Mike Krieger On The Death Of Globalization, The Death Of Currency And The Death Spiral

Thursday, February 3, 2011
By Paul Martin

by Mike Krieger of KAM LP

They had then learned how easy it is to issue it; how difficult it is to check its over issue; how seductively it leads to the absorption of the means of the workingmen and men of small fortunes; how heavily it falls on all those living on fixed incomes, salaries or wages; how securely it creates on the ruins of the prosperity of all men of meager means a class of debauched speculators, the most injurious class that a nation can harbor,—more injurious, indeed, than professional criminals whom the law recognizes and can throttle; how it stimulates overproduction at first and leaves every industry flaccid afterward; how it breaks down thrift and develops political and social immorality. All this France had been thoroughly taught by experience.

Everything was enormously inflated in price except the wages of labor. As manufacturers had closed, wages had fallen, until all that kept them up seemed to be the fact that so many laborers were drafted off into the army. From this state of things came grievous wrong and gross fraud.

– Andrew Dickson White, “Fiat Money Inflation in France”, How it Came, What it Brought and How it Ended

Where the road is dark and the seed is sowed
Where the gun is cocked and the bullet’s cold
Where the miles are marked in the blood and gold
I’ll meet you further on up the road

Further on up the road
Further on up the road
Where the way dark and the night is cold
One sunny morning we’ll rise I know
And I’ll meet you further on up the road.

– Bruce Springsteen, “Further On”

Globalization is Dead

I debated whether or not to write today. To be completely honest I feel as if I have said as much as I can and don’t want to start sounding like a broken record. That said, we have clearly entered the next stage in this tragic circus called the global monetary and financial system death spiral. The final stage comes when the system consumes itself as a result of its refusal to reform and we are there now. The fact that most people are completely unaware of it or have such strong “normalcy bias” they can’t see what is directly in front of their faces is immaterial. It is here, it is irreversible, and it will unleash a cyclone of chaos and confusion that will leave many literally suspended in disbelief as the entire false paradigm most of humanity has lived under for their entire existence is washed away forever.

Last week, I wrote about what is happening in Egypt and what it means. The key point I want to emphasize is that there is no going back from where we are. The notion of stocking up on the limited food and resources available today is no longer theoretical for governments it is a matter of survival. While many wake up in cold sweats with the memories of 2008’s commodity crash and the concurrent U.S. dollar rally fresh in their minds, these nightmares are misplaced. The U.S. dollar has been hyper-inflated since 2008 and the only thing that has kept commodities under wraps has been the absence of a sudden and violent mobilization of those dollars into real goods. Since so many of these dollars are sitting at the central banks of governments around the world, they key was always what would spark governments to mobilize those reverses. The spark has been food supply shocks and revolution at the periphery of the American empire. The gun is cocked, the bullets are cold and the heretofore benign tumor that we call the dollar will puke its malignancy all over the world at once in desperate attempts to own something that will have value in the next monetary system. The days of governments playing nice with one another is long over. This is the survival stage and every decision that is made from officials from here on out will be entirely self-serving. You want to go long protectionism. Globalization is dead.

The Rest…HERE

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