Our guiding premise here is that we are all fools. We do things that we can’t explain, governed by forces we didn’t create.
So too are there basic ‘laws’ and ‘rules’ in our financial lives. We didn’t invent them; we can’t change them…and we ignore them at our peril. You can’t borrow your way to wealth, for example. Neither can you ‘print’ money and expect to get rich. To the contrary, the more you print…the more you distort and corrupt the real economy. You can ‘break the rules’. But there’s a price.
And someone will pay. What follows is another way to think about it…and discover who.
Some people succeed in life by doing extraordinary things. They strike oil. They build a home computer. They conquer England.
But most of us ‘win’ by not losing. That is, we follow the rules. We fall in love. We get married. And then, in our 50s, we don’t run off with the fetching cocktail waitress! We stick to the program. We don’t steal from the church collection plate. We don’t invest all our savings in a kooky crypto. We don’t set the neighbour’s cat on fire. And if we’re lucky, things turn out all right.
The feds, meanwhile, think they can get away with anything. And in important matters — war and finance — they are largely right. It’s not their money…and other people die in their wars.
And now, after more than 10 years of phony negative-rate lending…and more than US$8 trillion new dollars ‘printed’ since 1999…creating trillions in fake prosperity and $90 trillion of real debt…
…somebody is going to pay for this nonsense. But who? How?
The feds? The deciders? People with PhDs or accounts with Goldman Sachs?
The following news item gives us a hint:
‘WASHINGTON, March 29 (Reuters) — U.S. Republican Senator Rand Paul on Wednesday blocked a bid to fast-track a ban of popular Chinese-owned social media app TikTok, which more than 150 million Americans use, citing concerns about free speech and uneven treatment of social media companies.
‘“I think we should beware of those who use fear to coax Americans to relinquish our liberties,” Paul said on the Senate floor. “Every accusation of data gathering that has been attributed to TikTok could also be attributed to domestic big tech companies.”’
When you’re among the ruling elites…and you’ve lost every war for the last 70 years…you’ve cut the nation’s GDP growth rate in half…made the common people’s lives more difficult by approximately doubling the amount of time they have to work to afford an average house…and added US$50 trillion in excess debt…including US$31 trillion in government debt (no one is very sure what the money bought)….
…every new thing is a threat. Every mob has a rope in its hand. Every market trend threatens to turn you into a pauper. And every entrepreneur may put you out of business.
The blame game
So, what do you do? You treat every challenge as an opportunity to grab more power and money from the public. Ban TikTok. Stop the Russians in the Ukraine…the Chinese in the Taiwan Strait…the White Supremacists in Tennessee. And don’t forget to save the banks.
Neither Russia nor China has done anything that the US hasn’t done. The US invaded Iraq. Russia invaded the Ukraine. TikTok gathers info from its customers. So does Apple, Google, Meta…etc. etc. And banks? Zombie companies? Reckless investors? All should be allowed to go broke.
But the mind of a hegemon is not driven by need. It is driven by the desire to keep things as they are. Its rules are those it makes for itself. And somebody pays.
No surprise, the deciders will decide that it shouldn’t be them.
For The Daily Reckoning Australia