” whereas what we see is full-spectrum failure. Again, this story doesn\’t fit the facts.

3. The US acts militarily to defend the status of the US dollar as the global reserve currency. But the US dollar is slowly but surely losing its attractiveness as a reserve currency, as witnessed by China and Russia acting as swiftly as they can to unload their US dollar reserves, and to stockpile gold instead. Numerous other nations have entered into arrangements with each other to stop using the US dollar in international trade. The fact of the matter is, it doesn\’t take a huge military to flush one\’s national currency down the toilet, so, once again, something else must be going on.

There are many other explanations on offer as well, but none of them explain the fact that the goal of all this militarism seems to be to achieve failure.

Perhaps a simpler explanation would suffice? How about this one:

The US has surrendered its sovereignty to a clique of financial oligarchs. Having nobody at all to answer to, this American (and to some extent international) oligarchy has been ruining the financial condition of the country, running up staggering levels of debt, destroying savings and retirements, debasing the currency and so on. The inevitable end-game is that the Federal Reserve (along with the central banks of other “developed economies”) will end up buying up all the sovereign debt issuance with money they print for that purpose, and in the end this inevitably leads to hyperinflation and national bankruptcy. A very special set of conditions has prevented these two events from taking place thus far, but that doesn\’t mean that they won\’t, because that\’s what always happens, sooner or later.

Now, let\’s suppose a financial oligarchy has seized control of the country, and, since it can\’t control its own appetites, is running it into the ground. Then it would make sense for it to have some sort of back-up plan for when the whole financial house of cards falls apart. Ideally, this plan would effectively put down any chance of revolt of the downtrodden masses, and allow the oligarchy to maintain security and hold onto its wealth. Peacetime is fine for as long as it can placate the populace with bread and circuses, but when a financial calamity causes the economy to crater and bread and circuses turn scarce, a handy fallback is war.

Any rationale for war will do, be it terrorists foreign and domestic, Big Bad Russia, or hallucinated space aliens. Military success is unimportant, because failure is even better than success for maintaining order because it makes it possible to force through various emergency security measures. Various training runs, such as the military occupation of Boston following the staged bombings at the Boston Marathon, have already taken place. The surveillance infrastructure and the partially privatized prison-industrial complex are already in place for locking up the undesirables. A really huge failure would provide the best rationale for putting the economy on a war footing, imposing martial law, suppressing dissent, outlawing “extremist” political activity and so on.

And so perhaps that is what we should expect. Financial collapse is already baked in, and it\’s only a matter of time before it happens, and precipitates commercial collapse when global supply chains stop functioning. Political collapse will be resisted, and the way it will be resisted is by starting as many wars as possible, to produce a vast backdrop of failure to serve as a rationale for all sorts of “emergency measures,” all of which will have just one aim: to suppress rebellion and to keep the oligarchy in power. Outside the US, it will look like Americans blowing things up: countries, things, innocent bystanders, even themselves (because, you know, apparently that works too). From the outside looking into America\’s hall of one-way mirrors, it will look like a country gone mad; but then it already looks that way. And inside the hall of one-way mirrors it will look like valiant defenders of liberty battling implacable foes around the world. Most people will remain docile and just wave their little flags.

But I would venture to guess that at some point failure will translate into meta-failure: America will fail even at failing. I hope that there is something we can do to help this meta-failure of failure happen sooner rather than later.

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My Prescription for 2016: Collapse Early and Often

Tony Futura

[Mein Rezept für 2016: Frühzeitig und häufig Kollabieren!]

[Ma prescription pour 2016 : Effondrez-vous rapidement et souvent !]

[La mia ricetta per il 2016: Collassare presto e di frequente]

We are in the time of year when most sensible animals living in northerly climates are hibernating in burrows and hollow tree trunks, while the somewhat less sensible pundits make their predictions for the coming year. My prediction is always the same—things will go on more or less same as before, until something major breaks, while the probability of something major breaking goes up with each passing year. I have called this event “collapse,” and have predicted, year after year, that it will eventually happen. And so, instead of repeating this less than useful prediction, this year I will instead provide a prescription.

Not too many people, I expect, will want to follow my prescription; not too many of my family members, or friends, or acquaintances, or you who are reading this. And that\’s fine because, as I have learned over and over again, there is no strength in numbers. Quite the opposite: the probability of any given trick working is in inverse proportion to the number of times it is tried, or the number of people who try it. And so, if you are reading along and think “I can\’t possibly do this because of [insert lame excuse]!” then—good! Fine with me. Fewer people equals more oxygen.

And that applies to the few people who will actually bother to read this. Lots more people will not want to read this, because—what collapse? Gasoline prices are low, Obama has shut down most of the wars, the economy is strong enough for the Fed to have started hiking rates, and once Bernie Trump gets into the White House, everything else will be set right too. To the people who think that, someone like me, who predicted collapse a while back, was clearly wrong, and needs to be psychoanalyzed, not followed. Again, fine with me, so long and thanks for all the bullshit.

The reasons it\’s all bullshit are as follows.

• Gasoline prices are low because high oil prices crashed the economy. In turn, low oil prices are destroying the North American oil patch, which was only showing new signs of life thanks to fracking and tar sands, which are expensive to produce and only make sense when oil prices are high. Rest assured, prices will go back up, and then back down, until, in the end, oil comes to be regarded as useless toxic waste. A year ago I described exactly this scenario.

• The wars are over because all of them pretty much ended in defeat for the US. None of them achieved any of their stated objectives. Now, some of you will jump up and try to comment that the stated objectives were not the real objectives, which were to sow chaos and destruction for the sheer hell of it while enriching defense contractors. That\’s fine too, because such “real” objectives are consistent with imperial collapse: empire wants to steal a precious vase; empire smashes it instead; success! Moreover, whatever the objectives, they don\’t matter any more, because now they can\’t be achieved no matter what. The new Russian/Chinese/Indian/Syrian ordnance, such as the S-300/400/500 air and space defense systems, the Kalibr long-range supersonic cruise missile, along with various electronic warfare systems such as Khibiny, has rendered most US forces obsolete. You can say that defeat is victory but, as I explained two years ago, it isn\’t. Cancel Red Alert and set course for nearest dry dock.

• The Fed is pretending to hike rates to avoid the impression that it has lost control. This is not the only sort of pretense being attempted in the financial arena; there are plenty of others. The US economy isn\’t growing, and if you subtract out the effect of runaway debt (which will never be repaid no matter what scenario you consider as likely) then it\’s actually shrinking. More accurately, it can be said that it is sucking in whatever it can in order to avoid collapsing. It is a black hole, as I described half a year ago.

• As far as the “Bernie Trump will save us” theme, it is well understood by now that the US is no longer a democracy. (Maybe it was one once upon a time, maybe not; it doesn\’t matter.) Consider the matter settled. Anyone who thinks that it is still possible to effect positive change in the US by voting is a conspiracy theorist of the most miserable, deluded kind.

* * *

There are some general properties of collapses to keep in mind.

1. All things that must collapse eventually do. All empires collapse—no exceptions. All buildings collapse—unless they are demolished first. All Ponzi schemes—such as the current financial system, based on runaway debt—collapse when you least expect them to. Seeing as collapses aren\’t optional, it makes sense to get used to the idea of them happening, and to learn how make the best of them. Some people consider this and are filled with grief. As I pointed out before, collapse is the worst possible time to suffer a nervous breakdown, so please get your blubbering over with ahead of time.

2. Some collapses are actually good for you. Some really important things could be saved provided whatever less important thing that would cause them to collapse collapses first. For instance, if indistrial civilization were to collapse soonish, this would avoid ecosystem collapse, leaving whatever survivors would be left with breathable air and a survivable climate. And if the gigantic bubble in human population, which grew apace with the burning of fossil fuels, were to pop before turning the planet into a giant smoldering trash heap, then the few survivors would have a reasonable chance of making it.

3. Bigger collapses are nastier than smaller ones. For example, if you had lots of local banks and credit unions making loans to people who then couldn\’t repay them, then some large number of these banks and credit unions would collapse, insured depositors would be repaid, bad debts would be written off, and the entire system would eventually recover. But if you have a handful of gigantic banks and financial institutions holding most of the bad debts, and they fail all at once, then that brings down the entire system. And if you bail them out, then the entire system ends up on life support for the rest of its life, because nobody has any incentive to stop generating bad loans, since now everyone expects to be bailed out again and again.

4. Frequent collapses are better than infrequent ones. This is because unless things—be they populations, Ponzi schemes, economies, cities or empires—collapse on a regular basis, they tend to get too big. And when they get too big, their collapse (which is inevitable, see Point 1 above) becomes bigger, making them worse (see Point 3 above). Plus, frequent collapses of the nonfatal kind can be actually good for you (see Point 2).

For example:

• If the electric grid collapses now and again, then you will eventually learn that you need to get yourself a 12V system, a generator, some solar panels, a wind generator, and install LED lights.
• If water pressure goes down to zero periodically, then you will learn that you need to put in some cisterns, a filtration system, a demand pump, and collect water off the rooftop.
• If garbage collection stops for periods of time, then you will learn to incinerate and to compost, and will try to minimize the amount of nonbiodegradable trash you generate.
• If paid work disappears for periods of time, then you will learn that you need to keep a few months\’ worth of savings around to ride out these periods.
• If stores run out of food on a semi-regular basis, then you will learn that you need to grow your own food, put a chicken coop in the back yard and figure out how many lazy beds of potatoes you need.
• If banks periodically confiscate all your money (that\’s called a “bail-in,” and it\’s actually been made legal not too long ago), then you will learn to keep an absolute minimum of money in the banks, and figure out other, more reliable forms in which to store your savings.
• If you were to periodically find yourself cut off from the medical system, then you would find out ways of staying healthy and of treating yourself.
• If you periodically found it impossible to buy gasoline, you would learn that you can\’t rely on your car, and would instead bicycle, or walk, or take public transportation.
• If your country\’s government periodically turned fascist and started detaining, torturing and killing people indiscriminately, then you\’d learn that you need to get yourself a second passport, and practice getting out of the country in a hurry.

These are all examples of small, frequent collapses that are good for you.

But that\’s not what everyone seems to be aiming for, now, is it? What everyone seems to be aiming for is preventing any and all of these small, frequent, nonfatal collapses. However, such efforts are in direct contradiction with Point 1: “All things that must collapse eventually do.” Instead of preventing collapse, such tactics guarantee a single, huge, catastrophic collapse that can very well turn out to be fatal for huge masses of people. But that\’s OK: see Point 2: if “the gigantic bubble in human population… pops before turning the planet into a giant smoldering trash heap, then the few survivors will have a reasonable chance of making it.”

And so, what if you aspire to being one of these few survivors who might stand a reasonable chance of making it? My prescription is simple: Collapse Early and Often.