The central illusion of Central Planning everywhere is that distributing insolvency will somehow magically create solvency.
Not only the US Federal Reserve, but the EU collectively and its members individually are blowing another bubble with artificially suppressed interest rates inducing a flight to equities. It may not look like a bubble because values are climbing so slowly and uncertainly, but that is just an indicator of the structural weakness and exhaustion of petrocapitalism. In terms of thermodynamics, the engine is just too big to run on the same fuel without serious retooling.
The debt from the past three decades of bubbles--finance, dot-com, real estate--is still largely unrepaid, and won’t be. Whether nefariously intended are not, the current payback scheme, focused as it is on sanctity of contract, is to keep the bond holders from absorbing any of the losses (the Greek haircut notwithstanding). Modern economics is all about trust, so if contracts are no longer reliable, then the whole system--which depends 100% on credit--functions much less efficiently and much more expensively. It begins to look medieval.
The hope is that the states can titrate these losses into the general population, where they will be diluted and absorbed like pollution. But like climate change, we’ve simply reached the saturation point. The world can no longer be a sump, economic or atmospheric.
Resistance, Revolution, Liberation: A Model for Positive Change (print $25)
(Kindle eBook $9.95)
We are like passengers on the Titanic ten minutes after its fatal encounter with the iceberg: though our financial system seems unsinkable, its reliance on debt and financialization has already doomed it.We cannot know when the Central State and financial system will destabilize, we only know they will destabilize. We cannot know which of the State’s fast-rising debts and obligations will be renounced; we only know they will be renounced in one fashion or another.
The process of the unsustainable collapsing and a new, more sustainable model emerging is called revolution.Rather than being powerless, we hold the fundamental building blocks of power. We need neither permission nor political change to liberate ourselves. A powerless individual becomes powerful when he renounces the lies and complicity that enable the doomed Status Quo’s dominance.
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