The Illusion of Control: What If Nobody's in Charge?

The last shred of power the elites hold is the belief of the masses that the elites are still in control.

I understand the natural desire to believe somebody's in charge: whether it's the Deep State, the Chinese Communist Party, the Kremlin or Agenda 21 globalists, we're primed to believe somebody somewhere is controlling events or pursuing agendas that drive global responses to events.

I submit whatever control we discern is illusory, as the dynamics unleashed by the pandemic have already escaped the control of elites. The fundamental reason the elites have lost control is that all the systems they depend on have been broken for 12 years, but were successfully papered over by doing more of what broke them in the first place. This papering over of broken systems generated an illusion of functionality: everything appeared to function as before even as dysfunction spread into every corner of every system.

As doing more of what broke the systems in the first place is failing, the illusion of functionality has been shredded. Now that the illusion of functionality has been lost, control of the narrative via institutional authority has also been lost.

I've often written about the difference between force and power; elites often mistakenly believe the two are equivalent, but they are worlds apart. Those who wield power persuade the masses to obey without being coerced, and to accept the self-serving narratives of the elite without question. Power leverages institutional authority and cultural myths and beliefs.

Force is costly, as coercion is costly. Force is a poor substitute for power, not only because the costs are so burdensome, but because the masses are not acting on their own volition; they are obeying only because the costs of not obeying are so high. But the unwilling can never be as productive as the willing, and so the regime that depends on force stagnates as the costs of coercion ratchet higher and the productivity of the forced steadily declines.

When power is lost, the masses simply stop listening to the authorities. In W.B. Yeats' line, the falcon cannot hear the falconer; once authority over the narrative is lost, the masses circle away from the voice of their elites.

The systems the elites depend on for their authority and power are now little more than fractals of incompetence, structures dominated by incompetence in every level and every nook and cranny, from the lowest paid employees to the top leadership.

All these systems serve the interests of insiders and vested interests first, the priorities of the elites second and the public / customers third, if at all.

The elites have lost control of everything that is critical to their survival: capital flows, faith in the future of eternal cost-free growth, and the rise of discontent and disillusionment.

The elites are discovering, to their dismay, now that competence has been lost, power has been lost, and force is no substitute for power.

All the papering-over tricks no longer work. Lowering interest rates to zero isn't going to increase consumption or investment, it's only pushing speculative frenzy to new increasingly fragile highs. Printing trillions and sluicing it to the super-wealthy isn't going to fix what's broken because that mechanism is what broke the system in the first place.

The last shred of power the elites hold is the belief of the masses that the elites are still in control. That belief is dissipating, despite the shrieks and cries of the elites that they are still in control. Events are illuminating their hubris and the fractals of incompetence that are crumbling beneath their feet.

Many believe the super-wealthy always transition seamlessly between regimes. But this is not always the case. The greatest personal fortunes in history (owned by private individuals, not royal/Imperial households) were likely accumulated by Roman elites. Their villas were in essence small cities and their fortunes were in Roman terms global.

Yet when the institutions that enabled their fortunes crumbled, these elites did not transition their wealth and power seamlessly to Barbarian rule: everything fell apart, their villas were abandoned and their power vanished.

Phantom capital is ephemeral, and so is power.

Recent Podcasts:

AxisOfEasy Salon #9: Algorithmic Guerrilla Warfare

A Reverse Wealth Effect? (41:52)

My COVID-19 Pandemic Posts


My recent books:

Audiobook edition now available:
Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World ($13)
(Kindle $6.95, print $11.95) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 (Kindle), $12 (print), $13.08 ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).


If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

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NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, Jed H. ($60), for your terrifically generous contribution to this site -- I am greatly honored by your steadfast support and readership.

Thank you, A.G.W.R. ($60), for your magnificently generous contribution to this site -- I am greatly honored by your support and readership.

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Dear Junkies Addicted to Fed Smack: The Monkey on Your Back Is Now a Gorilla

You thought that monkey on your back was light as a feather, but now it transmogrified overnight into a crushing gorilla.

Dear junkies addicted to the Federal Reserve's free-money smack: like all addicts, you firmly believe you're not addicted. Never mind those tracks, you can stop any time. Yeah, sure, but we all know you're going to buy the dip and max out your margin account because the craving cannot be denied.

Speaking of denial: you don't realize you're the dealers' chumps, the bagholders who bought at the top who the dealers are counting on to cling on to the bitter end because those Fed speedballs have inspired a euphoric faith in your god-like trading powers.

Here's how it ends, figuratively speaking: you'll wake up inside your Mercedes in a god-forsaken patch of urban wreckage, all the doors will be locked and you won't remember even leaving the party, much less how you got here.

You'll compulsively check your account and find that your margin call exceeds the value of your entire portfolio because the bottom dropped out while you were in a Fed-smack-induced haze, dreaming of prancing unicorns and angels dancing in the head of a pin.

Only now will you understand you were not a trading genius who would get out at the top, no problem, but a bagholder, played perfectly by the big dealers who sold to you. Now you're wiped out because you don't have enough cash to cover the margin call that's left after your portfolio was liquidated.

You thought that monkey on your back was light as a feather, but now it transmogrified overnight into a crushing gorilla. The dealers who you thought were your pals at the party made sure you wouldn't be around to cause a scene when you found you could no longer count on the Fed's baggies of the good stuff.

While you gird yourself for the agonies of cold turkey, consider Exhibit 1, the Fed'a balance sheet in February 2020:

2/5/20 $4.166 Trillion
2/12/20 $4.182 Trillion
2/19/20 $4.171 Trillion

Notice anything about the Fed's supply of free-money smack? It dried up. But all the junkies didn't notice because they were so sure that the Fed's supply of junk was infinite.

A funny thing happened on February 19--the market topped out and crashed the following week. Now look at this month's supply of Fed smack:

6/3/20 $7.165 Trillion
6/10/20 $7.168 Trillion
6/17/20 $7.094 Trillion

Umm, notice any similarity?

Fed junkies know one thing: the only thing that matters is the Fed's junk. Real economy: doesn't matter. Corporate sales: doesn't matter. Corporate profits: doesn't matter. Tax receipts: doesn't matter. Household income: doesn't matter.

The only thing that matters is the Fed is supplying baggies of the good stuff. Spoken like a true junkie, my friend, but once the high wears off consider what the Fed can't do:

1. It can't reverse the unprecedented wealth inequality its policies have pushed to the point of social disintegration and breakdown.

2. It can't make people take on the risks and heartaches of starting new businesses.

3. It can't force employers to hire more employees.

4. It can't make unprofitable businesses profitable.

5. It can't force people to buy assets at prices that no longer make financial sense.

6. It can't make insolvent businesses and local governments solvent.

7. It can't force people who now realize their priority is to save money to spend their cash, even if the Fed forces negative interest rates.

8. It can't lower the unaffordable cost structure of the entire economy.

9. It can't de-link all the financial dependencies in the financial system that make it so vulnerable to the first domino falling.

10. It can't stop people from selling their assets.

In summary, The Fed can't stop the unwinding of an unsustainable bubble of epic proportions. We are entering The Greatest Depression because Fed smack has zero effect on the real world; its only effect is to increase the delusion that asset bubbles are all that matters.

Also recall that the Deep State is not going to allow Jay Powell to re-elect Donald Trump with a stock market rally. From the point of view of the inner circle of the Deep State, the market collapse in March was simply a test to confirm what happens when the free-money smack is withdrawn. The test was a success and now the real crash can begin. Only this time it won't last three weeks. It will last all the way through October because, well, you know why: Deep State to Powell: Stop Goosing Stocks Higher Or You'll Re-Elect Trump (June 9, 2020)

Recent Podcasts:

AxisOfEasy Salon #9: Algorithmic Guerrilla Warfare

A Reverse Wealth Effect? (41:52)

My COVID-19 Pandemic Posts


My recent books:

Audiobook edition now available:
Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World ($13)
(Kindle $6.95, print $11.95) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 (Kindle), $12 (print), $13.08 ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).


If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

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NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, Rolf V. ($50), for your terrifically generous contribution to this site -- I am greatly honored by your support and readership.

Thank you, Jayne I. ($50), for your magnificently generous contribution to this site -- I am greatly honored by your support and readership.

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For the Rich to Keep Getting Richer, We Have to Sacrifice Everything Else

They're hoping the endless circuses and trails of bread crumbs will forever distract us from their plunder and the inequalities built into America's financial system..

The primary story of the past 20 years is the already-rich have gotten much richer, with destabilizing economic, social and political consequences. The Federal Reserve and its army of academic / think-tank / financier apologists, lackeys, toadies, apparatchiks and sycophants have several rather thin excuses to explain this away, including:

1. Gee, wealth/income inequality isn't quite as bad as everyone claims. (Actually, it's worse, but never mind unwelcome reality. Let us prove yet again how statistics can always be gamed.)

2. Wealth/income inequality is bad, but it's not the Fed's or policymakers' faults; the causes are all beyond our control: globalization, winner-take-all disruptive technologies, etc. We're just little old innocent bystanders. It's like blaming us for gravity, for goodness sakes.

3. Gosh darn it, the Fed is just trying to help the little gal and guy by digitally printing $6.4 trillion and giving it to parasitic, predatory financiers, banks, corporations and speculators; we're mystified how giving trillions to the already-super-wealthy somehow made them richer.

We've got hundreds of PhD economists working on some arcane mathematical models to help us understand the mystery of why giving trillions to the already-super-wealthy somehow made them richer. It's a real puzzle, but we have our best people on it-- yes siree, our best people.

4. We're perplexed why so little of the trillions we've handed the already-super-rich has trickled down to the little gals and guys struggling to keep their heads above water. We thought the last big tax-cut giveaway would do the trick, but dang, we're guessing it wasn't enough.

So we're thinking that giving the already-super-wealthy another $3 trillion or so might do the trick, and they might tip their maids, dog-walkers, gig drivers, yacht repair people, et al. a few extra bucks--but then maybe not, because the already-super-wealthy tend to be as greedy as all get-out. But we'll keep trying to shovel a few more trillion their way because there's just no other way to help the little people except to print up another trillion and give it to the already-super-wealthy.

What the well-paid army of apologists, lackeys, toadies, apparatchiks and sycophants never mention is that we as a nation have had to sacrifice everything else to ensure the rich will always get richer. Democracy was sacrificed so long ago there's no cultural memory of a time when "democracy" wasn't a pay-to-play bidding war between vested interests, insiders, billionaires, global corporations and political action committees pushing self-serving agendas.

The entire political order of the U.S. boils down to follow the money, as no cause or policy is what it claims. Somebody is inevitably angling for a self-serving sluice of cash that is politely hidden behind noble-sounding rhetoric (tm) delivered via micro-targeted ads served by the social media and advert-search monopolies.

Social cohesion has also been sacrificed, as there's nothing binding the nation together except I got mine greed, narcissism and anger, all of which fuel a blood-soaked circus of fragmentation and disorder.

The systemic asymmetries are so vast, so glaring, so sinful, that the nation's institutions have destroyed their credibility in their frantic efforts to justify the inequalities in wealth, income and power. Alarmingly, institutional insiders are completely tone-deaf when it comes to how their self-justifying bleating plays out in public.

Academics who've gorged on the $2 trillion in student loan debt that's turned the nation's youth into debt-serfs have no idea how lame they sound when they shrilly insist that their class is so valuable that, well, it's worth any price. Students should be thankful they received such incredible value for their $100,000. As for how students are supposed to pay it all back with crushing mountains of interest due the predatory lenders--not our problem.

Healthcare and Big Pharma CEOs must not realize how offensively clownish their defense of $1 million medical bills sound to people who are being forced into bankruptcy so the CEOs can collect an extra $20 million in stock options this quarter.

Yeah, we can really tell how much you care about our health. Bleat away, bozos.

So let's make sure we understand how America's system works. If you're a small business owner whose on the ropes, the federal government may loan you some money, but you have to personally guarantee the loan, meaning if your business fails, you're on the hook as an individual or household to pay the loan back with interest.

If you can't, then personal bankruptcy is your only alternative, meaning you're left with the '97 Corolla and the clothes on your back. Have a nice life, bucko, maybe you'll restore your credit in five years.

If you're the CEO of an airline or equivalent Corporate America darling, it's a much different story. That you borrowed $46 billion and blew it buying back your own stocks so you could cash in millions of dollars in stock options that boosted your personal wealth--never mind that, here's $50 billion in bailout money that won't require you to make any personal sacrifice whatsoever.

No clawback on the billions squandered buying back stock to enrich insiders and rapacious financiers: perish the thought that corporate management would ever be held responsible for anything--certainly not for fraud or embezzlement.

Consider this data base of 6,300 major corporate fines and settlements from the early 1990s to 2015 compiled by Jon Morse. Nobody made any personal sacrifices or paid any personal fines or served any prison time for any of these thousands of violations.

If you want $100 million to buy back shares in your own company, the Federal Reserve and the rest of Wall Street is delighted to help you. That the buyback will increase your personal wealth by $50 million for doing absolutely nothing for society or the nation--you generated no new goods, services, innovations, research or jobs--that's the way our system works.

Generating goods, services and jobs is for chumps. Get over it. The real money is made bellying up to the Fed's free money for financiers spigot.

If you want to save your small business--well, try working a second shift for free.

If you can't pay the staggering medical bills (neatly compiled in an inch thick sheaf of invoices), hey, life isn't fair, declare bankruptcy and start over, you're only 63.

What all the entrenched insiders in America's parasitic, predatory institutions don't dare admit is that to rig the system so they'll keep getting richer, we've had to sacrifice everything else. Having stripped the society and economy bare, there's nothing left but sound and fury, as if they're hoping the endless circuses and trails of bread crumbs will forever distract us from their plunder and the inequalities built into America's financial system.

Here's looking at you, Federal Reserve: here's a chart of your handiwork.

Of related interest:

No Wrongdoing Here, Just 6,300 Corporate Fines and Settlements (May 2015)

Recent Podcasts:

AxisOfEasy Salon #9: Algorithmic Guerrilla Warfare

A Reverse Wealth Effect? (41:52)

My COVID-19 Pandemic Posts


My recent books:

Audiobook edition now available:
Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World ($13)
(Kindle $6.95, print $11.95) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 (Kindle), $12 (print), $13.08 ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).


If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

---

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, Harvey D. ($100), for your outrageously generous contribution to this site -- I am greatly honored by your steadfast support and readership.

Thank you, Mark H. ($50), for your magnificently generous contribution to this site -- I am greatly honored by your steadfast support and readership.

Read more...