'Confidence' Is a Corollary In a Fiat Culture: The Triumph of the Shills

"When the political process becomes controlled by multi-national corporate interests, the US government becomes a tool of those interests. When multi-national corporations own the mass media as they presently do, honest democratic debate becomes unlikely.

As we witness corporate power becoming a dominate force in international relationships, it will surely continue to diminish independent national sovereignty under the banner of 'free trade.'"

Joseph A.

Economists are fretting about the current notion that the US is caught in a secular stagnation.  They are concerned because they believe that this is what is driving stock prices lower.  And lower stock market prices are upsetting to their masters.

 

 They are concerned that people are believing in stagnation as a sort of urban myth, and that makes it real.  Seriously.  Belief is not an effect, but a primary cause in their minds. 

The biggest myth that I know of is that confidence alone, no matter whether it is founded in fundamental reality, is enough to ensure a permanent plateau of financial asset growth.  If we believe something, it is.  No matter whether reality reflects it or not.

It is the corollary to the fiat culture that holds that if they say it, and we believe it, then that is enough.   They maintain their power to decide, and this is their real end.  Not accomplishments, not solutions for others, but the maintaining of their status quo. 

And so the Fed and the ruling elite will say whatever is needed to be said, whether it makes any sense or not, and paint pictures with their words and statistics, to make the people believe. If they believe, they will buy, using increasing levels of debt if needed.

Animal spiritism is the cargo cult approach to a financial recovery. If only we believe, then everything will be all right, and we can live in the Potemkin villages that we build with a debt that can never be repaid.

Or as Fernando said, 'It doesn't matter if you feel good, you only need to look good, and baby, we look marvelous.'

Confidence is not a crutch, not a substitute for fundamental growth. It is a spark, and it cannot burn the wet wood of a stagnant or declining real median wage. Just because some fools can believe something does not make it true, even in the Humpty Dumpty world of our pampered princes.

Related:

  Washington Post Insists Economic Inequality Is a Oversimplified Fiction

  Shiller: When aStock Market Theory Is Contagious

No Recovery: Longest Sustained Fall In UK Real Wages In Recorded History

Why is there no sustainable recovery?

Because of the policy errors of the West to save the corrupt financial system, but abandon the people whom 'the system' is intended to serve.

You may read the story about why the Bank of England is likely to keep interest rates low, which accompanies this graph, in the Financial Times.

Domestic Democracy or Foreign Imperialism, But Not Both

"Once you go down the path of empire, you inevitably start a process of overstretch, of tendencies toward bankruptcy, and, in the rest of the world, a tendency toward the uniting of people who are opposed to your imperialism simply on grounds that it’s yours, but maybe also on the grounds that you’re incompetent at it.

Indeed, one wonders whether we have already crossed our Rubicon, whether we can go back. I don’t know.

The Department of Defense is not, today, a department of defense. It’s an alternative seat of government on the south bank of the Potomac River. And, typical of militarism, it’s expanding into many, many other areas in our life that we have, in our traditional political philosophy, reserved for civilians. Domestic policing: they’re slowly expanding into that.

So, what do I suggest probably will happen? I think we will stagger along under a façade of constitutional government, as we are now, until we’re overcome by bankruptcy."

Chalmers Johnson

That bankruptcy will not only be financial, but moral and spiritual.  It will be a fiat culture, that is, reality will be defined as whatever power says it will be.

 

Below is a talk given by Chalmers Johnson in April, 2007

This was before the financial crisis and bailouts.

And before the Reform President Obama largely ratified the abuses of his predecessor and given over the welfare of the people to the corporations and the moneyed interests, finance and militarism, the pen and the gun, the bullet and the bribe.

 

 

Gold Daily and Silver Weekly Charts - Life During Wartime

There is a steady drain of silver from the warehouses. Not large enough to matter, but a million ounces here, a million ounces there.

Let's see if the precious metals can make that triple bottom stick, and break the downtrend.

Longer term it is all about the physical supply. That is what matters in a nutshell. Everything else is commentary.

Have a pleasant weekend.