I am not a professional economist, nor do I aspire to be one. I am what you might call “an interested and informed citizen” on the subject. To that end, I feel it is my duty to chime in on what I believe should be done given the present times of crisis, and also analyse and criticise what I see as the present sources of our suboptimal state. From this, I think it is valuable to postulate some scenarios. These scenarios are not along a continuum, as I feel continua posit an oppositional and dialectical approach to the problem that doesn’t “do enough”. If one thinks of a continuum like a number line from -infinity to + infinity, centred on zero, then you can think of my approach as a multitude or multiplicity of axia emanating from and continuing through zero, and also providing other zero points for a similar treatment.

That said, there are things I call “granularities” – irreducibles that cannot be broken down further. An example of an irreducible would the minimum caloric intake to healthily sustain a human. This value is a dependent variable on the particulars of a human, but these can be averaged into a fairly narrow range between roughly 1000 and 3000 calories – 50 isn’t nearly enough and 1,000,000 is far too much.

Now, granularities can be absolute, such as Planck’s limits, or they can be “false vacuums”, where a change in context, form, or practice collapses the granularity and it shrinks to a smaller value, and what once seemed as a fixed bottom value may serve as a new ceiling value.

So, we have a variety of continua and a number of granularities – and these operate over time in a variety of different and continuously evolving contexts or flows. For humans, these flows are regulated and delimited by language and communication -  a product of our brain as its reductively composes models and ideas of sense data and its own operations in order to reproduce more brains.

At this point you are probably wondering where the hell I am going with this and what on this little green planet of clocks (thanks for the fish!) does any of this have to do with economics. Be patient.

The United States of America, an Empire of extra-ordinary power, has been experiencing economic difficulties, difficulties I predicted prior to the crash of September 2008, where, on the energyResources forum on 8 APR 08, I wrote:

If the non-borrowed reserves are reflecting borrowing money from the
TAF , when can they possible get back in the black on the h3 table?

They have no reserves, and they’re borrowing Billions, they need to get
some profits rolling in order to get their Reserves back above zero.
But, if they’re borrowing money to keep afloat, and they’re sinking
because their source of income (debts and debtors) have gone sour and
can’t / won’t pay, then what exactly is the strategy to solvency?

The only thing I can think of is for the TAF to actually become a debt
liquidation instrument, and literally dump billions into the system by
buying all the bad debt and then “burning the certificates”.

And that is EXACTLY what the US government did, they basically developed the TARP from the TAF model and did it to an extent above and beyond the call of duty to the point where the executives of the very corporations that sank the economy were able to walk away with huge cash bonuses.

While billions were supposed to be moved into the toxic accounts where they were to be effectively “burned” and removed from the economy and piled onto the national debt – in a stroke basically externalising the debt out of the banking sector and distributing it to the public – what happened is the debt still sits there, toxic as ever, and the trillions pumped into the system are now sitting there in bank reserves. As of July 18th 2010, the h3 report stated that the total nonborrowed reserves of all financial institutions in the USA stood at $1,027,487,000,000. Yes. Just over 1 trillion dollars. Now compare this to the h3 report in October 2008 when it was NEGATIVE $333,707,000,000.

It sits because of the record high unemployment rate
(the highest sustained since the Great Depression of the 1930s)
depressed housing prices
(that continue to descend in many places)
the enormous debt burden already carried by the average citizen
(also in record territory)
and the preference of people to deleverage themselves out of debt in a precarious job market.
(which is only common sense)

It sits in the banks because the model of stimulus has been to lower interest rates to permit greater lending. When people are up to their eyeballs in debt, they are unlikely to take on more debt, especially when unemployment is high and the sensible thing to do is to get out of debt.

Therefore, the way to give this trillion dollars velocity is to not give it to the banks, but to give people jobs so they will spend it. But this doesn’t jive from the position of the owners of the banks, as it runs counter to their business algorithm (lend > get paid > lend more).

One axial critique would be the obvious: this is simply brutal class warfare, where the ruling elite turns into a kleptocracy and loots the Treasury at the expense of the working classes. Given the evidence, this analysis is true enough as far as it goes, but there is farther to go, as there are other axia to grind here, and the above axial critique (certainly a kind of Marxian approach as one extrema of a Marxism vs. Capitalism axis) doesn’t really go far enough.

So, this is what I think is going on:

The USA is a giant empire flailing about trying to maintain its hegemony through military dominance, much like what Rome did in order to maintain energy flows at a positive rate of acquisition. Rome failed as its ability to acquire resources ran up against the laws of diminishing returns and had to encompass ever larger areas. As a given area requires (x) military presence, and area squares as it doubles, Rome was not able to properly police its borders, and within its realm, the energetic and mineral resources began to stretch thin and fail, given their methods of acquisition.

It’s a good thing they never really figured out coal or petroleum – otherwise we would have had an ecocidal apocalypse 1800 years ago…

So, faced with an inability to expand itself eastward due to the brutal weather in Russia and impoverished locals in the NE and the enormous Parthian empire to the SE, and hemmed in by the Sahara to the south and the Atlantic Ocean to the west, Rome had nowhere to go. It began to dilute (inflate) its currency. At the Empire’s peak in 117ce it was only 110 years from financial collapse.

The USA is in much the same position. It can’t conquer more energy, because:

a. it’s broke
b. global oil extraction is at or very near peak

Because the USA is broke, it can’t really buy its way out of trouble and because of the peaking of its critical resource, it doesn’t have the wherewithal to produce itself out of trouble.

The monetarists might argue – nonsense – just go into debt.

And what exactly is debt? Debt is a claim on future labour.

Even for the capitalist. The Capitalist borrows money and builds a factory. The money borrowed is paid back by the labour of the factory workers who create the wealth.

Even for the ordinary citizen. I want a car. I take out a loan. I work and pay back the loan. In essence, the loan is a claim on a portion of my labour.

Debt is a claim on future labour.

Labour is work plus resources. The resources are reducing. Combined with the fact that energy is the ability to perform work, and that energy production is basically flat, even though population continues to grow, the ability for the USA to do the work to produce the labour at a rate that can pay back the debt at interest is looking increasingly poor over time.

Therefore, the USA gov’t has a limited set of options:

1. dilute the currency through a significant but controlled inflation, making the debt “payable” with worth-less money.
2.expand employment through government work systems – employed people spend money, and there is PLENTY of crap that needs to be done (alternative energy systems, electrify the railway system, radically expand the electric railway system, bulldoze dead cities, massively insulate private homes and businesses, etc.)
3. radically restructure the financial engine of the country AND the gov’t.
4. Paper over the holes and hope something good happens.
5. Conquest.
6. Some combination of  all of the above.

Very shortly the next debt tsunami is going to hit: commercial real estate notes who bought into the funky mortgage instruments is going to come due, and the Republicans, just as they did in 1936, are bleating about the debt. The disaster in the gulf is going to screw North American oil production for a good while. Right now there is a lot of oil simply being stored because the crappy economy has created demand destruction and reduced pressure on production. However, the summer sees increased demand for fuel. That will reduce the slack, and increase the demand, and when winter hits – the price will rise.

However, the price will not get stratospheric, or if it does, not for long. There’s a great article explaing why Here. In short, because oil is so strategic, the USA will sooner cajole / arm twist / invade the Middle East or Iran than let it hit $500 a barrel. The only problem with that is the USA is broke and can’t afford military adventures, and everything in the Middle East is so precarious thanks to the foolishness of the neocons and the Bush Junta, that any such action there would have catastrophic results – and it’s hardly the legacy the Obama administration would want to leave. Moreover, military action won’t increase the flow rate, or the total number of gigajoules of energy. At that point, like Rome, the USA will face the law of diminishing returns, and will have to do one of several things:

1. (My preferred solution) Renounce its Empire and focus on transitioning to a postcarbon future in a more mature, responsible, and adult manner.
2. (a very possible and likely solution) Hold onto its Empire resulting in a variety of easily predictable ranges of behaviour – all leading to a final collapse-
a. (a less likely, but very undesireable possibility) break into smaller states, many of them fascist, all of them a kind of neofeudalist economics.
b. (a much more likely and rather nasty outcome) hold the nation together but with a severe curtailment of traditional negative “freedoms” and immiseration of an expanded and poorer working class.
c. (and the old standby…) increase military adventures resulting in political and economic bankruptcy, leading to b.

Which do you think is likely? Which is preferred?

What do I see?

The Obama administration chickening out, again, and repeating the mistake of Roosevelt in 1936 and rolling on federal debt reduction. This will result in another recession on top of the one the USA is already in and culminate in what I call a spastic economy – as resources deplete, basics (food, energy) will increase in price – spurring inflation – but those things that are more subject to financialisation (mortgages) or economies of scale (consumer items) will drop in price – spurring deflation. This creates a spastic and sputtering economy, where by Xmas, we could see $4 for a loaf of bread and $3.50 a gallon of gas, but a former $400k McMansion auctioning for $100k…

Spastic.

And every day, another 80 million barrels of oil are extracted and blown into the atmosphere.

Now, what does this have to do with granularities? It’s the granularities that create the asymmetries. The asymmetries create localised scarcities, and these scarcities are what propel capitalism, as one can only realise profits on scarcity – ubiquity is non-economic.

A granularity can be seen in Grain – only so much is grown in a year, and this was a bad year. Per capita grain production has been falling for years, and with global warming parching traditional grainaries like Russia, this has had a bad effect on prices for grain when such a staple is exposed to the vagaries of the marketplace.

Another granularity is how much debt a human being can carry. The actual amount of debt is not important – that value is arbitrarily large – it could be in the trillions per capita in 2010 dollars – the question is how a person can meet the monthly payment. The grain is that payment. Again, this is adjustable, but not infinitely so. This is the kind of game the USA gov’t has been playing since the disastrous Reagan Administration.

A quick peak at The US Debt Clock reveals that the US gov’t is in debt approximately (as of 10.24, 12 AUG 2010) $13,314,341,000,000. For those less familiar wit such large numbers, that is 13 trillion, 314 billion, 341 million dollars. So, lets do a little math, and pretend that the USA will (in the next few minutes) miraculously stop adding to the debt, forever, and will begin paying it down at the rate of 1 million dollars a day. Note: the US gov’t has rarely been able to stop increasing its debt load, and has never been able to actually pay down its debt for any sustained period of time. That aside, let’s figure out how long it will take the US gov’t to pay off its debt in 2010 dollars.

First we take the total debt (which I have rounded off to the nearest billion) of 13.314 trillion dollars, and we divide that by 1 million, because that’s how much we are going to pay per day. We get the result of 13,314,000. That is how many days it will take to pay off the debt. Now, a year consists of quite nearly 365.25 days (the .25 to account for leap year), so let’s divide that in, and we get 36,451.74 years. Now, we do lose a leap day every 100 years, so we will subtract 364 from that number (almost a year right there!) and we come to the number 36,086.74.

So, if we were able to stop the increase in debt this afternoon, and immediately began paying it off at the rate of $1 million a day, it would take 36,086.74 years. From today, that would be May 9th, in the year 38096. So, if personal debt could also be rolled into the future like that, then there would be no real debt problem. There would be a massive currency problem, but debt would cease to be a significant issue. Similar strategies are already on line in places like Japan with their 100 year mortgages. So, if one applies this concept, only stretches out the payment from 100 years to 36,086 years, at zero percent interest, the payment on a million dollar home would go from $833 a month to $2.30 a month. The debt for this would be passed down from generation to generation, but each generation could then do the same – just kick it down the road indefinitely with stupendously long term loan terms.

Who would get hurt in such a bizarre system?

The ruling class who own the banks. They would get nailed because they would see their gross receipts crash by many orders of magnitude.

Who would benefit from such a nonsensical dream?

Pretty much everyone else.

What is the blind spot even in this?

Non-economic granularities. Geologically determined structures, like resources and energy. No amount of debt will put more oil in the ground or make the sun shine brighter or increase the grain harvest or restore extinct species. We cannot repeal the second law of thermodynamics or buy our way around it.

Again, there is no solution: just mitigation.

The recent move by the Federal Reserve to buy treasury notes is a desperate and foolhardy attempt by the banking system to continue pulling money out of the working class. What they fail to understand is that you can’t get money from the working class if the working class isn’t working. If they want to reignite the consumer engine, they need to give people disposable income and a sense of job security. When people have a steady energy inflow they will naturally engage in behaviour to expend the excess. They will get fat, drive huge trucks, put men on Mars, entertain themselves into imbecility, declare war for the fun of it, build cities in the desert, vacation in the Antarctic or the Moon, etc. all depending on how much excess they have and how secure they feel about it.

People can feel secure as can be, but if they have almost no excess, you still get stagnation. People can have gobs of excess, but if they feel insecure, they’re still dodging bullets and not taking much advantage of the excess. With the peaking of resource extraction, the per capita excess can only reduce. The only solutions are to reduce need (conservation down to granularity), reduce per capita (which is a very sticky subject, worthy of its own post) or some conbination of both.

So, in conclusion I would suggest that the best route would be what I called for almost a year and a half ago. Either that or give everyone the same deal the government has and given them 36,000 years to pay off any and all debts.

updated 12 AUG 2010

According to IEA and US EIA, Non OPEC-12 oil production peaked in 2004 at 46.8 million barrels/day (mbd) as shown in the chart below. This oil definition includes crude oil, lease condensate, oil sands and natural gas plant liquids. If natural gas plant liquids are excluded, then the production peak remains in 2004 but decreases to 42.1 mbd.

for more on this, go here.

Thursday, June 15, 2006
A post to a post

I found an interesting blog that I am going to add to my list at right. The writer discusses an article by Smil, and how he misses the point of Peak Oil awareness. Smil does have a point in that there are a number of people who approach this issue like a doomsday cult, but many people approach many valuable ideas in a less than optimal fashion. I posted the following as my response. To see the original post, go here:

http://www.energybrowser.com/

Hi!

Interesting blog, and interesting article. The continuing arguments between cornucopians like Smil, and nihilists like Hanson is, in my not so humble opinion, a significant problem for both sides of the argument.

Smil et al suggest that there will be some kind of an “energy fairy” that will save the day. Hanson et al suggest that not only will there be no “energy fairy”, but we are actually looking at an imminent die-off of catastrophic proportions.

What I have been advocating is a more balanced, middle pillar approach, where neither side of the coin is ignored, but neither side is accepted in total. I do think that technology will provide significant innovations that will help pull the right hand side of the resource depletion curve out a bit. At the same time, I think it is disingenuous to think that we can continue this industrial process of massive over-consumption of resources at the demand of massive over-population indefinitely.

As a consequence, there is a distinctive ideological component to the peak-oil discussion, and these ideological conclusions have very real and far-reaching results in terms of energy policy development and socio-cultural evolution.

Example – a society that is completely dependent on a form of energy that is of a limited variety will die off if they don’t shift to a renewable energy system coupled with social and cultural mores, ethics, values, and preferences that encourages the preservation of the resource base. A society that goes skipping down the lane of cornucopia disregarding the warnings will, eventually, run into a wall and fail. A society that looks at the resources available and then develops systems that can be used for millennia, and sets about developing the social and cultural preferences to enable such a permanent culture, will survive while the other dies off.

The problem is the loss of cheap petroleum energy is a global issue, and will require global solutions, as will the problems of resource depletion, climate change, and over-population in general. And this is where the likes of Smil are actually equally destructive to the likes of Hanson, et al., because following the lead of the nihilists results in paralysis, while the cornucopians advocate the unsustainable status quo.

I’ve also pointed out in my other writings that both sides are necessary – we need the concerned cornucopians to develop the new technologies, just as we need the nihilists to goad society into continuous re-examination of our directions and practices. Good Cop, Bad Cop. The problem is the citizenry of the industrial nations, both older and the newly industrialised, are used to cheap and plentiful energy and have built their expectations and infrastructure around it. These expectations and infrastructure lead to the cultural and social decisions that reinforce those expectations and infrastructure, creating a feedback of reaction and brutality.

The other problem is this: Smil et al are focussed on too short a term, while the nihilists are demanding too short a term. The Cornucopians will come up with technologies to mask the problem, but the fundamentals of expectations and infrastructure will still become increasingly manifest. In the meantime, the cornucopians get to discredit the Nihilists, while the Nihilists become increasingly distressed at the blinkered vision of the Cornucopians. Eventually, it will come to a head, and given the fact that petroleum is a limited resource, and industrial civilisation is structured around it and the society and culture it has produced is also dependent on it, it is, again, disingenuous for the cornucopians to argue for continued expansion of the human project over the back of petroleum.

Therefore, from my perspective, the only rational position is a middle position, one wher ethe dire warnings of the Nihilists are heeded, but immense investment and work should be devoted to the necessary technologies to achieve a smooth transition to a post-carbon society.

It is the cultural and infrastructural character of that society that I believe will prove most critical to the future of civilisation. It is that “criticality” that gives the nihilist position its strength, but it is the optomistic resourcefulness of the technologists and thinkers often found among concerned cornucopians that will manage the transition, as a nihilist position is no better than an unconcerned cornucopian position.

I discuss a lot of these ideas (in fact, I’ll be publishing this post there) on my blog, which is listed as my website. Let me know what you think.

Sunday, January 22, 2006
Back from the Shadows, again.

Well, dear friends, I’m back, and I’m just as pissed off as usual.

A friend of mine who is a consumer of the corporate propaganda machine was skeptical of the news regarding the collapsing dollar and Wall Street’s recent dive, etc.

So I sent her the following links and excerpts from articles all stating the obvious:

That the Iraq War has as much to do with defending the economy of Empire, as it does with the oil under its ground.

Here are the links and snippets of Real News.

Article #1: Kuwait lied about its reserves – news as of Friday, 20 JAN 06.

LONDON, Jan 20 (Reuters) – OPEC producer Kuwait’s oil reserves are only half those officially stated, according to internal Kuwaiti records seen by industry newsletter Petroleum Intelligence Weekly (PIW).

“PIW learns from sources that Kuwait’s actual oil reserves, which are officially stated at around 99 billion barrels, or close to 10 percent of the global total, are a good deal lower, according to internal Kuwaiti records,” the weekly PIW reported on Friday.

It said that according to data circulated in Kuwait Oil Co

(KOC), the upstream arm of state Kuwait Petroleum Corp, Kuwait’s remaining proven and non-proven oil reserves are about 48 billion barrels.

Officials from KOC were not immediately available for comment to Reuters.

PIW said the official public Kuwaiti figures do not distinguish between proven, probable and possible reserves.

But it said the data it had seen show that of the current remaining 48 billion barrels of proven and non-proven reserves, only about 24 billion barrels are so far fully proven — 15 billion in its biggest oilfield Burgan.

Kuwait has been adding up to 500 million barrels a year at Burgan which means the remaining non-proven reserves of some 5.3 billion barrels will likely be upgraded to proven, according to PIW.

Three consortia led by BP (BP.L: Quote, Profile, Research), Chevron (CVX.N: Quote, Profile, Research) and ExxonMobil (XOM.N: Quote, Profile, Research) are in the race for Project Kuwait, a 20-year operating service contract to raise crude capacity at four oilfields in the north of Kuwait.

Article #2: Kuwait’s largest field has peaked and is in decline, 12 NOV 05

Kuwait’s biggest field starts to run out of oil
Kuwait: Saturday, November 12 – 2005 at 08:46

It was an incredible revelation last week that the second largest oil field in the world is exhausted and past its peak output. Yet that is what the Kuwait Oil Company revealed about its Burgan field. The peak output of the Burgan oil field will now be around 1.7 million barrels per day, and not the two million barrels per day forecast for the rest of the field’s 30 to 40 years of life, Chairman Farouk Al Zanki told Bloomberg.

He said that engineers had tried to maintain 1.9 million barrels per day but that 1.7 million is the optimum rate. Kuwait will now spend some $3 billion a year for the next year to boost output and exports from other fields.

However, it is surely a landmark moment when the world’s second largest oil field begins to run dry. For Burgan has been pumping oil for almost 60 years and accounts for more than half of Kuwait’s proven oil reserves. This is also not what forecasters are currently assuming.

Forecasts wrong

Last week the International Energy Agency’s report said output from the Greater Burgan area will be 1.64 million barrels a day in 2020 and 1.53 million barrels per day in 2030. Is this now a realistic scenario?

The news about the Burgan oil field also lends credence to the controversial opinions of investment banker and geologist Matthew Simmons. His book ‘Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy’ claims that the ageing Saudi oil filed also face serious production falls.

The implications for the global economy are indeed serious. If the world oil supply begins to run dry then the upward pressure on oil prices will be inexorable. For the oil producers this will come as a compensation for declining output, and cushion them against an economic collapse.

However, the oil consumers then face a major energy crisis. Industrialized economies are still far too dependent on oil. And the pricing mechanism of declining oil reserves will press them into further diversification of energy supplies, particularly nuclear, wind and solar power.

Article #3: The implications of Iran switching away from dollars and only sell oil in euros.

“Until now oil is solely priced, traded and paid for in the greenback on both markets in London and New York. The Treasury Inflow Capital data from mid-2005 show that OPEC members have parked only a skimpy $120 billion in direct dollar holdings which are almost equally split between equities and debt paper. This is a clear indication that oil producers are investing their windfalls elsewhere. The yield spread between US and EU debt papers in favor of the EU is clearly another hint where the petrodollars might flow after conversion.

The Iranian Oil Bourse (IOB) will become a factor that could further unsettle the dollar’s dominant position.

Especially in the case of Iran it does not make sense to accept dollars only for its much desired commodity. Being seen as a hostile country by the USA for the intention to build its own nuclear reactors one wonders whether the new IOB will not try to attract other buyers than Americans who are particularly unwelcome in that corner of the globe. Iran has recently announced that the new oil exchange will start up its computers in early 2006.

Steering away from the almighty commodity, currency and commodity currency – the US dollar – can have a deeper impact on the US economy than a direct nuclear attack by Iran. The permanent demand for dollar denominated paper stems to a good part from the fact that until now almost all resources of the world are quoted in it.”

Article #4. The Iranians are converting their oil currency to euros, which will weaken the dollar

“In 2005-2006, The Tehran government has a developed a plan to begin competing with New York’s NYMEX and London’s IPE with respect to international oil trades – using a euro-denominated international oil-trading mechanism. This means that without some form of US intervention, the euro is going to establish a firm foothold in the international oil trade. Given U.S. debt levels and the stated neoconservative project for U.S. global domination, Tehran’s objective constitutes an obvious encroachment on U.S. dollar supremacy in the international oil market.”

Article # 5. The Iraq war as seen as an oil currency war.

“Although completely unreported by the U.S. media and government, the answer to the Iraq enigma is simple yet shocking — it is in large part an oil currency war. One of the core reasons for this upcoming war is this administration’s goal of preventing further Organization of the Petroleum Exporting Countries (OPEC) momentum towards the euro as an oil transaction currency standard. However, in order to pre-empt OPEC, they need to gain geo-strategic control of Iraq along with its 2nd largest proven oil reserves. The second coalescing factor that is driving the Iraq war is the quiet acknowledgement by respected oil geologists and possibly this administration is the impending phenomenon known as Global “Peak Oil.”

This is projected to occur around 2010, with Iraq and Saudi Arabia being the final two nations to reach peak oil production. The issue of Peak Oil has been added to the scope of this essay, along with the macroeconomics of `petrodollar recycling’ and the unpublicized but genuine challenge to U.S. dollar hegemony from the euro as an alternative oil transaction currency. The author advocates graduated reform of the global monetary system including a dollar/euro currency `trading band’ with reserve status parity, a dual OPEC oil transaction standard, and multilateral treaties via the UN regarding energy reform. Such reforms could potentially reduce future oil currency and oil warfare. ”

Articles #6 : China has announced that it is going to diversify its portfolio (i.e., reduce its investment in our debt) 6 JAN 06

” The latest comments from China should warrant more focus than today’s non-farm payrolls. Coming back to haunt dollar bulls was talk of Chinese reserve diversification. China announced yesterday that they plan on diversifying their reserves away from the US dollar and US treasuries. China is the world’s second largest holder of US Treasuries, which means that any diversification away from dollar denominated assets, could have grand ramifications.

Although they are not expected to make any quick or massive shifts, even gradual moves in an environment that is already becoming less and less favorable to the dollar, could certainly give dollar bulls another reason to jump ship. ”

So, that’s the news while I’ve been away: basically, the oil situation is a bit more dire than previously understood, and the Empire not only must defend itself from terrorist attack (as there is no credible national military threat, with the exception of Russian Nukes) but must also defend itself economically against a run on its currency which is tied to the production of oil.

The Empire has spent itself into oblivion, and needs to either wildly increase taxes on the rich (something the rich and their idiot minions are loathe to do) or simply monetise the debt through inflation.

A move in that direction is witnessed here:

The Fed is discontinuing the publishing of the M3

Once the public is in the dark about eurodollar transfers, the money supply can be expanded at will. The devaluation of the dollar can be seen as an “attack from the outside” when it is actually a strategic decision from the inside to monetise the debt. IF (and it seems fairly logical to me) that is what the pigfuckers running this show are up to, then the questions become: will they also raise interest rates to try and “stifle” the inflation? If so, then get locked in interest rates NOW, and pay off your debts with ever cheapening dollars, or sell off your house, move someplace cheap, and pay cash from your equity. If they DON’T boot interest rates, or boot them fast enough, we could get into a hyperinflation, in which case being in debt is a Really Good Thing, because you can borrow money that is soon worthless.

My guess is the Fed won’t let that happen.

(although it should be noted that while bread and other goods were insanely expensive, unemployment dropped to nearly zero during the Weimar hyperinflation, people paid off their houses in an afternoon, and the investment in industrial capital and infrastructure was astronomical. That the following crash led directly to the rise of Adolf Hitler is not lost on many…)

and will try to “manage” the inflation, so we have an inflation to defray the destruction of the debt, but not so much inflation that it runs away with the economy.

My next post will outline some policy.

I uploaded most of the old site into this site. It needs a lot of work – most of the CSS is totally hosed. Argh. But the “stuff” is there, so proceed as normal.

After haranguing my colleagues over “dynamic websites” I have decided that I should walk the talk, and get the same thing going on for my own bad self. So, I bought my name as a .com, and will now work to move most everything over from kether.com to here.

I will move the content over from my previous few blogs over to here and feature them as “previous writings”.

Kether will still exist and will be repurposed.

This site will change with some frequency.