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Tuesday, December 13, 2016

Government Excess-It’s robbing all of us

Poor Man Survival

Self Reliance tools for independent minded people…

ISSN 2161-5543

A Digest of Urban Survival Resources

Choking on Government Excess

It’s robbing all of us

   A long time friend joined us for dinner last night…We discussed how much less buying power our dollar has, how government inflation has robbed us and how much money we’re forced to give to the government each year in the form of property taxes and various mandated insurances-it is astronomical compared to when we were in college. 

A brand new VW, for instance, in the early 70s cost us less than $1900.  Now, you can’t purchase a decent lawn tractor for that!  Our health care premiums have quadrupled under Obama and we’re nickel and dimed on just about every cost related to government.  The costs for our city run water is $3000 annually [they charge us partially based on property value in addition to usage] and state mandated auto insurance [the highest in the country] have prevented us from finishing our retirement home.

Meanwhile, the Pentagon tried to hide a report which revealed they misspent its budget by $125 billion!

The war on cash is escalating around the world as the global economy stagnates.

As I wrote in Thursday’s issue, Trump will have a tough time fighting off the Fed and traitors in his own party along with jerk-offs in the press and the DNC…Those of us who in the Middle Class still struggle to keep ahead of curve [I just got my water bill and property tax bill for one quarter-more than most people earn in a month]…

Desperate governments are trying to force citizens to use digital money to rob them of their hard-earned wealth. It’s not just places like India. It’s critical you preserve your wealth outside the banking system, and outside the reach of the authorities. The answer: gold.

The Approaching Winter: The Super-Cycle Has Turned

By Charles Hugh Smith

How would you describe the social mood of the nation and world?
Would anti-Establishment, anti-status quo, and anti-globalization be a good start? How about choking on fast-rising debt? Would stagnant growth, stagnant wages be a fair description? Or how about rising wealth/income inequality? Wouldn't rising disunity and political polarization be accurate?
These are all characteristics of the long-wave social-economic cycle that is entering the disintegrative (winter) phase. Souring social mood, loss of purchasing power, stagnating wages, rising inequality, devaluing currencies, rising debt, political polarization and elite disunity are all manifestations of this phase.
There is a template for global instability, one that has been repeated throughout history...
Historian Peter Turchin explores the historical cycles of social disintegration and integration in his new book Ages of Discord.
Turchin finds 25-year cycles that combine into roughly 50-year cycles. These 50-year cycles are part of longer 150 to 200-year cycles that move from cooperation through an age of discord and disintegration to a new era of cooperation.
Turchin finds 25-year cycles that combine into roughly 50-year cycles.
That we have entered an era of rising instability and uncertainty is self-evident. There will always be areas of instability in any era, but instability and uncertainty are now the norm globally.
Turchin's model identifies three primary forces in these cycles:
  1. An over-supply of labor that suppresses real (inflation-adjusted) wages
  2. An overproduction of essentially parasitic Elites
  3. A deterioration in central state finances (over-indebtedness, decline in tax revenues, increase in state dependents, fiscal burdens of war, etc.)
These combine to influence the broader social mood, which is characterized in eras of discord by fragmented loyalty to self-serving special interests (disintegration) and in eras of cooperation by a desire and willingness to cooperate and compromise for the good of the entire society (integration).
Rising discord can be quantified in a Political Stress Index. Do we find evidence of Turchin's disintegrative forces in the present era?
  1. Stagnating real wages due to oversupply of labor: check.
  2. Overproduction of parasitic Elites: check.
  3. Deterioration in central state finances: check.
Is it any wonder that political stress, however you want to measure it, is rising?
Cycles are the result of the interaction of complex dynamics, and so they are not entirely predictable in terms of pinpointing the exact moment of crisis or the outcome of a systemic crisis.
These long cycles parallel the cyclical analysis of David Hackett Fischer, whose masterwork The Great Wave: Price Revolutions and the Rhythm of History.
In Fischer's well-documented view, there is a grand cycle of prices and wages which turn on the simple but profound law of supply and demand; all else is detail.
As a people prosper and multiply, the demand for goods like food and energy outstrips supply, causing eras of rising prices.
Long periods of stable prices (supply increases along with demand) beget rising wages and widespread prosperity. Once population and financial demand outstrip supply of food and energy — a situation often triggered by a series of catastrophically poor harvests — then the stability decays into instability as shortages develop and prices spike.
These junctures of great poverty, insecurity and unrest set the stage for wars, revolutions and pandemics.
It is remarkable that the very conditions so troubling us now were also present in the price rises of the 13th, 16th and 18th centuries.
Unfortunately, those cycles did not have Disney endings: the turmoil of the 13th century brought war and a series of plagues which killed 40% of Europe's population; the 16th century's era of rising prices tilled fertile ground for war, and the 18th century's violent revolutions and resultant wars can be traced directly to the unrest caused by spiking prices.
(The very day that prices for bread reached their peak in Paris, an angry mob tore down the Bastille prison, launching the French Revolution.)
After a gloriously long run of stable prices in the 19th century — prices were essentially unchanged in Britain between 1820 and 1900 —the 20th century was one of steadily increasing prices.
Fischer challenges the notion that all inflation is monetary; the supply of money (gold and silver) rose spectacularly in the 19th century but prices barely budged. In a similar fashion, eras of rising prices have seen stable money supplies.
Monetary inflation can lead to hyper-inflation, of course, but there are always mitigating factors in those circumstances. Fischer argues the long wave is not one of hyper-inflation but of supply and demand imbalances undoing the social order.
Americans are inherently suspicious of anything which seems to threaten constraint of the American Dream; thus it is not surprising that cycles of history are largely unknown in the U.S. As Fischer explains:
This collective amnesia is partly the consequence of an attitude widely shared among decision-makers in America, that history is more or less irrelevant to the urgent problems before them.
Fischer notes that he describes not cycles but waves, which are more variable and less predictable. In response to this great rise in prices of essentials, both commoners and governments debased the currency.
In old days, this meant shaving the edges of coins, or debasing new coins with non-precious metals. The debasement was an attempt to increase money to counteract the rise in prices, but it failed (of course). Every few decades, a new undebased coinage was released, and then the cycle of debasement began anew.
The debasement was an attempt to increase money to counteract the rise in prices, but it failed (of course).
Just as insidiously, wages fell:
But as inflation continued in the mid-13th century, money wages began to lag behind. By the late 13th and early 14th centuries real wages were dropping at a rapid rate. This growing gap between returns to labor and capital was typical of price-revolutions in modern history. So also was its social result: a rapid growth of inequality that appeared in the late stages of every long inflation.
And what happened to government expenditures? It's deja vu all over again — deficits:
Yet another set of cultural responses to inflation created disparities of a different kind: fiscal imbalances between public income and expenditures. Governments fell deep into debt during the middle and later years of the 13th century.
Crime and illegitimacy also rose. Fischer summarizes the end-game of the price-rise wave thusly:
In the late 13th century, the medieval price-revolution entered another stage, marked by growing instability. Prices rose and fell in wild swings of increasing amplitude. Inequality increased at a rapid rate. Public deficits surged ever higher. The economy of Western Europe became dangerously vulnerable to stresses it might have managed more easily in other eras.
And there you have our future, visible in the 13th, 16th and 18th century price-revolution waves which preceded ours.
It is hubris in the extreme to think we have somehow morphed into some new kind of humanity far different from those people who tore down the Bastille in a great frustrated rage at prices for energy and bread they could no longer afford.
It is foolish to blame "speculators" for the rise in food and energy, when the human population has doubled in 40 years and the consumption of energy and food has exploded as a result.
Based on the history painstakingly assembled by Fischer and Turchin we can thus anticipate:
— Ever higher prices for food, energy and water.
— Ever larger government deficits which end in bankruptcy/repudiation of debts/new issue of currency.
— Rising property/violent crime and illegitimacy.
— Rising interest rates (until very recently this was considered "impossible").
— Rising income inequality in favor of capital over labor.
— Continued debasement of the currency.
— Rising volatility of prices.
— Rising political unrest and turmoil (see "Revolution").
And there you have our future, visible in the 13th, 16th and 18th century price-revolution waves which preceded ours.
With this list of manifestations in hand, we can practically write the headlines for 2017-2025 in advance.
Regards, Charles Hugh Smith


Yours for another revolution,

Bruce ‘the Poor Man’


Post Script…

For the average person, the American Dream is rapidly fading.

It’s not just about wealth and fame, after all. For many people, the American Dream means owning their own home, starting a business, or seeing their children do better.

But the hard numbers show that each of these elements is in decline.

1) Children are doing worse than their parents, not better.

We already know the sad story about student debt levels reaching yet another all-time high.

But there’s some interesting 
new research released just last week from Stanford University comparing income levels between parents and children to see who was earning more money by age 30.

For example, the research shows that, when adjusted for inflation, 91.54% of people who were born in 1940 were earning more at age 30 than their parents did at the same age.

Conversely, just 50.03% of people born in 1980 were earning more at age 30 than their parents did at the same age.

The study shows a long, steady decline in income, concluding that:

“Children's prospects of achieving the American Dream of earning more than their parents have fallen from 90% to 50% over the past half century.”

2) Income and upward social mobility are stagnant

There’s a lot that’s been written about America’s “wealth gap”, sometimes known as wealth inequality or income inequality.

In other words, the vast chasm between rich and poor in the Land of the Free is at a level not seen since the Great Depression.

America used to be the place where people who worked hard could achieve higher incomes, become wealthier, and move up in life.

This is known as income or social MOBILITY.

Sadly, this is also in decline, and the 
trend has been heavily documented over the years.

The most 
recent research published earlier this month measured the increase in people’s income between two distinct 34-year periods in the United States.

Between 1946 and 1980, for example, the average American’s income increased by 95%.

Between 1980 and 2014, however, the average American’s income increased by just 61%.

For the poor and middle class, though, the numbers were even worse.

Between 1946 and 1980, income for the bottom 50% more than doubled. But between 1980 and 2014, their income increased by just 1%.

Similarly, middle class incomes increased 105% between 1946 and 1980. But between 1980 and 2014, middle class income increased just 42%.

For the top 1%, incomes increased 47% (below the average) between 1946 and 1980. But between 1980 and 2014, their incomes increased 205%.

The numbers paint a pretty clear picture: America is rapidly becoming a country where, if you were born poor, you’ll die poor. And if you’re born rich, you’ll die rich.

This is banana republic stuff… the exact opposite of the American Dream.

3) Home ownership is at its lowest level since 1965

Another part of the American Dream is owning your own home.

That too is fading, according to 
US Census Bureau statistics which show that the US home ownership rate is at its lowest level in more than 50 years.

Home prices are now rising much faster than income levels. And given that the average American has less than $5,000 in savings, coming up with a down payment is nearly impossible.

This list goes on and on.

The number of new
businesses being created is shrinking.

People have to change jobs much more frequently and
supplement their income with ‘gigs’, rather than having a lengthy career.

Retirement savings is at
appalling low levels.
Will Your Pay Get Better Next Year?

Here's what economists said when we asked whether Americans' wages will perk up in the New Near.


Additional Resources

The Anatomy of a Breakdown

The Prepper’s Blueprint: The Step-By-Step Guide To Help You Through Any Disaster

Contact! A Tactical Manual for Post Collapse Survival



Arm Up System-Defense Without Regulation
PM’s Guide to Home Defense

It is a crazy world out there with plenty of violence and everyone knows you that under most circumstances, police usually arrive after the fact. Your rights to defend yourself are often under attack, even for non-lethal self-defense tools…Includes book and 3 bonus CD ROMS


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R.Paul said...

As always this makes a lot of sense-we need folks like you [Paul Revere types] to sound the alarm!

Thomas said...

Stumbled across this blog-very wise words. Count me in as a new subscriber.