A Contrarian possibility

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jpitre's picture
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A Contrarian possibility

A Contrarian possibility ...........

 

However much I may disagree with the policies and actions followed by our current  administration (and the last for that matter), I do believe that most in and around the White House are intelligent albeit misguided insofar as righting the ship.

 

On the other hand, I wonder if .............  Suppose you were sitting at the desk in the Oval Office facing a collapsing economy, debt beyond imagination, 2 wars with no easy way out, a dysfunctional health insurance system, oil supplies in a precarious state and an unworkable monetary system, just to name a few of the bigger problems -- what would you do?

 

Well, you could let the banks go bust, (of course the real wealth remains untouched and controlled by the same people)  rein in spending to match tax collections and generally take an economically conservative position on all matters. Tell private industry to fix things up .......... etc. What immediate level of hardship would that impose on the American public? Economic disaster for sure in the short term, with extreme hardship of unknown duration with questionable ability to wind down the wars in a controlled fashion. I think we now know that we would be in the midst of a worldwide depression had that path been taken. Health care could be out of the reach of half or more of the population with food & shelter in short supply to those without work.

 

Alternatively, one could decide on a giant gamble (after all the world has never seen anything quite like this before) that could pay off by printing money/borrowing massive amounts of capital to keep things more or less as they were in the hope that the ship can be righted before collapse. Knowing that the economic world power is under the control of those other than the US Federal Government and likely ultimately beyond the effective reach of any governmental edicts that could be proposed. Maybe better to play the game a little longer so as to have time to plan a way to regain economic control for the American people instead of the few Oligarchs that control it now. In the meantime buy some time to get out of the wars, install a system whereby healthcare can be delivered at some (possibly minimal) level to all and other safety nets to help spread the hardship more equitably among all citizens should collapse happen. Maybe even time to make a dent in figuring out how to deal with the energy problems and install a working system of public transpiration.

 

A LOT more complicated than the above, but that’s the general idea.

 

Food for thought anyway

 

Jim

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Re: A Contrarian possibility

I'm trying to decide whether I agree with your assessment of TPTB in the White House.  However, if it was myself in the Oval Orifice, I think I might engage in a plan to "break the news" to the American Public, using the power of that position.  Encourage a viewing of the CC by a certain Dr. Chris Martenson for example.  Hire some smart folks who can present this complex senario to the public in a way as to encourage them to become part of the solution.  But then again how does one get anything really paradigm-threatening to occur when you've got to deal with the Military/Industrial/Congressional/Educational Complex?  I'm really hoping that Pres. Obama has got a plan to make some substantive changes and is biding his time for the proper moment- I person can hope can't they?  But why guys like Geitner, etc, are whispering in the Pres's ear is a mistery to me....Aloha, Steve.

 

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Re: A Contrarian possibility

This seems like a credible idea. 

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Re: A Contrarian possibility

I've entertained similar thoughts, essentially that the top leadership wants to keep things going for the short term while behind the scenes they get a truly long-term and sustainable future plan in place, and pull a 180 once we're ready or can't keep the game going any longer.  But based on the people inside the Obama administration, I see virtually nil possibility of that.  The makeup of his economic team alone convinces me of that.

Now I actually do think they have 'behind-the-scenes' plans being readied and put in place for the time if/when TSHTF.... only these plans are mostly about their welfare, not the average American.  At best I think such plans will ignore the welfare of the average citizen; at worst I think they involve cracking some heads should the unwashed masses get too upset.

- Nickbert

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Re: A Contrarian possibility
jpitre wrote:

On the other hand, I wonder if .............  Suppose you were sitting at the desk in the Oval Office facing a collapsing economy, debt beyond imagination, 2 wars with no easy way out, a dysfunctional health insurance system, oil supplies in a precarious state and an unworkable monetary system, just to name a few of the bigger problems -- what would you do?

http://www.peakprosperity.com/forum/what-if/9651

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Re: A Contrarian possibility

Sorry, but I don't buy that for a second.

A far more likely scenario is that TPTB are keeping the current system up and running so that they can extract every last little bit of value out before it fails.  It is like the captain and officers of the Titanic pretending that their is nothing wrong while they steal from that passengers rooms and disapear with all the liferafts.

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Re: A Contrarian possibility

The words "competitive devaluation" come to mind when reading "A Contrarian Possibility."

We have some of the best criminals on the planet (Geithner, Summers, Blankfein, and Paulson--he's still in the background, at a minimum), and thus, they might be able to steal a few more trillion worth of resources and wealth from the world by being a print or two ahead of the more naive world leaders, but that just bodes for a total dollar collapse in the end--IMO; worst of all, most of those trillions will go to the Usual "Suspects"; all else get nicely decorated paper for their lives' efforts.

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Re: A Contrarian possibility

While it may be emotionally gratifying to think of tptb as criminals or fools, it's good to occasionally try to figure out what the intellectual justification might be for their actions.  An excellent resource for figuring that out is the Bank for International Settlements (BIS), the central bankers' bank.

http://www.bis.org/

I assume others here are well aware of this site, but I only recently discovered it.  There is a speech on the site (with graphs) by Herve Hanoun, a deputy general manager for the BIS, on the rationale for QE and the risks in unwinding the artificial stimulus that has been pumped into the world's economies.

http://www.bis.org/speeches/sp091208.pdf?noframes=1

I don't pretend to understand global economics well enough to really grasp the whole issue, but Mr. Hanoun presents what appears to be a pretty good analysis of the need, timing and international coordination of such unwinding.

I. Unwinding the leverage-led growth model

II. Timing and speed of unwinding 

III. International coordination of unwinding

My take on the speech is that the whole endeavor will require very precise timing and coordination with pretty severe consequences for getting it wrong, amid a very imprecise understanding of when and how it should be done.  Perhaps we should be asking whether Bernanke, other central banks and the primary dealers can get it right, not just dismissing their efforts out of hand.

Doug

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Re: A Contrarian possibility

This is a fascinating thought exercise, but I'm finding it hard to get past 2 "realities" of the situation:

  1. To just get into power (figure-head power) would mean that I would be beholden to those with the real power (read money).
  2. To stay in power (or alive for that matter) would mean that I would have to abandon my own agenda for the agenda of those who put me in power.

So I really don't see the President, Treasury Secretary, and Chairman of the Fed having any realistic choice in the path that they take. They are all beholden to an agenda not of their own intellect. 

But what would really excite me as an American, is for our leaders to honestly communicate the predicament that our country is in, and for them to sincerely demand that we face the pain that the situation demands and sacrifice our present for our future. IMO this would, after great initial chaos admittedly, galvanize our country with a common cause and objective, and empower the individual to have a purpose larger than their individual agendas. For the first time in my lifetime, hope would be a significant component of my being.

 

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Re: A Contrarian possibility

JAG


Quote:

But what would really excite me as an American, is for our leaders to honestly communicate the predicament that our country is in, and for them to sincerely demand that we face the pain that the situation demands and sacrifice our present for our future.

I'm with you 200% here.

Also, after I wrote the post I thought a bit about what would happen if they are totally successful.  Seems to me they will just be pretending and extending again unless they are capable of or willing to fundamentally change the system.  I don't see that happening.  So, color me back in the cynic camp again.

Doug

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Re: A Contrarian possibility

Goes said:

Quote:

Sorry, but I don't buy that for a second.

A far more likely scenario is that TPTB are keeping the current system up and running so that they can extract every last little bit of value out before it fails.  It is like the captain and officers of the Titanic pretending that their is nothing wrong while they steal from that passengers rooms and disapear with all the liferafts.

I couldn't agree more.
Don't get me wrong - I don't believe this is a Partisan issue. I think the Bush administration did the exact same thing. It keeps the population guessing as to which side the Faustian Covenent is coming from.

"Enjoy millions of dollars printed out of thin air, while we secretly finance away your future!"

It's as if our ne'er-do-well inlaws sold our house for us without telling us. So long as the other family doesn't try and move in, no one will know.
When they do, we're going to have issues... and they'll be miles away enjoying the payoff. So is there any hope that The Powers that Be have our interests in mind?

No, I'll tell you what I think:
WE ARE "TPTB".

We, the citizens of the United States created a Government of the people, for the people and by the people.
The elected bureaucrats and oligarchs who hold the reigns are NOT the powers that be.
They are simply the once presenting the illusion.

They think they can destroy our system, but everything that lives, dies. The beauty of the Constitutional Republic is that it was designed with this in mind, and surely as the fields of liberty have gone fallow, the seeds have been and ideals have been sewn.

It only takes precious few to carry the torch of liberty, and with some luck, the revelation of this corrupt, criminal government (See, integration of the Judicial and Executive Branch as Criminal Charge #1. Ask any police chief if he'd make an unconstitutional arrest on the Judges order - I'll bet he will) is at hand, and even those with a modicom of power are going to see that in it's abuses are consequences...

Just look at the horrible state of distrust and violence we're seeing between citizens and Law Enforcement because of these abuses... The courts favor the criminals and abuse the police, the police distrust the citizenry as a side effect and we've inadvertantly stumbled upon an "us and them" mentality within our own ranks!

We're not meant to be at odds with one another, and regardless of who the D.C. gangsters are making rich with their pyramid scam, WE have the power to throw them out on their asses. They work for us. They are civil employees, and their debauchery will eventually outpace their ability to conceal it.

There's my rant for the day!
Cheers!

Aaron

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Re: A Contrarian possibility
JAG wrote:

But what would really excite me as an American, is for our leaders to honestly communicate the predicament that our country is in, and for them to sincerely demand that we face the pain that the situation demands and sacrifice our present for our future. IMO this would, after great initial chaos admittedly, galvanize our country with a common cause and objective, and empower the individual to have a purpose larger than their individual agendas. For the first time in my lifetime, hope would be a significant component of my being.

Yes!  Wouldn't that be wonderful.  I say that in all sincerity.  But that takes character and courage.  Character to take the unpopular steps that will cause (temporary) pain to the masses and the courage to take the risk to do something that could potentially turn the masses against them in a frightful manner.  Unfortunately, as their past and present behavior has shown, they are sorely lacking in both.  One of our few leaders who has the necessary character and courage, Ron Paul, unfortunately doesn't have the charisma to be a galvanizing national leader.

There is no way out of this dilemma except through it.  As Bill Bonner says, the only cure for a depression is a depression.  But this is bigger than just a depression. 

The results of the present dilemma will achieve the end that TPTB like David Rockefeller have aspired to.  If you create global uncertainty and chaos, people will clammer for TPTB to "do something".  They will accept the imposition of a one world government, one world security forces, one world currency, etc.  It's downright biblical.  You can see it coming a mile away like a freight train bearing down on a car stuck on railroad tracks.  There's no way to stop it and it's not going to be pretty.  There is a light at the end of the tunnel though but it can't be discussed here.

 

 

 

 

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Re: A Contrarian possibility

Aaron

Quote:

Just look at the horrible state of distrust and violence we're seeing between citizens and Law Enforcement because of these abuses... The courts favor the criminals and abuse the police,

Then why do we have the most people in prison per capita of any advanced nation on earth?  The courts have to put them there.  Everywhere I've been the police and courts work hand in hand.

Doug

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Re: A Contrarian possibility
ao wrote:

There is no way out of this dilemma except through it.  As Bill Bonner says, the only cure for a depression is a depression.  But this is bigger than just a depression. 

I agree.....I was just dreaming out loud.

The size of this predicament is much larger than a depression, its a global poverty trap. As Stoneleigh wrote in her brilliant piece, Fractal Adaptive Cycles in Natural and Human Systems:

Where higher and lower order cycles are very tightly coupled, they may synchronize, becoming trapped in a extended growth phase at many scales at once, thereby risking synchronous collapse. This need not be triggered at a large-scale level, but can begin anywhere in a set of nested adaptive cycles and proceed both upwards and downwards. A destabilizing event arising from below, for instance a disease outbreak leading to widespread morbidity and further adverse consequences, is called a 'revolt'. 

 

A synchronous collapse, which can take the form of a "pancaking implosion", to use Holling's term, can lead to a poverty trap, or persistent maladaptive state characterized by low 'wealth' and connectivity, which is very much more difficult to recover from than a localized reversal would have been.

 

By way of illustration, the Canadian province of British Columbia is currently facing a confluence of circumstances that pose a significant large-scale ecological threat. A long-standing policy of fire-suppression, in a hitherto naturally fire-controlled ecosystem, has led to a thick understory of growth, which has in turn caused significant stress to trees forced to compete for water and nutrients in an area becoming warmer and drier. Trees under stress have much lower resistance to pine beetle infestation, with the result that a pine beetle population explosion is killing huge tracts of forest despite all efforts to contain the outbreak. 

 

This adds to the combustible material on the forest floor and greatly increases the risk of widespread conflagration. The much smaller self-limiting fires typical of the province would have opened up areas for new growth, killed insect pests and released nutrients for regeneration, and in fact are required by some tree species in order to open up seed pods for reproduction. In contrast, very large and intense fires, fueled by a tremendous excess of flammable detritus, can comprehensively denude enormous tracts of land. 

 

This can remove the biological reservoir of potential repopulating species as well as lead to enough soil erosion to inhibit regrowth of the forest ecosystem. An interlocking series of adaptive cycles has been synchronized through being locked into an extended growth phase and is therefore much more vulnerable to a catastrophic event that could become a lasting poverty trap.


By not letting the forest (economy) burn in natural cycles, we have turned the whole forest into kindling. The next fire in the global economy will leave no survivors.

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Re: A Contrarian possibility

Doug,

Because it's an institution that generates revenue by creating a punishment free system of imprisonment.
Prisoners in the US have it so good that it's sickening.

The Police can't make arrests on anything other than the most overt, reckless criminals, while due process constrains them in investigative matters, and forces them into a "clean up" role. For example, Bernie Madoff was punished long after the money he stole was laundered and reinvested into sources that cannot be retracted and given back. He has no ability to pay this debt back. The evidence is clear that there are criminal endevours but the length of time required to properly investigate a well-funded criminal endevour allows ample opportunity for mishandling.

If you're naive enough to think that the police are the ones behind the Judicial mis-representation, you should probably dig a little deeper.

This cycle doesn't stop where I left it. Nor is it the main point of the post.

Cheers,

Aaron

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Re: A Contrarian possibility

OK, everyone -- I'm in the cynic camp along with most of you, however it was a warm and fuzzy feeling to think for a brief moment that somebody out there actually has a plan short of crash and burn that might work.

Doug's post with the Hannoun speech does give the indication that some in high places are at least thinking at a macro level what could/should occur. Not very practical in my opinion, and as he says "Promising to “be virtuous, but not now” is a perilous balancing act for policymakers." But, as I see it,  that is what they are doing so as we are all doing, look out for the fall.

My biggest gripe about all these high level sorts is that I see nothing (ever) from them that deals with the rot at the core and how we need to change. As Aaron says, "WE have the power to throw them out on their asses" - maybe if we can reach critical mass as a group soon enough they will have bought us enough time to change course before we are all in survival mode permanently

Jim

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Re: A Contrarian possibility
JAG wrote:

I agree.....I was just dreaming out loud.

The size of this predicament is much larger than a depression, its a global poverty trap. As Stoneleigh wrote in her brilliant piece, Fractal Adaptive Cycles in Natural and Human Systems

Nothing wrong with dreaming.  That's how we'll come up with solutions.

Global poverty trap ... that's a good term for it.  BTW, that is a fascinating article on Fractal Adaptive Cycles with widespread applicability.  Thanks for sharing that.

 

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Re: A Contrarian possibility
jpitre wrote:

My biggest gripe about all these high level sorts is that I see nothing (ever) from them that deals with the rot at the core and how we need to change. As Aaron says, "WE have the power to throw them out on their asses" - maybe if we can reach critical mass as a group soon enough they will have bought us enough time to change course before we are all in survival mode permanently

Your thoughts were well reasoned and appreciated.  It always helps to get another perspective on things. 

The high level sorts will never deal with the rot at the core because their behavior is part of that rot.  In terms of mitigating the damage done, the only hope I see of solving this problem with ballots is the emergence of a strong, viable, ethical (that's a big if) third party, something along the lines of C4L.  Otherwise, history says this problem usually winds up progressing from the ballot stage to the bullet stage and that's obviously something better avoided. 

 

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Re: A Contrarian possibility

Jag mentions "hope," then later says "I agree.....I was just dreaming out loud."

Good catch! And to which I offer a thought that kept reverberating in my head as I did my daily swim this morning (easy to stick on a thought, lap after lap of blue concrete): Hope is the primary progenitor of apathy. (Or as my Grandpa used to say: "Hope, the devil's headstart."

Sure seems like a a fair statement from where I'm sitting, as We (those of us counting on the 3 branches of American government to step up) are effectively boiling away (think Frog)  in a big nasty batch of apathy  (CM-ians aside). 

Jag continues: "The size of this predicament is much larger than a depression, its a global poverty trap."

As much as I feel like something is going to explode any minute now, I still have this nagging reality working on me; i.e., right now things (the stuff we eat, drink, and use) IS being made and moved and delivered and consumed and used. It's all working right now (world poverty aside). Thus, there seems to be no intrinsic reason (other than energy/resource depletion) that things can't continue to be grown, made, consumed, etc.  What I mean to say is that it's all about numbers on the relevant balance sheets. As long as people don't worry about the numbers, BAU goes on. And thus, it seems that the only problem is that the Americans' balance sheet needs to take a hit so that the consumption of all the goods can be readjusted as required by social justice--and the internet posse that's onto the game.  

However, the criminal/propoganda machine (remember Hank Paulson) takes that reallocation and turns it into "Inevitable Armageddon!" Kind of like the guy whose wife is going to leave him for another man, so he shoots her, or like the kid who doesn't want to share his Hot Wheels car, so he stomps on it. 

Hank Paulson as jilted husband and child: 

Wife scenario: Try to fuc* him now you dead *$&#!;

 Selfish child: I'll crush that fuc&ing car before I let you play with it.

Question is: Was it a bluff? He's spent his life bluffing; that's simply Wall Street's MO. He's gotta be good at it to get to where he got...

To the possible outcomes/soultions: I remember reading a Peak Oiler several years ago who said something to the effect of: America will not be able to sustain the per capita consumption of oil that it currently enjoys. The world will not allow it. Thus, there will be a currency adjustment that will cure that injustice.

And that's what current events seems to portend, IMO; i.e., we'll use less and they'll use more, and we'll pay more for less. All the while,  the world may chug along just fine--as long as you're not an American in the U.S. whose wealth is in dollars. Though, of course, peak energy will end prosperity everywhere, and will allow U.S.-based christians to experience their worst nightmare while still alive: "to take a trip and never leave the farm."

 

ao said:

"Ron Paul, unfortunately doesn't have the charisma to be a galvanizing national leader."

I think what is missing is not Ron Paul's charisma, but the average person's minimum level of maturity (of all kinds) that would allow a response to Truth that doesn't come paired with a kiss of the ass. I don't know how you get a broad spectrum of the population to respond in the necessary way to the Naked Truth when so many are either not listening because they literally don't have the time (working 3 minimum wage jobs and feeding 4 kids), because they don't have the background ( to mention one factor: there are about 100 languages in the U.S. right now), because they don't have the ability (genetic/biochemical/abused/etc.), or because they're less than human (cf. Goldman Sachs employees).

So, I guess what I'm saying, is that I would modify your statement:

"Ron Paul, unfortunately, doesn't have the audience to be a galvanizing national leader." And maybe we don't want a leader that can galvanize this motley group, as that would take a heap of generalization...

Maybe, as Christopher Hitchens' America-critical counterpart might say: "Americans are not great" (in the sense of serving the good--their own--cause).

"Me thinks the ship may have sunk, Captain! There be fish swimmin' in the galley."

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