FOURTH TURNING – THE SHADOW OF CRISIS HAS NOT PASSED – PART THREE

In Part One of this article I attempted to illuminate the concept of generational theory as articulated by Strauss and Howe in The Fourth Turning.  In Part Two I provided proof this Crisis is far from over, with ever increasing debt, civic decay and global disorder propelling the world towards war.

Seeds of Crisis & War

“The seasons of time offer no guarantees. For modern societies, no less than for all forms of life, transformative change is discontinuous. For what seems an eternity, history goes nowhere – and then it suddenly flings us forward across some vast chaos that defies any mortal effort to plan our way there. The Fourth Turning will try our souls – and the saecular rhythm tells us that much will depend on how we face up to that trial. The saeculum does not reveal whether the story will have a happy ending, but it does tell us how and when our choices will make a difference.”  – Strauss & Howe – The Fourth Turning

When you accept the fact history is cyclical and continuous linear progress is not what transpires in the real world, you free yourself from the mental debilitation of normalcy bias and cognitive dissonance. Things do get worse. There are dark periods of history and they recur on a regular cycle. And we are in the midst of one of those dark periods. This Crisis will not be resolved without much pain, sacrifice, bloodshed, and ultimately war. Catastrophe is a strong possibility. The core elements of this Crisis – debt, civic decay, global disorder – are coalescing into a perfect storm which will rage for the next ten to fifteen years. The rhythms of history only provide a guidepost of timing, while the specific events and outcomes are unknowable in advance. The regeneracy of society into a cohesive, unified community, supporting the government in a collective effort to solve society’s most fundamental problems seems to have been delayed. Or has it?

Maybe the answer can be found in the resolution of the last Fourth Turning. The seeds of the next crisis are always planted during the climax of the previous crisis, when the new social order is established. The American Revolution Crisis created a new nation, but left unresolved the issue of slavery. This seed grew to become the catalyst for the Civil War Crisis. The resolution of the Civil War Crisis greatly enhanced the power of the central government, while reducing the influence of the States. The rise of central authority led to the creation of the Federal Reserve, the implementation of income taxes to fund a vastly larger Federal government and the belief among the political class that America should intervene militarily in the affairs of other countries. The Great Depression was created by the monetary policies of the Federal Reserve; the New Deal programs were a further expansion of Federal government; FDR outlawed the ownership of gold; and America’s subsequent involvement in World War II created a military and economic superpower.

After sixty-two years of ever increasing debt; ever increasing taxes to support an ever growing governmental bureaucracy; ever expanding laws, regulations, and rules; currency debasement by the Federal Reserve; complete abandonment of the gold standard; and never ending wars of choice around the world, the next Crisis grew and blossomed from the seeds planted during the previous Crisis. The New Deal social programs, along with the extension of the welfare state by LBJ and subsequent administrations, have swelled to unprecedented unsustainable levels with unfunded liabilities exceeding $200 trillion. The promises cannot be fulfilled. The $18 trillion national debt increases by $2.3 billion per day; $96 million per hour; $1.6 million per minute; $27,000 per second. Does that sound sustainable? The legacy media sycophants cheer when consumer debt outstanding surges past $3.3 trillion, as their warped worldview applauds spending versus saving, consuming versus investing, and living for today rather than striving for a sustainable future.

The American people have lost their ability to think, reason, question, do math, control their urges, defer gratification, or realize when they are being lied to by the people they elected to public office. A culture of ignorance, celebration of the absurd, salutation of stupidity, honoring of the inane, being mesmerized by electronic gadgets, and satiating their egocentric shallow impulses on social media, is a sure recipe for societal collapse. Victory in World War II and becoming a modern day empire created the dynamic Eisenhower warned about. An immense military industrial complex has created enemies around the globe in order to keep the profits flowing in this welfare/warfare empire of debt. War is a racket for the rich. The peasants who buy into the incessant patriotic propaganda and volunteer are nothing but cannon fodder for the .1%. Keeping the masses fearful of phantom enemies and portraying foreign leaders as evil, is essential for the oligarchs to retain their wealth, power and control. Truth, facts, and long-term consequences are of no interest to the sociopaths running the show and pulling the levers. The dissent into darkness has been gradual and unnoticed by a purposefully distracted populace.

“As nightfall does not come at once, neither does oppression. In both instances, there is a twilight when everything remains seemingly unchanged. And it is in such twilight that we all must be most aware of change in the air – however slight – lest we become unwitting victims of the darkness.” Supreme Court Justice William O. Douglas

What I’ve begun to realize about Fourth Turnings is how slow and methodical they are in reality. They will play out over twenty years at a pace dictated by events and the actions of the major players. I had been looking for a regeneracy event that would unify the country behind one leader. It is not to be. Since Fourth Turnings are driven by mood changes amongst the generational cohorts, the changes are subtle, incremental and not visible as identifiable events. Looking back in history, the election of FDR and the rollout of his New Deal policies began the regeneracy of the nation, but did not create unity or solve the economic problems of the country. There was an actual plot by prominent businessmen to conduct a coup and overthrow the government. A large contingent of the population did not support the New Deal or our entry into World War II.

The first battle of Bull Run and the subsequent mobilization of a half million more men by Lincoln marked the beginning of the regeneracy during the Civil War Crisis. It certainly did not unify the nation or even the North. It just marked the point where there would be no turning back or compromise. There were draft riots in New York City in 1863 and Lincoln thought he would lose the 1864 election. The Declaration of Independence and mobilization of an army in 1776 marked the regeneracy during the Revolutionary Crisis period, but did not unify the colonies or colonists into a cohesive unit. The Revolution was piloted by a minority of freedom minded colonists, while the majority remained neutral or obedient to the Crown.

I now believe the focus of this Fourth Turning will be the conflict between the government and its supporters, and those who oppose the welfare/warfare surveillance state controlled by Wall Street vested interests. The overbearing, militarized, captured Federal government has treated citizens like suspects since 2001. Those in the highest echelons of wealth and power have captured the three branches of government (executive, legislative, judicial) and are ruthlessly ransacking the remaining wealth of the nation. Their unquenchable desire for more wealth and power has never been more blatantly obvious than in the aftermath of the 2008 financial collapse created by their derivative orgy of debt which blew up in their faces.

All the “solutions” implemented since 2008 (TARP, ZIRP, QE1, QE2, QE3, $800 billion stimulus plan, government takeover of student loans, subprime auto loan bonanza, waging wars of choice, doubling of food stamp households, and the Wall Street foreclosure/buy/rent scheme) have been designed to benefit the vested interests in this corporate fascist authoritarian regime. The average person has been left nearly destitute, unemployed or underemployed, bereft of savings, stuck with declining real household income, and left with political candidates hand-picked and bought off by the men running the show behind the curtain. The mood of the country has darkened significantly since 2008 and will darken further when the bubbles in stocks, bonds and real estate, created by the “solutions”, pop simultaneous in the near future.

The wave of dismay, disillusionment and blinding rage that will sweep across the land will mark the next phase of this Fourth Turning. The mistrust and cynicism toward government and politicians has already reached historic highs. Congressional approval levels reached 56% in 2001 and have been in a downward spiral since, with a plunge to single digits since the 2008 Crisis began. The number of people classifying themselves as independents reached an all-time high of 47% in 2014, up from 27% in 2006. An awakening minority now realize Democrats and Republicans are nothing but brands appealing to liberals or conservatives, but representing the ruling Party and beholden to Wall Street, the military industrial complex, mega-corporations, and not the American people.

As trust in the political, economic and financial systems implodes, the existing social order will crumble and be swept away in a torrent of chaos and upheaval. Severe misery will settle on our land and tear the fabric of our society. Internal strife will be compounded by external threats, with citizens fighting each other and nations going to war on a large scale. It has happened before and it will happen again. The realization this Crisis would be driven by the conflict between government and the people occurred to me in 2013 when Edward Snowden revealed the depth and depravity of a government which believes it to not be bound by the constraints of the Constitution, laws, regulations, or human decency.

The political class, along with the government apparatchiks, protected by their propaganda mouthpieces in the media, used the 9/11 attack as the basis to implement command, control and surveillance measures which make Orwell’s Big Brother seem like amateur hour. The hyperbolic level of propaganda in support of the vested interests is actually a sign of weakness, as their grip on the masses is weakening rapidly. Chris Hedges explains Washington as it functions today:

“Washington has become our Versailles. We are ruled, entertained, and informed by courtiers — and the media has evolved into a class of courtiers. The Democrats, like the Republicans, are mostly courtiers. Our pundits and experts, at least those with prominent public platforms, are courtiers. We are captivated by the hollow stagecraft of political theater as we are ruthlessly stripped of power. It is smoke and mirrors, tricks and con games, and the purpose behind it is deception.

The mass media blindly support the ideology of corporate capitalism. They laud and promote the myth of American democracy—even as we are stripped of civil liberties and money replaces the vote. They pay deference to the leaders on Wall Street and in Washington, no matter how perfidious their crimes. They slavishly venerate the military and law enforcement in the name of patriotism.

They select the specialists and experts, almost always drawn from the centers of power, to interpret reality and explain policy. They usually rely on press releases, written by corporations, for their news. And they fill most of their news holes with celebrity gossip, lifestyle stories, sports and trivia. The role of the mass media is to entertain or to parrot official propaganda to the masses.

It plays an essential role in the dissemination of official propaganda. But to effectively disseminate state propaganda the press must maintain the fiction of independence and integrity. It must hide its true intentions.”


It isn’t hard to connect the dots if you choose to open your eyes and not be blinded by normalcy bias or the nationalist propaganda spewed by the mass media. Snowden’s revelations of an NSA global surveillance network spying on U.S. and foreign citizens and approved by the highest levels of government should have caused outrage and mass protests.  Instead, the media propaganda arm portrayed Snowden as a traitor and spy. Snowden revealed that the NSA was harvesting millions of email and instant messaging contact lists, searching email content, tracking and mapping the location of cell phones, undermining attempts at encryption via Bullrun,  and the agency was using cookies to “piggyback” on the same tools used by internet advertisers to pinpoint targets for government hacking and to bolster surveillance.

The NSA was shown to be “secretly” tapping into Yahoo and Google data centers to collect information from hundreds of millions of account holders worldwide by tapping undersea cables using the MUSCULAR surveillance program.  The NSA’s top-secret “black budget,” obtained from Snowden by The Washington Post, exposed the “successes and failures” of the 16 spy agencies comprising the U.S. intelligence community, and revealed that the NSA was paying U.S. tech companies such as Apple, Google, Facebook, Microsoft, Verizon, and AT&T for “clandestine access” to their communications networks. Every electronic communication of every American is being collected by the government to be used at their discretion. It will be used against you when the time is right.

What kind of government clandestinely spies on its citizens; militarizes local police forces; conducts military training operations in major cities; wires its streets and highways with surveillance cameras; disperses peaceful protestors with water cannons, tear gas, pepper spray, and rubber bullets; and treats the U.S. Constitution like toilet paper? An authoritarian regime treats its people like this. Authoritarian regimes treat everyone like a potential enemy. They trust no one. Those in power care only for themselves and their lackeys.

The extreme wealth inequality created by dishonest means is leading towards strife and a systematic breakdown. Our entire system is built on lies, monetary machinations, propaganda and strict obedience to a vast array of laws, regulations and mandates. The ruling elite are desperate to keep their despotic bacchanal empire of debt from disintegrating in a catastrophic apocalypse of derivative time bombs, bank failures, corporate bankruptcies, and denial of their guilt. They recognize the consequences they face when the music stops. When people realize their money system is a fraud they’ll lose faith in all the institutions that make up a civilized society. Trust in politicians, corporate leaders, bankers, institutions, the media, parents, neighbors, and ourselves will evaporate in an instant. The anger and pursuit of those responsible will result in governmental collapse and domestic anarchy. The guilty and innocent alike will die.

Those in power are preparing for war – against you. Executive orders already in place, when executed, give the executive branch the ability to lockdown the country the same way they locked down Boston while bumbling about trying to capture two teenage kitchen utensil bombers. There are two things the ruling class fear the most – the internet and the approximately 300 million guns owned by citizens in 50 million households. The State, through the FCC, wants to “regulate” the internet to “protect” people from being told something other than what the State wants them to hear.

That First Amendment, with its free speech and freedom of assembly, is dreadfully inconvenient for the oligarchs. Truth and dissent will not be tolerated. Every mass shooting incident, caused by the shooters being pumped full of anti-psychotic prescription drugs, is used as an excuse to disarm the public. The Second Amendment right to bear arms makes it more difficult for government thugs to ignore the Fourth Amendment when they kick your door down during an illegal search and seizure operation. An armed populace is our only defense against the tyranny of a draconian government bent on retaining its stranglehold on the country.

After the 2008 financial collapse the guilty were not punished, prosecuted nor reproached for their criminally destructive schemes to loot the American people and the world. Instead they were bailed out, allowed to retain their wealth and power, and rewarded for their misdeeds with further riches provided by their politician puppets in Washington D.C. Evil won. The masses were frightened into keeping silent and believing bankers, politicians, and government bureaucrats had saved their world of bread (debt based consumption) and circuses (iGadgets & HDTVs). Ultimately, this Fourth Turning Crisis will come down to a battle between good and evil. It would be easy if the evil people revealed themselves and the good people could destroy them, but evil and good exist within all human beings.

As witnessed in previous Fourth Turnings, the majority will sit idly by paralyzed by fear or apathy. Most people wait to be led. But, as Samuel Adams profoundly noted:

“It does not take a majority to prevail … but rather an irate, tireless minority, keen on setting brushfires of freedom in the minds of men.”

The Federal and State government directly employs over 20 million Americans and millions more indirectly through their largess to arms dealers and other crony capitalist corporate entities. Over 145 million Americans receive a check of some sort from the Federal government every month, with over 100 million enrolled in a government welfare program. It is unlikely that many of these people will rise up against the government, unless their checks stop flowing (a distinct possibility). Every instance of governmental overreach, corruption, malfeasance, un-Constitutional act or ineptitude tips the scale further towards more people waking up and resisting. I believe the good in most people’s hearts outweighs the evil. Once a tipping point is reached and enough people defy the government, an avalanche of consequences will sweep away the existing social order. Justice for unborn generations will be sought. Keeping silent only allows the evil to grow ever more formidable and entrenched.

“In keeping silent about evil, in burying it so deep within us that no sign of it appears on the surface, we are implanting it, and it will rise up a thousand fold in the future. When we neither punish nor reproach evildoers, we are not simply protecting their trivial old age, we are thereby ripping the foundations of justice from beneath new generations.” – Aleksandr Solzhenitsyn, The Gulag Archipelago 1918-1956

In Part Four of this article I will focus on the drumbeats of war getting louder on a daily basis. Fourth Turnings always climax with war on a grand scale. There will be no escape.

Subscribe
Notify of
guest
106 Comments
starfcker
starfcker
February 11, 2015 5:08 pm

I don’t believe they fear the internet at all. Flick of a switch and you won’t know what’s happening ten minutes away. That said, this is running off the rails. I think paulsen made the right call in 2008, and I was no fan at the time. The problem was liquidity, and TARP solved it. Problem was, it was just too easy.

Bostonbob
Bostonbob
February 11, 2015 5:13 pm

Jesus Admin. I have to get off the roof from clearing ice damns and catch up on my reading. Nice work.
Bob.

Westcoaster
Westcoaster
February 11, 2015 5:14 pm

Truer words were never spoken, Admin. Thanks for your efforts and keep ’em coming!

starfcker
starfcker
February 11, 2015 5:16 pm

Prior to TARP, we discussed most economic issues in billions. The difference between billion and trillion really doesn’t register to most people. Let the heist begin, this time for all the marbles. When you can create a trillion dollars a year out of thin air, you can corrupt everything. Everywhere. And they have

Phil
Phil
February 11, 2015 5:21 pm

Thank you for this thought-provoking series of articles. I look forward to part IV. I think that the idea that the seeds of destruction are always planted in the outcomes of the previous turnings is interesting in that it explains how we are never able to shake off the consequences of our ancestors actions. It is like a latent virus that just requires a trigger to set it off again, changing a little, enough to give it features and characteristics that are somewhat different than its previous incarnation, but similar enough that the link is established. I suspect that there was a very good reason why the education mandarins of the West eradicated most of the meaningful study of history at elementary and high school level; to have explored mankind’s history in any depth would be to understand mankind’s intrinsic tendency towards evil. One who is aware of the evil tendency that lurks within might be on guard against producing the same results. Mankind is inherently selfish and will not see or guard against anything that might not directly adversely affect him and that is why, perhaps, I have been so unsuccessful in ‘enlightening’ my colleagues at work. No one is interested in history or any deep thought or analysis. As long as they can go home and rest and ‘watch the game’ and plan the next holiday, they do not care about the greater world at large. We will all share in what is coming, the only difference is, you and I will know it is coming and they will never see or understand what happened and why.

starfcker
starfcker
February 11, 2015 5:22 pm

Jim, I agree we should have broken up the banks, no question. And I agree that solvency was the underlying issue. But liquidity was the more immediate problem. The money supply wasn’t large enough at the moment. TARP (and I’m not a fan) was sold as a stopgap to buy time to sort out the excessed and course correct. I believe that could have worked. Instead, they went in the other direction. Stimulus

Stucky
Stucky
February 11, 2015 5:29 pm

Admin

I don’t understand the strategy of publishing these masterpieces on consecutive days … especially since the previous ones haven’t run their course in terms of comments.

This is only curiosity on my part, not a criticism, as you’ve not done so before. I’m sure you have your reasons though, which you may or may not want to divulge … and that’s OK.

OK, now I’ll go read this one.

starfcker
starfcker
February 11, 2015 5:31 pm

Jim, what would have been a better play at that moment, if your intention would have been an orderly unwind, and liquidation of the insolvent banks? As much as I hate TBTF, lots of other people, and entities with no blemish on their record, would have been destroyed, through no fault of their own. Sucker I am not, I just didn’t believe they would be allowed to double down the way they did, that really shook my belief in a self correcting system.

Wyoming Mike
Wyoming Mike
February 11, 2015 5:34 pm

Star, no it couldn’t. Printing has never worked and never will. What would have been so terrible if the crooked banks went under. We’d all be broke because of a shortage of fiat?? I call bullshit.

starfcker
starfcker
February 11, 2015 5:38 pm

I never said they used TARP the way it was intended. And the moment it was passed they started using it in ways quite different than what the bill clearly stated. And they (paulsen, geithner, etc.) seemed to imediately pivot to a position of saving the TBTF banks at any cost. Congress blinked, and I’m sure they were confident that they would blink again

Dutchman
Dutchman
February 11, 2015 5:42 pm

I have another computer science analogy: Alan Turing invented the Turing Machine. This is a ‘machine’ that reads instructions on a paper tape – it can load data / do simple arithmetic/ compare values. It is one of the first computer models.

What is useful is that the Turing machine can be used to determine if a problem is solvable – it’s called the Halting Problem. Goes like this:
Say we want to find if a number is ever or odd.
The machine reads the integer, divides by 2 (in integer division the remainder is thrown away)
multiplies the result by 2
if the value = initial value, then the number is even (and it stops on the even answer on the tape).
If the values aren’t equal it stops on the odd answer on the tape.

However it’s not so simple – try to find the largest prime number – since you don’t what it is – the machine will never stop – thus the problem is not solvable.

This Fourth Turning is similar. There seems to be no program (philosophy) that can recognize the input (event) that will cause it to be deterministic.

I don’t remember the name of the Greek Philosopher who said: If you could plan for all contingencies – then you could predict the future.

Stucky
Stucky
February 11, 2015 5:44 pm

“The $18 trillion national debt increases by $2.3 billion per day; $96 million per hour; $1.6 million per minute; $27,000 per second. Does that sound sustainable?” ———- from the article

Yes, it is sustainable. I will ‘splain why with some simple maf.

1) Let us agree there are 75,000,000 people who work.

2) Let us assume that they all make ONLY $7 bucks an hour.

3) $7 bucks an hours is .0194444 cents per second.

4) 75 million times .0194444 = $1,458,333 earned PER SECOND in the USofA.

5) $1,458,333 available dollars minus $27,000 spent dollars = $1,431,333 left over!

Clearly, any monkey can see that we can still spend a LOT more money before panic sets in.

Shouldn’t I be able to get a job at the BLS??

Stucky
Stucky
February 11, 2015 5:45 pm

” …. 37 pages long in Word” ———– Admin

Just two comments.

1) Oh, I see. Thank you.

2) Holy Shit!!!!!!!!!!

starfcker
starfcker
February 11, 2015 5:46 pm

I’m getting crushed like a bug here, and that’s ok. If you have a business, and you pay your bills on 30 days, and your receivables come in on 60 days, sooner or later you hit a crisis point. Are you illiquid or insolvent? On that day, it doesn’t matter. You just need money so you can buy time to figure it out. That’s how TARP was sold

starfcker
starfcker
February 11, 2015 5:52 pm

Jim, your post at 5:45 is exactly right. I don’t disagree with any of it. But to liquidate a JPM or AIG doesn’t happen with the snap of the fingers. There was going to be a cost. They lied. No shit. And the heist was on, 4 months later with the stimulus, and all the QE’s.

Stucky
Stucky
February 11, 2015 5:55 pm

“I think that the idea that the seeds of destruction are always planted in the outcomes of the previous turnings is interesting in that it explains how we are never able to shake off the consequences of our ancestors actions.” —————- Phil

That answers the question I had in Part One. I asked if the Fourth Turning is inescapable … cast in stone … can’t intelligent humans escape from the mistakes of the past, and prevent it?

It appears the answer is a resounding “No!”.

And if I read correctly … whatever happens in THIS coming Fourth Turning, that it WILL sow the seeds for yet ANOTHER Fourth Turning somewhere down the line! fuckmedead!!!

And Ponce de Leon searched for the Fountain Of Youth? Fuck that shit.

starfcker
starfcker
February 11, 2015 6:18 pm

Honestly, I’m not arguing with you on that, at all. I’m saying that on that day in 2008, short of an enormous injection of liquidity into the system, there would have been no system. Banks should have been liquidated, bankers should have been jailed, and ill gotten gains clawed back. But while all that should have been happening, life needed to go on for the majority of americans. I was happy when TARP failed to pass the first time, until I realized my retired parents were about to become roadkill

Wyoming Mike
Wyoming Mike
February 11, 2015 6:28 pm

Sorry Stuck, you misplaced a decimal above. 7*75,000,000=525,000,000 per hour divided by 3600 seconds in an hour = $145,833 a second. The gubmint is spending 19% of all wages, not 1.9%.

Wyoming Mike
Wyoming Mike
February 11, 2015 6:29 pm

Sir Stuck, yes, given your poor decimal skills, you could work for BLS.

llpoh
llpoh
February 11, 2015 7:00 pm

How were bank depositor funds not at risk? Seems to me if the banks failed, depositors were gonna take a hit. Maybe there would be some insurance coverage, but where would the cash come from to cover the deposits? Sales of assets perhaps could have covered the deposits. I do not know what deposits to assets were.

llpoh
llpoh
February 11, 2015 7:09 pm

Admin wrote: “I now believe the focus of this Fourth Turning will be the conflict between the government and its supporters, and those who oppose the welfare/warfare surveillance state controlled by Wall Street vested interests.”

If this is true, and it is quite likely, then the sooner the better as far as timing of the crisis. Each passing day creates more and more free-shitters dependent on the govt tit.

As has been pointed out, most crisis seem to involve only around 10% of the population. The remainder sit around watching and munching popcorn.

In this case, when 150 million or so free shitters suddenly get no free shit, get no SNAP cards, get no electricity, get no free medicine, etc., I suspect the percentage of those involved will skyrocket.

Those free shitters have a tendency to burn down their own neighborhoods. Great loss that will be. And I do not know if they will be able to organize themselves enough to actually rally in support of the government.

But no matter the numbers, in the end, the free shit/welfare state cannot win. At best, they may slaughter a great many of the productive. And boy, won’t that hep keep the free shit flowing. And if they enslave the rest of the productive, gee, won’t there be incentive to keep being productive.

In the end, the free shit welfare state simply cannot win. The productive, one way or another, will no longer be able, or willing to do all the heavy lifting, and will head off into the sunset.

It is the interim that will be most unfortunate. There will be perhaps 200 million people with no means of taking care of themselves.

It really could get very ugly indeed.

starfcker
starfcker
February 11, 2015 7:12 pm

Jim, the government on every level long ago outsourced all their pension checks (and all the FSA stuff) to JPM. FDIC was 100 grand back then. They could have gotten scalped big time.. they never owned a stock in their life. Dow 600? Meh. Either way, it did turn out to be a heist. Because there was no one to hold anyone accountabl

llpoh
llpoh
February 11, 2015 7:13 pm

Admin – you can only imagine how happy I would be to be left with $250k.

Fuck that. Go Wall Street! Bankerz are the best! Go go go!

JP Morgan he’s our man! Keep him funded yes we can! Go-o-o-o-o-o JP!

llpoh
llpoh
February 11, 2015 7:17 pm

Seriously, tho, payouts of $250k would wipe out the most productive section of the US. I am not talking about the mega rich. I am talking about the top 10% – the small businessmen and small employers of the country. They would be decimated by that. The flow on catastrophe if they could only retain $250k would be unbelievable.

But as you said, they did not lose a dime. But we are now talking a bunch of very large banks, not one or two. Perhaps the assets could cover the depositors in full. FDIC as bare coverage would be catastrophic if it was on a national level.

bb
bb
February 11, 2015 7:23 pm

….the mental debilitation of normalcy bias and cognition dissonance….. Are you saying this is what’s wrong with me?

I look forward to reading the last part. You really should think about organizing your articles in a book
Oh well,maybe sometime in the future.

hardscrabble farmer
hardscrabble farmer
February 11, 2015 7:32 pm

“The American Revolution Crisis created a new nation, but left unresolved the issue of slavery. This seed grew to become the catalyst for the Civil War Crisis. The resolution of the Civil War Crisis greatly enhanced the power of the central government, while reducing the influence of the States. The rise of central authority led to the creation of the Federal Reserve, the implementation of income taxes to fund a vastly larger Federal government and the belief among the political class that America should intervene militarily in the affairs of other countries. The Great Depression was created by the monetary policies of the Federal Reserve; the New Deal programs were a further expansion of Federal government; FDR outlawed the ownership of gold; and America’s subsequent involvement in World War II created a military and economic superpower.”

That’s one of the most trenchant passages on US history I’ve ever read.

Your writing keeps getting better and your analysis is inarguable.

Thank you.

starfcker
starfcker
February 11, 2015 7:43 pm

Let me restate my original point. TARP turned out poisonous. It ended up keeping the failed institutions alive, and showed the banksters how easy it would be to steal trillions from the biggest pile in the world, the US treasury

llpoh
llpoh
February 11, 2015 8:25 pm

Admin – lots of small businesses have more than $250k. My business is not huge in the scheme of things, and we can and do float many times that amount at times. Timing of incoming and outgoing funds can take you up/down hundreds of thousands or millions even. Lots of businesses have sales of $2mm and up. Just about every one of those would be at risk of losing major amounts of funding, depending on timing.

For instance, if a company has sales of $12mm a year – not necessarily a huge business – their incoming checks/money will be a million a month, and it will all often lob in around the same time.

And floating the money around to several banks is not an option in many cases. The company churn rate can be too high, and entanglements with the bank often tend to prevent it. Plus, if your primary banker finds out you are holding money in other banks, they tend to get a bit funny about things. They tend to cancel overdrafts, or raise/lower your rates, or be less prepared to help you in times of need. I know this for sure and certain. Companies with overdrafts will get their ODs cancelled if the bak gets a whiff they are holding funds elsewhere – the banks want as much security for the OD as they can get. Same goes for where you hold your personal assets – they want to see small business owners hold their mortgages with them, their savings and personal acts, etc. And they are very good at watching you.

If I write a check for $500k for instance, or transfer money from my personal account, the transaction gets scrutinized. I will get a call asking what that is about. Every time. And I do not have an OD. Now, I can tell them to mind their own frigging business (which has on occasion happened), or I can do a song and dance, whatever. But bankers watch what you are doing with reasonably sizable slabs of money.

It is not nearly as simple and easy as you are indicating.

llpoh
llpoh
February 11, 2015 8:50 pm

Admin – not meaning to over-emphasize. Just trying to point out the consequences to a small business if it did happen. I doubt it would happen en masse. I just wouldn’t want to be the poor SOB that did get the shit end of the stick.

Also, I thought folks might find it interesting how their money is watched by banks. If someone has a it of wealt or cashflow, it is monitored. And questioned ie “Hi, just noticed you shifted $xxx to YYY bank. Just wondered if there was a problem, or if we could offer any assistance to you” etc. Those guys have some serious balls that do that, but do it they do.

Similarly, I just read where Connecticut monitors its high-wealth residents. Seems they pay a very significant portion of the state’s taxes. There are folks that keep an eye on these high net worth folks, and try to “motivate” them not to relocate to other less – taxing states, like say Texas.

Overthecliff
Overthecliff
February 11, 2015 8:55 pm

Will the steeple ever realize the truth in these articles? I don’t know. However, they do know stuff has really gone wrong and they blame each other. This country is polarized and in no mood to work things out. I think civil war with more than 2 sides. There will probably be foreign intervention as well.

Garth
Garth
February 11, 2015 10:41 pm

The essay above are standard memes among the informed crowd. I summarize the 4th turning as a total and absolute loss of Confidence, trust and reliance of all currently governing bodies from the local police all the way up to the wall Street bureaucrats. No more fiat and no more techo surveillance state.

starfcker
starfcker
February 11, 2015 10:46 pm

Jim, I think you have lost sight of what a bank optimally did, before they got rid of glass-steagal. When you run a real world business, everything channels through your bank. Money comes in and goes out constantly. Gum that up, even for a couple of weeks, and a lot of businesses will be on their knees. Shareholder equity, preffered equity, subordinated debt, that’s got nothing to do with the business of budiness.

starfcker
starfcker
February 11, 2015 11:00 pm

If you have 100+ employees as llpoh does, 250k might run through the payroll account every pay period. That flow is nonstop, and the bank is the facilitater. Cut that oxygen while lawyers squabble over who gets what, and lots of businesses go dark in the meantime. And again, FDIC was only 100k prior to TARP.

starfcker
starfcker
February 11, 2015 11:46 pm

Washington mutual doesn’t hold up as an example, they had assets of maybe 300 billion. JPM and citigroup were each probably 8 or 10 times that size. What did sheila bair have to work with, less than 100 billion? Didn’t make me feel safe. Bush sold out, no question, and I don’t think obongo really grasps any of this. It needs to crash. I’m cheering on that outcome. We aren’t that far apart

Stucky
Stucky
February 11, 2015 11:54 pm

WaMu wasn’t the only one. IndyMac dipped into the FDIC funds. Maybe Countrywide? Certainly other mortgage banks.

Point is, I recall the FDIC was damn near broke. They’re supposed to be funded by deposits and they were waaaay short. But, I guess the gooberment could just replenish the money with fake money?

I don’t understand how it all works. It just seems that if a few large banks, or some large and several small ones, or some combination of failure does exist where there just isn’t enough money to cover the depositors …. regardless of some FDIC “guarantee”.

Bea Lever
Bea Lever
February 12, 2015 12:16 am

Stucky

The FDIC is really just a case of smoke and mirrors. They only have around 1% of the amount that depositors have in the banks. When a bank fails, FDIC arranges for a larger bank to take over the insolvent bank. If a TBTF bank bites it, there is a bailout as FDIC could not come close to covering them.

the tumbleweed
the tumbleweed
February 12, 2015 12:19 am

On TARP: Don’t really know what the controversy is about. You don’t need to dig into the details to know that TARP was the scam of scams. If freedom of thought somehow manages to survive, the 22nd century’s version of Gibbon will no doubt cite it as a major milestone to ruin. The party line now parroted by the Ivy League flunkees is that TARP “made money for the American taxpayer.” First of all, these goofs have zero credibility, one doesn’t even have to look closely anymore to know that they manipulate data to arrive at a desired conclusion. Their conclusions are meaningless. Secondly, even if they were not lying for the first time in their lives, if it takes a crisis followed by two votes to ram through a massive bill of theft, one that was opposed to by 90% of the people, to “make money,” your system is corrupted beyond repair. We had to destroy the village to save it.

On the Internet Takeover: Glad this was mentioned. The FCC is going to pass the internet’s version of Obamacare, a 223 page bill to start to crush the freedom of information that has been a major annoyance for the rulers. Like Obamacare, it is marketed under the guise of “net neutrality,” or making the internet a “public utility” to make everything fair. Like Obamacare, it no doubt contains a litany of vague regulations that can and will be loosely interpreted in clever ways to crush dissent and the free spread of information. They don’t need to “flick a switch” to make the useful nature of the internet disappear, they just need to strangle free thought through endless licensing and regulation that will make the truth tellers hang up their hats due to lack of resources. If you value the things you read, it’s time to start cryptoprepping, download and save what you think you might need onto hard media not capable of wifi.

IndenturedServant
IndenturedServant
February 12, 2015 6:49 am

Starfucker, you seem to have started with the premise that TARP was somehow meant to benefit main street. TARP was nothing but a MASSIVE fucking wealth transfer to the oligarchs. Period. End of story.

The first clue was when the lobbied Congress to reverse course on what main street wanted. Second clue was when we were told that it absolutely, positively had to pass otherwise the entire economy would be gone by morning and then when the bought and paid for cocksuckers passed it and sent it to the White House, the President let it sit over the fucking weekend while he took a trip. Third clue was when the very first fucking thing the oligarchs did was to pay themselves MASSIVE fucking bonuses right out of the gate.

There is nothing your owners do that is EVER intended to help you unless it helps them even more and even then it’s just an unavoidable happenstance that they will make up for later.

Get a clue!

flash
flash
February 12, 2015 7:20 am

Epic , Admin. I do think this essay-a damn fine albeit succinct history lesson, rolled up in financial analysis, topped off with warnings of dire consequences for a apathetic nation of self-deluded fools in the process of being viciously reamed by a Corporatocracy masquerading as a Republic which like feral hogs have broke into and ravenously consumed the peoples seed corn leaving the ignorant victims to face a bleak and terrible winter of scarcity and destitution which may be the undoing of this once fair and civil Republic- is your best. + 10,000

Stucky- That answers the question I had in Part One. I asked if the Fourth Turning is inescapable … cast in stone … can’t intelligent humans escape from the mistakes of the past, and prevent it?

It appears the answer is a resounding “No!”.

Correct , because MPAI ( most people are idiots)

Tator
Tator
February 12, 2015 7:22 am

Back in the 90s when I became aware of what the real world was like and who controls things I came to the conclusion I was born in the “sweet-spot” of American history. I was born in 1954 and benefited from the opportunities it provided.

I no longer believe that because of what is coming and when. At 62 I expect (barring a sudden death) to live through the turmoil. I now believe the sweet spot to be born was somewhere in the 1944-1945 years. I would be 70 and may have died of natural causes and miss the final stages of a Fourth Turning.

Admin—-Brilliant summaries. I have sent them to many of my friends.

—————————-

In all of history, no government became more honest, less corrupt, or granted its citizens more rights as it grew in size. E.L. 2011

flash
flash
February 12, 2015 7:35 am

Stucky says:

Point is, I recall the FDIC was damn near broke. They’re supposed to be funded by deposits and they were waaaay short. But, I guess the gooberment could just replenish the money with fake money?

Funny that. FDIC is short cash , FICA is bleeding read ink and the nation’s infrastructure crumbles from lack of cash and , but somehow 29 trillion fiats magically appears from the Fed to bail out the global banksters. If you want to know who your rulers truly, just look to who has unfettered access to loading your ass up with enormous and unserviceable debt.

Sensetti
Sensetti
February 12, 2015 7:36 am

“As trust in the political, economic and financial systems implodes, the existing social order will crumble and be swept away in a torrent of chaos and upheaval. Severe misery will settle on our land and tear the fabric of our society”

That’s the point I make over and over again which falls on deaf ears for the most part, related to the fact, nobody wants to upend their lives to prepare for such an event. People sit in their suburban home in the midst of a large population center and rage against the government machine. They bloviate about how the people will rise up and take back power from the Government, they will be the first ones killed, and the thug down the street will pull the trigger not the Government.

The thug down the street packing a thirty eight already lives like a fucking animal and has no respect for a human life, he’s tougher than shit. If you want to survive you better be meaner than that bastard, he already knows how to steal to survive and has no problem with it, he won’t even blink an eye, he will kill someone and sit down and eat a sandwich and never give it a second thought. When this system blows up it’s not going to be the Fucking Government you need to worry about it’s the hoards of hungry starving people that’s going to kill you, it’s the guy around the corner that when he knows law and order have broken down he has a free ticket to rape, rob, and steal. Look at the ferguson riot for a guide post, when the mobs take over the law will not hold them back they won’t even try.

The Government will use the up armored men and machines to hold the centers of power and let the sheep kill each other, it’s not the cops dressed in battle gear you need to worry about it’s the former food stamp recipient.

If you are not willing or able to survive the upheaval don’t worry about the Government that’s not your problem, it’s the mob you must survive. So at the end of the day it’s not you and your fellow citizens against the Government. It will be you against your fellow citizens, that’s an easy one for TPTB to set up, when they pull the Food Stamps it’s on.

The mistake people make is they think law and order will hold, that right there my friend is the normalcy bias that kills.
[imgcomment image[/img]

flash
flash
February 12, 2015 7:44 am

Republicans aren’t called the Party of Stupid for nothing.

“I’ve abandoned free market principles to save the free market system” – George W. Bus

https://www.youtube.com/watch?v=Tmi8cJG0BJo

[imgcomment image[/img]