Of Two Minds

So by all means, focus on the inexorable rise of stocks, cryptos and housing as “proof” of America’s soaring “wealth” while the social order unravels beneath our feet. It is a supremely tragic irony that while the corporate media ceaselessly touts America’s soaring financial “wealth,” the nation’s true wealth–its social order is fast unraveling.

The banquet of consequences is being served, and risk-off crashes are, like revenge, best served cold. The ideal setup for a crash is a consensus that a crash is impossible–in other words, just like the present: sure, there are carefully measured murmurings about a “correction” but nobody with anything to lose in the way of public credibility is calling for an honest-to-goodness crash, a real crash, not a wimpy, limp-wristed dip that will immediately be bought.

The Fed and its minions are about to get what they so richly deserve: the full blame for the coming catastrophe. The key justification for the Federal Reserve’s zero-interest rate policy is that inflation is transitory. Sorry, Fed, inflation is already embedded, i.e. inflation is now a self-reinforcing feedback loop: price leaps trigger wage increase demands, supply constraint expectations are now built into wholesale cost increases, and all these increases in wholesale, retail and wage costs drive each other higher as participants now understand that higher wholesale costs drive higher retail prices which feed higher wages which feed higher costs.

What if our commoditized, financialized definition of wealth reflects a staggering poverty of culture, spirit, wisdom, practicality and common sense? The conventional definition of wealth is solely financial: ownership of money and assets. The assumption is that money can buy anything the owner desires: power, access, land, shelter, energy, transport and if not love, then a facsimile of caring.

Losses will be taken and sacrifices enforced on those who don’t understand the Chinese state will no longer absorb the losses of speculative excess. Let’s start by stipulating that no one outside President Xi’s inner circle really knows what’s going on in China, and so my comments here are systemic observations, not claims of insider knowledge.

This complete capture of all avenues of regulation and governance can only end one way, a kind of hyper-stagflation. Zeus Y. and I go way back, and he has always had a knack for summarizing just how insane, disconnected from reality, manipulative and exploitive the status quo narrative has become.