Carolyn Baker reviews "The Final Empire" by Kotke

Carolyn Baker Reviews “The Final Empire” By William Kotke

Posted on February 1, 2008 by dandelionsalad

Dandelion Salad

by Carolyn Baker
Speaking Truth to Power
Friday, 01 February 2008

My intention in reviewing this stunning book is to share how it has illumined my understanding that collapse and vision are not separate, but that in fact, they travel together and need each other. That is to say that collapse makes vision possible, and vision makes collapse the most desirable option of all as we confront the earth community’s current dilemma.

Disaster is not approaching,

It has arrived.

It is happening now.

Blessings and Grace are not approaching

They have arrived.

They are here now

I say I believe in Grace

But I think, feel and move as though

Only Damnation is real.

Or if Grace does exist,

It is for someone else.

I close my heart to pain

But it doesn’t help,

I cannot circumvent disaster.

But in closing my heart to disaster

perhaps I can circumvent Grace.

Can I bear the burden

Of knowing disaster and Grace,

Each in its own awful fullness?

James Hillman says our problem

Comes down to a failure of imagination.

I need an image, a picture…

Who would I be

If I were willing to risk believing

That Grace is real?

~By Paul Tierney~

It has repeatedly been my experience that when a book is supposed to enter my life, it does. Often it falls off the shelf into my lap, and at other times a friend suggests it, or the author him/herself sends me a copy for review. William Kotke has written articles for this website, and his Final Empire has been reviewed elsewhere, most notably by Dan Armstrong. However, the timing of my requesting a review copy of the book from him could not have been more momentous. As a result, I am not only reviewing the book, but using the review as an opportunity for sharing a recent shift in my perspective that may make this the most important article I’ve ever written in my life. It is written in two parts: The first contains Kotke’s extraordinary analysis of why civilization is collapsing and must collapse, and the second offers his vision of what is possible when empire has been eliminated.

My intention in reviewing this stunning book is to share how it has illumined my understanding that collapse and vision are not separate, but that in fact, they travel together and need each other. That is to say that collapse makes vision possible, and vision makes collapse the most desirable option of all as we confront the earth community’s current dilemma.

For at least the past two years I have been writing and speaking about the collapse of empire/ civilization, along with a chorus of other voices such as Matt Savinar, Mike Ruppert, Dmitry Orlov, Catherine Austin Fitts, Richard Heinberg, James Howard Kunstler, and Tim Bennett and Sally Erickson. I name only a few of us, mindful that ours are not the only voices speaking from the depths of exhaustive research and personal experience. And now in the first month of 2008, the world is beginning to witness a dramatic unraveling of civilization. The spectacle has begun with the convergence of what I have been naming for years as the “Terminal Triangle”: Peak Oil, climate change, and global economic meltdown. A number of related issues such as population overshoot, species extinction, and global pandemics, abide in the mix, but the “Big Three” are now juxtaposed in what appears to be the beginning of the end of life as we have known it on planet earth.

William Kotke has brilliantly articulated what I would not only describe as an “encyclopedia of collapse” but has skillfully depicted a vision of possibility imbedded within the core of apocalypse. The introduction and first chapter of this masterpiece can be read online, but they do not include what I believe are the book’s fundamental underpinnings consisting of Chapter 9, “The Cultural Dynamics Of Empire” and Chapter 10, “The Psychology Of Empire”, nor do they contain Kotke’s elaboration of the exquisite vision he holds for the earth community.

The author painstakingly describes the history of the disintegration and the collapse of the ecosystems in such a manner that the reader cannot escape the reality that all of this is inherent in the very nature of civilization itself. In fact, he thoroughly convinces us that no project in the history of the human race has been so unequivocally doomed from its inception as civilization, its ultimate destiny being its demise and the obliteration of everyone and everything in its wake. Had I had the slightest doubt that civilization must and will collapse in order to spare what it has not yet annihilated on this planet, my uncertainty would have been expunged by Kotke long before arriving at Chapters 9 and 10.

The Cultural Dynamics of Empire

Kotke takes on the linear concept of cultural evolution which assumes that natural cultures of ancient times were "in much worse condition than we are today" and that "we are at the forefront of social evolution." Contained within this notion is the delusion that humans invented agriculture as an escape from unsatisfactory conditions. (197) This myth presumes that "there has been a qualitative advancement with the change from forager/hunter culture to civilization." On the contrary, Kotke notes, compared with natural culture, civilization has brought forth a lowering of living standards and a world in which starvation is increasing--where "progress" is defined primarily by the technological objects that we have invented.

But the fundamental question that must be asked is: "What is it about the culture of empire that has produced the prospect of planetary suicide for the earth community?" Most of us know the standard answers to this question: Human culture changed from cooperation to competition; from social equality to hierarchy; from matrilocal consciousness to patriarchy and an emphasis on the warrior. (199)

Yet even more specifically, natural culture understood that each living thing is a spiritually conscious entity as well as understanding that "everything in material reality was spiritually vivified." The hallmark of that culture was a "continuing and direct spiritual contact with the cosmos" and one in which decisions were made with their repercussions on subsequent generations in mind. (200-201)

The culture of empire is characterized by a rejection of adaptation and insistence on control. It may be argued that as a result of natural culture's intimacy with the cosmos, its most remarkable asset was a willingness to adapt; whereas a culture immersed in materialism can only manage, manipulate, and dominate. Natural culture is one informed and guided by something greater than itself, but the culture of empire is a culture where the ego reigns supreme. Civilization inculcates the belief that bigger is better in every realm, and especially with respect to population. Increase in numbers of citizens offers the hope of physical safety, and economic growth delivers the false promise of immunity to scarcity. In summary, "a profound change takes place in the psyche of the culture when this change from forager/hunter to civilized, imperial energy systems occurs." (203)

Imperial culture, Kotke emphasizes, in contrast to natural culture, is shortsighted and accumulative. No longer is value found in preserving soil, water, forests, or other resources. Thus he argues that:

No one in the empire advocates long-term gain in soil fertility when the short-term gain of profit margins or production quotas are the whole point of the effort. This is the reason that nothing real will be done to avoid the final collapse of civilization. The structure of empire is to enrich the emperor/elite at the expense of the earth and society, not to manage affairs for the benefit of the whole life of the earth. (205)

Therefore, the culture of empire is one in which the earth is a "resource" to be used for the benefit and gratification of empire. Another word for this is quite simply, fascism.

Kotke's brilliant analysis of the cultural dynamics of empire confirms nothing if not the desirability, indeed the absolute necessity, of the collapse of civilization.

In "The Psychology of Empire" we are offered an intimate exploration of empire's impact on our hearts, souls, and bodies with a daring statement by Kotke that "We live in a culture that conditions us toward psychological disintegration" and the admonition that "the examination of these disintegrative factors will aid us in creating a new culture that is pointed toward healing and wholeness." (216) He then presents the analogy of malignancy, stating that "empire feeds on the earth like a tumor" because humans do not depend on the life of the earth for their sustenance but on what human society produces by way of using and exploiting the earth.

When one considers the cancer epidemic of recent decades in the light of the above assertion, one can only wonder to what extent our collective "feeding on the earth like a tumor" is influencing the incidence of this fatal disease. Kotke quotes cell biologist, L. L. Larison Cudmore, who states that "Cancer cells do not respect the territorial rights of other cells and refuse to obey the two rules obeyed by all other cells: they neither stop growing nor stop moving when they encounter another cell, and they do not stick to their own kind. Quite simply, they are cells that have decided on autonomy and independent growth, rather than cooperation....Cancer will not stop its hideous course of uncontrolled growth and invasion until it or its victim is dead." (218)

In other words, the cancer dynamic is without limits, inherently colonizing, omnipotent, and anti-dependent. Can we find a more apt description of empire consciousness?

Enculturation to empire begins in the birthing process itself which is not given the proper reverence it deserves, often complicated by or intruded upon by medication, technology, or both. Equally sacred is the bonding process, so frequently minimized, thwarted, or non-existent in the culture of empire. Yet another characteristic of civilization is its stilted relationship with erotic pleasure and the "anguish, shame, guilt, and automatic negative response to sexual love." (237) Thus the "civilized" child frequently enters adulthood carrying massive anxiety and little sense of connectedness with other humans or the earth. One of the most common outcomes is addiction, which empire feeds and perpetuates endlessly with a plethora of substances, things, activities, and people. Unlike growing up in natural culture, the child of empire "Not knowing the security of life and the earth and not knowing the security of a natural clan providing the learning of human sociability, the industrial human becomes a victim of all the forces of society that tend to make the person powerless and dependent, the perfect subject of addictive dependencies." (248)

Therefore, Kotke wisely concludes: "The logical extrapolation of civilization is the mental institution." (249) Neurosis, schizophrenia, and catatonic states, politically defined as insanity, are simply "logical extensions of the already existing social isolation of the individual in the culture of empire. It is also the logical end of the culture itself in the cosmos, lost in space and surrounded by life but talking only to itself." (250)

By the end of "The Psychology of Empire" it is difficult to even consider arguing for "reform" or the prevention of collapse. In fact, Kotke boldly and blatantly argues for collapse!:

We are not fighting to reform a maladaptive and dying social body. There is no conflict with civilization, it is passing away. There is no battle for civilization's power, the power to kill. There is only the open, positive and sharing sustenance of the new life. (252)

That is to say: Stop trying to fix a dying system. Rather, in Kotke's words, "As with a physical wound, the imperial tissue that has lost integration with the body, lost coherence with the complex flows of energy, falls away. One allows the diseased and injured portions to fall away, while resisting injury to that which is still healthy. One focuses on the new growth, the area of healing....In the case of civilization, it is now poised, tipping and beginning the slide into complete disintegration."

We must realize, says Kotke, that "the dear thing cannot be saved, even with major surgery."

The Ramifications Of Surrender

Some may object to the use of the word "surrender", with its spiritual undertones. However, I was greatly inspired last year by Sally Erickson's blog piece "Catastrophe As Spiritual Practice" in which she shared how surrender to collapse can be a powerful component of our personal, as well as planetary, evolution. These past two years have been for me a cellular-level experience of comprehending more deeply than ever what that actually means. The spiritual dimension for me is non-religious and non-theistic, yet informed by something greater than myself.

From the beginning of this millennium until I encountered the topic of collapse, I had been a prisoner of ego, intent on doing battle with the darkness of empire, hopeful that enough grassroots momentum could be marshaled to affect change and return the United States to the principles of a democratic republic verbalized in the Constitution, albeit not always practiced, through political and community action. What I have learned from my willingness to descend into the abyss of collapse is that there is no return to the "Common Sense" of Thomas Paine, nor is the prevention of collapse even desirable. On the contrary, the collapse of civilization is the only "hope" humanity has of restoring sanity to its own species.

Unfortunately, as I have written profusely about the desirability of collapse, some readers have argued that embracing collapse is synonymous with "giving up." For this reason, the second part of this review of Kotke's Final Empire will be devoted to exploring the other half of the book, "The Seed Of The Future," in which I will demonstrate that surrendering to collapse is anything but giving up.

What natural cultures understand that empire culture does not and cannot, is that before we can take action that makes a significant difference, we must surrender to the worst case scenario; that is, we must be willing to abandon, reject, and resist "hope" and open to abject despair. In other words, as Paul Tierney's poem reminds us, when we circumvent pain, we also circumvent grace.

Hope Vs. Vision/Mindset

As Truth To Power readers know, I have a strong reaction to the word "hope", and I take great pains to distinguish it from vision or mindset. For those who don't know, I want to explain why-again. My 2007 "The End Of The World As We Know It: Hope Vs. Mindset" addressed the issue by illuminating the word "hope" as an unfortunate casualty of the language of empire. Although not quite as cynical about it as James Howard Kunstler, I agree with him when he argues that any hope we have must come from within ourselves. Empire has inculcated in us the belief that our hope lies in something external-politicians, policies, programs, or other people, and as a result, the tendency is to embrace those as our "hope" rather than journeying into the recesses of our own psyches in order to create a vision that we can manifest in relationship with our fellow humans and the entire earth community. More often than not, our "hope" is a defense against feeling despair, but until we have visited the abyss, we are ill-equipped to affect meaningful change and are more likely to engage in activities that appear to be innovative but actually perpetuate denial-our own and that of our allies.

When I abandon the ego-driven project of preventing collapse, when I surrender to utter hopelessness, a fertile space is created in my psyche and my life for giving birth to and nurturing my vision. No longer is my vision jaded by fantasy or a compulsion to circumvent upheaval. I can stand in the tracks of the non-humans struggling to avoid extinction engendered by "superior" humans and open to the possibility of sacrificing myself and my own species so that they may live. My surrender allows me to find my proper place and purpose in the earth community-one species among countless others, willing to allow those others the last word because, of course, they will have it anyway.

Part II of this review will explore "The Seed Of The Future", creating and tending one's vision.

Wm. H. Kötke is widely traveled and published. His most recent book, prior to Planet Garden, was the underground classic, The Final Empire: The Collapse of Civilization and the Seed of the Future. He has been a journalist, a radio script writer, a pamphleteer, a novelist, an essayist, and has had many articles published in periodicals. He lives in Geyserville, California and may be contacted at wmkotke@earthlink.net This email address is being protected from spam bots, you need Javascript enabled to view it .

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see

The Plan By William Kotke (Survival; resources)

THE HERO’S JOURNEY By William Kotke

George Ure prepares us for the next few months

Report from peoplenomics.com and halfpasthuman.com

The links are requested, but I like to remind people about them from time to time, anyhooo.


This is kinda like a Big Day WOW! thing for me. This report is always eagerly anticipated, like my own private HUGE box of Godiva (Prefer Leonida's) to eat and NOT get sick.

THIS, THIS is the latest report, but no great surprises here. Not REALLY. It's about time for Dick Cheney to "get his" .... that's just one thing. The anger toward the Bushistas? Totally deserved and my take on Scott McClellan is right on target. This is awful stuff he is saying and perhaps we can use it to push these WAR MONGERS behind bars where they BELONG, so richly.

Oh, and remember what I say about the idiocy of the financial house managers - THEY CANNOT REORGANIZE THEMSELVES. They cannot see that IF they would stop and think about the sustainable future that we want to build, there would be plenty of work!! PLENTY!! But they cannot think outside the "box" they've built for themselves with THEIR media (consumerist, warmongering), their value set (get more! Kill anyone in our way!), and their inability to use hearts, hands, hopes and health together at one time. Sad comment, but TRUE. Remember this .. I worked at the Wall Street law firms, at many many major banks, in the City of London, at the United Nations .. I KNOW how warped the values reallly are.

If you are new, and don't know about the linguistic runs, head over to halfpasthuman. FIND OUT. You will be glad you did - and tell George I sent you. You'll WANT to fork over that 40 bucks, you really will. It's about the best deal I know of.

Tickers & Time Tinkers

Things are at a serious enough point where the time monks at www.halfpasthuman.com have given me the green light to roll out a little more of the predictive linguistics so you can brace for what's ahead for the population of the USA in the next couple of months. If you repost any of this, a link to both this page and www.halfpasthuman.com is required. So fasten your seat belt, here's a kind of sneak peek under the covers as to where we are, where we're going, and 'what comes next.'

Let's start with the report Monday that vice president Cheney has been been undergoing heart treatments for an irregular rhythm.

This is something we've been expecting since it popped up in the predictive linguistics almost 6-months ago. From ALTA 0108 (Part Zero, May 2007), we seemed to get a sense that the health issues would begin around the time of some new disclosures about what it's like inside the Bush White House. Best we can figure, the coming 'tell all' book by Scott McClellan which was unveiled a couple of days back is just about a perfect temporal marker. Here's how it looked when reported as a linguistic probability mid May of this year:

"As the modelspace is progressed into December and the [results linger/limp_along] from the [power outage], the TPTB entity is showing that the [exposure (of the) hungry mouth/teeth] will [precipitate] a [wave/residual flow] of [bad luck/happenstance]. The data sets are under the influence of the [conflict] meta data layer, and are supported with [beasts] and [blood], as well as [crippled/lame] and [damaged tendons pulling]. This sub set has the supporting aspect/attributes with close links to the Press entity which point toward a [visibility] of the [warfare/strike] with TPTB causing an image of [rapacious/lust], and [hunger (for) all (things?/resources)] to emergence within the global mediastream. This is *not* good for TPTB entity and there will be a swift [reaction] and an [attempted purge] of some [offending voices/faces].

"There are several detail layers within the aspect/attributes which help to describe the situation immediately following the [exposure] of the [conflict]. These are pointing to a [bed-ridden/sick/ill] [government] with specific references to vice Dick Cheney. There are other sets going to [loss (of ability) to reunite], with special emphasis on the [fractured/split] being [permanent], and [without (possibility) of repair]. This area shows that the [broken alliances] will [leave stranded] (many) in [desolated plains/places]."
Plain as mud? At the archetype level, t the visibility of warfare/strife within the TPTB entity is well met by the McClellan book, and along about now, we have the vice president's health issues, and with the opening of the Middle East peace conference in Annapolis today, linguistically at least, one way to read the view from May of this year would be not to expect any reuniting as the fracture in that part of the world will be permanent and is past repair.
Time and Markets

Before returning to some of the linguistics for the markets in the coming weeks, let me first drag out a chart for you to ponder. I know the market futures are pointing to an up day in the market as we head into the opening, but the market popped to the up side yesterday too, and that didn't keep us from seeing nearly 240 points whacked off the Dow.

I've been closely watching how this market seems to be running parallel to the declines which followed the market peaks in 1929 and 1987, and as you'll see, the markets right now (today) are at an important 'fork in the road' because if we don't stop this decline in its tracks, the Fed and other PTB forces may not be able to prevent a wholesale rout over the next couple of weeks are events in the past (we think of these as 'self-seeding time cycles' but there's nothing in the literature, so just use the words to conjure up what that means) and events rhyme/echo to cause a next bigger down move.


Now, to return to the linguistics, from the ALTA 0508 report, there was a sense that although there would be a break in the 'panic' language that accrued around the end of August/early days of September, for a 72-day respite, the problems of the market would continue to build under the surface:
"As the modelspace is moved through the 'turn around' point of September 19th and beyond, the [blood letting] meme begins to accrue almost instantly. It gains strength through the Fall, and goes into its maximum emotional summation levels just as Fall transitions into Winter. Thereafter it fades rapidly as though 'once the beast is drained, nothing more to be said'. There are a number of temporal markers which appear in conjunction with the [blood letting] meme, and these include a [wave/tidal_wave] of [job loss] within [banks]. This area is also curiously involved with [visible] examples of people who [abandon] their [positions] as the [banks fail], and those who [stubbornly maintain attendance] even though their [former employer] (the bank) has failed. This [visibility] of the [bank employees wandering aimlessly] and [locked doors] represents the second level of the [employment crash] and the beginning of the [visibility] for some of the [new populations/self_organizing- collectives] to begin to appear in global mediastream.

The [progression of loss of money/currency] which is supported by bespoke [confidence] such that a better interpretation of the whole of the aspect/attribute set might be a [progression of the loss of confidence in currency/paper_debt]. As part of the other temporal markers for this period include [officials] who [make rash promises], and [other officials] who [act as though blind, rashly running (into) obstacles and crying out]. These last are apparently within the [currencies industry] which is another name for the Federal Reserve Bank/Central Bank...which we note is *not* a bank, and therefore is very likely the 'beast' being let of its blood over the course of this Fall. There are repeated references to much [stink] in the way of [talk/verbiage (from/of) officials] which is shown as [doing/accomplishing no things/results], and indeed actually [causing/initiating inter national arguments]. In the end, at the deepest level of support for this area, the [officials] are described as being [exhausted/deflated] and [weeping] and [broken] and [energy depleted]. At this level the cross links go more heavily to the Bushista entity where they are terminating in the main in areas which are controlled by, or participate in [revolution] as a meta data layer, *and* as the actively rising {ed note: near the end of Fall}, dominant aspect/attribute set within Bushista. Apparently lots of people will be very very very p*ssed off about losing all their 'power' and 'money' and will assign blame to the Bush White House."

Again, as you read the linguistics, it's important to read the words trying to sense the 'feel' or 'texture' of what the words paint. With this continuous 'turning' of the markets, we have to confess to being less than surprised when it was reported yesterday at Citibank may be cutting as many as an additional 45,000 people from its payroll, a headline number that's sort of buried by LameStreamMedia in the USA, but which has not escaped the notice of the Chinese media group at Xinhua...

As the September 15th 0508 Part Three continues, we also get a vision of what late winter and heading into spring will 'feel' like - revolutionary change in the wake of economic failure in general and the foreclosure crisis in particular:

"This area is also described within the Markets entity as the [point/time] in which [decisions] are [taken/made] which will begin to manifest as the [new populace] entity that we have been observing forming up in modelspace. Apparently the [fuzzy revolution] will begin to emerge into [visibility] this Fall as [squatting] in [blanks/empty houses] will take on a whole new meaning, and which in turn will begin to build [new collectives/communities] within the populace. This is mostly affecting of the Populace/USofA, but some of the themes will emerge from patterns in other parts of the planet. There are images of [people/crowds (who/which) squat/seize/appropriate] [golf courses], and [canals/other water-ways/sites] where they will [construct places of food production]. In several of the more visible [squatting incidents] there will be actual [battles] with [officialdom] which are shown as [proceeding/lasting] for several months."
When reading these linguistics, it's important to realize that 1) the language always seems to err on the side of the extreme and 2) it is often not an event, per se, that is referenced, but rather the emotional reactions of the planet/population as expressed in MainStreamMedia.

An example of this was the case a while back where linguistically we saw references to a 9.5 earthquake associated with Hawaii, which has very high emotional values, but it turned out to be a rumor reported in Hawaiian media that was passed along the beach and that rumor was what was picked up because of its emotional intensity.

So, just because the language goes to falling markets, collapse of paper assets, or even a bed-ridden vice president and failed Middle East talks, and problems for the upcoming shuttle mission, none of this means these events will happen, it's just that down at the archetype level of mass consciousness measured by scanning millions of web discussion groups, this is what the language shifts imply.

The time monks continue to work on tuning of the technology. The actual beginning of the release period came a couple of days ahead of schedule (McClellan's book references on the 20th) and so with each 'hit' linguistically, a few words/phrases can be tweaked this way or that to improve the temporal accuracy of forecasts.

If you're looking for something really, really big as a 'forecast', you might want to watch the upcoming Atlantis space shuttle mission. Here, we've got loads of linguistics that seem to foretell an Apollo 13-like "Oh my God, will they make it?" kind of event, but sadly, nothing specifically actionable in the way of preventative measures. Even if we had, who would believe such a garage based effort? We won't post that whole section publicly, until the events that seem to be foreshadowed to occur over the Atlantic occur (or don't), although this gives you some sense of it:
"This last has the descriptor set of [unknown object] as a place holder or 'variable' in the programming sense of the word. The data sets are indicating, and we are predicting from them, that an 'unknown at this time' object will be [dislodged] and it will be the proximate cause of a [disastrous unfolding/process]."
Hopefully, that's just an artifact of the processing, which with more than 200 operations on millions of half page snips is to be expected. But, in a sense, the lack of minute details about the future may be a blessing. If we could say "stay off that street corner tomorrow at 2:53 PM because a bus will go out of control" the accuracy be such that mere possession of it would make some of us outright expendable, as people hungry for power will usually stop at nothing. On the other hand, seeing only the broad brush of events before they happen is useful in terms of 'bracing' for whatever comes next. The disclosures to come about some of the presidential wannabe's is another area to be watching. January-ish.

To return to our economic focus, the problems of the dollar (from ALTA 0708 Part 0, 10/21/2007) continue to center on the troubled Buck:
"The longer term value sets remaining from ALTA series 0508 continued to accrue supporting sets under the [millions of small particles]. It now appears that while there are certainly [housing] related inferences within the data set, the *more* likely interpretation is now for either [dollars] or [credit cards]. There are several large sub sets supporting both aspects within the [millions of small particles] new accretions. These data sets of [credit cards] and [dollars] are perhaps *both* legitimately represented. The interpretation of both would forecast a [fall default] wave on credit cards, and this would come in conjunction with a huge [repatriation] wave of [dollars] back to the [usofa]. How this [repatriation] might occur is less clearly described. There are hints that a [complete/total] [abandonment] of [us treasury] and other paper debt instruments would in effect be [repatriation] of [dollars], and would certainly be in the [millions] levels. Further there are
also pointers toward a [forced purchase] which involves [metals/commodities] and another which involves [property] of an unknown type. In both cases these are seen as [repatriating] [millions] of [dollars] back into the system.

There are recent accretions from the immediacy values of 0708 which also are going to the idea of [millions of dollars] [returning home]. This is cross linked internally with 2/two aspect sets of interest. The first these is terminating in [housing] and seems to be pointing to yet another wave of [foreclosures] and other [abandonment] issues which will begin to surface in late October/early November. Then in conjunction with aspect/attributes from 0508, longer term values sets, the other cross link is pointing toward a [mutiny/insurrection] which is directly held within the Markets entity. This area has very extensive cross links over to the Bushista entity, but is still holding its mass entirely within the Markets entity linguistic structure. The [mutiny/insurrection] values have a very high [visibility] sums, and therefore are expected to be covered by the global mediastream. Further, the [mutiny/insurrection] is apparently to surface as we move into the release period
after November 22. In this case we note that the Markets entity is forecasting that the [mutiny] will [topple/fall] the [markets] in December of this year. An additional and possible interpretation for the [mutiny] area also includes [retreat]. The support for this area includes [under/pressured by] and [disparate/separated forces]. There are also [iraq] values directly held as well as extensive cross links over to the [failure] sub set within Bushista. In either interpretation, the impact will hasten the [degradation/death] of the [usofa dollar], and have very serious [dampening] impact on the [markets] for [paper] originating in the [usofa].

Not that there won't be plenty of [drama], [heartache], and vast amounts of [increasing tensions] in the [markets] prior to December's 'release language episode'."
So on that note, I can only tell you that while we have hope that a major 'crash' kind of event won't happen in December, down in that preconscious place where people don't spend much time (it is very scary!) there are shifts in the archetypes that seem to be sending us warnings that would fit with precipitous economic decline. Is it just a Big Fear or Real Deal? We're about to find out...

Having posted this larger context of future events, it's a little repetitious for me to go through a bunch of links about what's going on today - or more accurately, what happened yesterday that's coming out the news pipes today.

Most of the broad brush of things is fairly clear, and except for filling in a specific event detail (like the precise Consumer Confidence number at 10 AM Eastern today, or existing home sales about the same time) we can just go ahead and skip ahead to our "Coping" section so we can get to the actionable work: collecting ideas for how to be ready for what may...

Some headlines this morning go to the idea that now that the market has done a 10% correction everything is set for a rally. Here's a "Duh!" for you: Although a 200 point rally would be widely reported and hyped, if it comes on the heels of a 237 point drop the previous day, it's only a dead-cat bounce on steroids, but then again, I guess you have probably already figured that...

----snip and save section ----

Coping: Great ideas
Lots of emails coming in, so here are some snips to save. Let's start with how to pass the time...
"For your upcoming coping page, something most folks won't think of, is having on hand a few decks of cards, cribbage and backgammon boards, dominoes, and non-electronic board games (you know, old-fashioned Parcheesi, Monopoly, Scrabble, etc). The stress relief and competition of playing games (or sports) can make hard times seem a little easier. Also birth control - can't think of anything more inconvenient than becoming parents in the middle of an apocalypse."
And no, playing cards for profit at someone else's expense is not a proper use of cards. Depression, or not.

Next, let's talk about fireless cooking.
"George,
I have done two published articles on “Fireless Cooking” (cooking with retained heat ), modern-day haybox cooking, bearing similarity to today’s posting about cooking rice in a pot that has had the fire turned off except that an insulated container is used to hold in the heat the pot has received. I have done fireless cooking many hundreds of times over 30 years in a variety of vessels and it works great. It is a way to potentially save a considerable amount of fuel in a crisis because most foods cook with no additional heat input beyond the point where boiling is achieved. I

www.solarcooking.org covers “fireless cooking” and every conceivable aspect of solar cooking, too, for those who might want to build their own solar cooker from scratch for a couple dollars. This is a huge website.

www.thermos.com carries Nissan vacuum products and they make the “Cook and Carry System” Fireless Cooker which I’ve personally used for 15 years. It is tremendously efficient and compact; has a 5 quart capacity. They had 4 sizes at one time but now just sell the one at $125. Their vacuum technology is head-and-shoulders the best in my testing. Their wide-mouthed thermos bottles make the best fireless cookers of this sort esp. where a portable unit is desired. Just pour in the boiling hot ingredients, seal it up and give it 2 to 2-1/2 hours for most foods (beans take longer and may benefit from a reheat.)

Another thing Aprovecho (www.aprovecho.org) has done work on is the “Rocket Stove”, a small cook stove that uses ridiculously small amounts of wood to cook a family’s food. See 40 pp. tech paper off their home page that also has a section on “Fireless Cooking”.

A lot of the best technology in the above areas is directed to Third World countries but it would behoove us to pay attention while the internet is readily available.
The commercially-produced “Zipp Stove” ( a wood-burning camping stove in two sizes from www.zzstove.com ) accomplishes a similar feat for a few bucks but the smaller unit requires a battery to power its draft fan. But I would still recommend knowing how to make and use a Rocket Stove if I lived where fuel might be an issue, which may be everywhere with the eco-nazis on the loose.
Another reader has thoughts about this, too:
The item about cooking rice in a pot (heat off) reminded me of "Thermos cooking". In short, you put whatever you're cooking in a pot, add water, and bring to a boil. Then pour it all into a vacuum insulated bottle. In a few hours your meal is ready. I tried it several years ago and it works great. For more info see: http://www.homestead.com/peaceandcarrots/Thermoscookinglinks.html
Home Stocking:
"Have your readers look at Sprouts... I've been buying the following in bulk.
http://www.wheatgrasskits.com/sprouting/5_part_salad_mix.htm 5 part salad mix Crunchy lentil fest and many others for variety
Then Spirulina, Grits, multi-grain cereal, Rice and seeds.
I have Chickens and Rabbits and then guns for protection..
Its funny how just about everyone at my work say that I can't stock pile enough for all of them and I just kindly remind them that I stock for my family and a select few and then bullets for the rest... They think I'm joking..."
And a question:
"I looked at the site about the 100 things that go missing first from a Sarajavo survivor.... Excellent reference list but #14 and #15 are missing.
Wonder what they were? They were near the top of the listings too."
Hmmm...haven't had time to look yet.... more tomorrow...

--- end of snip and save section ----

Forecast: U.S. dollar could plunge 90 pct

By UPI

Well, gee, do ya think so ?? and this is only the TIP of the iceberg. How are things going to get to MARKET, guyz ..? Plus, for the umpteenth time, this guyz making policy have NO IDEA, none at all how to handle ALL THAT PAPER! The corporate culture mitigates against it .. mortgages, currencies, DEEDS, paperwork related to shifting staffs at financial institutions, reorganizing office structurally to deal with MORE paper and more EFT, . . . it's all quite, quite staggering. Even the accounting staff at these financial institutions will NOT BE ABLE TO KEEP up doing the books, let alone calculate future value and strategies. Oh, dear!!

But then you'd had to work on Wall Street and the City of London like I did to see what the next "synthetic" terror event is actually going to be, folks! They don't need to detonate the Twin Towers' equivalent for HELL to come and bit all our heels.

Turf the idiots out of their bars! Don't let them see their doctors for more pills to handle their high blood pressure! Give them an 86!! Intervene the addicts/gamblers and fantasy folks!! Don't rely on the government to do it, we're gonna HAVE to do it !! Keep up the PRESSURE.

Ps, subscribe to peoplenomics.com and to Mish Shedlock, Whiskey and Gunpowder.com. GET THE FACTS. Also, check out gata.com and the Privateer. Get some truth going. Try Dr. Michael Hudson, Dennis Kucinich's economic advisor for information, too. Don't let anyone MINIMIZE what is comoing, that's UNHEALTHY. Dont' let them rationalize or deny it. And don't fall for DELUSIONAL THINKING. The bulk of the economists don't know what they are talking about, they really DON'T.

Veeger

11/24/07 -- -, Nov. 19 (UPI) -- A financial crisis will likely send the U.S. dollar into a free fall of as much as 90 percent and gold soaring to $2,000 an ounce, a trends researcher said.

"We are going to see economic times the likes of which no living person has seen," Trends Research Institute Director Gerald Celente said, forecasting a "Panic of 2008."

"The bigger they are, the harder they'll fall," he said in an interview with New York's Hudson Valley Business Journal.

Celente -- who forecast the subprime mortgage financial crisis and the dollar's decline a year ago and gold's current rise in May -- told the newspaper the subprime mortgage meltdown was just the first "small, high-risk segment of the market" to collapse.

Derivative dealers, hedge funds, buyout firms and other market players will also unravel, he said.

Massive corporate losses, such as those recently posted by Citigroup Inc. and General Motors Corp., will also be fairly common "for some time to come," he said.

He said he would not "be surprised if giants tumble to their deaths," Celente said.

The Panic of 2008 will lead to a lower U.S. standard of living, he said.

A result will be a drop in holiday spending a year from now, followed by a permanent end of the "retail holiday frenzy" that has driven the U.S. economy since the 1940s, he said.

"A Generalized Meltdown of Financial Institutions"

Take a Look at Professor Roubini's Crystal Ball

By Mike Whitney

11/24/07 "ICH" -- - Reality has finally caught up to the stock market. The American consumer is underwater, the banks are buried in dept, and the housing market is in terminal distress. The Dow is now below its 200-Day Moving Average -- the first big "sell" signal. Anything below 12,500 could trigger program-trading and crash the market. The increased volatility suggests that we are watching a "real time" meltdown.

International Business editor for the UK Telegraph, Ambrose Evans Pritchard, summed up yesterday's action in the Asian markets:

"The global credit crisis has hit Asia with a vengeance for the first time, triggering a massive flight to safety as investors across the region pull out of risky assets. Yields on three-month deposits in China and Korea have plummeted to near 1pc in a spectacular fall over recent days, caused by panic withdrawals from money market funds and credit derivatives.

"'This' is a severe warning sign,' said Hans Redeker, currency chief at BNP Paribas. 'Asia ignored the credit crunch in August but now we're seeing the poison beginning to paralyze the whole global economy.'" (Credit 'Heart attack' engulfs China and Korea" Ambrose Evans Pritchard,UK Telegraph,)

The credit storm that began in the United States with subprime mortgages has spread to markets across the globe. In fact, the train has already crashed. What we're seeing now is the boxcars piling up on top of each other.

On Tuesday Chinese government officials ordered a complete halt to bank lending to slow the speculative frenzy that has created an enormous equity bubble in the stock market. According to the Wall Street Journal:

"Chinese authorities are slamming the brakes on bank lending, in their latest attempt to curb the runaway investment threatening to overheat what is soon to be the world's third-largest economy. In recent weeks, regulators have quietly ordered China's commercial banks to freeze lending through the end of the year, according to bankers in several cities. The bankers say that to comply, they are canceling loans and credit lines with businesses and individuals." ("China freezes lending to Curb Investing Frenzy" Wall Street Journal)

The move illustrates how concerned the Chinese are that a slowdown in US consumer spending will trigger a crash on the Shanghai stock market. It also shows that the Chinese are having difficulty dealing with the inflation generated by the hundreds of billions of US dollars absorbed via the trade imbalance with the US. China is awash in USDs and that surplus is causing a steady rise in food and energy costs. This could be mitigated by allowing their currency to "float" freely. But a sudden, steep increase in the Chinese yuan's value could also send the world headlong into a global recession. For now, the lending freeze and price fixing appear to be the way out.

Another sign that the markets have reached a "tipping point" appeared in a Reuters article on Wednesday; "Interbank Covered Bond Trading Halted on Volatility":

"Renewed credit turmoil and volatility led the European Covered Bond Council (ECBC) on Wednesday to suspend inter-bank market-making in covered bonds until Monday, Nov. 26.

The move is a sign of the stress in the covered bond market, which is dominated by German institutions that have almost a trillion euros of covered bonds outstanding.

Covered bonds -- backed by pools of assets that remain on the borrower's balance sheet -- are usually highly liquid and typically rated triple-A by ratings agencies. The ECBC's recommendation is aimed at relieving the pressure on market makers who are forced to quote prices at a fixed bid-offer spread.

"In light of the current market situation and in order to avoid undue over-acceleration in the widening of spreads, the 8-to-8 Market-Makers & Issuers Committee recommends that inter-bank market-making be suspended," the ECBC said in a release."

Note: This isn't mortgage-backed junk that's being sold, but highly liquid bonds that are usually easy to cash in. The ECBC's action is a sign of pure desperation and indicates that credit paralysis has infected the entire euro banking system.

Reuters: "Due to general market conditions and the specific mechanics of the inter-dealer market making it even seems possible that inter-dealer market making will not be resumed this year."

That's bad. The mechanism for converting covered bonds into cash has broken down.

The dollar took another pasting on Wednesday, sliding to $1.49 on the euro; another new record. Gold shot up to $814 per ounce. Oil continues to flirt with the $100 per barrel mark, and the yen rose to 107 per dollar forcing a sell-off of hedge fund assets levered through the carry trade.

Jon Basile, economist at Credit Suisse, summed it up like this: "There's a heck of a lot of bad news out there." Indeed.

In California Governor Arnold Schwarzenegger has joined with four mortgage lenders to freeze adjustable interest rates (ARMs) for some of the state's highest-risk borrowers; another unprecedented move. The Governor hopes to avoid a collapse of the California real estate market which has gone into a tailspin. Home sales have plummeted more than 40 per cent for the last two months. Prices have dropped sharply---roughly 12 per cent statewide. New construction has slowed to a crawl. Layoffs are steadily rising. Jumbo loans (mortgages over $417,000) have been put on the "Endangered Species" list. Even qualified borrowers can't get mortgages. Nothing is selling. California housing is "off the cliff".

Schwarzenegger's plan to keep over-extended subprime mortgage-holders in their homes faces an uncertain future. What incentive is there for homeowners to continue paying exorbitant monthly rates when their payments are not applied to the principle? The homeowners would be better off bailing out, accepting foreclosure, and starting over with a clean slate.

It's unrealistic to thinks that Schwarzenegger can stop the tidal wave of foreclosures that are sweeping across the state. An estimated 3 million homeowners will lose their homes nationwide.

If you want to blame someone; blame Alan Greenspan. He's the one who created this mess. According to the economist Mike Shedlock:

"The Fed caused the credit crunch by slashing interest rates to 1 per cent to bail out its banking buddies in the wake of a dotcom bubble collapse. All the Fed did was create a bigger bubble. This bubble is so big in fact that it cannot even be bailed out. It's the end of the line for a serially bubble blowing Fed.

"So not only was this the biggest credit bubble in history, this was also the biggest transfer of wealth from the poor and middle class to the already enormously wealthy. That is the real travesty of justice regardless of whether or not the price tag is $1 trillion, $2 trillion, or $10 trillion." (Mike Shedlock, "Mish's Global Economic Trend Analysis")

The problem has gotten so serious that even Secretary of the Treasury, Henry Paulson, is putting up red flags. Last week, Paulson ignited a sell-off on Wall Street when he made this statement:

"The nature of the problem will be significantly bigger next year because 2006 [mortgages] had lower underwriting standards, no amortization, and no down payments....We're never going to be able to process the number of workouts and modifications (to mortgages) that are going to be necessary doing it just sort of one-off. I've talked to enough people now to know that there's no way that's going to work."

The desperation is palpable. Like Schwarzenegger, Paulson is trying to get mortgage-lenders to provide a safety net for struggling borrowers who are defaulting on their loans.

Paulson is calling for emergency legislation that will allow the Federal Housing Administration to play a greater role in the relief effort. The FHA has already expanded its traditional role by taking on hundreds of billions in extra debt just to keep a few "private" mortgage lenders and banks from going bankrupt. Of course, when Paulson's plan goes kaput and the debts pile up; it'll be the taxpayer that foots the bill.

"Paulson also called the Senate's failure to pass legislation overhauling mortgage giants Fannie Mae and Freddie Mac frustrating," saying that the two government-sponsored entities need to be playing a bigger role in the housing market.

"If we ever need them it's during times like today, and they're most valuable when there is distress in the mortgage market," he said. "I'd like to see them playing an even bigger role."(Wall Street Journal)

Fannie and Freddie, have already posted enormous quarterly losses and don't have the capital reserves to put millions of subprime mortgage-holders under their "government-sponsored" umbrella. Paulson is just grabbing at straws.

Similar troubles are brewing in the broader market where late-payments and defaults have spread to credit card debt and new car loans. Every area of "securitized" debt has suddenly veered off the road and into the ditch. Last week the Fed injected more credit into the teetering banking system than anytime since 9-11.

No one has predicted the downward-spiral in the market more accurately than Nouriel Roubini. Roubini is a Professor at the Stern School of Business at New York University. His analysis appears regularly on his blogsite, Global EconoMonitor. Last week's prediction was particularly dire and is worth reprinting here:

"It is increasingly clear by now that a severe U.S. recession is inevitable in next few months...I now see the risk of a severe and worsening liquidity and credit crunch leading to a generalized meltdown of the financial system of a severity and magnitude like we have never observed before. In this extreme scenario whose likelihood is increasing we could see a generalized run on some banks; and runs on a couple of weaker (non-bank) broker dealers that may go bankrupt with severe and systemic ripple effects on a mass of highly leveraged derivative instruments that will lead to a seizure of the derivatives markets... massive losses on money market funds with a run on both those sponsored by banks and those not sponsored by banks; ..ever growing defaults and losses ($500 billion plus) in subprime, near prime and prime mortgages with severe knock-on effect on the RMBS and CDOs market; massive losses in consumer credit (auto loans, credit cards); severe problems and losses in commercial real estate...; the drying up of liquidity and credit in a variety of asset backed securities putting the entire model of securitization at risk; runs on hedge funds and other financial institutions that do not have access to the Fed's lender of last resort support; a sharp increase in corporate defaults and credit spreads; and a massive process of re-intermediation into the banking system of activities that were until now altogether securitized." (Nouriel Roubini's Global EconoMonitor)

"A generalized meltdown of the financial system".

Looks like Chicken Little might have gotten it right this time; "The sky IS falling."

Mike Whitney lives in Washington state. He can be reached at: fergiewhitney@msn.com

Unvarnished / wallpapered / manipulated truth!!

http://mwhodges.home.att.net/inflation.htm#1800

There is ia WHOLE LOT MORE at that link.

CHECK IT OUT!

Inflation Report
By Michael Hodges - email
updated Sept. 2007
- a chapter of the Grandfather Economic Reports -

INFLATION - WHO SAYS IT'S DEAD?

88% EROSION OF PURCHASING POWER - AND CONTINUING

- a dollar in 1950 will buy only 12 cents worth of goods today, 88% less than before -

Inflation in my adult years increased average prices 1,000% or more -
example 1: a postage stamp in the 1950s cost 3 cents; today's cost is 41 cents - 1,266% inflation;
example 2: a gallon of 90 Octane full-service gasoline cost 18 cents before; today it is $3.05 for self-service - 1,870 % inflation;
example 3: a house in 1959 cost $14,100; today's median price is $213,000 - 1,400% inflation;
example 4: a dental crown used to cost $40; today it's $1,100 - 2,750% inflation;
example 5: an ice cream cone in 1950 cost 5 cents; today its $2.50 - 4,900% inflation;
example 6: monthly government Medicare insurance premiums paid by seniors was $5.30 in 1970; its now $93.50 - 1,664% inflation; (and up 70% past 5 years)
example: several generations ago a person worked 1.4 months per year to pay for government; he now works 5 months.
And in the past, one wage-earner families lived well and built savings with minimal debt, many paying off their home and college-educating children without loans. How about today?

Few citizens know that a few years ago government changed how they measure and report inflation, as if that would stop it - - but families know better when they pay their bills for food, medical costs, energy, property taxes, insurance and try to buy a house.

Is inflation a threat to society? Consider this famous quote:
"There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose." Lord John Maynard Keynes (1883-1946), renowned British economist.

DEFINITION OF INFLATION:
Inflation is the loss of a constant purchasing value of the dollar,
caused by an increase out of 'thin air' of the supply of money and debt creation by the financial system

---

10 graphic pictures help tell the story
(a picture is worth a thousand words)

This Inflation Report is a chapter of the Grandfather Economic Report series, showing serious economic and education trends facing today's families and youth, compared to prior generations.

Quick Links to sections this report
CPI Since 1800, Value of Dollar since 1950, For the Grandchildren, Annual CPI, Revising CPI, What is the CPI?, Foreign Comparison, Money Supply, Student Loan Debt, House Inflation, Mortgage Interest Rates, Commodity Index, Bottom-line

QUESTIONS:

1. For 150 years America experienced relatively stable consumer prices, but in the last 50+ years prices have soared. Today's inflation is highest in 15 years. What happened?
2. Why do we pass on to young families and youth a currency which has lost 88% of its purchasing value?
3. Should we not provide annual rates of inflation of less than 1% as was achieved in the past, when family incomes consistently zoomed upward with one wage-earner per family - - and more mothers had a real choice to stay home and raise the kids?
4. Should we accept statements that inflation is "under control" when nothing basic has changed to restrain the banking system from creating money and debt out of thin air, meaning the dollar's internal value may drop another 58% before our infants are out of college - and decrease by another 88% before they reach retirement age?
5. Why do we have a government mandating inflation protection via cost of living adjustments for the incomes and medical insurance of government employees (federal & state/local) - - while many, many families pay extra taxes to provide that protection for others with no such guaranteed protection for themselves?
6. Should we be proud today's families pay a higher share of their incomes on all taxes than before - another form of inflation?
7. Should we be proud that inflation in housing prices has caused the highest percentage debt load on families in history?
8. Should families be proud to take the 'buying power hit' caused by the fact today each working person must now support 3 times more state & local government employees than before, in addition to supporting more seniors per capita?
9. Should we feel good about future prospects when the nations money supply has been driven up at rates 2-3 times faster than economic growth and much faster than that of our major trading partners, meaning more and more debt creation and more trade deficits are needed to support a dollar of growth?
10. Should we 'feel safe' accepting official cost of living index reports when we know measurement criteria were dramatically revised during the 1990s to minimize same, plus recognizing that the CPI does not include cost impacts of government and taxes - - the largest spending component in the entire economy - - and does not reflect manipulated asset bubbles in stocks and real estate, or home prices?
11. U.S. oil production peaked in 1970 and world production is expected to peak in the next 5-15 years. We now import over 60% our needs. Energy inflation appears as a 'ticking time-bomb.'
12. U.S. inflation rates are higher than competitor nations, as U.S. trade deficits soared to new records each year indicating declining international competitiveness, causing us to become the world's greatest debtor.

INFLATION HISTORY

Stable consumer prices for 125 years.
And then, prices soar up, up and away.

This chart shows the Consumer Price Index (CPI-U) from 1800 to today, a period of more than 200 years.

For the first two-thirds of this chart the consumer price index oscillated at or below the 50 point price index mark, indicating relatively stable consumer prices for nearly a century and a half.

Thus, 150 years of near nil inflation.

But in the past 50 years, especially after 1971, the consumer price index in this chart took off - -
- - inflating prices more than 1,000 times higher.

Note: prior to 1913, a period of relatively stable prices, there was no Federal Reserve Bank. This chart calls into question the stated purpose of creating a Federal Reserve in 1913 to assure price stability, when thereafter prices soared instead of becoming more stable. This chart appears to shout that > > the Federal Reserve was created for the purpose of generating inflation.

The data source for this chart is from the Minneapolis Federal Reserve Bank, incl. data from the U.S. Bureau of Labor Statistics (link #12). (The chart denotes U.S. citizens for the first time ever were disallowed in 1933 (FDR) from exchanging dollars for gold; in 1971 (Nixon) foreigners were likewise disallowed and the dollar ceased being backed by any gold standard.)

---

With those soaring prices, let us now look at what happened to the purchasing power of a single dollar - - from 1950 to today > >

88% Decline of a Dollar's Purchasing Value since 1950

This chart shows an 88% reduction in the value of a dollar (its internal purchasing power) since 1950, where a dollar of 1950 is worth but 11.9 cents today - based on the consumer price index. Restated, an average cpi item costing $10 in 1950 costs $88 today.

Note in the chart: The accelerated fall of the domestic purchasing power of the dollar from 1965 to 1980 was due to higher annual inflation rates, which was a period when government social spending ratios were rising much faster than general economic growth.

As the chart shows, starting about 1981 and The Reagan Era, the decline of the purchasing power of a dollar started slowing dramatically - a significant rate of change in inflation compared to the prior several decades.

Now look to the right side of the chart, which shows an apparent slow-down in recent years. Actually this curve should point down faster after 1995, since in 1981 and 1995 the federal government changed the way their people measure the cost of living index by a cumulative 4.8% - - which otherwise would have placed the today's value of a 1950 dollar at 9 cents using the old criteria, not the 11.9 cents shown via the new criteria. (this is discussed further down this page).

For this chart, the average annual inflation rate since 1950 was about 4%. To some people 4% doesn't sound like a big number. However, compound 4% over 50+ years and the 1950 dollar is worth but 11.9 cents today - - as seen in the chart.

(Compound it out another 50 years into the future to 2056, when today's 15-year old will retire, and the value of today's dollar will be worth just 12 - - another 88% plunge - - bringing it to a value of just 1.5 cents when compared to the 1950 dollar.)

---

It takes $10,000 cash today to purchase that which $1,190 would purchase in 1950. And with higher combined federal & state/local tax rates today compared to then, it takes even more. Typical example: you need 39 cents as of 2006 to purchase the same stamp that cost just 3 cents in 1950 - - a 1,300% price increase - - and nobody dare claim any quality improvement for that increase.

Had annual rates not exceeded the approx. 1% average inflation rate of 1950-65 (see chart below) for the entire period shown it would take just $2,200 today (not $10,000) to be equivalent to the $1,190 of 1950 - meaning 78% fewer dollars to have the same buying power. No wonder many mothers were forced into the work-place to help make ends meet, as shown in the Family Income Report. If most of the men and women are today in the work-force to make ends meet, who else can a family send into the work-force during the next decades? Their children? And/or, just open up the southern borders even wider?

Who benefits from this performance? Answer: the financial sector and governments at all levels (and proponents of big government over families), as revenue streams are accelerated by both tax bracket creep, extending the caps for social security taxes, property taxes, and sales taxes. Inflation camouflaged government growth, as it expanded to consume and control a larger share of the economy.

And, government spending is mostly consumptive spending that adds inflation via increased demand of its employees and transfer recipients, without compensating productivity. Few deny that government is significantly less efficient and productive than the private sector. As it expanded its relative size, and as credit/debt soared, such contributed to more national inefficiency and therefore to a reduction in the purchasing value of a dollar.

A "Slow Motion Train Wreck"

A "Slow Motion Train Wreck"

by Stephen Lendman

These days, financial/market punditry seems to follow two opposite lines of thinking. It ranges from the predominant view that world economies are growing and sound, problems in them minor and fixable, and current volatility (aka turmoil) is corrective, normal and a healthy reassessing and repricing of risk. Contrarians, on the other hand, believe the sky is falling. Most often, extreme views like these turn out wrong and are best avoided. Things are never that simple and hindsight usually proves only Cassandra was good at forecasting although calling market tops and bottoms wasn't her specialty.

Amidst all the commentary and sorting out of market Strang und Durm these days, some financial world figures stand head and shoulders above the rest for their wisdom, level-headednessness and believability. One in particular is Jeremy Grantham, called by some the philosopher king of Wall Street even though he's based to the northeast in Boston. In 1977, he co-founded Grantham, Mayo and Van Otterloo, now known as GMO. In his Quarterly Letters to clients, he assesses current market conditions and usually takes a longer view as well. His commentaries are detailed, scholarly, sober and clear.

*snip* link above