Hello Friends. If you’ve read some of my other postings, you know the perspective I adopt towards anything comes from reading it’s trajectory. They’re going somewhere, have a momentum of their own and will reach a destination. Identifying where something is heading provides me with the truth about that thing. I develop an understanding of what it’s natural outcome will be. This understanding produces an alternative to the natural outcome, and I define the duality. With this understanding, I can influence and manage the trajectory.
You and I have common, shared trajectories. Their outcomes represent permanent and often devastating effects on everyone. The environment’s a thing and it has it’s own trajectory. So is the economy. A number of our shared trajectories have matured and are approaching their natural, uninterrupted outcomes. There is enough information or history in them, to recognize their patterns and tell us what to expect. Once we understand their trajectory, we enter a period of one last chance. It’s like an event horizon, and will be our last chance to change something before it reaches it’s natural, uninterrupted conclusion. Think tipping points with the environment.
The consequences of unattended trajectories are chaos and pressure. As these shared trajectories near their outcome we’re getting a taste of what to expect. Nation destroying floods, and droughts that cripple global food supply. Assaults on democracy, growing nationalism and public outrage. Financial insecurity and now inflation. It’s these kinds of things we will increasingly have to live with as our common, shared trajectories move to their maturity. Each one like an individual weight, hobbling our personal and shared capacity. From here on, our common problems won’t go away unless we individuals act as one to interrupt their destructive trajectory.
The most recent pressure to burden our capacity is inflation. It’s a global, shared experience. Throughout the world, very few nations are experiencing annual food inflation rates of less than 5%, and most are in the teens. North America is right around 10%.
The reasons for this inflationary period are multiple. We’re still experiencing supply chain issues due to the COVID pandemic. Due to it’s Zero-COVID policy, China continues to implement huge lockdowns and consequently is creating supply interruptions. Putin’s war is disrupting agriculture and energy supply. Severe droughts, floods and inconsistent weather patterns are increasingly stunting harvests.
To counter the runaway inflation we’re experiencing, federal banks around the world are abruptly raising interest rates. They’re doing it at a pace that will have severe consequences on the everyday consumer. Now in addition to struggling with the higher cost of groceries, families are going to pay higher interest on mortgages and loans. In the 1980’s, this rate went up to 19%, and that was due to an oil crisis; a single issue. Today, we face an oil crisis, ongoing supply issues, and a war that uses supply interruption as a weapon.
From the 1980’s we know rapid interest rate increases reduce inflation, but also cause loss, recession and high unemployment rates. The Fed is responding to today’s inflationary predicament in the very same way. It understands the consequences. It has no other options at this time. If their actions do not produce immediate results, we face stagflation; a time when the economy is not growing, unemployment is high, and prices continue to go up.
This is what we have come to regarding our economy, particularly in the Western World. Inflation, and more probably stagflation is the new burden we citizens of the world will have to face collectively. Our shared environment includes a climate crisis, ongoing disruption from the global pandemic, a war threatening democracy and world order, and now stagflation.
The reason this particular inflationary period is so scary is because the chickens have come home to roost. This inflation is in response to the biggest heist and bail out the world has ever seen; the subprime loan scandal. This corruption created the 2008 Great Recession and a false economy propped up by quantitative easing.
Poor economic policy, particularly because of extended periods of low interest rates, causes inflation. Sound familiar? That’s exactly what happened as a result of the 2008 Great Recession. At the time central banks were forced to drop interest rates to 0 or near 0%, and flood the market with accessible money by buying corporate and government bonds. This practice is known as quantitative easing and it continued for fourteen years.
We now have an understanding of what happened during the period of easy money created by quantitative easing. It bailed out the banks immediately, by flooding them with money. There have been 3, but arguably 4 quantitative easing packages issued in response to the 2008 financial crisis. Almost all of the first one went to banks clearing their subprime mortgage debt. After that, money became more available to the common consumer and they started borrowing and spending money as well.
Quantitative easing revealed a recognizable K-shaped economy in the Western World.
As you can see, with a K-shaped economy a small group of organizations and individuals get a lot more, while a log more get a lot less. This is what happened with quantitative easing. A lot of money was released into the economy and the rich got much more than the rest of us. Never considering to do something productive with all that money, the rich poured it into assets and now on top of everything else, we’re facing an asset bubble, which should burst just about now, as interest rates go up.
At this point, you would think the party’s over for these select few who benefited from QE. Well, never underestimate the ingenuity of the criminal mind. There is the repo market where they can continue their practice of funneling money to the rich which is a little further removed from the public eye. The repo market, funds banks, corporations, wealthy individuals and countries, exclusively through short term loans. All the fed has to do is inject money here, and the richest people in the world will continue to take more money from you and I. The consumer class is one step removed from the true economy.
The fed has done this once already to the tune of $1.2 trillion just prior to the pandemic. It was such a big package that many economists consider it another quantitative easing. This only difference is the market got all the money. As inflation continues, I suspect we will see the Fed continue to increase interest rates, while pouring money directly into the market through ongoing short term funding in the repo market.
So what we’re seeing here is the repeat function of the western world economy. Take. Take. Take. In the UK, Liz Truss tried to give the rich even more money by cutting all their taxes. Just the rich. Everyone else had to pay. The repeat function in the western world economy is to take more, regardless of the consequences to the everyday consumer.
It’s unbelievable how greedy and unconscionable these people are. Just prior to the 2008 Great Recession the big banks in the global economy were consciously selling debt they knew was nowhere near the rating they had placed on it. People without jobs were given mortgages on houses they had no possibility of paying off, and these loans were sold as prime and secure debt. Through outright fraud the top echelon of the banking world bankrupted the economy, not just of the United States, but the entire Western World. Millions of people suffered life changing financial ruin, and there was no remorse whatsoever.
Only one banker has gone to jail over the subprime loan crisis. Rather than hold people and institutions accountable, government rewarded the bankers by filling their vaults up again through QE. They simply discovered a new way to take, and as we now know, the money continues to flow to the top. Then, when extreme excess once again threatened our economic instability, the Fed gave the market even more money through the exclusive repo market. The practice of take, break, and repeat has become institutionalized, and this is the natural outcome of our economy today. It won’t change until we change it.
This is a sickness that transcends morality. These people are not ethical beings. They’re not even capable of being ethical. This part of their humanity is missing and if they show any compassion, they’re aping it. In psychological terms, they are antisocial. They are incapable of showing regard for right and wrong, and are not conscious of the rights and feelings of others. They are incapable of doing what’s best for anyone but themselves.
This is what we’re dealing with in all spheres of leadership across the globe. There’s only one way to change it. We, the people who share and have a stake in this world, have to reject the systemic leadership that has institutionalized itself in our minds. Reject all of it. Reject their mucking around with the environment. Reject their distorting of democracy, and reject their incompetence regarding the economy. This is the only way out of the destructive trajectories we are living in today.
As a rightful voice in world issues, you have a right in the say of how this world is run. Power and money attract people lacking in conscience and these people have become near exclusive in who are representing you. Look to see what their motives are who they are by what they do. I’d be willing to bet a majority of our current leaders in the private and public realm have a number of antisocial characteristics by this metric. One of the most prominent being lack of empathy. This group which has become institutionalized through passive acceptance, is not equipped to represent our needs. Today, when I look at our leaders and politicians, I don’t see them as the smartest people in the room, as they would have us believe. I see them as a bunch of big babies that need to be watched over. They have yet to develop the characteristics of a mature and inclusive perspective. They just want their rattle. Look at Putin. ‘If I don’t get my annexed territories, I’m going to use the nuclear bomb.’ This is something you might expect to hear from an eight year old.
I urge you to be available to act on the things you believe in. Start talking and find your tribe and organize a movement. Be a part of something you create that has momentum of it’s own. The whole world is on the internet and like minds wait to hear from you. We’re in the collective event horizon of world outcome right now. We can either turn away from the paths that are leading us to the point of no return, or go there. We can’t ease into anything anymore. The duality has been defined and we know what’s coming. We can no longer accept a half-assed approach to the environmental crisis. Institutional frameworks that facilitate corporate theft and give facilitators like Ben Bernanke the Nobel Prize have to be restructured. Democracy has to be cherished and defended. If enough people participate, the right answer will appear. Find your people and act to remove the barriers that hold us back from the glorious life God intended. There’s so much potential that waits for a free and open society.
Some sites I visited while writing this:
theguardian.com/uk-news/2022/sep/23/kwasi-kwarteng-mini-budget-key-points-at-a-glance(opens in a new
https://en.wikipedia.org/wiki/Quantitative_easing
https://www.imf.org/en/Blogs/Articles/2021/12/15/blog-global-debt-reaches-a-record-226-trillion
https://www.oecd.org/corporate/risks-rising-in-corporate-debt-market.htm
https://www.theguardian.com/uk-news/2022/sep/23/kwasi-kwarteng-mini-budget-key-points-at-a-glance
https://data.oecd.org/hha/household-debt.htm
https://www.hoover.org/research/inflation-and-monetary-policy
https://www.thebalancemoney.com/what-is-qe1-3305530
https://www.investopedia.com/articles/stocks/10/5-steps-of-a-bubble.asp
https://en.wikipedia.org/wiki/September_2019_events_in_the_U.S._repo_market