Of Two Minds

How do you unrig a speculative rigged market? You don’t. It simply crashes into a putrid sinkhole. Gamed speculation using knowledge of how markets can be pushed to profit those doing the pushing–has long been decried. Declaring that the unproductive profiteering of greedy speculators will be the death of the Republic goes back to Rome, and in American history, to Alexander Hamilton’s battle in 1791 to pay the speculators who had bought up the new nation’s war bonds for pennies on the dollar full value plus interest.

That’s how Neofeudal systems collapse: the tax donkeys and debt-serfs finally rebel and start demanding the $50 trillion river of capital take a new course. The Great American Middle Class has stood meekly by while the New Nobility stripmined $50 trill…

I’d say more about Big Tech but since they’ve ‘privatized totalitarianism’, I fear being ‘digitally disappeared’ if I dare criticize Big Tech. Mr. Bob Dylan was once again prescient: Everything Is Broken. You may think I’m referring to the political system or Big Tech or the Corporate Media, and certainly all those are very broken indeed, but I’m actually referring to everyday life systems that once worked fairly well.

The Fed has a binary choice: preserve America’s global hegemony or further enrich the billionaires. You can’t have both. The Fed will fail as a result of two dynamics: diminishing returns and the U.S. dollar’s role as a global reserve currency. The Fed’s reign as the godhead of financier-banker supremacy has been fun and games for the past 12 years of stock market euphoria, but that’s about to change.

Allow me to translate the risible claims of Jay Powell and Janet Yellen that their stimulus policies haven’t boosted wealth inequality to the moon: “Let them eat cake.” The euphoria of ever greater monetary and fiscal stimulus overlooks the diminishing returns and higher risks generated by near-exponential increases in stimulus.

The consensus is that asset inflation is unstoppable and forever. History begs to differ. Not unsurprisingly, people want a binary option: do we get deflation or inflation? Unfortunately, reality is messy. Broadly speaking, globalization is deflationary as capital seeks the lowest cost labor, parts and materials, the least stringent environmental standards and the most corrupt governance to maximize profits by any means available (in this case, exploitation and corruption).