Slouching Toward Bedlam

The global financial storm encircles remote, beautiful Iceland.


If one favors poetry over precision, Iceland could be described as a frozen island sitting atop a huge volcano. Its economy in recent years was similarly poised for a meltdown, and the inhabitants of that remote but beautiful land were too busy enjoying the transitory pleasures of soap-bubble "prosperity" to pay attention.


Now that their banking system has collapsed and their imports have been cut off, Icelanders are too busy emptying supermarket shelves to ponder the disastrous errors that led to their national disaster.


Embodiment of a hearty people: Iceland's Jon-Pall Sigmarsson (1961-1993) was a four-time World's Strongest Man. He died in the gym attempting to dead-lift the equivalent of a small continent. There are worse ways for a man to go.

Iceland was settled by Norwegian explorers in the ninth Christian Century, and for most of its history the country's economy was wedded to fishing, a cyclical market that taught the nation's inhabitants to value strength, perseverance, thrift, and relatively modest living.


Other migrations brought Danes, Irish, Scots and Swedes to Iceland. A vigorous and attractive people flourished in splendid isolation. And it's no surprise that Iceland, in recent years, distinguished itself by producing some of the strongest men and most beautiful women known to humanity.


Like too many other countries, however, Iceland fell prey to the peddlers of debt-based financial "products" whose terms were impenetrably abstruse and whose connections to actual productivity were distant and dubious. The tiny nation's banking system became deeply involved in repackaging international investment instruments, and with its minuscule population (roughly 300,000), Iceland vaulted to fifth place on the list of the world's wealthiest nations as measured by per-capita GDP.

Northern Colossus: The wonderfully named
Magnus ver Magnusson, another four-time
World's Strongest Man from Iceland,
seen here in a typical event.

The illusion of prosperity was dispelled a little more than a week ago, when Iceland's entire financial system imploded. For months ahead of that cataclysm, Icelanders, under the pressure of economic necessity, had begun to rediscover the virtue of frugality. But their economy had already passed the Event Horizon.



When skittish British depositors began pulling their funds from Icesave, an on-line affiliate of Iceland's Landskanki, Reykjavik responded by imposing what amounted to a limited bank holiday. This prompted the British government to employ a "counter-terrorism" law to freeze Icelandic deposits in British banks.



So we were treated to the fascinating spectacle of one NATO ally treating another as a terrorism-sponsoring "rogue nation." This picture became a touch surrealistic when Iceland's government, having nationalized the banking system and desperate to prevent a permanent system-wide collapse, turned to Moscow for a multi-billion-euro emerency loan.



Three years ago, Iceland was ranked second (after its Mother Country, Norway) on the UN's Human Development Index. Now, its currency is dead, its banking system is in hospice care, and its government -- in a role familiar to juntas ruling many indigent societies so charmingly referred to as "developing" nations -- is playing the mendicant at the International Monetary Fund, pleading for an international bailout. It is the first "developed" nation to request such help since pre-Thatcher Britain did so in 1976.



Irony is plentiful in the story of Iceland's descent from Nordic economic titan to bankrupt international panhandler. But Americans aren't entitled to so much as a second of smugness, given that we're following exactly the same trajectory.



American tables are not as dependent as Iceland's on imported food. But for the past several years, we have imported more food than we have produced. And now that short-term commercial credit has frozen, getting imported food to supermarkets and other retail outlets has suddenly become much more difficult. The effects of this development are yet to be felt, but they will be manifest in due time.


Icelanders are denuding supermarket shelves of basic household needs, from fresh produce to canned items to light bulbs. This is as close as that island's small, tranquil, and relatively homogenous population comes to an outright riot.



When Americans face the same circumstances -- and we will -- we can expect to see localized eruptions of Bedlamite violence that will make the 1992 L.A. Riots look like a series of mild high school pranks.



I'm cynical enough to think that our rulers, who eagerly seize power under the pretext of crises,
are counting on an upheaval of this kind in order to propel us into the "New Bretton Woods" global financial system now being openly discussed.


Evil designs: John Maynard Keynes (left) confers with Harry Dexter White at the 1944 Bretton Woods Conference.


Eventually this would be an updated and fully realized version of the Bretton Woods system as originally envisioned by the detestable John Maynard Keynes and his comrades, which would be built around a world central bank and a world fiat currency (Keynes suggested that it be called the "bancor"; Keynes' comrade Harry Dexter White wanted to call it the "unita").



This was seen as a bit too ambitious in 1944. In 2009, this proposal may be embraced by many as the only alternative to the complete collapse of the world economy. And the political class both here and abroad is doing its part by enacting policies that are certain to fail.


There is already a de facto global financial system in operation, as the United States and the governments of the various European Union states implement exactly the same policies on both sides of the Atlantic: Socialize the bad banking assets, and nationalize any good ones that remain. This amounts to a global race in which the finish line is economic oblivion. The U.S. may not be the nation that breaks the tape, but we'll ge there eventually.


The Triumvirs assemble: While the Bushling (off-camera) recites his scripted lines, Henry Paulson works on his Mussolini impression and Bernanke channels Lenin.


Yesterday, Commissar Paulson, head of the Directorate for Protection of Plutocratic Assets, summoned the CEOs of nine "healthy" banks to announce that the Regime is taking a controlling interest in each of them. Eventually, the Regime will take control of thousands of smaller banks and financial institutions.


As Megan McArdle of The Atlantic observes, the Regime is first recapitalizing the big, "healthier" institutions, rather than the sicklier ones, in order to defer, for as long as possible, public disclosure of the condition of the banking system: "In this case, the government is specifically fighting to keep the market from getting information about whose balance sheets are shakiest [and] ... recapitalizing only the weak ones would send a message about their balance sheets that might trigger the run he is trying to prevent."


This morning (October 14), the withered little simian in the White House, who has a little less than 100 days left to ruin whatever still works in this country, emerged from his lair, squinted the eyes from which the light of intelligence has never shone, rummaged around in the cranium in which wisdom has never dwelt, and then spoke another of the lies that come so easily to his sneering lips:


"The government's role will be limited and temporary. These measures are not intended to take over the free market but to preserve it."


Bush was flanked by the other two members of the Regime's de facto ruling Triumvirate, Commissar Paulson and Commissar for Currency Destruction Bernanke.


Paulson struck an authentically Stalinist note when he declared: "The needs of our economy require that our financial institutions not take this new capital to hoard it, but to deploy it." Down with "hoarders," those self-fixated wreckers who react to an economic downturn by intelligently choosing thrift over profligacy! Who ever heard of a bank saving money, rather than pissing it away in bad loans to government-favored recipients?


But here's the point: Now that the banks are receiving "capital" from the government, and under government control, they will operate on the basis of political priorities, rather than the needs of the market and the interests of their shareholders.


Bernanke, who really deserves to be beaten savagely with the nearest available object (especially if that object is either Paulson or Bush), announced, in effect, that the "temporary" measures described by Bush will be in place in perpetuity: "We will not stand down until we have achieved our goals of repairing and reforming our financial system and thereby restoring prosperity to our economy."


Given that the course being pursued will result in the destruction of our currency, what Bernanke was really saying is that the Triumvirate will not "stand down" until it has finished destroying our economy, or until the new global banking system is in operation, or both.


For as long as they can get away with it, everyone who benefits from this deception will play along. With the dutiful but palpably doomed earnestness generally displayed by adherents of a suicide cult they will assure themselves, and the rest of us, that we really can magically heal mortally crippled financial institutions through the laying-on of authoritarian hands.



Last Friday, reacting in shock as markets around the world were in free-fall, one London trader exclaimed, "It's like someone cancelled gravity."



Actually what we saw last week, and will see in the future, is the equivalent of gravity pitilessly asserting itself.


Massive liquidation of some kind simply has to occur. It should take the form of vast, painful settlement of bad debts and the shuttering of terminally stricken financial enterprises. Instead, we're going to see the annihilation of the fiat dollar and the liquidation of the American middle class.












Get it, read it, and get ready.












Dum spiro, pugno!

...Its Hour Come Round At Last... (Important Update)

**

"When Black Friday comes

I'll stand down by the door

And catch the grey men when they

Dive from the fourteenth floor

When Black Friday comes

I'll collect everything I'm owed

And before my friends find out

I'll be on the road

When Black Friday falls you know it's got to be

Don't let it fall on me."



A little more than a week ago, emissaries from the Power Elite fanned out on Capitol Hill to bribe, brow-beat, and threaten congressmen into passing the Economic Dictatorship Enabling Act.


The Boot: Headquarters of the Bank of International Settlements in Basel, Switzerland.


We were told that the last argument they deployed to break down the resistance of recalcitrant representatives took the form of a terrorist's ultimatum: Either give us what we want, or economic misery and armed violence will ensue, in the form of a global market meltdown and troops on the streets of American cities.



I suspect that the truth is even more sinister than what we were told, that the actual threat took the form of the rapist's instructions to his victim: "It's going to happen anyway, so you might as well stop resisting and get it over with."


The basis for that suspicion is found in the fact that passage of the "rescue" package that would supposedly obviate a market meltdown was followed immediately by the most dramatic market plunge in history, eclipsing even the worst decline that took place during the Great Depression. So we managed to get both the creation of an economic dictatorship and a fully realized market collapse.


It is entirely likely that we will likewise see overt martial law measures put in place in the near future, as well.



If, as some very capable analysts anticipate, the short-term commercial credit system were to seize up, one immediate result would be shortages at grocery stores and gas stations. [See the Update below; this process is already underway.]



Our just-in-time commercial supply system runs on just-in-time financing, after all. And most American households, which are operated on a paycheck-to-paycheck basis, are woefully unprepared to deal with the shortages and dislocations that would result if store shelves were suddenly denuded, and gas station fuel tanks went dry.



If, as we have reason to fear, municipal and state governments start to default on their debts, then the teeming hordes of public employees may be left without their share of official plunder. We're being advised that crime rates among the, ahem, common people tend to soar during times of severe economic hardship.



What would be the result were widespread unemployment suddenly to hit the huge and ever-growing population of tax-feeders -- who are often people with an exceptionally well-developed sense of entitlement, and accustomed to a living based on coercive extraction, rather than mutually beneficial free commerce? To what extent would their hardships translate into an upsurge in (private) crime? We don't know; we've never confronted this problem before.



With the cognoscenti of the G-7 and IMF now meeting in Washington, there is open discussion of a possible global "market holiday" in order to retro-fit a new rule set into the global financial markets.



The rules for the "new Bretton Woods," according to the G-7's latest communique -- a document that manages to wed brevity and opacity in such a way as to communicate nearly nothing of value, a remarkable bureaucratic accomplishment -- will be based on the recommendations of the Financial Stabilization Forum (FSF), an obscure group whose secretariat has its headquarters at the Bank of International Settlements in Basel, Switzerland.



That boot-shaped edifice was seemingly designed to reflect Orwell's description of the totalitarian future -- a "boot stamping on a human face, forever."


The chief author of the guidelines for what Commissar for Plutocratic Redistribution Henry Paulson calls the "international regulatory response" to the global market convulsions is an all-but-unknown Italian banker by the name of Mario Draghi, Chairman of the FSF. The G-7, according to Paulson, is "committed to tackling the next steps laid out by Chairman Draghi to be done by the end of this year...."



Surely -- you're thinking -- this enigmatic Mr. Draghi is the epitome of independence and sober objectivity! Surely, he is untainted by conflicts of interest that might detract from his ability to devise a wise and equitable regulatory scheme!



Surely, you jest.



Mr. Draghi's brief but informative vita, circa 2004, proudly notes that he "joined Goldman Sachs as a partner in January 2002 and is Vice Chairman and Managing Director."



That's the same Goldman Sachs once headed by Chief Commissar Paulson, of course. It's the same outfit to which Paulson directed a huge portion of the $85 billion lent to AIG so that their top echelon management could continue their lives of exemplary asceticism and self-denial. It's the same talent pool from which Paulson selected the new Sub-commissar for financial stability, 35-year-old former Goldman Sachs executive Neel Kashkari. And it's the same entity in which Herr Paulson continues to have extensive investments, as well.


At the hub: Mario Draghi, Chairman of the Financial Stabilization Forum at the Bank of International Settlements.


But what's going on right now is not just a hugely amplified version of the same State-enabled crony capitalism that precipitated the present crisis.


Yes, the Nomenklatura is taking care of its own, and using unimaginably huge amounts of plundered wealth to do so.


But the real story here is the creation, under the pressure of an unprecedented financial crisis, of a global apparatus of wealth redistribution larger and more powerful than anything ever conceived by Lenin's diseased brain.


As Ambrose Evans-Pritchard of the London Telegraph points out, Washington "has taken over the entire credit system ... surpassing Roosevelt's New Deal. The US has guaranteed the $3.5 trillion money market funds. It has nationalized the $5.3 trillion pillars of the mortgage market, Fannie and Freddie. The Fed is accepting any junk as collateral at its lending window. This week it went the whole hog after panic hit the $1.6 trillion market for commercial paper. It is now offering loans without any security at all."



"The US government has become a bank," concludes Evans-Pritchard. "Yes, this is US socialism. What is the alternative?"



The alternative, of course, would be for our economy to absorb the terrifying shocks made inevitable by decades of government-abetted fraud, and then proceed in exactly the opposite direction from the one we're headed.














(K)neel before Goldman Sachs, peasants! Newly appointed sub-commissar for "economic stability" Neel Kashkari (left),who should not to be confused with either the evil Raza from the Summer blockbuster Iron Man (below, left), or the endearingly self-enraptured Sam the Eagle from The Muppet Show.



This would mean radical reductions in government spending -- beginning with an immediate end to the wars in Iraq and Afghanistan. That one policy change alone could still conceivably save our economy.



Evans-Pritchard and other communicants in the Church of Keynes insist that the only way to deal with the global depression into which we are sinking is to emulate the behavior of FDR during the period to which history will someday refer as the "Lesser Depression." In fact, we could do worse than to adopt some elements of the neglected 1932 Democratic Party Platform.



That document, in some ways, actually criticized the Hoover Administration from the right. It called for "a federal budget annually balanced on the basis of accurate executive estimates within revenues" (although the engine of revenue was to remain the Marxist abomination called the progressive income tax).



The Democrats called for restoration of "a sound currency," preferably to be backed by silver; the "removal of of government from all fields of private enterprise except where necessary to develop public works and natural resources in the common interest," thereby at once invoking a sound principle and nullifying it through proposed action.



The platform also repudiated foreign aid in principle by opposing cancellation of foreign debts to Washington, and foreswore an interventionist foreign policy by pledging to pursue "peace with all the world" and "no interference in the internal affairs of other nations...."



Granted, the platform was burdened with a generous amount of left-populist nonsense, and was entirely disregarded by FDR once he had used it to climb to power. But it attests to the fact that in 1932, amid near-universal economic ruin and inescapable despair, there was still widespread understanding of the fact that recovery would require radical reduction in the size, expense, and intrusivess of government, and eschewing foreign adventurism. FDR and his cabal, having marketed themselves to the electorate on those terms, proceeded in exactly the opposite direction, thereby exacerbating and prolonging the Depression.



The Standard Narrative of the Great Depression, as Dr. Robert Higgs of the Independent Institute points out, is based on three phases: The Great Decline of 1929-1933; the "Great Duration" until the outbreak of World War II; and the "Great Escape" as productivity and prosperity supposedly returned by way of the definitive government enterprise, war.



As Higgs reminds us, it was the end of the New Deal and the abolition of the war economy that lifted our economy out of the depression. "The year 1946, when civilian output increased by about 30 percent, was the most glorious single year in the entire history of the U.S. economy," Higgs writes. "By 1948, real output was back on its long-run growth trend, and during the decades that followed, the economy was spared the sort of deep and long debacle that a congeries of wrongheaded government policies had caused during the 1930s."




That blessed interval came to an end in August 1971, when Richard "We Are All Keynesians Now" Nixon de-coupled the dollar completely from the gold standard, in tacit acknowledgment that waging war in Asia while building a domestic welfare state had rendered Washington bankrupt. Thanks to the petro-dollar entente with Saudi Arabia, which preserved the dollar's status as the world's reserve currency, we've been able to avoid the consequences of national bankruptcy.



Until now.



As the song says, when Black Friday comes, "you know it's got to be." There has to be a Day of Reckoning. It can be deferred, but not forever. Herr Paulson and his comrades have generously arranged for the rest of us to suffer the consequences of their corruption and cupidity. After all, they can't be distracted from the task of building a new global economic order based on the same practices and policies that have led our nation to ruin.


UPDATE -- It's Already Begun....

"The credit crisis is spilling over into the grain industry as international buyers find themselves unable to come up with payment, forcing sellers to shoulder often substantial losses," reported Canada's National Post last Wednesday (October 8).

"Before cargoes can be loaded at port, buyers typically must produce proof they are good for the money," continued the Post. "But more deals are falling through as sellers decide they don't trust the financial institution named in the buyer's letter of credit, analysts said."

Bill Gary, President of the Oklahoma City-based Commodity Information Systems, confirms that this developing crisis is a product of the accelerating disintegration of the banking system: "There's all kinds of stuff stacked up on docks right now that can't be shipped because people can't get letters of credit.... The problem is not demand, and it's not supply because we have plenty of supply. It's finding anyone who can come up with the credit to buy."

This is just one of several potential cataracts in the supply system, which depends in large measure on independent truckers who are likewise going to find it difficult to get short-term credit.

"We've got a nightmare in front of us and a lot of people are concerned it's going to get a lot worse," warns Vancouver-based grain industry analyst Anthony Temple.

"What some companies are saying is we can't pay you until our customer pays us, so it becomes a question of who bares [sic] the financial risk and the cost," adds Jason Myers, head of the Canadian Manufacturers and Exporters trade association. "We're hearing about it more and more."

The credit crunch may prove to be as devastating as a trade embargo, which wouldn't be a problem for the United States if we still had a self-sufficient market economy. It's worth noting at this point that the United States -- once the breadbasket of the known universe -- recently became a net importer of food.

On sale now!










Dum spiro, pugno!

What Rough Beast... (EXTREMELY Important Second Update, 10/8)

The October Revolution of 2008 will prove to be at least as consequential as the one that occurred in Russia in 1917.



Beginning immediately after 9-11, George W. Bush and the cabal he represents began the controlled implosion of the hollowed-out shell of our once-sturdy republic. Last week the final phase of that demolition project got underway.



By using monetary inflation as a sapping device, the FED is knocking down the few federalist pillars that, at least in theory, separated the various layers of government. It is also preparing to nationalize key segments of the commercial economy. All of this is being done through the FED's New Deal era "emergency powers" to extend "credit" to any entity it chooses, whether governmental, commercial, or "public-private partnership."

The "Lenin" of America's October Revolution: Chief Fed Commissar Ben Bernanke

The revolution of 1913-1933, which inflicted the Federal Reserve, income tax, and the New Deal apparatus upon the United States, left us with a system Mussolini described as a "corporate state," more commonly known as Fascism.



Admittedly, the American version was milder than most, at least domestically. The Revolution of 2008 is consolidating the elements of that system into a monolithic, unitary State of the sort Lenin and his heirs would applaud, were they not busy suffering for eternity in hell.


The creation of the Federal Reserve in 1913 was a partial enactment of the fifth plank of the Communist Manifesto, which called for creation of "a national bank with State capital"; last week, with the creation of a de facto economic dictatorship under the Secretary of the Treasury, Congress implemented the other key element of that plank, "centralization of credit in the hands of the state."



Approval of the new economic dictatorship was the irreducible purpose of the so-called Economic Stabilization Act, which -- true to the measure's pedigree of grandly named government interventions -- has summarily failed to stabilize the economy.



The $700 billion disbursed by the bill was a trifle, in light of the magnitude of the debt flood to be "bailed out" and the ability of the FED to create what it's pleased to call "money" in any amount it chooses. But that relatively trivial amount was enough to create a constituency for the bill not only on Wall Street, but also in statehouses, city halls, and wherever else the Horseleach's Daughters convene.
















"Yes, we can!" Hey, guess what? Before Stalin became one of history's most prolific mass-murderers, he was a "community organizer," too! Here he helps mobilize support for the little exercise in idealism called the Bolshevik Revolution.


With both the corporatist and political elements of the parasite class enlisted to support the revolution, all that remained was the neutralize the productive class -- the common people, who found ourselves on the bad end of what the reliably perceptive Chris Floyd calls "one of the largest single redistributions of wealth since the Bolsheviks seized power in Russia in 1917."



Unanimity is, almost without exception, a bad thing in politics. The near-unanimity of the electorate in rejecting the Wall Street "bailout" measure is one of those incalculably precious exceptions. In the teeth of this near-unanimity, Congress -- led by the Senate, supposedly the more deliberative chamber -- took the rejected bill, an austere 3-page Enabling Act for the economic dictatorship, plumped it up with several hundred pages of bureaucratic boilerplate and undisguised pork, and passed it four days later.



Bribing a Congressman is generally about as challenging as seducing Catherine the Great. Getting the institution to surrender its institutional control over the public purse was a bit more difficult. Some Congressmen -- well, at least one, perhaps two or three others -- recalled their duty to their constituents, as well as their constitutional mandate to control the public purse, and held fast. Many others opposed the Enabling Act/Plutocrat Bailout because of simple terror over the prospect of immediate unemployment.



But in this case, bribery was coupled with undisguised official terrorism -- the use or threatened use of violence to achieve a radical change in the political system.



As Brad Sherman, a Democratic Congressman from California, testified in a remarkable address on the House Floor -- an address the likes of which will soon be punishable as sedition -- that representatives of the Regime candidly informed recalcitrant congressmen that refusal to pass the Enabling Act would result in nothing less than "martial law in America."







Subsequently, many people, including Rep. Sherman himself, sought to minimize the significance of those threats, describing them as manipulative hyperbole rather than a credible threat. This would be something on the order of a frantic lobbyist exclaiming that failure of the bailout would lead to real "Wrath of God-type stuff" -- the stock market collapsing, permanent constipation of the credit markets, shortages, troops on the streets, human sacrifice, dogs and cats living together, mass hysteria.



The jolly jokesters representing the White House and the Bankster Elite were just exaggerating for effect, you see.

The problem with that explanation, of course, is that the Bush Regime is actively preparing for martial law. So is the German government. So is the British government. Most likely, so are other governments throughout the Euro-Zone, and everywhere else central banks are still coupled to the rapidly disintegrating dollar.



There is no way we can honestly construe the comments reported by Rep. Sherman as anything other than a legitimate, credible threat to accomplish, through a coup de main, what Congress was being ordered to do: Surrender its power over the purse to an executive branch department that is an appendage of Wall Street.



This time, the mere threat of direct military action was sufficient. Next time, we may see putsch come to shove. But the real problem is this: The willingness of congressional majorities to be complicit in this betrayal most likely means there won't be a "next time" -- another occasion in which public outrage, coupled with the threat of quick voter retaliation, prompts Congress to act in the public good.


Go ahead and vote this November, if you can find national candidates unsullied by this consummate betrayal. But a higher priority should be to anticipate, and prepare for, the severe dislocations that are about to occur in our everyday life as the collapse accelerates and deepens.



As credit lines grow more constricted, shortages of gasoline and grocery items become more likely. Fill your pantry with non-perishable foods that don't require much preparation. Secure an adequate supply of drinking water. Network with informed family and like-minded friends and, if possible, keep an inventory of emergency supplies. If you can build a small fellowship of that kind, it's a good idea to have a designated meeting place to gather and pool resources in the event of a severe emergency. Toward that end it's also a good idea to keep your gas tank topped off, or nearly so, if this is economically feasible.



Don't confide in the idea that you will always have access to cash via an ATM, even if your deposits (like mine) aren't within a parsec of the new $250,000 FDIC limit. Owners of 401(k) accounts are learning in the worst possible way about the evanescence of virtual "wealth" as some two trillion dollars of that hypothetical commodity disappear into the ether.


For that reason, it's wise to keep a supply of tangible money. Yes, of course, that means silver -- particularly pre-1964 "junk" coins -- and gold. It also means keeping a supply of ready cash on hand in the form of the depreciating but still useable FRNs.* In the event of a "bank holiday," you won't be permitted to withdraw cash, and it's likely that debit cards wouldn't work. So keeping sufficient cash on hand for a month's expenses is a wise precaution.



It is my fondest hope that the advice offered in the foregoing paragraphs will prove to be the product of unwarranted alarmism.



I experienced exactly the same sentiment last March when I first suggested that "panic" of that variety was a perfectly rational course of action; I had the same desperate eagerness to be wrong last March 7, when -- citing analyses offered by much better minds than my own -- I predicted on Dr. Stan Montieth's radio program that the long-anticipated financial collapse would begin in late September or early October.



Maybe I'm entirely wrong now. May God grant that it be so. But don't count on it.



Update: Happy (Bank) Holidays...?


His Imperial Ineptness is going to convene an emergency international finance summit, most likely in Washington. With Iceland and Pakistan on the brink of national bankruptcy, and the contagion raging out of control, we may see an international bank holiday very soon.


Get liquid, right now.


And, as poster Dixie Dog reminds us (and I stupidly neglected to), this is an exceptionally good time to pray.


Second Update: "Regime Change" Through Inflation

When Thomas Jefferson famously warned Treasury Secretary Albert Gallatin that "banking institutions are more dangerous to our liberties than standing armies," this is the kind of thing he almost certainly had in mind:


"Having tried without success to unlock frozen credit markets, the Treasury Department is considering taking ownership stakes in many United States banks to restore confidence in the financial system."


The plan being discussed in the Olympian realm of the Power Elite is reportedly similar to the ongoing nationalization of Great Britain's banking system. At the same time, notes the New York Times, "investors are clamoring for the Fed to lower interest rates to nearly zero. Some are also calling for governments worldwide to provide another round of economic stimulus through expensive public works projects."


Predictability offers some comfort, I suppose, in these turbid and troubling times, which is why there's something winsome and reassuring in the knowledge that people will still seek "solutions" from Keynes's syllabus of economic errors. Perhaps the "public works" in question would be, as Keynes suggested, hiring one body of men to dig holes, and another to fill them. Or our rulers might combine the expense and futility of that exercise with massive death, terror, and destruction and simply arrange a ripping good war, the public works project for which government has displayed a singular aptitude.


Indeed, as the Times points out in words that chill any perceptive person to the marrow, we've already reached the phase at which those who presume to manage our destinies are talking about the "moral equivalent" of war:


"Fed officials increasingly talk about the challenge they face with a phrase that President Bush used in another context: `regime change.' This regime change refers to a change in the economic environment so radical that, at least for a while, economic policy makers will need to suspend what are usually sacred principles: minimal interference in free markets, gradualism and predictability."


Reverse-engineering the FED's intention from that report, it's clear that we're in for maximal interference in, or abolition of, free markets, accomplished suddenly by people who exercise power capriciously.


In other words -- an October Revolution brought to us by the Banksters without their Bolshevik middle-men.


And by the way....


Imitation is the sincerest form of ... Birchism, I guess. Then again, if those folks hadn't done this, maybe they'd occasionally be on top of relatively significant developments, such as the terminal unwinding of the global financial system....


___
*FRNs = Federal Reserve Notes, the intrinsically worthless pieces of tastelessly decorated rag paper the Regime insists we refer to as "money."



It's more timely than ever, and it's on sale now.











Dum spiro, pugno!