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In what will be our final installment together, at least
for the foreseeable future, Andy and I will look at the sole largest reason for
the current circumstances in which nearly the entire Western world finds
itself. We end not our friendship nor our collegial working relationship, but
have mutually reached the decision that these collaborations are no longer
generating benefits anywhere near the expenditures required to produce them.
The title of this piece explains in some degree why this is the case. We hope
the rest will fill in at least some of the blanks.
While many believe that Newton��s
laws only apply to physics, a powerful analogy can be drawn between them and
the rest of existence as well. Of particular interest here is that a body in
motion stays in motion until acted upon by an outside force. The same would
certainly seem to be true of socioeconomic phenomenon. America is in debt and
she��ll continue down that pathway until the pathway
is acted upon by an outside force. We��ll leave it to
the shock-monger folks in Baltimore and other places to tell you what those
particular forces will be (for a mere $50/year along with the obligatory 5
free gifts), but the takeaway is that America isn��t
going to just magically clean up its act. Neither her government, nor her
people, will suddenly wake up one morning and say ��We��ve been doing it all wrong; we need to stop this now!�� However, the only reason we pen this last piece is in the hope
that one or two might read it and come to exactly that conclusion on their
own. It won��t make a lick of difference in the
aggregate, but a few less ruined lives are never a bad thing.
America��s mind has died folks,
and even more importantly than that, her will has died also. Those who do
know merely shrug their shoulders and say ��que sera
sera��. They��ve largely
given up. They blithely do the very things they know they shouldn��t, expect the very things they shouldn��t,
then give that slack shrug when it all goes wrong just like they knew it
would. Everyone knows that in the financial world there are no get rich quick
schemes for the man on the street. Those perks are reserved for others. No,
for the man on the street, growth takes a lifetime, but destruction and
annihilation take only an instant. We saw this in grand form in 2008. The
reprobate bums in the media will shrug this off saying it is an irrelevant
point because the Dow has regained all the lost territory and then some. What
they fail to acknowledge (as usual) is the fact that most of the Joe Average
types sold at the bottom and have only been expressing a desire to get back
in now that more record highs are in place. In other words, they got most if
not all of the loss and very little of the subsequent ��gain�� (sic). We say gain with sarcasm
because anyone can jigger an index, yank the losers, put in winners, and then
call it a gain.
Yes, we��ve been there a hundred
times. Nothing is what it seems. The not-so-USFed now claims it has figured
out why there has been no inflation (another laugher) despite massive
injections of QE monopoly money. Get this: the American consumer is hoarding
money. Yet this same institution will release a report a week earlier saying
that 40% of households are under financial stress. Which is it, folks? For certain, price inflation has been tame
compared to the amount of QE unleashed. Exhibit One is the stock market. The
money has been pent up. The ��fed�� buys its bonds, then the banks that receive that money as primary
dealers use the money to jam commodities markets, pump equities, and in
general perpetrate what will go down in history as the biggest scam mankind
has ever seen. A decade ago, the above might have qualified as a ��theory��, but lately the admissions pour out in the mainstream media. You��d think such revelations would cause some concern? Not in America
where the mind has died. Even in rabble-rousing Europe, the cries for reform
have calmed as Cyprus fades into the background and the debt crisis slowly
simmers; kept at bay by �� you guessed it �� massive money printing. Nobody is fazed by any of this and those
who are don��t need to be told there is something
wrong.
Along these lines, likely the biggest economic event that
has happened recently to underscore all of this is the absolute fabrication
of GDP numbers. Instead of merely reporting numbers, now we have to spin them
because the numbers aren��t enough to maintain the
illusion anymore. So we get a stuffed shirt or three on television and blame
the weather for the lack of economic activity. Over a hundred billion dollars
in Q1 vaporized because it snowed. Really? Evidently it has never snowed
before, but it is sure likely to from now on because snow, in addition to
being a great source of fun for the young chaps, is also an excellent
scapegoat for lackluster economic performance. However, the snow and cold
didn��t cause people to shift dollars spent on spring
and summer products to shovels, salt, snow blowers, heating oil, and warmer
clothes? Nope, the quislings in the establishment tell you that you didn��t spend because it was cold and that you��re
absolutely dying to break out the credit cards once it gets warmer. It��s all in the subliminals. They might have just as well trotted out
Bush Junior and had him tell America to go on another vacation to Disney
World. Remember that one? Personally our favorite is Fantasyland, but since
we��re already there, a vacation is somewhat
pointless.
The situation is not much better across the pond either.
While Europeans have a penchant and reputation for rioting and burning at
perceived injustices, even the most battle hardened of them will admit that
it is more about taking out frustrations than actually effecting change. Like
America, much of Europe is drunk on excess, frivolity, sports, and the ��me generation��. We have iPhones. Shocking
that the narcissism of society would be so intense that companies would
actually market to it. In true Biblical sense, the world has been turned
upside down. What was abhorred is now revered. What was bad is now good and
what was good is now bad. ��Global warming�� results in extreme cold, peace talks result in more war, and ��patriot�� acts result in the trashing of
the American Constitution and the snooping on anyone who dare plug into the
matrix. And, as we have tirelessly pointed out, consumer protection acts
result not in the protection of consumers, but rather join them with unsecured creditors, strip them of their depositor
status, and leave them wide open to further acts
of robbery.
But nobody pays attention. Why? It is almost for certain
that many folks are just tired of hearing about it. Think about the
responsible person��s quandary today. They��re responsible for supporting not only themselves, but well over a
hundred million of their fellow countrymen �� just in
America. They��re responsible for supporting a
government that is out of control with regard to spending and other excesses.
And lately, they��ve become further encumbered
because the two-headed hydra known as America��s
political system has unleashed untold millions of illegal (not undocumented)
individuals onto the various welfare rolls. Sure, some of them will work.
Most will not, but it doesn��t even matter. One side
wants votes and more dependence on government. The other side wants cheap
labor and more dependence on government. The establishment couldn��t care less about the plight of the responsible people; they are
there to be milked and bilked.
What��s the common denominator
here? If the school system taught history the way it ought to, this would
alarm most folks. However, what do you do when people don��t even know they should be alarmed? Leave it to common core and
kids graduating high school in 4 years won��t even be
able to find their own country on a map let alone contemplate these and many
other important matters. Too many already can��t. But
nobody cares. Everything is fine.
When the lawless make the laws, there are going to be
problems. So we don��t hold it against you if you��re working your knuckles to the bone to do the right thing while
so many others have capitulated into the dark world of government dependence
and social welfare. Meanwhile, there is a whole alternative world, based on
the sham of ��reality TV��,
here people can drape themselves in a cocoon of nonsense and a false world
while the very real world spirals out of control around them. Why do you
think every little town in America wants a minor league baseball team? Or a
casino? Or maybe rails to trails? Bread and circuses, but again, most don��t even know what that is thanks to the dumbing down of the
generations through government education. Make no mistake here; we are not
setting ourselves up as being better than anyone else. Part of our fortune
lies simply in when we were born. Much of the rest of our wiring is the
result of having parents who understood rules and that when you break the
rules there are consequences. We��ve had the benefit
of being America��s last generation, to to speak. The
ones after us have not only felt the full brunt of the misinformation and
lack of true education, but for the most part, didn��t
have parents that grew up in a generation of hardship and deprivation.
Consider today, here it takes stumbling across someone
who is at least 90 years old to find an individual with any recollection of
the Great Depression. We can read all the books we want, but nothing portrays
the story and circumstances like someone who was there. Yet instead of
cherishing this rapidly declining resource, we stick it in nursing homes
where it is cared for by a generation that is more concerned about Facebook
than the faces of those it is charged with caring for. Harsh words, but it is
the death of the American mind captured in a picture.
Graham and I entitled this piece ��Death of the American Mind��, but it is by
no means exclusively an American problem. No doubt those of you who take the
time to read this will think of a hundred, if not a thousand, other examples
of what we pointed out above. We both went into this joint venture of sorts
thinking we were going to change the world. We were wrong. The world cannot
be changed because it doesn��t want to be changed.
The world enjoys circumstances as they are. The world is hooked on largesse
and in a way it is, in fact, hooked on its own ignorance of its perilous
state. The establishment that intertwines the fabric of society is heavily
invested in maintaining the status quo because that establishment��s power is at its maximum when personal responsibility, liberty,
and cognitive activity are at their minimum.
As someone who is responsible, it is incumbent on you to
make this fight a personal one. We need to forget about saving the world and
start focusing inward. Not in a selfish way, but from a preservation point of
view. There will no doubt come a day when the foolishness ends and that
outside force acts on the orb of insanity that drifts along on its collision
course with its self-imposed destiny. Then panic will ensue and there are
going to millions asking ��what do we do now?�� It is imperative that there are those who can succinctly outline
what happened, why, and how to move forward. In short, this world is going to
need leaders rather than pretenders. It is going to need thinkers not
stinkers. That will be the time of your opportunity. And in that time you��ll have the chance to prove this article wrong; that America��s mind wasn��t in fact dead, but was merely
embroiled in a century-long daydream.
Graham Mehl is a pseudonym. He currently works for a hedge fund and is
responsible for economic forecasting and modeling. He has a graduate degree
with honors from The Wharton School of the University of Pennsylvania among
his educational achievements. Prior to his current position, he served as an
economic research associate for a G7 central bank.
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