The State of the Union according to Ol’ Remus

Posted on July 18, 2014

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 The Doug Ross @ Journal frequently features a segment called Larwyn’s Linx, which is a list of article links that he thinks his readers may be interested in reading. The other day I clicked on one of the links and it took me a site called Woodpile Report. I’m so glad I did. Woodpile Report is not a blog. I would describe it as a journal where the author, who refers to himself as Ol’ Remus writes his opinions on sundry subjects in a style I find reminiscent of the great Chicago newspaper reporter of the past, Mike Royko. The entry that caught my attention was under the heading “Are we there yet?”, which is presented below. It is, in my opinion, the most accurate assessment of the state of our union I’ve yet come across. Warning! This assessment of where we are will not leave you whistling a happy tune.

Are we there yet?

by Ol’ Remus

Imagine everything familiar collapsing like an accordion in the time between your morning coffee and your first midday yawn. It may happen just that way. In fact, it’s difficult to see how it can happen any other way.

Back in 2001, the Argentine economy all but collapsed. In a matter of days, the country went from mild recession to full-blown economic crisis. The currency went into freefall. Police were out in the streets shooting protestors. Unemployment and crime rates soared overnight. And the nation defaulted on its debt.
Simon Black at sovereignman.com, July 10, 2014

It’s said we’re in hard times, and we are in hard times. But as hard times go, these are the good days. There are those who have known real-and-for-true hard times. Not the poverty porn hawked around by social activists or the tiresome stories peddled in the movies. Actual hard times are ahead, not hard times by comparison but long term destitution with real privation, when we’ll fear a lot more than fear itself.

Ahead, stretching to the horizon, lies deepest 1932 but without the civility and yes, without the relative plenty. The Great Depression will be something to aspire to, where even migrant field hands drove cars to work. Actually it doesn’t all lie ahead, some of it is already behind us. Truth is, we arrived a while back. We’re like the Okies in that first month without a good rain, or the laid off employee who thought he was between jobs. The era of hustle and opportunity that lifted all boats ended a long while ago. We’ve fallen below the event horizon. Gravity is in charge now. We’ve entered an era of relentlessly deepening want. In not much time it will beggar belief, then plunge directly to the heart of catastrophe. You’ll never again use the word hungry as lightly as you do now.

You needn’t fear the Mad Max scenario ‘though, not for long, there’ll not be the wherewithal to support it. Nor should you fear DC overmuch, other than rogue Free Corps and last ditchers and everyone taking control of everything and arresting each other. It will remain an obnoxious meddler at the outset and a while longer, but it’ll be mostly habit. DC‘s broke. In fact, it’s broker than you are. Meddling gets prohibitively expensive absent voluntary compliance. We’ve already seen DC metastasize from a dignified bribery and extortion racket with a credible claim to utility into smash-and-grab street thuggery. But more importantly, DC has become exclusively self-referential, a dead short in the circuitry, irrelevant to the problems at hand other than as an extravagant consumer of wattage.

The Tenth Amendment movement looks more dynamic every day, in fact, they’re already preparing Uncle Sam’s commitment papers in the back room. He doesn’t like it one bit. Too bad. We’ve had a family meeting and that’s the way it has to be. You see, not only is our formerly beloved Uncle paying his bills with counterfeit trolley tokens and IOUs, and not only does he get violent just because he can, he’s getting, well—bizarre. When we’re on the phone, he listens in, then says he didn’t. And he insists we expose ourselves to him as a condition of travel. Stuff like that art-link-symbol-tiny-grey-arrow-only-rev01.gif. The senile demand attention in, you know, odd ways. Our descendents will wonder why we ever took him seriously but we remember him in his youth, when he was a quirky but okay guy.

What you should really fear is scarcity. It’s unAmerican to say this, but what you have is all you’re likely to have and chances are you won’t keep all of that. So, are you planning a mountain retreat with a well and a hand pump, more than a tank of gas from the nearest urban center, away from lines of drift, solar powered hot tub with optional foot massage? If you’re not there now, or nearly so, you’re not going to get there. In other words, time’s up. Get your affairs in order where you are, because where you are is where you’re going to be. And what you have is what you’re going to have.

Societies are normally this badly wounded coming out of catastrophes, not entering them. Which means we’re in no condition for what’s coming, and what’s coming is something not seen since feudal times. Everything’s on the table including civilization itself. We’ve run out of good outcomes. There isn’t even a name for what’s coming. So far we’ve only seen the water trickling between the sandbags. Even so, the alarms have been notable, full of entertaining nuance and learned anecdotes about Medieval Venice and such. We’ve had the time for it. There’ll be no time for nuance when it all unzips. It’ll be a fire-hose in the face. Events won’t so much occur as uncork that which has already occurred.

The financial sector has reached the suburbs of self-parody. ‘Bmoreland’ at Zero Hedgecomments: “it takes holding $50,000 in a Wells Fargo High Yield Checking Account for 1 year to generate the $15 necessary to handle one Incoming Domestic Wire Transfer. Yes, that’s Incoming Wire Transfer, what used to be free at 95% of the banks a decade ago.” When deposits are a liability for both banker and depositor it’s plain we’ve been “crashing upward” long enough. With nothing to keep it aloft it’s visibly stalling. Dire warnings are arriving closer together. Here are samples from recent days:

So just maybe the Fed fully intends on heeding the advice of the BIS [Bank for International Settlements], and is strategically positioning itself as a stalwart dove to shield itself from the public fallout of it’s orchestrated financial calamity. A particularly sound play from a political perspective in the event that things don’t go as smoothly as planned. One thing is certain at this point: An intentionally orchestrated crash is the direct recommendation of the BIS, per it’s annual report. That this action exists as a potential policy measure is now confirmed. The remaining question is: Would the Federal Reserve pursue such a policy measure openly, or behind the same curtains from which most of their historic policies were enacted.
notquant.com, July 8, 2014

art-link-symbol-tiny-grey-arrow-only-rev01.gif The report and a plain English analysis by Ambrose Pritchard, at The Telegraph.

and, about the market:

We are now at heights where even the so-called “Uber Bulls” are beginning to get a little nervous in the hoof. For just who is going to buy when the first major dip goes stampeding past? There are no shorts to speak of at these levels… These prices are only representative of anything worth value if they can be sold.
Mark St. Cyr at markstcyr.wordpress.com, july 8, 2014

FOMC Minutes Show Fed Fears Investors Are Too Complacent; QE To End In October
Tyler Durden at zerohedge.com, July 9, 2014

and, about banks:

Germany’s cabinet Wednesday approved plans to force creditors into propping up struggling banks beginning in 2015, one year earlier than required under European-wide plans that set rules for failing financial institutions… “This ensures that in times of crisis mainly owners and creditors will contribute to solving the crisis, and not taxpayers.”
Andrea Thomas at marketwatch.com, July 9, 2014

Note: this appears to be the infamous “bail-in” where depositor’s accounts are “recognized” as “shares” in a bankrupt bank. Add the risk of confiscation to the next-to-zero interest rate now, and a negativeinterest rate soon, where direct taxation of deposits is automatically deducted. And note well, Spain’s trial bail-in is retroactive to the first of the year. The mother of all bank runs could be in the making from this alone.

Karl Denninger at Market Ticker summarizes the Fed’s dilemma plainly:

In the last quarter for which we have data the net economic impact including QE, which totaled about $250 billion during that time, was a negative $500 billion… The Fed has maintained repeatedly that QE “helps the economy.” The facts say it does no such thing; gross economic output trends downward to flat when QE has been in process, and net-net economic progress is negative. They lied. What QE did was boost asset prices—but not economic activity.
Karl Denninger at market-ticker.org, July 10, 2014

The Fed is pulling QE because it doesn’t work, exactly as I pointed out it would not because arithmetic doesn’t allow it to (and which the Japanese discovered over a decade ago) and laddered fixed-income segments in the market are being progressively destroyed by it.
Karl Denninger at market-ticker.org, July 12, 2014

Charles Smith at Of Two Minds says reform hasn’t worked, probably can’t work, and offers his bottom line:

People constantly ask me for solutions to our all-too visible ills. You want solutions? Here’s the solution for every systemic, structural problem we face: Avoid getting hurt when it collapses, then start over.
Charles Smith at charleshughsmith.blogspot.com, July 13, 2014

Every bank’s liabilities are on every other bank’s books as credit or collateral, except massively more bloated with years of leveraging and rehypothecatation. The BIS is warning the Fed to back away and the Fed is backing away. We’re about done stair-stepping into the night. A colossal collateral meltdown is looming. This time it won’t merely take down a Lehman or two, it may take down whole nations.

Big Money knows it. They’ll act with blinding speed in the final feeding frenzy, anxious to cage prize morsels before decamping to their redoubts for brandy and cigars. This is what all the positioning is about. They’re maneuvering, rigging this and nudging that to get just the right deflection, always careful not to snag a tripwire prematurely, but knowing someone will blunder eventually. When they do you’ll need an egg-timer at most. The alert and realistic observer—also known as a tinfoil hat alarmist—sees the maneuvering and what it points to.

You may think it comforting we’re all in this together. We’re not all in this together. While you’ve been stockpiling essentials and planting thorny bushes outside your windows and putting away heritage seeds, the upper percentiles have figured out they don’t need to be clever to survive, they just need to be somewhere else. Surely you’ve noticed sellers of big boats and Peruvian realty are affluent America’s new best friends. And how they’ve been keeping company with vendors of portable wealth.

You and yours, and those trusted few with whom you can ally, will be on your own. America isn’t the Apple Blossom Valley of the past where communities looked out for one another and left a picnic ham on the porch of those in need. No, this time your odds are millions to one. Against. For those who think there’s safety in numbers, you’re wrong. As has been said here many times: get away and stay away from crowds. Most are created by opportunists calculating an advantage at your expense, the rest are outright vermin. When it all goes sour, and it will, they’ll cash in your well being to save their own. Control over your own life passes into the hands of others when you find yourself in a crowd. The crowd’s fate becomes your fate.

You may believe being a productive and honest citizen is an asset. It isn’t. If you listen carefully you’ll hear yourself being positioned as an enemy of all that is good and wholesome. For instance, if you oppose the regime’s serial squandering and—gasp! are a veteran—you’re an incipient terrorist. If you criticize Obama by name you’re a crypto-racist. If you’re a boomer you wantonly plundered the nation’s future for your own squalid gain. If you take responsibility for your own life and expect the same from others, especially if you seriously prepare for hard times, you’re an anti-social loner nursing dark thoughts of mass violence. It’s a setup.

These lone wolves. These homegrown violent extremists are people who keep me up at night, as well. Trying to monitor them, trying to anticipate what it is they are going to do. And the experience that we had in Boston is instructive. It only takes only one or two people to really do something horrific.
Attorney General Holder via Daniel Halper at weeklystandard.com

Wherever the TSA or the Department of Education struts its stuff even toddlers are a security risk for which they have “zero tolerance”. Being a kid is the new entry-level crime. Nobody escapes. Creating criminals is not only fun, it’s profitable. Notice the Soviets vilified the wealthy, not the workers and peasants. Also notice the untermenchen of the Third Reich had confiscatible wealth. The SS was not only self-supporting, it returned a profit. Even slave labor wasn’t free, it was rented out. Wholesale, systematic wealth confiscation, not wealth creation, is the universal model for political economies.

All any regime requires is a continuing supply of crimes that can be neither understood or avoided. Think of Political Correctness as the field-testing and conditioning phase and it all makes sense. Notice how the civil rights movement went from sunny sing alongs to one-way prosecutable offenses in less than a generation. Notice who’s terrified of getting tangled in some trivial, unintended but ruinous offense. Hint: it isn’t The Diversity.

These are good times for the crime-fighting trade. Thanks to asset forfeiture, the militarization of civilian police and other outrages, there are plenty of resources to use for a police state. Those well-publicized SWAT debacles rattle dissenters like direct threats never could art-link-symbol-tiny-grey-arrow-only-rev01.gif, and they normalize random violence for the troops. Mainly, they display the new order at street-level in a wartime occupation sort of way.

These are nice side benefits, but law enforcement is a business, and like any other business it has to pay its way. If you’re a solid citizen with something to lose, watch out. It’s unlikely their financial files on The Dependency see much use. You, however, interest them. Maybe it helps to know there’s little new in all this. When Sherman marched through Georgia, well beyond his supply lines, he took the census and tax roles with him as ready-made shopping lists.

Perhaps you believe this time it will be different, that the safety nets put in place since the Great Depression will be there for you. They won’t be. The safety nets are overflowing with professional voters and have been from the first day. They’re part of the boondoggle bankrupting us in the first place. As any first-aider knows, first stop the bleeding. That would be you. The rhetoric will say otherwise, but you’ll be amputated like gangrene.

There’s a tsunami arriving. If you paid attention to those who saw things clearly and warned you plainly for all of your adult life, if you recalibrated your expectations and took charge of your own destiny, good for you. This calamity won’t last forever, quite, but it will bring low those it doesn’t maim or destroy. There won’t be any bystanders. The prudent and prepared may make it, some of them, maybe even most of them. Lord help the rest. Nobody else will.

 

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