Being There: 'We Have Moved Away From Embracing The True State of the Economy' - CaptainHook

By: CAPTAINHOOK

Still as poignant as ever in capturing the essence of an increasingly debased reality of life in an unbridled (fiat currency) economy, we have Being There, Jerzy Kosinski’s masterpiece, first published in 1970, and then made into a film starring Peter Sellers in 1979. Along this line of thinking, one cannot help but be struck by the parallels to present times, with an aging plutocracy seemingly searching for wisdom in all the wrong places in an effort to maintain the status quo, both then and now, unfortunately found in simple-headed wisdom learned from watching too much television. Because people are too busy to read apparently, if they can read at all (Chance was not a reader), so they depend on television not just for their entertainment, but also for their education and news. So what you get is a bunch of dummies listening to unscrupulous talking heads who will literally say anything to forward their agendas, clinging onto absolute non-sense because such views meld with their own distorted views of the world – all looking to either defraud or for a free lunch – or both.

To say we’ve come along way in this regard is an understatement. To say we have moved away from embracing the true state of the economy, as Chance the gardener correctly (viva laissez faire) recommends, is an understatement. Indeed, even the kleptocracy (and certainly Orwell) pictured in Being There, which was representative of the bureaucracy of the time, would look at the measures their present day counterparts are taking (think fraudulent information and coercion) in an effort to maintain the status quo and think, ‘these guys are nuts if they think this can go on forever’, as extremes in the lunacy seem to reach new heights daily. (i.e. tyrannical fascists now run America.) Every day is a bigger challenge in this regard and it will continue to accelerate until the economy, markets, and spirits of the manipulators are broken, which will come once the USDollar($) loses reserve currency status as reflected in the necessity for meaningfully higher interest rates in order to maintain any value what-so-ever.

Because no matter how much they want you to believe things are getting better they are not. The rising stock market does not mean things are getting better, it just means it’s becoming more leveraged. In fact, and ironically, the rising stock market means currency debasement rates are accelerating, and in a mature fiat currency regime this reflective of control loss and end game dynamics, which is definitely the case as this pertains to the US, the $, and empire profligacy. Again, no amount of lying will prevent the inevitable, it will only distort and delay things, which in this case means further debasement of the currency (because of diminishing returns), increasing instability, and more profoundly hollowed out economy. What’s more, the scuttlebutt of all this is it’s all for naught, because as discussed previously, when fiction meets reality we will essentially end up in the same place – mass insolvency – whether it be by hook (deflation) or by crook (extreme inflation).

In the meantime however, it appears stock investors think we are in the summer of our lives, with the retail crowd now going all in, providing the set up for a ‘winter of discontent’. And if you study the reasons why stocks are higher, with increasing money printing, credit growth, and financial repression main ingredients in the cocktail, one would know present conditions are more ‘bubble like’ than any other time in history because central authorities have gotten better at it, tweaking things ‘just right’ daily, along with using mass psychology and obfuscation to the max. That’s what all the taper talk is – obfuscation – where whether they actually taper or not (not to mention timing is uncertain), this cannot be considered a ‘true tightening’. Make no mistake in this regard, despite everything else you may hear or read, the bottom line is central authorities cannot reduce currency / system debasement rates for very long considering our mature situation – because they must keep the credit and $ bubbles inflated.

This is likely to prove a daunting task however (although not impossible), unless banks start letting out those enormous reserves they control. Of course if the Chinese example is the test case in this regard, then the deflationists may have it right, especially considering how the stock market and bank balance sheets have ballooned since 2009. What’s more, and to go along with this, one must also recognize that margin debt levels are also at historic highs, making the stock market highly susceptible to yet another crash (the multiple expansion needs correcting), which again, will make such a task very difficult indeed, at least until after such an event. Afterwards however, if the Fed stops paying its commercial banks for holding deposits on reserve with them we may witness the mother of all ‘crack-up booms’ running into decade’s end. (i.e. because commercial banks will forced to lend reserves out to make a return.) At least that’s what gold is telling us with its pause now, and anticipated resurgence into 2021. (i.e. with the Fibonacci number ‘21’ expected to define the numbers of years in the bull market.) (See Figure 1)

Figure 1

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