Guest Post by Dmitry Orlov
A while ago I had the pleasure of hearing Sergey Glazyev—economist, politician, member of the Academy of Sciences, adviser to Pres. Putin—say something that very much confirmed my own thinking. He said that anyone who knows mathematics can see that the United States is on the verge of collapse because its debt has gone exponential. These aren’t words that an American or a European politician can utter in public, and perhaps not even whisper to their significant other while lying in bed, because the American eavesdroppers might overhear them, and then the politician in question would get the Dominique Strauss-Kahn treatment (whose illustrious career ended when on a visit to the US he was falsely accused of rape and arrested). And so no European (never mind American) politician can state the obvious, no matter how obvious it is.
The Russians have that pretty well figured out by now. Yes, maintaining a dialogue and cordial directions with the Europeans is important. But it is well understood that the Europeans are just a bunch of American puppets with no will or decision-making authority of their own, so why not talk to the Americans directly? Alas, the Americans too are puppets. The American officials and politicians are definitely puppets, controlled by corporate lobbyists and shady oligarchs. But here’s a shocker: these are also puppets—controlled by the simple imperatives of profitability and wealth preservation, respectively. In fact, it’s puppets all the way down. And what’s at the bottom is a giant, ever-expanding, financial black hole.
Do you like your black hole? If you aren’t sure you like it, then let me ask you some other questions: Do you like the fact that your credit cards still work, or that you can still keep money in the bank and even get cash out of an ATM machine, or that you are either receiving or hope to eventually receive a pension? Do you like the fact that you can get useful things—food, gas, airline tickets—for mere pieces of paper with pictures of dead white men on them? Do you like the fact that you have internet access, that the lights are on, and that there is water on tap? Well, if you like these things, then you must also like the financial black hole, because that’s what’s making all of these things possible in spite of your country being bankrupt. Perhaps it’s a love-hate relationship: you love being able to pretend that everything is still OK even though you know it isn’t, and you wish to enjoy a bit more of the business-as-usual before it all goes to hell, be it for a few more days or another year or two; but you hate the fact that eventually the black hole will suck you in, after which point things will definitely… suck.
In the United States, so far the black hole has been sucking in individual families (although it does sometimes suck in entire cities, like Detroit, Michigan, or Bakersfield, California, or Camden, New Jersey). With the help of the fraudulent mortgage racket, it sucks in houses, and spits them out again encumbered with bad debt. With the help of the medical industry, it sucks in sick people and spits them out again, bankrupt. With the help of the higher education racket, it sucks in hopeful young people, and spits them out as graduates, with worthless degrees and saddled with mountainous student debt. With the help of the military-industrial complex, it sucks in just about anything and spits out corpses, invalids, environmental damage, terrorists and global instability. And so on.
But the black hole can also suck in entire countries. Right now it’s busy trying to suck in Greece, but it’s having a hard time with it, because Greece is, of all things, a democracy. This has the black hole’s puppets in quite a state at the moment, and starting to clamor for “regime change” in Greece, so that Greece can be made to capitulate before the black hole gets hungry.
The way the black hole sucks in entire countries is as follows. If the black hole doesn’t have enough to suck in for a period of time, it gets hungry and makes the financial markets go into free-fall. The financial instruments of countries that happen to be farther away from the black hole—out on the periphery—fall faster. In search of a “safe haven,” money floods out of these countries and into the “core” countries that are clustered tightly around the black hole—the US, Germany, Japan and a few others. The black hole gobbles up this money, but is then hungry for more. But since the periphery countries are now financially too weak to resist, they can easily be turned into black hole fodder. This is done by saddling the country with a foreign debt it can never repay, then forcing it to keep making payments against this debt by making it a condition for maintaining a financial lifeline—keeping the banks open, the ATMs stocked, the lights on and so on. To be able to make the payments, the country is forced to dismantle its society and economy through the imposition of austerity, to privatize everything in sight turning it into collateral for more loans, and to surrender its sovereignty to some transnational organizations, such as the IMF and the ECB, which are directly involved in the care and feeding of the black hole.
Who is in charge of all this? you might ask. If all there is is the black hole, the puppets charged with its care and feeding, and its hapless victims, then who is making the decisions? Well, it turns out that the black hole is sentient. But it is also very, very stupid. And the way is enforces its will is by destroying the minds of its puppets—by making them unable to understand certain things. However, stupidity is a double-edged sword, and in enforcing its will in this manner the black hole also thwarts its own purpose.
For example, some time ago the black hole happened upon a rather large item it wanted to suck in, but couldn’t. The item is called Russian Federation. It controls a huge territory that is full of all sorts of natural resources the black hole would love to turn into loan collateral and suck in. The problem is that it is full of Russians, who are a difficult people for the black hole’s puppets to deal with. They keep telling the puppets to please keep their toes on the other side of that red line over there, and if they don’t then click goes the safety on their guns, precluding further discussion.
This situation calls for negotiation, but the black hole, which, as I mentioned, is very, very stupid, has just one negotiating tactic. It makes its demands, and then waits for the other side to capitulate. If that doesn’t work, it applies pressure: imposes sanctions, attacks the currency, complicates financial transactions, arrests the country’s foreign assets and so on—and waits for the other side to capitulate. And if that doesn’t work either, then the country gets bombed to rubble by NATO or, if NATO doesn’t want to come along, by the US alone. That generally works, but in the case of Russia it doesn’t. But the black hole, if you recall, is very, very stupid, so it keeps trying anyway. As it does, the minds of its puppets get really warped, to a point where they don’t understand what’s going on at all.
For example, everybody knows by now that pressuring Russia doesn’t work: according to Newton’s Third Law, every action produces an equal and opposite reaction, and Russia is big enough that pushing it doesn’t cause it to move at all—it just causes whoever is pushing it to hurt themselves. It’s like trying to shift the Earth’s orbit by jumping off a chair while keeping your knees locked—which is a good ploy if you are clamoring for medical attention. In fact, the Russians are rather grateful for the sanctions, because now they have a reason to finally get serious about investing in domestic economic development and self-sufficiency. But the puppets, having had their minds warped by the black hole, cannot see that, so they just keep pushing, wrecking their own economies in the process.
Since the sanctions don’t work, it is time to exercise the military option. Doing so requires concocting a casus belli—a reason to go to war. The black hole does this by hallucinating: Russia invaded Crimea!—sure, a few hundred years ago, and has been there ever since, most recently based on an international agreement, but never mind! (Oh, and legally Crimea was never actually made part of the Ukraine because Nikita Khrushchev botched the paperwork when handing it over.) OK, never mind that, but then Russia invades the Ukraine!—on every day that has the letter “D” in it, but it’s very sneaky and withdraws its troops before anybody can snap a single picture of them there. OK, never mind that either, but then Russia is poised to invade Estonia, Latvia and Lithuania, and maybe Poland too. Invade how? You mean like take a bus to the music festival in Jūrmala? Consider it done, but the festival is already over and the invading music fans are back home. OK, never mind that either. But the puppets keep saying “Russian aggression!” over and over again. It’s the brain damage caused by proximity to the black hole. Look at this poor guy, for instance. He keeps flapping his lower jaw, going “Russian aggression! Russian aggression!” while trying to self-soothe by fondling the rump of his imaginary pet cow. God help him.
Back to the real world: the poor puppets are unable to understand that there is no military option when it comes to Russia: it’s a nuclear power with an excellent strategic deterrent, a well-defended territory, and no aggressive intentions against anyone. But the puppets, with their warped minds, cannot see that, and so they pile various kinds of obsolete military junk along Russia’s borders, and are even threatening to bring into Europe the entirely obsolete Pershing medium-range nuclear missiles. They are obsolete because the Russians now have the S-300 system with which to shoot them all down. The military option just isn’t going to work, but don’t tell that to the puppets—they cannot absorb such information without sustaining further neurological damage.
Back to Greece: tiny Greece certainly isn’t mighty Russia, but it nevertheless refused to capitulate to the demands of the black hole. It was asked to completely wreck its society and its economy as a condition for maintaining its financial lifelines from the IMF and the ECB. Most inconveniently for the black hole and its puppets, Greece is not some obscure “third world” country peopled by dark-skinned people you wouldn’t want your daughter to marry, but a European nation that is the cradle of European civilization and democracy. Greece managed to elect a government that tried to negotiate in good faith, but the puppets don’t negotiate—they demand, threaten and cause damage until they get their way—or until their heads explode.
This one will be interesting to watch. If the black hole does succeed in sucking in Greece, then which country is next? Will it be Italy, Spain or Portugal? And, as that process continues, at what point will enough people say that enough is enough? Because when they do, the black hole will shrivel up. It’s not a real black hole that’s made up of incredibly dense matter—so dense that its gravitational field traps even light. It’s a fake black hole, made up of everyone’s combined greed. It has greed at its core, and fear all around it, and it sustains itself by feeding on fear. If it can continue sucking in people, families and entire countries, it can keep the greed at its core alive, but if it can’t, then the greed will also turn to fear, and it will shrivel up and die. And I hope that when it dies all of its brain-damaged puppets will snap out of it, realize how deluded they have been, and go find something useful to do—farm sheep, grow vegetables, dig for clams…
Nice post, dmitry.
Greek debt is about $360 billion quatloos … a paltry sum, really. Why doesn’t China, or even Russia, just fuckin’ BUY Greece? China could build dozens of ghost cities on the Mediterranean, thus keeping their economy going. Russia would get an awesome warm water country and they can spice up their borscht with thousands of tons of olives.
Very apt analogy. A black hole knows no limits, is built only to consume and as it grows both its need and ability to consume more grows as well. Very much like the debt trap the whole western world now finds itself in. Of course, it is also very much fake, and the world is waking up to that fact. I would make the slight distinction however, that “what’s making all of these things possible in spite of your country being bankrupt” is not the black hole itself, but people’s CONFIDENCE IN the black hole. We can buy gas damn near everywhere because people throughout the supply chain go to work everyday, which they do because they have confidence in the system. We have running water/electricity because people at the utility companies go to work everyday, because they have confidence in the system. We can use our little plastic rectangles to buy all kinds of shit because we ALL have confidence that it will work. The point here, is that this COULD, in a less fucked-up world, all still work without endless debt. We would have to be more careful with our environment and less wasteful of our energy (which are truly irreplaceable resources) but the system could exist quite well had it been built from the beginning on sound money. Since it was built on debt and the true foundation is confidence (faith), once the debt illusion begins to crumble the collapse in confidence will follow very quickly. I thin Greece was a VERY slow burn compared to the conflagration coming soon to the USA!USA!USA!
Mmmmh…buy Greece…and flip it. This is a trillion dollar idea, Stuck…not to mention a hit new show on HGTV…Flip This Failed State.
Dimitry is always a good read. He’s a thinker, obviously a Type 5 Enneagram, like me. I’m going to use your very apt analogy. Great metaphor. The US, I believe has just passed the ‘Event Horizon’ of the financial ‘black hole’ pulling the world with it.
The ‘Event Horizon’ for those who don’t know and are too lazy to look up, is the point of no return, the point where you will be pulled into the ‘black hole’ and you have no control over the outcome.
Think of it this way. The US is like a turd that you just flushed down the toilet. It slowly circles the funnel of water on its outer edges. It starts out slowly and then pick up speed as it moves to the center of the funnel until it exits the watery conflux and disappears, never to be seen again.
The ‘Event Horizon’ is like a ‘black swan’. One second everything is fine as it should be and, a second later, it is turmoil, collapse, and destruction.
It is impossible to see the ‘Event Horizon’. you can only look at the things passing thru the ‘Event Horizon’ before you do. Take Cypress an Greece for example.
My word of advice is to escape the ‘Event Horizon’ while it is still possible.
I have noticed that whole beat on the Russians thing on various TV shows. Makes me ill. And of course,there is no talk about the problems we face. The debt is never mentioned. Questioning the way we use our military abroad is never even debated.
I keep wondering how long things will keep going on until SHTF. I try to enjoy how things are right now,while i can.
Eat drink and be merry for tomorrow you die?
But … drum circles!
I read what the MSM, bloggers, and financial columnists write about the American and international economy.
The-sky-is-falling is a current theme nad has been for many years. Yet it hasn’t happened.
My opinion is that the Neo-Cons, with their empahsis on bombs and bullying, have done us all a great favor in keeping the lid on Pandora’s box of disasters.
In the next few years setting NATO and Eurpoe against Russia – a limited war may be necessary – and our Far Eastern fringe allies against the Chinese should help to keep Ameerica top dog.
My impression is that the Russians and Chinese don’t want a wajor war. If the United States is willing and keeps pressuring the Russians and Chinese, we should be able to remain the main man and set the world’s agenda.
IraK–You appear delusional. Sure, they don’t want a war because they’re winning the 3rd WW war. Which is a financial and economic war. All they have to do is wait us out while we collapse under a mountain of debt and broken promises. Tanks don’t win wars, although they help. It is the fortitude of the population that ensures victory. It ain’t us.
There ain’t no such thing as a limited war with nuclear powers. And our “Far Eastern fringe allies’, and who might that be? Japan’s a has been. Its demographics are one day older than Moses. Trouble is Japan has been sucking at the American tit for so long they’re brainless and broke. Thanks Abenomics.
And IraK, you say, “My opinion is that the Neo-Cons, with their empahsis (sic) on bombs and bullying, have done us all a great favor in keeping the lid on Pandora’s box of disasters.”
Where in the hell have you been napping all these years. Korea was a disaster, Iran was a disaster, Viet Nam was a disaster, Iraq was a disaster, Libya was a disaster, Egypt was a disaster, Iran again is a disaster, and Ukraine is a colossal disaster. I guess you can ask the people who lost their loved ones, children and parents who were maimed, cities bombed, livelihood stolen whether it was a disaster. I wonder what they would say?
And Americans, who paid for the whole f**king mess. Money that could have been used for rebuilding the infrastructure, education, jobs, and cheaper prices with more choice. I wonder what Americans would say? The trouble is they’re too stupid to understand the question.
You say, “The-sky-is-falling is a current theme nad has been for many years. Yet it hasn’t happened.”
News Flash, Flash, the greatest depression in American history didn’t happen until it did. That’s the way things work. I take little comfort in the phrase, ‘Yet it hasn’t happened’. I see all around me harbingers that change is upon us. I don’t buy your arcadian views.
I thought this was going to be about Zara’s or bb’s ex.