I hear many forecasts these days. People wonder if we will have hyperinflation, whether the Empire will collapse, and so on. I cannot predict. There are too many variables and too many scenarios, and there is no theory that comprehends the totality of reality.
The same thing happens in trying to forecast the stock market. I believe that making forecasts is a trap. There is one thing we can do, and that is pay attention to what is occurring NOW. We can analyze that, and that can help us understand where we may be going. That general method works better for the stock market than guessing tops and bottoms or guessing what will happen in 2009, etc. When a bottom forms, we will know it if we constantly attend to what is happening NOW.In that light, I have a few observations about the American Empire.
The Empire built itself up using financial ties as all empires do. The problem is moral hazard. The rulers and bankers have no accountability. It’s not their money. When the State does this, it has little or no competition, apart from other States, so it goes too far and undermines itself. If the States form a combine or a bloc, then they can prolong what they are doing. The planners in this case, like the Trilateral Commission, saw a bloc consisting of 3 parts: US, Europe, and Japan. They didn’t count on China. Later they incorporated China. But they figured this bloc could rule the world, since Africa, South America, Russia, and the Middle East were lesser entities.
Will another bloc arise as this one fails or weakens? There are bound to be great instabilities caused if the American bloc disintegrates and weakens. War becomes more likely, despite its costs. But the existing bloc will do everything it can to maintain its power and get through this crisis. If it got through the Great Depression, it probably can get through this.
Clearly we the people would be better off with markets and competition. That provides accountability. It would set the system right. But what we may get instead is exactly what we are getting now. This is centralization or greater control from the center: Treasury and the Fed. The Empire is aging and it is now responding to its past failures by centralizing. This will probably continue with stops and starts. That was the response to the first energy crisis, before controls finally got lifted. But the seeking for oil control came back in the Iraq War. Bretton Woods was a control response until Nixon abandoned gold altogether. That is what I mean by stops and starts.
At this time, we are likely to get whatever controls they put in in order to stabilize the situation. The result will be much slower growth accompanied by bouts of inflation. We go the way of the Roman Empire. The system is not yet a corpse, but it will have very clogged arteries. One or two wiser rulers may then loosen things up a bit so as to rebuild some growth. In the mean time, the rulers will dictate the economy. A handful of super-big banks is shaping up via mergers and favoritism. They will be under the thumb of the financial regulators. They will decide who and what will be funded. If the Fed can lend directly in the commercial paper market, it can control bank loans and ration them. It can direct investment. We are headed toward a controlled economy based on what is happening RIGHT NOW. We need not make a forecast. We need only understand the present.
Our rulers, in an American style, will try to perfect what the Nazis and Soviets did in the 1930s. It will be an American version of German-fascist or Russian-Communist economics.
They will not want to be accused of being fascists or communists, so they will use the American style of terminology and vocabulary to cover what is happening. Price controls are not new to this Empire. They won’t be a hard sell. But they are not occurring now except in controlling the interest rates on lending. We are getting domestic capital controls. That’s the typical American style inasmuch as the Empire also used such financial means as the IMF, loans, aid, and the World Bank. But what the Empire did overseas, which was using bases and armed forces, it may now use domestically to keep a lid on the unrest that is bound to develop. Again, what is happening now are the precursors to this.
This is all speculative, but yet anchored in the past and present. It is only a step or two beyond the present.
What can be done? Awareness of what is happening now, and then mass organization and voting on a single issue basis, which is the issue of LIBERTY. By the time voting becomes a complete farce, it will be too late. A few generations will be subject to a great deal of control.
6:59 pm on October 7, 2008
