Leviathan Is About To Change Everything

leviathanages (2)The ability to foresee what is about to happen is not something most people possess. Forecasting is not easy and is a fools errand. Yet sometimes things are so obvious and so unavoidable that have a reasonably high expectation of what comes next is possible. Even the obvious is difficult to see if you live your life assuming tomorrow will be the same as today. This condition is often referred to as "normalcy bias." The blindness that normalcy bias produces is often not harmful because change is typically incremental and slow.

Today the incremental and slow aspect of change is unlikely. Change is about to accelerate in a manner few can conceive. We don't live in normal times. We are on the precipice of a crisis, one so great that the 1930s are apt to seem mild in comparison. The coming crisis will likely invalidate the plans and dreams of anyone who assumes  that tomorrow will be very much like today. Those who argue something can't happen because it has never happened before are apt to suffer the worst. This premise is usually wrong because most things have happened before, perhaps not in their lifetime or country. That is a danger from not knowing history.

We are close to a turning point, a turning point that will be sudden and major. It is not a turn or change that can be extrapolated from past parochial experience (at least in this country). It represents what Peter Drucker referred to as a "discontinuity." The future is about to become very different from the past.

The change will be precipitated by an economic/financial event. That in itself will be traumatic. But, it is the reaction of government to this event that will be more disturbing. The event will threaten the very survival of government and that will create additional danger because government, like any cornered and wounded animal, will do whatever it can to survive.

Unlike a wounded animal, government has power, guns and an ability to ignore or change rules at will. The Rule of Law and Constitutional constraints will not matter once this crisis hits. Survival of the political class will be all that matters, at least for them. 

For those incapable of the complex reasoning, let experience provide an idea of what is coming. Recorded history provides hundreds, if not thousands, of examples. The latest one is the situation in Argentina today. Here is some of  Simon Black's commentary on Argentina: 

In the case of fiat currency, governments in terminal decline resort to a very limited, highly predictable playbook in which they try to control… everything… imposing capital controls, exchange controls, wage controls, price controls, trade controls, border controls, and sometimes even people controls. 

These tactics have been used since the ancient Sumerians. This time is not different.tyranny1d 

Today, Argentina presents the most clear-cut example. Here the 'mafiocracy' unites organized crime, big business, and politicians to plunder wealth from Argentine citizens. Just since 2010, President Cristina Fernandez has– 

* Nationalized private pensions, plundering the retirement savings of her people. 

* Increased tax rates across the board– income, VAT, import duties, etc. as well as imposed a new wealth tax. 

* Inflated Argentina's money supply, printing currency with wanton abandon; M2 money supply has increased 215% in the past three years. 

* Driven the value and purchasing power of the currency down by 50%. Street-level inflation is now 30%+ per year. 

* Made a mockery of official statistics, comically understating the level of Argentine inflation and unemployment. She even began punishing economists for publishing private estimates of inflation that didn't jive with the government figures. 

* Taken over control of one industry after another, most notably the nationalization of Spanish oil firm YPF's Argentine assets. 

* Imposed export controls of agriculture products from beef to grains, forcing growers to sell at artificially lower domestic prices. 

* Imposed capital controls, reducing her citizens' capability to dump their poorly performing currency and hold gold, dollars, euros, or anything else. 

* Imposed a two month 'price freeze' on items in the supermarket, and encouraged retail consumers to rat out any grocer that doesn't abide by the government order. 

* Imposed controls over the media, most recently ordered an advertising ban in Argentine newspapers (weakening their financial position).  

Do not be so ignorant as to believe this set of desperate measures will not be implemented here.  We will soon see some or all of these measures. Government will act to avoid the unavoidable and when that happens, your wealth and freedom are not going to matter.  

1 Comment

  1. Monty – Has this and other recent postings concerning the pending crisis, societal, governmental and economic upheaval changed your mind as to “prepping”?
    If so, how?
    If not, why?
    Inquiring mind wanna no something admittedly none of his/our business — other than your mention of eschewing such preparations several weeks ago.

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