Tag: decline and fall

Clown World Makes You Stupid

Being raised in the traumatic environment of post-Christian America appears to be sufficient to reduce your IQ by a whole standard deviation:

In the study published in the journal Personality and Individual Differences, researchers from Kookmin University in Seoul and California State University compared the characteristics of a woman who grew up in South Korea to that of her sister, who was raised in the U.S.

The sisters were born in Seoul in 1974, but were separated from each other at the age of 2 after one of them got lost at a market. Despite the efforts of her parents to look for her at the time, the missing daughter was eventually adopted by an American couple.

The adoptee grew up without knowledge of her siblings, until she participated in a South Korean government program that reunited family members. In 2020, she learned through her DNA results that not only did she have an identical twin, but she has an older brother and an older sister as well.

Shortly after the program reunited the twins, they agreed to undergo a study involving a series of tests that compared their intelligence, personality profiles, mental health and medical history.

In the study, the twin who grew up in Korea described living in a loving and harmonious household, while the one who lived in the U.S. shared an upbringing with regular conflict and the eventual divorce of her adoptive parents. One similarity the twins shared was their medical background, having both undergone surgery to remove tumors from their ovaries.

Based on their IQ test results, the woman from the U.S. scored 16 points lower than that of her sibling in Korea.

And that was for children growing up in the 1970s and 1980s. No wonder so many people submitted to the vaxx 40 years later. The denizens of Clown World are quite literally retarded. Which explains my observation that MPAI.

As for the inevitable Nature vs Nurture, the important thing is to realize that base IQ comes from Nature, while Nurture can only reduce base IQ. The loving and healthy upbringing in Christian South Korea didn’t make the one twin more intelligent, it was the trauma of growing up in post-Christian Clown World America that reduced the intelligence of the adopted twin.

However, the extreme degree of the reduction leads one to suspect the adopted twin suffered some level of abuse during her formative years.

DISCUSS ON SG

The Collapsing Tripod

The Atlantic is not exactly a publication in which I have any trust whatsoever. But it is informative to note that even some of the most-hallowed mainstream media institutions are beginning to attempt to come to grips with the ineluctable fact that the economic order is on the verge of collapsing because the foundational principles upon which it rests have proven to be false.

The Anglo-American system of politics and economics, like any system, rests on certain principles and beliefs. But rather than acting as if these are the best principles, or the ones their societies prefer, Britons and Americans often act as if these were the only possible principles and no one, except in error, could choose any others. Political economics becomes an essentially religious question, subject to the standard drawback of any religion—the failure to understand why people outside the faith might act as they do.

To make this more specific: Today’s Anglo-American world view rests on the shoulders of three men. One is Isaac Newton, the father of modern science. One is Jean-Jacques Rousseau, the father of liberal political theory. (If we want to keep this purely Anglo-American, John Locke can serve in his place.) And one is Adam Smith, the father of laissez-faire economics. From these founding titans come the principles by which advanced society, in the Anglo-American view, is supposed to work. A society is supposed to understand the laws of nature as Newton outlined them. It is supposed to recognize the paramount dignity of the individual, thanks to Rousseau, Locke, and their followers. And it is supposed to recognize that the most prosperous future for the greatest number of people comes from the free workings of the market. So Adam Smith taught, with axioms that were enriched by David Ricardo, Alfred Marshall, and the other giants of neoclassical economics.

The most important thing about this summary is the moral equivalence of the various principles. Isaac Newton worked in the realm of fundamental science. Without saying so explicitly, today’s British and American economists act as if the economic principles they follow had a similar hard, provable, undebatable basis. If you don’t believe in the laws of physics—actions create reactions, the universe tends toward greater entropy—you are by definition irrational. And so with economics. If you don’t accept the views derived from Adam Smith—that free competition is ultimately best for all participants, that protection and interference are inherently wrong—then you are a flat-earther.

Outside the United States and Britain the matter looks quite different. About science there is no dispute. “Western” physics is the physics of the world. About politics there is more debate: with the rise of Asian economies some Asian political leaders, notably Lee Kuan Yew, of Singapore, and several cautious figures in Japan, have in effect been saying that Rousseau’s political philosophy is not necessarily the world’s philosophy. Societies may work best, Lee and others have said, if they pay less attention to the individual and more to the welfare of the group.

But the difference is largest when it comes to economics. In the non-Anglophone world Adam Smith is merely one of several theorists who had important ideas about organizing economies. In most of East Asia and continental Europe the study of economics is less theoretical than in England and America (which is why English-speakers monopolize Nobel Prizes) and more geared toward solving business problems.

First, Rousseau was always an absurd and nonsensical joke. Second, Steve Keen has mathematically proven the fundamental incorrectness of Adam Smith due to the unreliable nature of the collective demand curve. Third, List is not the solution to Smith, and for the same reason.

The hardest thing for even many of the people on the so-called ideological Right to accept – so-called because Left-Right ideology is incoherent, irrelevant, and entirely outmoded – is that the Enlightenment has proven to be an intellectual and philosophical dead end. Reason, at least in its human embodiment, has turned out to be irrational; all of the models and creeds and policies that rely upon the basic concept of human rationality have not only failed, but have been conclusively proven to be false.

It was simply inertia from Christendom that allowed the Enlightenment to pass itself off as progress. But the systematic eradication of Christianity from intellectual, professional, and public life combined with the adulteration of the European nations is finally overcoming that centuries-old inertia, to disastrous effect.

DISCUSS ON SG

Forever Swept Away

Alastair Crooke points out that we are witnessing the end to what he describes as the neoliberal cosmopolitan economic order upon which globalization was constructed.

The First World War signalled the end to a mercantilist order that had evolved under the aegis of European powers. One hundred years later, a very different economic order was in place (neoliberal cosmopolitanism). Believed by its architects to be universal and everlasting, globalisation transfixed the world for an extended moment, but then started the subsidence from its zenith – precisely at the moment the West was giving vent to its triumphalism at the fall of the Berlin Wall. NATO – as the order’s regulatory system – addressed its attendant ‘identity crisis’ by pushing for eastward expansion toward Russia’s western borders, disregarding the guarantees it had given, and Moscow’s virulent objections.

This radical alienation of Russia triggered its pivot to China. Europe and the U.S. however, declined to consider issues of due ‘balance’ within global structures, and simply glossed over the realities of a world order in momentous metamorphosis: with the steady decline of the U.S. already apparent; with a European faux ‘unity’ that masked its own inherent imbalances; and in the context of a hyper-financialised economic structure which lethally sucked out the juice from the real economy.

The present war in Ukraine therefore simply is an adjunct – the accelerant to this existing process of ‘liberal order’ decomposition. It is not its centre. Fundamentally geo-strategic in their origin, the explosive dynamics to today’s disintegration can be seen as blowback from the mismatch from diverse peoples’ looking now to solutions tailored to suit their non-western civilisations, and from the western insistence on its ‘one size fits all’ Order. Ukraine thus is a symptom, but is not per se, the deeper disorder itself.

Tom Luongo has remarked – in connection with the ‘messy’, confusing events of today – that that which he fears most, is so many people analysing the intersection of geopolitics, markets and ideology, and doing so with such striking complacency. “There is a stunning amount of normalcy bias in the punditocracy, too much ‘cooler heads will prevail’ and not enough ‘everyone’s got a plan until they’re punched in the mouth’”.

What Luongo’s retort doesn’t fully explain is the shrillness, the outrage, with which any doubting of the accredited ‘punditocracy’ of the moment is met. Plainly, there is a deeper fear stalking the lower depths of western psyche that is not being made fully explicit.

Wolfgang Münchau, formerly at the Financial Times, now authoring EuroIntelligence, describes how such a canonised Zeitgeist implicitly has imprisoned Europe in a cage of adverse dynamics which threaten its economy, its autonomy, its globalism and its being.

Münchau relates how both the pandemic and Ukraine had taught him that it was one thing to proclaim an interconnected globalism ‘as cliché’, but “It is quite another to observe what actually happens on the ground when those connections get torn apart … Western sanctions were based on a formally correct, but misleading premise – one that I believed myself – at least up to a point: That Russia is more dependent on us than we are on Russia … Russia however is a provider of primary and secondary commodities, on which the world has become dependent. But when the largest exporter of those commodities disappears, the rest of the world experiences physical shortages and rising prices”. He continues:

“Did we think this through? Did the foreign ministries that drew up the sanctions discuss at any point what we would do if Russia were to blockade the Black Sea and not allow Ukrainian wheat to leave the ports?… Or, did we think we can adequately address a global starvation crisis by pointing the finger at Putin”?

“The lockdown taught us a lot about our vulnerability to supply chain shocks. It has reminded Europeans that there have only two routes to ship goods en masse to Asia and back: either by container, or by rail through Russia. We had no plan for a pandemic, no plan for a war, and no plan for when both are happening at the same time. The containers are stuck in Shanghai. The railways closed because of the war.

“I am not sure the west is ready to confront the consequences of its actions: persistent inflation, reduced industrial output, lower growth, and higher unemployment. To me, economic sanctions look like the last hurrah of a dysfunctional concept known as The West. The Ukraine war is a catalyst of massive de-globalisation”.

Münchau’s response is that unless we cut a deal with Putin, with the removal of sanctions as a component, he sees “a danger of the world becoming subject to two trading blocs: the west and the rest. Supply chains will be reorganised to stay within them. Russia’s energy, wheat, metals, and rare earths will still be consumed, but not here – We [just] keep with the Big Macs”.

So again, ‘one’ searches for an answer: Why are the Euro-élites so shrill, so passionate in their support for Ukraine? And risk heart-attack from the sheer vehemence of their hatred for Putin? After all, most Europeans and Americans until this year knew next-to-nought about Ukraine.

We know the answer: the deeper fear is that all the landmarks to liberal life – for reasons they do not understand – are about to be forever swept away.

The World Doesn’t Work That Way Anymore, Alastair Crooke

Note that this is not a prediction. This is an observation of what is already happening, of what is already in progress. It is the actualization of what I have been predicting since 2004. And it is now readily apparent that the 2033 scenario originally articulated 18 years ago remains very much in play. Cooke summarizes his observations in a single cogent paragraph.

“Here is the point: The fixation with Ukraine essentially is but a gloss pasted over the realities of a global order in decomposition. The latter is the source of the wider disorder. Ukraine is but one small piece on the chess board, and its outcome will not fundamentally change that ‘reality’. Even a ‘win’ in Ukraine would not grant ‘immortality’ to the neoliberal rules-based order. The noxious fumes emanating from the global financial system are wholly unconnected to Ukraine – but are that much more significant for they go to the heart of the ‘disorder’ within the western ‘liberal order’.“

And while I, like everyone else, remain uncertain about what will eventually replace the failing current order, I nevertheless anticipate the inevitable change due to the fact that lords of the neoliberal order have, in its incipient death throes, helpfully clarified for us precisely how wicked and awful and terrible it truly was while producing the fattest, most licentious, most solipsistic, and most credulous populations in human history.

Whatever difficulties and challenges the collapse of the neoliberal rules-based order poses us, we can be confident that they will not be worse than the horrors that were intended for us in a Clown World without end. It’s an unusually astute article, so read the whole thing, which tends to explain the panic implicit in the recent statement

DISCUSS ON SG

A Rare Confluence

In which, for once, I actually agree with the Andrew Anglin Committee:

Here is a simple outline of what I’ve argued over and over again regarding the overarching picture of the current situation:

• There is a long-running plan for a global “scientific dictatorship” that was more or less solidified in the 1970s when they first started pushing the environmentalist flapdoodle.

• In the 1970s, the people planning this did not believe that China was a threat at all, because they basically thought Chinamen were backward autistic morons.

• In the 1990s, Western industry was moved to China, creating massive wealth in China, and everyone just assumed that these small-eyed people they thought were autistic morons would be turned into gay retards by a little bit of economic success.

• In the late 00s and early 10s, it became clear that China was not interested in being a part of the globalist project – they were just going to keep the money and do their own thing, which is a kind of merchant empire that is not dependent on the interdependence of the Western globalist order.

• By this time, no one running elite organizations in the West was capable of recalibrating the agenda based on the predictions about China being proved wrong.

• The elite are pushing forward with the agenda as it was laid out before China’s current direction was clear.

I don’t think this is really that complicated, but a lot of people seem to not understand what I am saying. I have no desire or ability to force anyone to agree with me, but if they’re going to disagree, they should put forward a response to what I’ve said and a countertheory on why it appears that the West is totally destroying itself in a program that is going to leave the Chinese ruling the world.

The Status of the Globalist Agenda Has Been Escalated from “Confused” to “Chaotic”, 4 June 2022

I tend to agree with these observations. As I’ve pointed out previously, the high-performance, low-trust population that tends to dominate the globalist elite of Clown World has been dealing with high-performance, high-trust European populations for centuries and is accustomed to manipulating them with astonishing ease using nothing more than credit and rhetoric. The modern Chinese, however, have proven to be an unexpectedly high-performance, low-trust population, and they have the additional benefit of political leadership from very intelligent men of principle like Xi Xinping and intellectual leadership from brilliant intellectuals like Wang Hunin.

This was, very understandably in light of well-documented Chinese history, not even remotely anticipated by anyone, least of all by the planners of the globalist elite. There was absolutely no reason to expect that the Chinese wouldn’t fall headlong into Clown World every bit as quickly and completely as they were taken in by Marxist-Leninism.

Nor was the rise of Russia from the ashes of the much-plundered Soviet Union expected. And now, here we are, with the short-sighted, unimaginative posterity of the founders of Clown World attempting to blindly implement the plans made by their wicked, but more intelligent predecessors despite the fact that their evil plans no longer accord with reality.

Remember, it isn’t just the native populations of the West that have been materially dumbed-down. The globalist elite has also been affected by their own self-destructive policies, and their degradation has been exacerbated by their determination to silence everyone who tells them anything they don’t want to hear.

And just in case you weren’t convinced that Clown World is being ruled by retards.

The United States is involved in “extremely active” discussions with European countries aimed at limiting the revenues Russia can generate from selling oil without interrupting supplies, US Treasury Secretary Janet Yellen said on Tuesday, according to Reuters.

Did it seriously not occur to anyone that a) Europe needed Russia’s oil more than Russia needed revenue from selling oil to Europe, and, b) there is no shortage of other buyers of Russian oil?

Also, about that….

European companies have almost doubled their shipments of Russian oil since the start of Vladimir Putin’s invasion of Ukraine, despite desperate efforts by EU leaders to squeeze the Kremlin war machine by blocking Russia’s exports from global markets.

DISCUSS ON SG

The Downhill Slide

The owner of a trucking company explains why the USA is rapidly sliding into the worst recession it has ever seen.

I own a small trucking company, and this is what the fuel crisis is doing to our country… Today I filled up my truck to deliver products that help keep our country fed. When I filled up my truck, it cost me $1,149.50. This is ONE truck, for ONE day of fuel. I own three. So for one day of operation, it’s costing me $3,448.50. (Yes, we use a full tank of fuel every single day, sometimes more than 1 tank per day).

My trucks generally run 5-6 days a week, so we’ll just estimate on the low side and say five. That’s $17,242.50. Last week was over $20k for ONE week, that I have to pay out of my pocket to try and keep not only my children fed, but those of my employees, and our country.

Mark my words, we are on a downhill slide to the worst recession our country has ever seen. Trucking companies are going under left and right. (Literally hundreds weekly.) If you’re not aware, what you’re wearing, what you’re eating, what you’re living in, what you’re driving, what you’re reading this on, was delivered by a truck.

If something drastic doesn’t change in the next few weeks/months, I promise you, you’ll see empty shelves everywhere you look. You’ll see chaos as people fight for the basic necessities of everyday life. Food, medicine, etc…

I pray that all of you have the ability, knowledge, and skills to fend for yourselves. Not only against those who would do you or your family harm, but to be able to find sustainable food and water.

Fortunately, Russia is about to surrender any day now due to the brave Ukrainian military forces that are already within sight of Moscow, so fuel prices should rapidly decline to affordable levels before people actually start to starve.

Even so, it would be foolish to rely upon military outcomes, no matter how certain we are. So, why not just convert the entire US truck fleet to electric engines? Or – and let’s face it, this is thinking well outside the box – what about powering each truck with its own windmill? Since driving generates wind, a wind-powered vehicle should be able to operate for pennies on the diesel dollar!

It’s becoming increasingly apparent that Ukraine is Poland, Europe is Japan, and the USA is Germany in this upsized cartoon remake of WWII. Which, of course, makes Russia England and China the Soviet Union.

Russia ramps up gas supply to China. Gazprom intends to become China’s biggest natural gas supplier, accounting for more than 25% of Chinese imports by 2035.

DISCUSS ON SG

The Limited Appeal of Clown World

The globalist elite are beginning to realize that we’re not locked in here with them, they’re locked in here with us. The former Italian Prime Minister Silvio Berlusconi laments the bitter reality that Clown World only rules over 17.9 percent of the human population:

The Ukraine conflict has revealed “a very bitter reality. Russia is isolated from the West, but the West is isolated from the whole world,” he said.

The former prime minister explained that only 1.4 billion people live in systems “that can be broadly defined as free and democratic, of a Western type,” while the “other 6.4 billion human beings live under dictatorships, autocracies, oligarchies, theocracies, authoritarian or totalitarian systems in various ways and to varying degrees.”

He added that the largest countries in the world – China, India, Russia, and many other Asian, African, and Latin American nations – “are not with the West at the moment.”

Berlusconi noted that, despite all “the errors and crimes” committed by the US and Europe, the West created “the freest and most democratic political, civil and social system that humanity has ever known in its history,” while ensuring “the greatest well-being” of its people.

However, he said, the Western world has failed in one aspect – “due to the lack of authoritative leadership in recent years and in the present but also due to lack of confidence in itself,” it has not been able to create a system of alliances or come up with an attractive political and economic concept.

The West ceased to be appealing, or aspirational, the moment that the satanic elite were successful with enough of their incessant subversions of Western institutions and take control of it. There is, in fact, nothing “Western” about Clown World; it is comprised of imposters wearing the collective skinsuit of the former inhabitants.

The West had three components: Christianity, the European nations, and the Greco-Roman philosophical legacy. All three of these components have been abjured and significantly adulterated by the current rulers of Clown World. So, having witnessed this, it is hardly a surprise that the rulers of great historical civilizations such as China and Russia, and well-established societies such as the clans of the dar-al-Islam and the various Asian, African, and Latin American nations, see absolutely no appeal in permitting the cancerous convergence of their own civilizations and societies by Clown World imperialists.

The canary in the Clown World mine is Japan. Under its influence, Japan is fake, gay, barren, and demoralized. Many Japanese of the early 20th Century saw this coming as a result of Japan’s submission to the West; Yukio Mishima’s literary legacy was only one of the many prescient rejections of Clown World rule. I anticipate that Japan, which has a very distinct and noble cultural history, will see another Restoration, one hopes a more successful one, and lead the revolt against Clown World and its disintegrating neo-liberal rules-based world order.

DISCUSS ON SG

The New Berlin Wall

An interview with Michael Hudson addressing the economic aspects of the unrestricted war between the Imperial USA and the Sino-Russian alliance.

PS: Let’s say all these European programmes like the REPOWER Programme come into effect, how do you expect the EU standing to be on the stage after that?

MH: Well, the EU standing will be squeezed economically. It was trying to be a powerhouse in the world economy but in the last month the euro has been declining steadily against the dollar and it’s on the way to one dollar per euro. That’s because it’s having to pay much foreign exchange for energy, for food, for weapons. It’s shrinking in terms of other economies.

PS: Where do you think the EU’s standing will be in relation to powerhouses such as China?

MH: Well, it’s obviously out of the game. Instead of putting its own interests first, it’s really putting the US interests first. It’s acting more like a satellite of the United States thank trying to its own destiny. The whole plan of the EU 20 years ago was to get rich by investing in Russia, investing in China and a mutual exchange. And now it’s decided to stop that. The US has absorbed Europe. The war in Ukraine is a war by the US primarily to pull Europe into the US orbit, prevent European transactions with Russia or China. So Western Europe is being left out, while Russia, China and Eurasia are going with the rest of Asia. Europe is simply going to be left behind. It’s losing its export markets, it’s being squeezed and -as you just mentioned- it’s pushed up the retirement age because it’s spending its budget on replenishing American military arms instead of investing in industry as it had been doing since 1945.

PS: You did indeed write that Europe has ceased to be an independent state. You’ve almost mentioned that the United States wanted to sever EU trade ties with Russia and China. How exactly did you get to that conclusion and do you think that this alleged US plan is succeeding?

MH: Well, I simply read the speeches of President Biden and his team. They’ve said that China is America’s number one enemy. If you’re going to call a country your number one existential enemy, you’re not going to be increasing your trade and mutual dependency with it. And it’s already insisted that its allies sanction -meaning boycott- Russian sports not only of oil and agriculture but of titanium, helium and all of the other exports that Russia has been making. Europe is been following US directions not to have contact with Russia and without contact with Russia it’s not going to have contact with China because China sees that Europe is going to do to it exactly what it’s been doing to Russia.

PS: Obviously as a result of this current situation, for many years now, Russia and China have been growing closer diplomatically and economically. How do you see a global shift in power evolving over the next 5, 10 years or so?

MH: The current war is dividing the world into two parts. There’s going to be a US dollar area of the US, Europe and its satellites. And there’ll be a multipolarity; there’ll be a group of Russia, China together and basically they will be making their proposal of a different way of organising the world economic affairs to Africa, Latin America and other Asian countries. And other Asian countries, Latin America and the global south will see that it can get a better deal with Russia and China than it can get with the United States.

PS: On the flip side of that coin, one could argue that the existing situation, world order, has only been cemented by this war. You see NATO more aligned than ever, you see Europe more aligned than ever. You see Finland and Sweden on the brink, perhaps, of joining NATO. What would your response to this be, Michael?

MH: This integration of Europe into the United States sphere is like the new Berlin Wall. It’s isolated the US from the whole rest of the world. So instead of a victory for the United States it’s self-isolated itself because US strategists have realised that they’re losing the economic war with China, Russia and the whole group of emerging nations. All they can try to do is hold on to Europe as their one source of income to exploit from Europe what it can no longer get from any other country.

The Great Bifurcation between the economy of Clown World and the economy of Sovereign World is becoming increasingly obvious to the more intelligent observers. No wonder the smarter globalists such as Henry Kissinger are urging a Ukrainian surrender in order to try to preserve the failing status quo.

DISCUSS ON SG

Checkmate, Putin

The Russian military has no response for the US military’s stunning and brave transwarrior slay queens:

The U.S. Air Force is hosting Drag Queen Story Time at Ramstein Air Base Library in Germany.

“We’re celebrating Pride Month at the Ramstein Library with Drag Queen Storytime! Join us with special guest reader Stacey Teed! Be sure to wear your brightest and most colorful outfits!,” says the Facebook event announcement, which was posted by the Ramstein & Vogelweh Air Force Libraries page.

This suddenly puts all those insane stories from Roman history about Nero and other imperial freaks into perspective, doesn’t it? What future reader would ever believe that in a time of war, when its ally is being badly defeated and when its opponent has demonstrated unstoppable hypersonic weapons technology, the US military’s response was to provide pedophiles dressed as women access to the children on its military bases?

DISCUSS ON SG

The End of Globalization

The economic insanity of the post-Cold War era is rapidly coming to an end, as the global economy is dividing again into three parts, Clown World (USA-UK-EU-Israel), Sovereign World (China-Russia-Iran), and the unaligned countries.

Moscow expects increased economic cooperation with China as the West takes a more dictatorial stance, in global affairs, Russian Foreign Minister Sergey Lavrov warned on Monday. Russia intends to build relations with independent countries and will decide how to deal with the West if and when it comes to its senses, he added.

“Now that the West is taking the position of a dictator, our economic ties with China will grow even faster,” Lavrov told students at the Primakov School… If and when the West comes to its senses and wants to offer something in terms of resuming relations, Russia will “seriously consider whether we will need it or not,” the foreign minister told the high-schoolers.

Moscow isn’t just implementing a strategy of import substitution in response to anti-Russian sanctions, but “must stop in any way being dependent on the supply of anything from the West” and rely on its own capabilities and those countries that have “proven their reliability” and act independently, Lavrov explained.

The difference is that whereas the First World previously had the advantage because the Second World was subject to a dysfunctional economic ideology, it’s now Clown World that is subject to an insane ideology that permeates and weakens every single aspect of its societies. This means that the odds of success are heavily in favor of Sovereign World, a situation that is compounded by the pressure that Clown World is presently putting on the unaligned countries to support its insanity.

Those who think that the lessons of history support the probability of Clown World success are looking superficially at the nominal labels of the parties involved rather than the substance of the various parties and their relative capabilities. Consider this: whereas the populations and the industrial capacities was heavily stacked in favor of the Triple Alliance in WWI and the Allies in WWII, they are even more heavily stacked in favor of Sovereign World now.

And whereas Britain was once powerful enough to force Chinese submission in the First Opium War of 1839-1842 by itself, it no longer has the ability to meaningfully oppose Iran, let alone Russia or China. Not only are the states of Clown World no longer what they were, unlike the nations of Sovereign World, they are no longer even proper nations anymore.

DISCUSS ON SG

The Fed Can’t Do What It Must

Karl Denninger sees the proximate problem, but not the structural impediment to solving it:

Either Hike 200bps Today and 100 Each Mtg Until PPI Cools. or watch the economy literally burn to the ground.

At the same time all inhibitions on energy production here in the US must be lifted immediately. All of them. All coal plants shut down but still operational and those intended to be retired must have those orders rescinded immediately. Further, all refined product exports must be banned.

If you didn’t get the hint from WalMart and Target’s earnings announcements you’re deaf, blind, stupid and might be starving and homeless within months. Fuel prices continue to ramp, in no small part not because of oil but because we’re exporting products to other nations, specifically Europe. This must end now.

There is no instant solution but if we do not put a stop to the transportation cost and fertilizer problems now by this fall and winter the lower 50% of the economic strata in this nation will be hard-pressed to both feed their families and heat their homes. That is the combination that leads to riots and worse. Witness Sri Lanka where its already happening and politician homes are being set on fire.

Stocks? Who cares. The entire ramp from roughly 2011 onward likely will and should come back off. If you believed that said price advances of roughly a triple over that period of time were reasonable you’re nuts. If you predicated your future or present on it there’s nothing we can do to help you at this point; you ridiculously overpromised to yourself and overspent behind that.

Ditto for real estate. There’s nothing to be done other than let prices go back to where they should be. They will, by the way.

The Fed absolutely should be raising interest rates and raising them very steeply. The last time the USA saw this sort of inflation, it was the 1970s and interest rates went as high as 20 percent. However, there was considerably less debt then, and both consumers and corporations were able to service the debt payments even at those higher rates because the prices were so much lower.

Now that debt-consumption has raised prices by artificially stimulating demand, consumers can’t even make their payments on very low, historically low, interest rates. The level of defaults would be astronomical, and would essentially amount to a debt jubilee that would utterly destroy every single federally-regulated financial institution in the country. So, the Fed cannot, and will not, do what the laws of economics require of it.

My expectation is that there will either be some sort of federalization of the entire US economy, possibly on a neo-global scale that includes the NATO countries, or a recurrent series of defaults in which rates are raised slightly, allowing the weakest institutions to fail first in the hopes that the stronger institutions can survive on the strength of the assets previously held by the failing ones.

Neither option will work, of course, but the Fed has successfully kicked the can down the road for more than a decade already, so perhaps they might be able to buy themselves another year or three.

DISCUSS ON SG