



Santa came early this year, he left presents for all the children … whether they wanted them or not!

Hard to say what Santa will offer next year, Christmas may be cancelled … or Stukas might be dive-bombing Poland. In the twilight of ‘More’ anything is possible except ‘more’.

Anguish being felt across the country after Trump election, (LA Times):

Americans who voted against Trump are feeling unprecedented dread and despair. I have never seen anything quite like the grief being felt by the majority of American voters who did not vote for Donald Trump. Back in 1980, there was disappointment among Democrats when Ronald Reagan won. In 2000, after the long Florida recount and the intrusion of the Supreme Court into the decision, there were plenty of upset people who thought Al Gore, not George W. Bush, deserved to be president. But the losing voters in those elections were not despondent. They were not breaking out in tears weeks later. They were not waking up each morning with feelings of dread about what was to come. This time it is different … (David Frum): “Construction of the apparatus of revenge and repression will begin opportunistically and haphazardly,” Frum wrote. “It will accelerate methodically.”

Do you mean the apparatus of revenge and repression aimed at Chelsea Manning, or the citizens of Boston? How about other ‘Brand X’ whistle blowers? (Justice Integrity Project):

OpEd News (OEN) Publisher Rob Kall, another speaker, has a different view. “Since Obama has taken office,” Kall reported in ‘RoughTime for Whistleblowers’, “most whistleblowers say his administration and his DOJ treat whistleblowers worse than any previous president.” Kall quoted GAP Homeland Security and Human Rights Director Jesselyn Radack, a well-credential ethics advisor in 2001 at the Bush Department of Justice. It promptly ousted her from her job and tried to inflict harsh reprisals in her later career after she provided to superiors her opinion that FBI personnel committed an ethics violation in questioning American John Walker Lindh after he was caught with the Taliban in Afghanistan. “Obama,” she told Kall, “has brought more prosecutions against whistleblowers under the Espionage Act than any previous president and all presidents combined.”

Thank you sir, may we please have another! Everyone knows Trump is a Fuhrer who is making lists and identifying enemies, (WaPo):

Obama administration tries to shut down visitor registry program before Trump takes office The Obama administration on Thursday took the unprecedented step of creating obstacles to a widely-anticipated but poorly understood plan by President-elect Donald Trump to establish a Muslim ban or registry — by dismantling the registry system that already exists.

In fact, almost every ‘crime’ the oafish Trump is being accused of in advance has been committed already by preceding administrations including Obama’s, starting illegal wars, snooping on citizens, raping the environment, cozying up to bankers, bankers, bankers and more bankers.

Don’t forget Obama’s ‘drone war’, suspension of habeas corpus, arbitrary imprisonment and torture in secret prisons. These programs took form under Bush but Obama did nothing to end them or much to rein them in.

Erratic, bullying, Nazi, paranoid … all are unpleasant to contemplate, but are hardly new. The issues that defines our new (gauche) president are matters of form rather than substance. The conflicts of interest, the ‘massive self-enrichment’ by office holders and ‘retaliation by means fair and foul’ are as entrenched in Washington as traffic jams. Our small-d democracy isn’t threatened, it vanished a long time ago, after people decided to let ‘experts’ tend to their affairs and for corporate marketing and PR to do everyone’s thinking for them.

Remember this?

Comparing Combatants in Syria – Iraq Theater

COUNTRIES – INTERESTS WHAT THEY INTEND TO GAIN COST WHAT THEY OFFER GOVERNMENT: CURRENT | PROPOSED ECONOMY USA Arms sales. To destabilize region to import consumption Operational expenses & loss of influence Transient tactical advantage for no one in particular Corporate plutocracy / None Capital destruction – consumption / Ponzi finance

“Corporate Plutocracy / None” … that’s us!

So is Capital destruction – consumption / Ponzi finance!

The United States must greatly strengthen and expand its nuclear capability until such time as the world comes to its senses regarding nukes — Donald J. Trump (@realDonaldTrump) December 22, 2016

This generated blind fury across the mediasphere; the suggestion is Trump is a nuclear madman.

Obama’s Russian Rationale for $1 Trillion Nuke Plan Signals New Arms Race February 23 2016 The Obama administration has historically insisted that its massive $1 trillion nuclear weapons modernization program does not represent a return to Cold War-era nuclear rivalry between Russia and the United States. The hugely expensive undertaking, which calls for a slew of new cruise missiles, ICBMs, nuclear submarines, and long-range bombers over the next three decades, has been widely panned by critics as “wasteful,” “unsustainable,” “unaffordable,” and “a fantasy.”

It’s okay as long as ‘our guy’ does it: it wasn’t Trump who ringed Russia with military bases, missiles and combat formations, it wasn’t Trump who sent spies and provocateurs to destabilize Ukraine or attack Russian clients Syria and Libya from the air. It wasn’t Trump who is engaged in questionable wars in multiple countries across the globe all aimed at driving energy- and resource consumption to the world’s largest energy hog. It isn’t Trump who made al-Qaeda into a defacto ally of the Pentagon and the CIA, who gave the militants arms and training, who enabled the rise of Turkish neo-Ottoman ambition alongside Saudi Salafism and state terror. It was Obama who did all these things and more, following in the footsteps of American presidents going back to Truman.

Or was it? Whoever is president doesn’t matter, he is irrelevant. Our managers (including Trump) are actors reading from scripts, performing at the direction of shadowy back-door men, employed strictly by how they conform to the public expectations created by corporate marketing. Conforming includes how they look, dress, speak, where certified and whom they ‘know’; where they live and work and how they travel. Trump himself acknowledges this reality by selecting as footmen those who are possessed of a certain je ne sais quoi, that is, they have the appropriate outward appearance. Activities that require labor, skill, difficulty or do not present a marketing opportunity are penalized with diminished status. There are no grimy proletarians, mechanics or farmers in the current administration or those set to come; nor in Congress or the Courts. Instead, there are neatly coiffed thievish mandarins. Because our Ponzi- economy is divorced from reality the scam managers are expected to be incompetent, they have to be even as they are fashionable. There is no penalty for stupidity in America.

Competence is unacceptable except where it allows for the proper internal functioning of the enterprise. Our ostensible Ponzi- masters are grasping buffoons while those tending the boilers (Goldman-Sachs) must know what they are about.

The conflict in America is not between ‘left’ and ‘right’, ‘liberal vs. conservative’ but between logic and illogic, between reality and denial. The establishment’s factions are parties to malfeasance and mis-communication. To tell the truth is to acknowledge that business as usual is bankrupt regardless of who is in charge, (Brooking Institute):

﻿﻿Another Clinton-Trump divide: High-output America vs low-output America Last week, as my colleague Sifan Liu and I were gnawing on some questions asked by Jim Tankersley of The Washington Post, we happened upon a revealing aspect of the election outcome. While looking at number of influences on the presidential vote outcome, we found that in a year of massive divides, one particular economic split stands out. Our observation: The less-than-500 counties that Hillary Clinton carried nationwide encompassed a massive 64 percent of America’s economic activity as measured by total output in 2015. By contrast, the more-than-2,600 counties that Donald Trump won generated just 36 percent of the country’s output—just a little more than one-third of the nation’s economic activity.

Candidates’ counties won and share of GDP in 2000 and 2016

Figure 1: US counties voting preference, (Brookings Intitute, click for big).

Here you can see very clearly that with the exceptions of the Phoenix and Fort Worth areas and a big chunk of Long Island Clinton won every large-sized county economy in the country. Her base of 493 counties was heavily metropolitan. By contrast, Trumpland consists of hundreds and hundreds of tiny low-output locations that comprise the non-metropolitan hinterland of America, along with some suburban and exurban metro counties, as Indeed Chief Economist Jed Kolko pointed out in a tweet …

The foundation of Brooking’s argument is breathtakingly false, yet is so fashionably rendered anyone looking at it uncritically would take the authors’ premise at face value: that the metropolitan areas who fell to Clinton ‘produced’ greater ‘output’ than the backwards redneck promised lands that supported Trump. By way of Brookings’ logic, the consumption that takes place in cities is ‘productive’ because the various banks magically output ‘money’ to pay for it.

Cities are sinks not sources, their actual output is little or nothing but waste. The backwaters of America don’t ‘produce’ either, they extract our nation’s wealth — our non-renewable resource capital — and speed it to its death. Soil fertility, water, oil, gas, coal, metallic ores along with the lumpishly unfashionable activities that require labor, skill, difficulty … all these and more are sucked out of our towns making stops at Hillary Clinton’s capital-annihilating colonias on their way to the landfill. Retail sales and speculation are measured as production by Brookings’ economists and the banks which fund the process, lending abstract ‘wealth’ into existence using the wasting processes as collateral. Given four- hundred-plus years of mechanized pillaging the flyover counties have been emptied out with the extractive returns captured by well-positioned rentiers. The locals cry, “where’s our cut?” The fact of the question itself reveals the answer …

Establishment whines about ‘fake news’; what is fake is denial of the onrushing consequences of resource squander and how these are making themselves manifest.

Figure 2: Fed Funds by FRED, (click for big). Immediately before president-elect Obama took office in ’09, Santa gave the children negative real interest rates, that is, yields below the rate of inflation. Bargain basement borrowing costs were the incentive for firms to borrow astronomical sums, to fund carry trades of all kinds, to become larger and more concentrated, to buy out competition, to overpay for the firms’ own shares. Tycoons borrowed to buy luxury real estate, yachts and fine art. This offered the impression of a recovery from the ’08 crash, everyone looked like geniuses for a little while including Obama, for whom it can be said it is better to be lucky than good …

Even without the Fed, rates would have been low. Because of the Great Recession, there was a ‘flight to safety’ and the bidding up Treasuries in the absence of real, non-financial returns elsewhere. Added was systemic moral hazard and the eagerness of banks to lend back-and-forth to each other. The outcome was dollar carry trades speeding US inflation around the world; ‘Lucky Obama’ able to enjoy interest rate tailwinds every single year throughout his term in office.

Figure 3: Chart by estimable Doug Short, (Click for big). Obama is jumping ship before the storm breaks: 10-year Treasury rates are galloping upward due to dollar preference which pressurizes foreign exchange and unwinds dollar carry trades. The ‘official narrative’ is future US inflation but the decline in bonds is the re-pricing of repayment risk and the forex depreciation that is certain to come. In developing countries, borrowers with cavitating currencies cannot repay their dollar debts. The incoming president promises (more) tax relief for overburdened tycoons, those expected to pick up the tab are the same developing countries already tapped to service and retire prior rounds of credit expansion.

Remember dollar preference? Don’t pick up that economics textbook, you won’t find it there! Just because Marshall or Keynes didn’t write about it doesn’t mean it isn’t real. Dollar preference is what it sounds like: given the choice between accepting a dollar as payment or one- or more foreign currencies; between holding the dollar or spending it for shit or between holding the dollar or non-cash assets, people will choose the dollar. At issue is what determines the dollar’s worth. Conventional Lucas/Friedman economics suggests ‘efficiencies’ going forward discount future money: this and time preference ‘discovers’ present monies’ worth. The conventional narrative supports the rate-setting role of central banks and centrality of monetary policy. Debtonomics insists dollars and other currencies are priced by their exchange on demand for petroleum, something that takes place millions of times every day at gas stations around the world. Question for Donald Trump: millions of motorists vs. a handful of central bankers and corrupt politicians, who wins? The worth of the dollar is the fuel price bargain each one represents relative to other currencies, also what future dollars will be worth in a fuel constrained world. In this narrative, dollars are a proxy for fuel as dollars and other currencies were proxies for gold was during the periods of the gold standard. As such the dollar is a hard currency now becoming harder, to be hoarded out of circulation for the value it represents.

Put another way, dollar preference is the convergence between the value of the oil capital and the dollars that are exchanged for it. Fuel by itself is worth more than the real-world enterprises that make use of it regardless of what means are used to ‘adjust’ the price. By this way of reasoning, fuel in the ground in North Dakota is worth more than fuel wasted in a car stuck in traffic on an LA Freeway. Business (wasting) enterprises earn nothing on their own and are essentially worthless. They exist solely to borrow, gaining- and making use of credit is their primary product: other goods and services are intended to justify credit issuance in ever-increasing amounts. Part of this stream becomes the property of well-positioned ‘entrepreneurs’: enormous unearned borrowed profits are what drives the system. When debt = wealth, there is an incentive to take on as much debt as possible, keep what you can for yourself and to shift the retirement- and servicing burdens onto others.

Our economy as nothing more than a vast cost-shifting regime, our ongoing crisis is the shortage of ‘others’ able to bear the burdens of rapidly increased surplus-related costs.

Figure 3: Emerging market currency ETF: carry trades have been unwinding since 2011 as the dollar becomes stronger. A dollar carry is a way to sell the dollar short; investors borrow in the US at low rates then ‘sell’ dollars for higher-yielding assets in another currency. Decline of dollar becomes profits to those holding the overseas assets. When the dollar strengthens as it is doing now, the deal is a bust. Any asset appreciation in an overseas currency is more than offset by foreign exchange losses. What this means is costs are more difficult to shift, that dollar debts held overseas cannot be retired. The export of dollars and the shifting of costs that have been the mainsprings of globalization; that and the petroleum trade. Resource depletion and dollar preference are undoing all three …

Figure 4: Polygon of Doom: since 2008, price peaks in oil markets are followed by sharp declines, the amplitude of peaks diminish as the world’s customers go broke, chart by TFC Charts (click for big). Unraveling of carry trades, currency depreciation, runs out of forex and generalized credit contraction ruins millions of customers at a time. This in turn strands oil drillers who cannot extract the cheap petroleum as our economy requires. In our over-financialized world, fuel shortages don’t manifest themselves as gas lines or odd-even days. Rationing takes place through the credit transmission channel. When oil price rises high enough credit vanishes and customers cannot buy. How high is too high? Last year $65/barrel turned out to be pricey enough to torpedo China’s currency; the diminution of Chinese consumption crushed the price of crude. The current barrel price of $55 appears to be too high with another predictable banking- and credit crisis unfolding in Europe.

Energy deflation occurs when shortages cause prices to fall instead of rise. This is another something not found in your macro textbooks, it’s real nevertheless and unfolding under @realDonaldTrump’s nose. Because shortages can’t make customers richer, they are unable to borrow in order to bid up the price. The drillers are stranded because they don’t have customers to sell products to. Ruined customers is the reason why oil prices have declined 60% since 2014, broke customers are why the entire oil extraction industry is insolvent.

Oil prices can only decline as there are diminished returns on each energy dollar invested … diminished GDP, diminished credit availability, diminished ability to meet ever-higher real extraction costs. Going forward, real energy costs will increase relative to the ability to meet them … even as nominal costs decline. The result is a net-energy death spiral or ‘energy deflation’ similar to Irving Fisher’s Debt Deflation. Whatever the fuel price happens to be at any given time it is too high. The price falls to meet the market, but fuel is removed from the market because of the drop in price, the ongoing shortage reduces the ability of customers to meet the price which is still too high … in a vicious cycle.

Energy deflation and dollar preference are large forces beyond the control of politicians, generals or central bankers. They are driving countries and events toward involuntary conservation. America’s new president is the product of economic failure; the inability of the economists to make correct analysis, a long grinding recession disguised as recovery; media falsehoods and the unwillingness of Americans and others to face reality, government policy failures and the headwinds of resource depletion. Trump and his cretinous gang of thieves represents the last gasp of a defunct industrial system that is sinking under the weight of its own costs.

Keep in mind, oil producing states like the US tend to be autocratic. The US, Canada, Mexico and others are on their way to becoming single-party police states like Saudi Arabia or Iran. Because of autocrats promise of access to energy, they gain ascendancy with their populations’ eager consent. What is at stake for Americans and the West is democracy itself: a choice between the right to have a say in our own affairs versus the false-promises of energy-driven ‘prosperity’ offered by autocrats … the choice between the (vague) promise of convenience or having a functioning republic.