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Irreversible Damage – The U.S. Economy Cannot Be Repaired

Irreversible Damage – The U.S. Economy Cannot Be Repaired thumbnail

As I outlined in my article ‘The False Economic Narrative Will Die In 2017’, the mainstream media has been carefully crafting the propaganda meme that the Trump administration is inheriting a global economy in “ascension,” when in fact, the opposite is true. Trump enters office at a time of longstanding decline and will likely witness severe and accelerated decline over the course of the next year. The signs are already present, and this fits exactly with the basis for my prediction of the Trump election win – conservative movements are indeed being set up as scapegoats for a global economic crisis that international financiers actually created.

Plus, it doesn’t help that Trump keeps boasting about the farcical Dow hitting record highs after his entry into the White House. Talk about the perfect setup…

With the speed at which Trump is issuing executive orders, my concern is that people’s heads will be spinning so fast they will start to assume an appearance of economic progress. Here is the issue — some problems simply cannot be fixed, at least not in a top down fashion. Some disasters cannot be prevented. Sometimes, a crisis has to run its course before a nation or society or economy can return to stability. This is invariably true of the underlying crisis within the U.S. economy.

It is imperative that liberty activists and conservatives avoid false hope in fiscal recovery and remain vigilant and prepared for a breakdown within the system. Despite the sudden political sea change with Trump and the Republican party in majority control of the D.C. apparatus, there is nothing that can be done through government to ease fiscal tensions at this time. Here are some of the primary reasons why:

Government Does Not Create Wealth

Government is a wealth-devouring machine. The bigger the government, the more adept it is at snatching capital and misallocating it. Such a system is inherently unequipped to repair an economy in a stagflationary spiral.

I’m hearing a whole lot of talk lately on all the jobs that will be created through Trump’s infrastructure spending plans, which reminds me of the desperation at the onset of the Great Depression and the efforts by Herbert Hoover to reignite the U.S. economy through a series of public works programs. Reality does not support a successful outcome for this endeavor.

First off, Trump’s ideas for infrastructure spending to kick start a U.S. recovery are not new. The Obama administration and Congress passed the largest transportation spending bill in more than a decade in 2015 and pushed for a similar strategy to what is now being suggested by Trump. I should point out though that like Herbert Hoover, Obama’s efforts in this area were essentially fruitless. Obama was the first president since Hoover to see “official” annual U.S. GDP growth drop below 3 percent for the entirety of his presidency, with GDP in 2016 dropping to a dismal 1.6 percent.

Though projects like the Hoover Dam were epic in scope and electrifying to the public imagination during the Depression, they did little to fuel the overall long-term prospects of the American economy. This is because government is incapable of creating wealth; it can only steal wealth from the citizenry through taxation to pay debts conjured out of thin air, or, it can strike a devil’s bargain with central banks to print its way to fake prosperity.

Some might argue that Trump is more likely to redirect funds from poorly conceived Obama-era programs instead of increasing taxes or printing, but this does not change the bigger picture. Redirected funds are still taxpayer funds, and those funds would be far better spent if they were returned to taxpayers rather than wasted in a vain effort to increase GDP by a percentage point. Beyond this, the number of jobs generated through the process will be a drop in the bucket compared to the 100 million plus people no longer employed within the U.S. at this time.

Bottom line? Though new roads and a wall on the southern border are winners for many conservatives, infrastructure spending is a non-solution in preventing a long-term fiscal disaster.

Interdependency Is Hard To Break

Another prospect for raising funds to pay for job generating public works projects is the use of tariffs on foreign imports. Specifically, imports of goods from countries which have maintained unfair trade advantages through global agreements like NAFTA, CAFTA or the China Trade Bill. This is obviously a practical concept and it was always the intention of the founding father post-revolution for government to generate most of its funding through taxation of foreign imports and interstate commerce, rather than taxation of the hard earned incomes of the citizenry. However, the idea is not without consequences.

Unfortunately, globalists have spent the better part of a half-century ensuring that individual nations are completely financially dependent on one another. The U.S. is at the very CENTER of this interdependency with our currency as the world reserve standard. In order to change the nature of the inderdependent system, we have to change the nature of our participation within that system. This means, in order to assert large tariffs on countries like China (which Trump has suggested), America would have to be willing to sacrifice the main advantage it enjoys within the interdependent model — we would have to sacrifice the dollar’s world reserve status.

Keep in mind, this is likely to be done for us in an aggressive manner by nations like China. China’s considerable dollar and treasury bond holds can be liquidated, and despite claims by mainstream shills, this WILL in fact have destructive effects on the U.S. economy.

Also keep in mind that with higher tariffs come higher prices on the shelf. The majority of goods consumed by Americans come from outside the country. Higher tariffs only work to our advantage when we have a manufacturing base capable of producing the goods we need at prices we can afford. The American manufacturing base within our own nation is essentially nonexistent compared to the Great Depression. In order to levy tariffs we would need a level of production support we simply do not have.

The point is, an unprecedented change in America’s production dynamic would have to happen so that we do not face heavy fiscal consequences for the use of tariffs as an economic weapon.

Manufacturing Takes Time To Rebuild

Much excitement has been garnered by reports that certain U.S. corporations will be bringing some manufacturing back within our borders over the course of Trump’s first term as president. And certainly this is something that needs to happen. We should have never outsourced our manufacturing capability in the first place. But, is this too little too late? I believe so.

I remember back in 2008/2009 mainstream economists were applauding the Federal Reserve’s bailout efforts and the call for quantitative easing, because, they argued, this would diminish the dollar’s value on the global market, which would make American goods less expensive, and by extension inspire a manufacturing renaissance. Of course, this never happened, which only adds to the mountain of evidence proving that most mainstream economists are intellectual idiots.

It is important that we do not fall into the same false-hope trap in 2017. While Trump may or may not handle matters more aggressively, there is only so much that can be accomplished through politics. Rebuilding a manufacturing base after decades of outsourcing takes time. Many years, in fact. Factories have to be commissioned, money has to change many hands, wages have to be scouted for the best possible labor per-dollar spent and people have to be trained from the very ground up in how to produce goods again. In many cases, the skill sets required to maintain functioning factories in the U.S. (from engineers to machinists to assembly line labor to the people who know how to manage it all) just don’t exist anymore.  All we have left are millions of retail and food service workers forming mobs to demand $15 an hour, which is simply not going to encourage a return to manufacturing.

Beyond this, at least in the short term, America will have a much stronger dollar on the global market, rather than a weaker dollar, due to the fact that the Federal Reserve has initiated a renewed series of interest rate increases just as Trump entered office.  While the mainstream theorizes that the Fed will turn “dovish” and back away from rate hikes, I think this is a rather naive notion.  It serves the elites far better to create a battle between Trump and the Fed – therefore, I see no reason for the Fed to back away from its rate hike process.  Trump will demand a weaker dollar, the Fed won’t give it to him, and ultimately, the global economy will start to see the dollar as a risky venture and dump it as the world reserve; which is what the globalist have wanted all along so that they can introduce the SDR as a bridge to a new world currency.

With a “strong” dollar (relative to other indexes) there is even LESS incentive for foreign nations to buy our goods now than there was after the credit crisis in 2008. If the dollar loses world reserve status (as I believe it will during Trump’s first term), then at that point we will have a swiftly falling currency — but too swift to fuel a manufacturing reboot.

Is there even enough internal wealth to support the rise of manufacturing within the U.S. for a period of time necessary for our economy to rebalance?  If there is I’m not seeing it.  We are a nation mired in debt.  So much so that even selling off our natural resources would not erase the problem.

Ultimately, the shift away from being tied to a globalized system towards a self-contained producer nation with a citizenry wealthy enough to sustain that production in light of limited exports to foreign buyers is a shift that requires incredible foresight, precision and ample time. It is not something that can be ramrodded into existence through force or by government decree. In fact, the act of trying to force the change haphazardly will only agitate an economy already on the verge of calamity.

Solutions Start With The Citizenry, Not Washington

I understand that conservatives in particular want to “make America great again,” and I fully agree with that goal. But, someone has to point out the inconsistencies in the current strategy and recognize that the situation is beyond repair. To make America great again would require decentralized efforts to maximize production and self reliance at a local level, not centralized federal tinkering with the economy. The globalists have been far too thorough in their programs of interdependency. The only way out now is for the system to crash and for the right people to be in place to rebuild.

Sadly, not only will a crash result in great tragedy for many Americans, but it is also an outcome the globalists prefer. They believe that THEY will be the men in the right place at the right time to rebuild the system in an even more centralized fashion. They hope to sacrifice the old world order to inspire the social desperation needed to convince the masses of the need for a “new world order.” Again, this crash cannot be avoided, it can only be mitigated. We can prepare and become self sufficient. We can fight to ensure that the globalists are not in a position to rebuild the system in their image once the dust settles. But, we should not place too much expectation that the Trump administration will be able to solve any of our economic problems, if that is even their intent.  The solution remains in our hands, not in the hands of the White House.

Alt-Market.com



19 Comments on "Irreversible Damage – The U.S. Economy Cannot Be Repaired"

  1. onlooker on Fri, 3rd Feb 2017 7:38 am 

    Here is where, we on this board have gotten into useless squabbles about who will collapse first or worse. The whole ship, meaning the Economies of the entire planet are going down. We made it so by being so dependent on each other and on modern technology and intensive energy systems. Nothing now can stop this inevitable decline. Singling out the US or whomever is nitpicking and useless.

  2. Jef on Fri, 3rd Feb 2017 9:26 am 

    The exponential increase in net available energy that we experienced over the last 100 years or so, peaking somewhere around 1998 or earlier, allowed for a whole host of industries that simply tap into and syphon off money without adding anything to the mix. In fact those who gained wealth in those industries were/are able to consume on a colossal scale. This is now where the power lies so it is not possible to change things.

    The surplus net energy has stopped increasing and may even be declining but the leech economy must continue to seek returns so they must resort to a number of …how shall I put it?…negative activities such as cannibalism.

    Any “solutions” at this point simply means some sector of the economy will loose.

  3. Revi on Fri, 3rd Feb 2017 9:41 am 

    The crash is going to be a major bummer for everybody. I like the bit about the reserve currency being at the center of the economic system and that putting tariffs on everybody else’s goods only hurts us. Duh!

    I think these people see it as some kind of game somebody can win. We have been the winners in this crazy economic system for so long we don’t know how bad it’s going to be not to be on top of the system. We have nowhere to go but down.

  4. Sissyfuss on Fri, 3rd Feb 2017 10:36 am 

    “While Trump may or may not handle matters more aggressively”. C’mon, this fellow is not even paying attention. Ain’t no may not in Trumpys’ aggression.

  5. Hubert on Fri, 3rd Feb 2017 10:43 am 

    This stupid country is bankrupt and out of money. There is no way it will ever be able to pay off it’s debt.
    https://patrick.net/The+World+Debt+Cycle+and+Nation+Debt+by+Country

  6. penury on Fri, 3rd Feb 2017 11:51 am 

    But, haven’t you heard? We owe it to our selves, so no one loses actual money. The object is not to repair the economies, but to replace “money” with another form of barter to keep the system going for another round.

  7. onlooker on Fri, 3rd Feb 2017 12:08 pm 

    Penury, what are we going to barter the way things are going, good wishes haha

  8. penury on Fri, 3rd Feb 2017 1:31 pm 

    What does it matter what you use to barter? As long as the Elites control the majority of whatever it is, sheeple will perform as directed to obtain whatever they are told to collect.

  9. onlooker on Fri, 3rd Feb 2017 2:22 pm 

    True Penury, just was making a reference to the annulment of the habitable nature of our planet. Not much to barter in a dead world or anyone left to barter

  10. Rob on Fri, 3rd Feb 2017 3:49 pm 

    As long as people, other countries, continue to take USD in exchange for good/service…I don’t even pay attention to debt. Just keep printing digits out on the money machines. No wonder Trump wants to dump everything into military. It will be the only thing that keeps the USD propped up.

  11. Harquebus on Fri, 3rd Feb 2017 5:19 pm 

    This can only end badly.

  12. Apneaman on Fri, 3rd Feb 2017 6:40 pm 

    More of this and in Canada and Europe too. Sleeping rough they say in the UK.

    Homeless camp overwhelms south Austin greenbelt

    http://kxan.com/2017/02/02/south-austin-greenbelt-neighbors-find-large-homeless-camp/

  13. Apneaman on Sat, 4th Feb 2017 1:00 am 

    “Government Does Not Create Wealth” – not true

    “Government is a wealth-devouring machine.” – true

    These libertarian retards are so convinced of their never before tried system/fantasy that would only have a chance of working pre 1800’s and a slight one at that. America is a big government project and especially after WWII. How can these dreamers ignore the reams of technology and infrastructure only made possible from big gov projects? Am I really supposed to believe that if after WWII America went libertarian some backyard entrepreneur would have beat the commies in the space race? The atomic bomb was big gov, but I’m sure that some Austrian economics disciple would have figured out eventually in his garage cause of libertyNstuff. If not for Big gov funding thousands of military R&D projects, defense contractor R&D projects , university R&D projects, AKA as science leading to technology and military supremacy, America would have ended up as Soviet bitches. Further, how much infrastructure has the Army Corps of Engineers built, still builds and maintains? And on and on and on. Techno industrial societies are too complex not to have a great deal of central control and organization and global techno industrial civilization only works through cooperation of those governments. I am by nature anti authoritarian, but I’m also a realist not a fantasist. Anyone who feels they have benefited or humanity has benefited, had their lives improved from the technological advances of the last 70 years owes a hat tip to the US government and the US tax payer who made much of it possible. Other wealthy countries followed suit and contributed as well, but the US Gov is/was far and away the leader. Was there ever a great empire that did not have central control and the big bureaucracy? I think not. Any of the first world countries today have that fantasy tiny gov? What about China’s explosive growth the last 30-40 years? Another big gov controlled and managed project. In the end they all get corrupted by greedy elites, but they never would have been able to, grow, conquer and rule without big central authority. Impossible to have it both ways.

  14. Apneaman on Sat, 4th Feb 2017 1:13 am 

    Surplus Energy Economics

    How the economy REALLY works – Tim Morgan

    “What is Surplus Energy Economics?

    Very briefly, SEE says that the economy is an energy system, not a monetary one. Prosperity is determined by surplus energy – that is, the energy available after the deduction of the energy which is always used up whenever we access energy.

    Our entire history can be seen in this way. As hunter-gatherers, all the energy that people obtained from food was consumed obtaining that food, so there was no surplus, no economy and no society.”

    https://surplusenergyeconomics.wordpress.com/2017/01/09/85-perfect-storm-gets-nearer/

  15. Apneaman on Sat, 4th Feb 2017 1:22 am 

    UK, another country going back to the norm for the vast majority of civilizations history. The great anomaly is almost over.

    Prepare for the worst: this inequality rift will tear our society apart

    The biggest rise in inequality since Thatcher is on its way, bringing economic instability, poverty, poor health, increased violence and fear among neighbours

    “Homelessness and child poverty have risen, the NHS is in dire financial straits, understaffed prisons have record suicide rates, the elderly lack social care – yet the rich continue to get richer, and continue to avoid taxes. This is an expression of abject moral bankruptcy.”

    https://www.theguardian.com/commentisfree/2017/feb/03/prepare-inequality-rift-tear-society-apart-thatcher

  16. joe on Sat, 4th Feb 2017 1:27 am 

    Those who think that the printing presses can run forever are making the mistake of Weimar Germany. You can’t monetise inflation. The FED knows this, so every few years they limit economic growth by spiking rates in ‘cycles’ we call them ‘recessions’. As a global reserve, the dollar can absorb allot of global problems. But 20 trillion of national debt has a problem. This is treasury debt. So once the treasury deposits its borrowings from the FED in the fiat currency trick, all that debt is reissued ten times over, etc etc until it gets all the way down as far as you, the little guy. 20 trillions of national debt actually funds hundreds of trillions of debt in the economy and most of that debt can never be repaid, ever. So whenever there will be a crisis of faith in the dollar, like say the arrival of Bitcoin or a few BRICS dumping the greenback then action is required to cut off even these minor threats before they grow. In 2007/08 Bush then Obama had to choose between letting the The Great Recession run its course as it should have naturally, or to fight it with a fire hose that shoots money. 10 trillion dollars later we know the answer. Trumps path is chosen for him now. If he diviates then its trouble because nothing much has changed since 2007. Most people are still mired in debt ten years later and global gdp isn’t doing much of anything so instead of pumping dollars out into the world to drive growth and causing global demand to pick up, we see the debt collecting in a pool we call ‘national debt’, that means the system is filling with cash nobody wants. Thats an inflation ticking time bomb.

  17. Apneaman on Sat, 4th Feb 2017 1:32 am 

    If You Owe Taxes To IRS, You Could Lose Your Passport And Your Ability To Fly

    “On December 4, 2015, the Fixing America’s Surface Transportation Act, or “FAST Act,” became law. The purpose of the law was to provide long-term funding for transportation projects, including new highways. However, the Act also included a significant new provision which allows the Department of State (sometimes just called “State Department”) to yank passports from delinquent taxpayers.”

    http://www.forbes.com/sites/kellyphillipserb/2017/01/26/if-you-owe-taxes-to-irs-you-could-lose-your-passport-and-your-right-to-fly/#44e21eb25a1d

    Completely obscene and cynical, but especially in light of the Panama Papers leak.

    Panama Papers: a special investigation
    Mossack Fonseca: inside the firm that helps the super-rich hide their money

    As Panama Papers shine light on offshore world, Luke Harding takes a closer look at company exploiting tropical tax havens

    https://www.theguardian.com/news/2016/apr/08/mossack-fonseca-law-firm-hide-money-panama-papers

    Here’s the Price Countries Pay for Tax Evasion Exposed in Panama Papers

    “How much tax revenue do the world’s governments lose thanks to this kind of financial engineering?

    According to The Hidden Wealth of Nations, a recent book by University of California, Berkeley economist Gabriel Zucman, the answer is that tax evasion costs governments approximately $200 billion per year.”

    https://theintercept.com/2016/04/05/heres-the-price-countries-pay-for-tax-evasion-exposed-in-panama-papers/

  18. Davy on Sat, 4th Feb 2017 6:12 am 

    Europe is as bad as or worse than the US. The US wags Europe’s tail like a bitch. Maybe that is why the majority here talk your anti-American talk because it butt hurts. Canada is even worse it really isn’t a country it is an asshole 51st state acting like a country. Poor people too, they have a horrible place like the US bitch slapping them around daily for 200 plus years. That is an epic butt hurt. The big ugly mother of all Bitches called the beacon of freedom kicking your ass daily. No wonder the Anglosphere is so insane with anti-Americanism. They can’t stand themselves for being gimps. This is why I admire Russia above all other nations. They are an alcoholic corrupt mafia nation that bucked the American bitch system. They understands themselves for what they are. Long live Putin and death to the NWO of hideous thieves and scoundrels. LOL.

  19. Davy on Sat, 4th Feb 2017 7:35 am 

    European financial circle jerk:
    “Meet The New, “Safe” Synthetic CDO’s That Could Spell Disaster For The European Banking System”
    http://tinyurl.com/hcqwdf4

    “So what do you do if you’re a European banking regulator faced with the task of maintaining a safe, sustainable financial system amid a concerning growth in bank leverage. Well, if you said sell down risk assets then you’re just being silly or completely ignoring your implicit obligation to engineer higher banking profitability at all costs. If we can get serious for a moment, like in the early 2000’s, when all else fails you turn to synthetic CDO’s which, courtesy of some magical, if completely incomprehensible, math, slashes the risk of bank balance sheets while having a negligible impact on profitability. It’s called the Synthetic Collateralized Loan Obligation and it’s all the rage in Europe.”

    “As Bloomberg points out, from the regulator’s perspective the logic is that these deals are usually fully funded, with investors posting the full amount that they’re on the hook to cover should a lot of a bank’s loans go bust. They’re not highly leveraged wagers similar to the pre-crisis synthetic collateralized debt obligations, which were backed by who knows what and sold to whomever. Of course, the problem with that perspective is that it views the risk profile of the synthetic CLO in a bubble and completely ignores all other possible second derivative implications.”

    “hedge funds are all too willing to post the collateral required to backstop losses on a bank’s loan portfolio but only if they can juice their returns somehow. So how do they do that? Well, they borrow money from banks, of course. Yes, you read that correctly, banks are lending money to hedge funds which use that leverage to backstop losses on the bank’s loan portfolio…effectively the bank is issuing loans to backstop loans. We vaguely remember similar shenanigans occurring roughly 10 years ago when most of wall street’s modern day titans were still watching Power Rangers in their PJs…as we recall, in the end, it didn’t work out well.”

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