Using Hitchcock's Notorious KEY Shot to Focus on Political Palms - Part 3/3

••• today's entry continues here below •••

» Unsustainable » "The Road up ahead is OUT!"

So .. when I look out over the valley that is 2012, what do I see? You should hope I have no prophetic gift .. because I see it getting ugly, or I see it getting worse .. just below the layer of FOG sitting there.

[ UPDATE February 29, 2012 - Heck, the Chairman of the Federal Reserve, Ben Bernanke himself, has warned members of Congress that he SEES the United States economy headed for a "massive fiscal cliff" on January 1st, 2013, which is a mere 11 days from December 21st.

Now I do not know if the Mayans were a detail-oriented people, but 11 days is pretty dang close. I think the Chairmen would agree. "Massive," you say, Ben? </update> ]

So the question at hand seems to be not if, but rather » WHEN. When will the fog lift?

Allowing myself the freedom of unfettered imagination .. I see it going down something like this (  . just playing with my creativity here, for fun) » there's a spark. A little spark.

But it grows. And things get brighter as the spark gets bigger. And the brightness causes people to be able to see thru/into the fog.

Here's the part where you get to use your OWN imagination .. and you know what Napoleon said about imagination. Einstein, too.

What *is* clear however, is that most Americans will to need to adapt to a lower standard-of-living (SOL). Most. So as you can see, SOL also = shit-outta-luck.

We had the The Great Depresson. We had the Great Recession. Next up » the Great Adaptation.

If the American people continue to lose purchasing power as their real incomes slide, while everything (except housing) costs more .. uh, you neednt possess prophetic gifts to figure out that one.

If the economy is sputtering along after years of Trillion dollar deficits to help "stimulate" it, what is going to happen when that stimulous goes away? (Because it obviously cant continue forever.)

Dont need to be an Economic Einstein to figure basic math » 3 minus 1 equals 2. Two is less than three.

And just like with Corzine (a former U.S. Senator from Jersey) you'll find that the money is gone baby, gone.

Didnt Jon Corlezonie also star in the Sopranos? (Guess I was wrong. It appears that he just looks like some of the actors.)

$1.2 billion. "Uh, we kinda lost it."

Wasnt just numbers on a balance sheet. No, it was real people's real money.

How many trunk-loads full of $100-dollar bills does it take to equal $1.2 billion? A lot.

And nobody's in jail. Or has even been arrested. Or charged. Actions speak louder.

Surprised? Me neither. The most accurate term is » impunity.

Wasnt Jon a former CEO of Goldman Sachs .. from '94 to '99? (Yeah, I think he was.)

So let me see if I got this straight .. Jon went to Goldman Sachs where he met smart money people, made friends and learned all about the intricacies of financial markets and how they work.

Then he went to Washington where he met smart goverment people, made friends and learned about the intracacies of how government does (and doesnt) operate.

The he "lost" $1.2 billion. Of other people's money. Do I have it right?

Does this not have the appearance of .. what's the word I'm looking for here? Well, you dont need me to tell you what it looks like.

Most would say that Jon learned good .. real good. Seeing that a fabulous amount of money is missing from the customer accounts and nobody is in jail .. or heck, has even been charged. What a system they have created for themselves. A giant free-money tree.

I read somewhere that Jon was seen chatting with Ken Lay on his new yacht. But that couldnt be right, could it? (I must be thinking of somebody else.)

"I didnt plead the 5th with my old buddies in Congress. So that proves I really-really dont know where the money is hiding."

Meanwhile, "Hey you, over there, downloading an MP3! Stop, thief! Officer, arrest that man! The nerve of some people. Can you believe that guy? Throw his ass in jail." [ Doesnt seem right, does it? ]

My buddy, the Dog, who grew up in Jersey (Hoboken), and graduated from Columbia (NYC) .. he says that, in Jersey, "If you lose $1.2 billion, you're a colossal fuck-up. But if you steal 1.2 billion, and dont get caught, you're a demigod. And Jon's no fuck-up."

Now everybody KNOWS (and admits) that a crime was indeed committed here .. because money was indeed transferred out of customer accounts and into the general fund .. which is illegal. Yet dozens of regulators and investigators say cant figure out what happened to the money or where it went.

Surprised? Either those guys at MF Global are the financial wizards they claim to be, or they're very connected.

Or maybe it's not llegal to 'lose' a billion dollars of customer money. Lose .. as in, "Uh, we cant find it."

Until Jon Corleozonie and his "I plead the Fifth," cronies trade in their expensive Wall Street threads for a standard-issue prison jump-suit (preferably day-glo orange), nobody is going to have much trust, or confidence in you guys.

Because We the People know that the laws you write do not apply to you and yours. There are names that describe this type of injustice.

By the way, "I plead the Fifth," [bookkeeper Edith O'Brien] means » "I'd rather not tell you guys about all the illegal shit we've been doing at MFGlobal .. cuz you guys might use it to send us to jail."

Here's a good question » What is the credit limit of the United States government? $20 Trill? $25 Trill? How long 'til we find out? Are we TRYING to find out? Do we want to? (find out)

The reason our government is able to secure such low borrowing rates (.. at least part of the reason) .. is because they have made it clear they have no qualms about sticking our children with the tab. (Thanks, kids. We sure appreciate it.)

"See that young sap(ling) over there? The one sitting in the booster. Yeah, that one. Give him the bill. And while you're at it, bring me another bucket of escargot."

There must be something I'm not seeing. Because it seems so obvious. Are we not on an UNSUSTAINABLE path?

Unsustainable is not a good path to be on. Means something is seriously wrong. Our road is lined with Warning signs that read » Danger ahead!

unsustainable:

"Not able to be maintained or supported in the future without damaging or depleting a resource."

If you happen to be driving down the road .. say, in your pink Cadillac, and you see a sign posted on the side of the road .. very prominently (.. so everybody can see it) "Road Out Ahead" .. that means you are on an "unsustainable" path.

At the very least .. we're in for a bumpy ride. But that's only if we take the last detour. If not .. we go sailing off .. into the drink. "Might wanna buckle up, boys."

If so, then obviously something needs to change. Right? Not if, but when? And it seems like the longer we wait, the worse it will get. Is this not clear as day?

Pundits love to disagree over everything, but I've never heard any of them argue that our current economic trajectory is sustainable. Have you?

Seems that our Government has NO INTENTION of paying down the debt they've accumulated for our kids .. seeing they cant even agree to balance the budget and stop us from going further into debt.

Or am I missing something? (Such as a secret debt payment-plan .. that I dont know about.)

All the economic models that our government has been using for us, for you & me & our kids, have turned out to be shit. Based on an overly optimistic element of fancy (.. known as "unfunded liabilities" .. more info » here).

While the models they use for themselves are much more conservative .. made of steel-reinforced concrete. Truly beautiful works-of-art overlaid with goldleaf. The details of their design have been deliberated and agonized over for many years.

If our government spending is on an unsustainable path .. that means WE (you & me & our kids) are on an unsustainable path. Not them. It doesnt mean they are on an unsustainable path. They've already been taken care of. (Which is why they dont seem very concerned .. that things seem to be on the skids.)

I doubt they can really understand what the world looks like from our perspective. How can they? Lots of people struggling to hold it together.

Maybe these people are not desperate yet, but they can see Desperation .. waiting for them, out on the front lawn, uncomfortably close, where it has set up camp .. right next to the For Sale sign.

And sometimes Mr. D. waxes rambunctious at night and causes a ruckus that wakes the parents. And sometimes they have trouble getting back to sleep. So they lie there, staring at the ceiling. Sound familiar?

I'm sure things look far rosier seated at a fund-raiser .. sponsored by Friends with lots of funds. "Pass the bucket of escargot, Bretton."

So, as you can see .. we always return to the » fund-raising. The funny fund raising.

[ Update: June, 2012 - Seems the term unsustainable has entered the public conversation. See the video at the end of this article at t=9:20 to t=10:40, where Bernanke is addressing members of Congress. ]

The Heavily-Medicated Patient Analogy, Extended Version

My purely instinctive feelings are » there is something inherently wrong with the design of our economy that has made it sick.

And like someone with the FLU, rest is needed for a few days, or a week, for the natural process of healing to occur.

But the powers-that-be dont want our economy to rest .. because they fear it might never get back up, might never recover (.. die, like a terminal patient).

For political reasons, they want the economy up and out, every morning, bright and early. "More strong coffee over here."

Havent forgotten that we are at war, have you? On the other side of the planet. Wars cost lots of money. Fabulous amounts. Treasury-busting amounts. And two wars cost twice as much. Bust that treasury twice as fast.

So they keep "stimulating" and "easing" and taking measures, both fiscal & monetary, to keep us, uh I mean, their economy, on its feet.

"It doesnt need to go very fast. Just keep it going. Take whatever steps necessary. What ever you do, dont let it rest."

Do you not feel the effects of this constant stimulus yourself? As tho the world's biggest carrot were danging forever before you, calling out sweet promises of instant gratification.

While behind follows the world's biggest stick. Menacing. Forever threatening to tell the world that you dont measure up, cuz you dont have what it takes, cuz you dont make enough money.

And I just happened to have this magic card. This magic plastic card .. that can help you reach that carrot, and silence that stupid talking stick.

It fits nicely into your wallet, so you never need to be without it. Ever. Nobody will know. (You know the deal.)

Or maybe I am just more sensitive to it .. sitting here in SoCal, where we're famous for inventing the saying » he who dies with the most toys wins. (Newport Beach.)

There is a school-of-thought out there that suggests .. what's good for the economy-at-large is not necessarily good for the individual consumer .. and vice versa.

Sure, I love the stimulating effects of coffee, but I take a break every now & then. And when I push myself too hard and get sick, I lie down and rest.

Is it not the case .. when we are either unwilling or unable to rest, that the shit just seems to linger forever? You become like a zombie. The March of the Walking Dead. Carrying the crud with you, everywhere you go.

Guess what I'm trying to say is .. it feels like the economy is getting medicine when what it really needs is rest. Hayek says WE are the Economy. Think about it.

From the Keynes vs Hayek rap-video.

The economy's not a car
There's no engine to stall
No expert can fix it
There's no "it" at all
The economy's us
We dont need a mechanic
Put away the wrenches
The economy's organic

[ I am sooo déjà vu'ing on The Matrix right now, feeling like a battery. ]

The Fed's most recent stimulus program, called "Operation Twist", is set to expire on June 30, 2012. We'll know more then .. how the economy will respond when the most recent junkie's IV is removed .. or maybe not.

» Disclosure

I have an issue with long-term medication (.. give me points for self-awareness) .. cuz I have (had) relatives who died of cancer.

And what you notice (.. if you've ever watched someone you love die before your eyes, wasting away to nothing) .. is, uh that » as the prescribed medicine increases, their health gets worse. They get worse.

Scary shit, for sure. (At the end, they get morphine.)

[ Cancer is not caused by what you eat; cancer is caused by what's eating you. Trite but true. ]

Of course, I understand the proportions are designed to match (.. the doses to the need/state of the patient). But for me, this inversely proportional relationship (.. which graphs like a big 'X') had a strange side effect.

Now, perhaps this analogy is not valid when applied to the economy, but at least I'm thinking. (For myself.) And it seems that Hayek's arguments would suggest my analogy is (valid).

The perspective (right now) that makes the most sense to me (.. because of my experiences .. which lead to » my assumptions .. which lead to » my theories) is [ "Drum roll, please." ]

A little medicine can be a good thing. A great thing, even. But when the medication NEEDS TO CONTINUE .. over an extended period .. that's a bad sign. Because, IF IT CONTINUES .. the road (.. in my experience) always leads to » death.

And we all know our economy has been getting lots of medicine for a long time now. Years, dawg. And it looks like they're preparing to administer another dose. A larger dose.

Bill Gross, aka "the Bond King," who runs the world's largest bond fund, says there HAS TO BE a QE3 "and perhaps even a QE4" .. because whenever the Fed has paused ther QE program since 2009, the stock prices have fallen and Economies have slowed.

They have determined we need another dose? A larger dose? We do? Think about that. (Cantcha almost see them wheeling in the hospital bed?)

The word/term that they themselves use to describe the State-of-the-Recovery is » fragile. Here's two definitions (neither very promising):

1. (of an object) Easily broken or damaged.
2. Flimsy or insubstantial; easily destroyed

Much of politics however, is about word-play (.. which is why most Americans have trouble trusting politicians).

So let me offer another word .. that I think better captures the State of our Union, and you tell me whether or not you think it fits more accurately » malignant:

1. Dangerous to health; characterized by progressive and uncontrolled growth (especially of a tumor) .. tending to produce death.

Does that not sound uncannily like the effect our national debt is having on our economy? » "Uncontrolled growth .. that is dangerous to health"

Does it not seem like a cancer growing on our children's future? Strikingly similar? [ I know » "Better them than us." Right? ]

You decide which term seems more appropriate, more accurate. Fragile or malignant.

Is it me, or does it seem like our government acts more like a cheerleader .. than a dispenser of honest facts?

Profits & economic growth .. but at what cost?

In weight-training, the body grows when it's able to rest. "Thank you, doctor, but what happens if I dont want another dose?" How many more trillion do you figure it will take?

At what point do you wean the junkie off the junk and let nature take its course? What is the difference between an accommodating pharmacist and an accommodating pusher?

Can WE not handle market forces? Or can THEY not handle market forces?

The analogy seems obvious. It doesnt however, appear that many others share my sense of impending doom .. when I see a patient being administered increasingly large quantities of medicine .. over an extended period.

Maybe we should just let the patient REST for a while. Remove the IV (.. that our kids are paying for .. without their consent, mind you, a mind-blowing amount). And see how the patient responds.

No doubt, at first, it will not be pretty. (Try fasting for a few days. At first you feel like krap, but then you detox, and you feel like a million bucks.)

Now, either we get rid of the "toxins" at this point .. or we die. Does that not seem to be the situation we are faced with?

Because I see no hope for us on our current path of endless "medicine".

And maybe the patient will recover. But come on. Let's not kid ourselves. I mean, just look around. Objectively as possible.

Do you not see signs of serious decay? Review the state-of-affairs in ancient Rome as it went down (.. over many years). Talk about an 'analogy' (» decline accompanied by clear signs of decay). And everybody will readily agree that things are moving much faster these days.

If Capitalism itself almost "went down" during the Great Depression, and our Great Recession of today is being COMPARED to the Great Depression .. then the analogy seems not so farfetched.

The US economy is the biggest on the planet. So if it goes down, I suspect it would make quite a splash. Probably take a few neighbors down with us .. sucked into our colossal economic vortex. [ "What's that flushing sound I hear, dawg?" ]

I mean, think about it .. things in the Investing World have become SO SCREWED UP that good news is no longer good news. Rather good news has become bad news. And bad news is now good news .. because that means the Federal Reserve is more likely to initiate QE3. How insane is that?

Another analogy » the farther we push these stimulations and easings, the further into uncharted territory we find ourselves. And the further out from the norm we wander, the greater our chance of unexpected consequences .. of being eaten by an unanticipated wolf. (This is why I feel we need to expect the unexpected.)

I hope these ideas make sense, because they are new to me, still in their formative stages. But clear nonetheless.

As long as we keep going deeper into debt as a percentage of GDP (.. roughly 8 or 9% per year, over the last few years) FASTER than GDP grows (.. roughly 2 or 3%) .. it's just a matter of time. Simple math. A 1st grader can see the inevitable coming.

That means our nation is currently going into debt 3 or 4 times FASTER than our economy is growing . and HAS BEEN for the last few years. An obvious unsustainable recipe for disaster. That number needs to shrink down to zero, then turn negative. Or we're finished.

Feliz año nuevo, amigos. "Ready or not, New Year here we come."

» Beginning of the End?

If the world really does end on December 21st like the Mayans predict,

then January 1st would be » the beginning of the end.

From where we sit, perched on the precipice of 2012 (less than 36 hours away)

the idea does not appear so very fanciful or farfetched.

Certainly not as farfetched as we would like. I mean, it wouldnt take much of a misunderstanding, or an unanticipated event, to take us from bad to worse. Or from worse to very bad. And the weapons they have today. Such overkill. Oy vey.

Am I the only one who feels a little uneasy about the competence of our government?
.. to deal with unconventional challenges? I think not.

If you consider how, earlier, we were discussing how tightly the Economic & Social systems are connected .. you can see how a failure in/of the Economic system .. can cause the Social fabric to fray.

If you peer out your front door, in addition to signs of Economic strain, you'll also see signs of Social strain.

The Social fabric is showing clear signs of wear-n-tear. Will things change course and begin to mend? Or will the deterioration continue?

Consider the fact that people are now stealing (nationwide) laundry detergent. That's right .. the stuff you & I use to wash our clothes.

As Society deteriorates, people lose trust in their fellow man. As Society becomes more desperate, people become cautious, more suspicious, and maybe even a little paranoid.

Misunderstandings abound in such an environment .. because desperate people do desperate things.

The end-result of the Commanding Heights videos » U.S. policy makers have CONNECTED / JOINED our economy with the World-economy. This involves both positive and negative aspects.

But I dont think anyone anticipated how this would also connect / join our societies. So that suffering anywhere is felt more easily and readily everywhere (.. because of the way Economic & Social systems are connected / linked).

In other words, you get the bad (social problems) with the good (cheap labor). And our economy is now more subject to the vagaries of foreign economies .. and therefore to foreign governments.

Is it me, or is not our government LESS ABLE to dictate global affairs .. than we were just a decade ago? ( I'm talking not just politically & economically, but militarily & ethically, too. )

I'll leave you with a quote from a classic American masterpiece: the Grapes of Wrath (1939, set in the Great Depression):

".. to know the great fact: when property accumulates in too few hands it is taken away. And that companion fact: when a majority of the people are hungry and cold they will take by force what they need. And the little screaming fact that sounds through all history: repression works only to strengthen and knit the repressed."

- Steinbeck, winner of both the Nobel & Pulitzer Prizes for Literature

Two thousand twelve [ 2012 ] promises to be an interesting year. There will also be many cool celestial and plantary alignments .. including the über-rare Transit on Venus .. on June 5/6th .. smack dab in the middle of the year.

The next Transit of Venus wont occur until December, 2117. ( You probably dont need to know the exact date, but it' the 11th. )

The Transit of Venus, to me, says that few people alive during this transit will be alive during the next. Very few. Maybe one or two.

Are we setting them up (.. our descendants) for success? Or failure? What kind of world are we leaving them?

Peace, out. ■

For more along these lines, here's a Google search preconfigured for the query » campaign finance reform, and another for » keynes vs hayek, another for » john maynard keynes, another for » friedrich august hayek, another for » political economic theory, one more for » alfred hitchcock notorious

» Lords of Finance

You might also enjoy the book titled » Lords of Finance, subtitled » The Bankers Who Broke the World. (It discusses the era that includes the day when Hitchcock filmed his Notorious scene.)

From the back cover of my copy:

It is commonly believed the Great Depression resulted from a confluence of events beyond any one person's or government's control.

In fact, it was the decisions made by a small number of Central Bankers that were the primary cause of that economic meltdown, the effects of which set the stage for World War II and which reverberated for decades.

As yet another period of Economic Turmoil makes headlines today, Lords of Finance is a potent reminder of the enormous impact the decisions of Central Bankers can have, their fallibility, and the Terrible Human Consequences that can result when they are wrong.

So dont fuck it up, Ben.

One question, tho, Ben. Riddle me this. What rationale did the Bankers of the 1930's give as their reason for REFUSING to adopt an "Accommodating Monetary Approach" .. such as you have adopted? .. and was there any merit to their rationale?

Was it to "starve the beast"?

What do your bosses think of » this? Free money sounds better than borrowed money. ■■

This is the end of Part 3. [ The end of the end. ]

Part 1 is posted here » Using Hitchcock's Notorious KEY Shot to Focus on Political Palms - Part 1

UPDATE 29.January.2012 » I posted a follow-up entry a month later. See here » Reflections on the Hitchcock Economy | The Missing Trillion-Dollar Lollipops

Radified home