In this week's Off The Cuff podcast, Chris and James Howard Kunstler discuss:

• Rate Hike!
  • The Fed just increased the interest rate by 0.25%
• Scam-o-rama
  • The financial system is now a racketeering fraud
• The Net Energy Predicament
  • The unseen cause of so many of the systemic breakdowns we're seeing
• The Deep State In Turmoil
  • The Trump administration has set off an internal war

James Howard Kunstler returns to Off The Cuff this week for a wide ranging discussion. First on the docket is the recent Fed rate hike, and the baffling logic that markets are using to interpret is as another "bullish" signal for piling into stocks. 

No surprise, Jim thinks the markets have become one big roach motel for investment capital. 

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Executive Summary

• How the Deep State/"shadow government" came to be
• A number of "quiet coups" have concentrated power over the decades
• The moral hypocrisy of today's ruling elite and the public's growing rebellion against it
• The key success factor the current people's coup will need in order to triumph

If you have not yet read Part 1: The Power Struggle Unfolding Before Our Eyes available free to all readers, please click here to read it first.

In Part 1, we reviewed six narratives that seek to “explain” Donald Trump’s unexpected victory in the 2016 presidential election. We then distilled these narratives down into three categories: moral claims, elite machinations and structural economic/social issues.

I propose that the most comprehensive explanatory narrative of Trump’s improbable victory is The People Staged a Coup D’Etat.

Threats to Democracy

To understand this narrative, we must first examine the structure of the American system of governance and the previous “quiet coups” that consolidated power in new elites.

In broad brush, the U.S. Republic was designed to be run by elites—hence the Electoral College and the bicameral legislature with a senate overseeing the rabble of the House of Representatives.

The founders—particularly James Monroe and his allies—were acutely aware that the greatest threats to an enduring democracy were a tyranny of the majority, a majority that undermined the civil liberties for all, or an elite whose powers could not be constrained.  This is the purpose of the balance of powers between the Executive, legislative and judicial branches of the federal government.

But these structural efforts to restrain a tyranny of the majority or an above-the-law ruling elite, the U.S. has experienced both a tyranny of the majority—the Jim Crow racial discrimination that was institutionalized in the Southern states until the mid-1960s—and a ruling elite that is above the law.

I would argue that the current ruling elite (neocon, neoliberal) personified by Hillary Clinton, is effectively a force unto itself, i.e. above the law.

The roots of this ruling elite’s expansive power can be traced to the 1940s rise of the National Security State, the catch-all term for the institutions (CIA, Department of Defense) established by…

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Executive Summary

• A middle ground approach is best at this stage
• While the Deep State is threatened by its own dysfunction, a collapse will not be pretty for citizens
• How not to volunteer for victimhood
• Where hope lies

If you have not yet read The State of the Deep State, available free to all readers, please click here to read it first.

On general principle, the sort of odious operations represented by the Deep State, including warrantless police actions, immersive surveillance, and even assassination, ought to be opposed by Americans who care about their country and the ongoing project of remaining civilized. The Deep State’s totalitarian tendencies are self-evident. Therefore, “we the people” are obliged to dismantle it as expeditiously as possible, ideally by voting for electoral candidates who vow to work toward that end, but by resistance if that fails. Political actions might include getting rid of all the redundant “security” agencies piggybacked around the CIA since 9/11; voting the Patriot Act out of existence; and introducing legislation to re-define the “personhood” of corporations and their putative “rights” to “free speech” as defined by flinging money at elections.

However, the electoral process, being subject to the depredations and manipulations of the Deep State, may itself be too much a part of the problem at the present time. Resistance, on the other hand, can beat a fast path into the perilous realm of revolution and sedition, inviting punishment by the Deep State. For the moment then, the preferable action probably lies in the middle ground: political persuasion, speaking out against the Deep State. There is simply not enough of this now, especially among serious people in positions of authority. This, by the way, was exactly what turned the nation against the folly of the Vietnam War.

It begs the question: where are the Bobby Kennedys, Gene McCarthys, and William Fullbrights of our time? Where are the visible people of stature willing to take a stand, to put their careers on the line? Not just…

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Executive Summary

• The Deep State, and its dawning realization that Wall Street is a foe vs an ally
• Why Wall Street's threat to the dollar hegemony is of such concern
• History gives us many examples to predict a 'war of elites' (e.g. Wall Street vs the Deep State) is highly likely
• Who will lose? And what implications will it have for the rest of us?

If you have not yet read Have We Reached Peak Wall Street?, available free to all readers, please click here to read it first.

In Part 1, I sketched out why the financial sector—the Fed, Wall Street and “too big to fail” banks—pose a strategic threat to the nation, as their policies threaten one key foundation of American pre-eminence, the U.S. dollar.   Should money and credit creation cause the dollar to lose its reserve status, the nation would lose the fundamental advantages that go with being able to print a reserve currency.

I then suggested that the Deep State might eventually wake up to the strategic threat posed by a self-serving financial sector, and this would lead to a showdown between the financial Elites and the Deep State.

The Systems-Level view: the S-Curve works on Wall Street, too

Long-time readers know that I often refer to systems-level dynamics, one of which is the S-Curve, which traces the rise, maturation and decline/crash of systems both natural and human-designed. An astonishing array of systems has been found to follow an s-curve, from the spread of infectious diseases to financial bubbles.

Why would Wall Street be uniquely immune to these systemic forces? I submit that Wall Street’s power has topped out and is about to decline precipitously, just like any other system which has over-reached by sucking its habitat dry.

I think we can chart Wall Street’s S-Curve thusly…

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