Where Will You Be When the End Game Begins?



Cognitive Dissonance

Sometime after oh dark thirty it will begin, the previously cocked trigger suddenly released to wreck havoc throughout the world’s financial system. Like an intricate and interwoven design made entirely of standing dominoes, all it takes is a slight disturbance to knock one off its base and start the cascade of toppled consequences running down the line.

With the benefit of hindsight it will be seen that the trigger itself was not the killer. Instead, sometime later, a specific projectile will be (most likely falsely) identified as the blunt instrument which tore economic flesh asunder and quickly bled the system of ‘liquidity’ faster than a slash to the femoral artery. Too late to make a difference, tourniquets will be applied to stem the red tide. Sadly, all it will accomplish is to extend economic life long enough to enable a final frenzy of looting before the bloody end.

And the totalitarian end game will have only just begun.

A socioeconomic system, if healthy and vibrant, can usually withstand extremely rough handling and even intentionally directed assault. A severed lifeline, while certainly a devastating shock to the organism, can and will be survived simply because adequate resources and flexibility remain within the structure which can be quickly marshaled while emergency repairs are made.

But a compromised entity already deathly ill, continuously pumped with toxic drugs and stimulants, stressed beyond compare by various Rube Goldberg financial devices, constantly monitored and regulated to assure compliance to artificial standards no natural system would ever adhere to, is always one disturbance away from disaster.

Thus the stage is set for the dark thirty triggering event.

While several likely scenarios can be put forward regarding the sequence of events that might follow the triggering (as well as the trigger itself) the precise chain of events is ultimately of little importance since a million and one fingers are resting on the trigger and several trillion dominoes await their inevitable fall. The socioeconomic weapon will be fired, of this there is little doubt. The more penetrating, and ultimately personal, question is of what intensity and duration are the intended consequences.

I sincerely fear a long term mass casualty event of such strength and scope as to be inconceivable, therefore impossible, for the average cloistered mind to comprehend. Even those of us presently reading this article believe we have a heightened, some might say enlightened, perspective and understanding of the coming trials and tribulations.

We do not. And quite frankly, we cannot.

I say this with great conviction by way of my interaction with, and study of, living examples…those who lived through and carried the lifelong scars of the Great Depression of the 1930’s. While just about any American over the age of 60 has talked to, or heard stories of, older family members who survived that decade plus of sustained hardship and deprivation, as a financial planner and broker I worked directly with many who suffered the most in the area of greatest damage, their personal financial affairs.

The best way to describe this class of people, an entire generation in fact, is that of walking wounded who are deeply scared by post traumatic stress disorder (PTSD). More than ‘just’ suffering from the effects of a horribly maiming bomb blast, these survivors carried the burden of having been completely demoralized and abandoned by every institution they ever came to believe in. Seventy plus years after the fact, the remaining few still hold little trust in anything they cannot hold in their hands or create with their own sweat and blood.

Talk about a lost generation.

Thankfully for the powers-that-be who presently guide us into dark territory, that generation, along with its vivid memories and stark warnings, is rapidly dying off. There is nothing more annoying than attempting to run the train off the tracks while those in the back seats are rabble rousing with dire warnings of impending doom, death and destruction. Into the valley of death rode the 6 billion.

As they say in poker, this nearly extinguished generation is a ‘tell’, a sign, a marker unmistakably warning in no uncertain terms where we are headed is not where we want to be. This alone should be sufficient for any critical thinker to settle his or her affairs and remove themselves from the clearly marked ground zero, your local (sub) urban center where any semblance of independence and self sufficiency is a pipe dream of the self deluded mind. It is well past time to move to where we have a chance of regaining some (even limited) control over our food, water and (safer) space.

This is not to say we should bunker in, both physically and mentally. In fact I speak of just the opposite. As I have expressed time and time again, while bunkering might tide us over nicely for a short duration event of a few months or even a year, at some point we must come up for air and interact with the local population.

If at that point we have not integrated ourselves into the community, an extremely unlikely event if we were actually bunkering, it will be exponentially more difficult to do so after the fact. At best, if we are seen as a threat they will shun us and leave us to our own devices. At worst we will be treated as a dangerous nuisance animal that must be eliminated or neutralized for the community’s greater good.

If the community, already dealing with great stress and turmoil, finds ‘us’ of less value than our ‘stuff’, they will take our stuff and leave our rotting carcass behind. We will be outsiders and must prove our worth to the others. In a devolving socioeconomic situation a cohesive community must work together as equals while providing similar and equal value to the whole in order to survive. Those alien to the area will be quickly cast off if they do not measure up.

But there is more, so much more, to the unfolding totalitarian equation. One must be willingly deaf, dumb and blind not to hear the propaganda on the boob tube, understand the game theory being played out and see the bleak writing on the wall.

Any oppressive and controlling regime, whether it is defined as the elite, the one percent, shadow government, deep state, corpocracy, fascism or whatever label we use to mindlessly identify, compartmentalize and thereby cognitively diminish, will use any and all means at its disposal to defend itself when it perceives itself under attack. And the term ‘attack’ is loosely defined to encompass any perceived danger real, imaginary or falsely concocted.

To view the increasingly hostile police state which America is rapidly becoming as anything other than an oppressive and controlling entity readying itself for war upon its population is to expose the reader’s appalling denial of the glaringly obvious. This is nothing short of an emotional and intellectual defect that is severely debilitating and potentially terminal. The danger is clear and present and growing on a daily basis. If this cannot be seen for what it is, the observer remains hopelessly mired in the bargaining phase of their denial.

Then again never underestimate the time, energy and effort seemingly intelligent and worldly people will invest in constructing an alternative reality they wish to believe in. As a corollary, never underestimate the time, energy and effort an oppressive and controlling regime will invest in promoting an alternative reality the population wishes to believe in.

A self deluded populace is more easily controlled and directed than one whose sticks and stones, when used in anger, may break the elite’s bones. If the population wants to believe in fairy tales, give them fairy tales they can love, honor, cherish and defend. If they don’t, convince them they should believe by any means possible.

The genius of those who are constructing the underlying superstructure of the police state is their cunning ability to do so under the unflinching glare of the midday sun. Problem, reaction, solution is their trade craft, the government bureaucracy their blunt instrument, a corrupted legislature the enabler and creator of the unconstitutional and immoral laws, a co-opted and controlled press their sympathetic choir and the judiciary the final fraudulent arbiter of the chains that bind. Make no mistake about it, every ‘government’ at war with its people makes certain its actions are ‘just and lawful’, particularly when they are patently not.

When viewed from the point of view of the disinterested and detached, the inevitable is obvious. The only purpose for power is to use the power…or have it used against its own creator. Therein lays its absolute ability to corrupt absolutely. Clearly the rapidly increasing capacity of the powers-that-be to surveil, subvert, suppress, subdue, subsume and slaughter is self evident to all but those who are desperate not to see. Or, in what is more likely the case, are either paid not to see or wish to continue to be paid if blindness is feigned and cooperation assured.

See No Evil 2

Nothing here to hear, see or speak.

This is why, at least at this moment, we would not be able to strike directly at the heart of the diseased beast, for it will be our fathers, family and friends who will defend ‘it’ from us. The Empire is exquisitely designed and constructed to be empowered when physical force is used against it. Both the physical structure of its ramparts and the perverted psychology of its defenders are strengthened and emboldened when physical force is applied. Active resistance, when directed towards the Empire, is our own worst enemy.

The only way physical force has any chance of working against the Empire is when applied in overwhelming numbers against all vulnerable borders on a continuous basis. Since this requires great sacrifice by the population at large, Jane and Joe will only turn to these devices as a last resort, when all hope is lost and abject desperation sets in.

Even then, the controlling elite are expert at employing propaganda and psychological operations to turn Jane against Joe, thereby minimizing the effectiveness of the opposing force. One must be competently conditioned to kill on command in great numbers with ruthless efficiency to be considered an effective fighting force. Quite frankly an angry mob is the exact opposite, making it very easy to turn each upon the other since the only driving force of the mob is blind emotional outburst easily subverted and misdirected.

Below are some sobering thoughts to ponder regarding human psychology and armed resistance to the Empire.

  • Organized revolution requires both the will and a way. And by ‘way’ I mean money. Any money procured by, or offered to, a resistance always comes with strings attached. Often the money comes directly from the controlling elite itself via back channels designed to subvert, misdirect or implode the resistance. Or it might come from an enemy of the Empire, thereby making you a proxy and not an independent force. Someone’s bitch, plain and simple.
  • Essentially, when outnumbered and outgunned guerrilla tactics are usually employed. Basically you are fighting fire with even more devastating fire. If you have any moral qualms with using the methods of Empire against the Empire, this fight isn’t for you. To convince yourself otherwise will only destroy you from within.
  • If you aren’t ready to declare war on your community, don’t even consider this path. Ninety percent of the population is hopelessly compromised, whether spiritually, morally, medically or pharmaceutically, psychologically, financially or ideologically. To believe otherwise is to engage in self deception. The vast majority will never oppose the Empire in any consistent or meaningful way.
  • Even worse, in the words of Morpheus, “You have to understand. Most of these people are not ready to be unplugged. And many of them are so inured, so helplessly dependent on the system that they will fight to protect it. This is so much more than a quote from some silly Hollywood movie. This is a universal psychological truth used to the significant advantage of the Empire. While the puppeteers are a relative few, they leverage the minds of millions far more effectively than if the bodies were simply cannon fodder.
  • Any serious degradation or collapse of the system will not weaken, but rather strengthen, the Empire, if only because it is accelerating the endgame towards the present day. Those compromised by the system will beg the corrupt system to save them from the collapsing system, a fool’s errand vigorously pursued by unprepared and panicked fools along with the ever present groveling sycophants.
  • Desperate men do desperate things. Our mistake is assuming that when the downward spiral accelerates the core elite will be among the desperate. Those pursuing a plan of divide and conquer while reaping the spoils will not panic when it’s playing out as expected. Socioeconomic chaos is their friend, not yours or mine.
  • While the endgame may be accelerating, it will not conclude quickly. These long period cycles of madness require many years, even decades, to complete its rotation only to begin the cycle once again. Since the insanity of a decaying and corrupt Empire is constantly renewed and invigorated by new blood from below, its lifespan is far longer than yours and mine. The name of the game is survival, not gloriously wasted death or indefinite incarceration.
  • The greatest danger to us and our loved ones is not (just) the violent thrashing of the expiring Empire, but our refusal to deal frankly and honestly with our own personal shortcomings and denial. Our unwillingness to soberly assess ourselves and our surroundings circumvent any proactive response by us to a worsening situation. To think one can shelter in place within the confines of the corral is shear lunacy. To believe one can effectively time their escape to greener pastures just ahead of the initial imposition of the financial lockdown is not dealing with reality, other than one produced by the self deceived.

The reason most of us remain frozen in place like jack-lighted deer is our reluctance to recognize the severity of our situation and the capacity for further degradation. Quite frankly, this reduces us to little more than rationalization and justification to explain our near total inaction, other than possibly stockpiling. Ultimately our ‘plan’ is to cheer on a systemic collapse in the hope those in power will be deposed and a new regime arises from the ashes to rebuild the Empire from the tattered remains of its glorious capitalist past.

At best this is wishful thinking, at worst suicidal. There is madness afoot, a debilitating energy that permeates all that lives, not just the ‘bad’ guys and gals. In the vast majority it expresses as obsessive compulsive behavior, in some it manifests in the form of a sociopath or psychopath, with others various combinations of the seven deadly sins (greed and pride/ego especially) rise to the surface, in still others fear and cowardice prevails. Great personal and collective courage is required to overcome the disaffected ‘self’. And during times of mass delusion and hysteria, courage is in chronic short supply.

I am fully aware all that is necessary for the triumph of evil is that good men do nothing. I do not propose nothing be done. But the choices are not limited to either charging directly into withering rifle fire or remaining huddled behind phantom cover in the hope we survive. There are many equally viable alternatives, including (at least partial) withdrawal to begin the process of starving the beast.

Make no mistake about the following. The power of the Empire has not yet waned to the point where it will be toppled by its own arrogance, hubris or blind greed. It has miles to go, and lives to destroy, before it sleeps. Any weakness displayed by the Empire will be compensated for by even greater transgressions against the population. The lie we tell ourselves is we are not participating in strengthening the Empire by simply going about our daily business while drafting, and possibly even implementing, contingency plans A, B and C.

The Empire cares little about the plans of individual mice and men. So in this respect the illusion of safety within the anonymous pack emboldens inaction. But to believe we are not contributing to the Empire because of our status as an individual snowflake flatly denies our involvement in the avalanche. Empire does not require willing participation, just involvement plain and simple. The more our contribution is reduced, the less dependent we become, the less contributory we are.

The ugly, and self evident, truth is the vast majority of us wish to partake of the spoils of Empire while denying Empire and the means by which it acquires the spoils. We know any significant change to our living arrangement involves dislocation, deprivation and uncertainty. We pontificate about high moral aspirations while decrying the despicable greed and self interest of the elite and powerful. Yet our perceived ‘enlightened’ self interest dictates our own (in) action even if it ultimately undermines us as well as our family and friends.

Who are we kidding if not our ‘self’?

As stated previously, Mrs. Cog and I do not have the answers, let alone a firm understanding of all the questions. What we believe we know is extremely personal in nature, but can be universally applied. Either we declare powerless victimhood by doing little to nothing while awaiting the ‘sign’ to engage Plan B, or we execute a living breathing plan of action here and now by changing nearly everything about our lives and begin the process of reclaiming our personal sovereignty one step at a time.

To change the world I must first change myself. To approach this in any other manner is to adopt the techniques and mindset we decry as dishonest, disingenuous and corrupt. I have come to realize the approaching trials are about so much more than just survival. This is about personal growth and spiritual transformation, of reaching for and achieving a higher plain of existence greater than the lowest common denominator, the heart of the fraud the Empire promotes and which “We the People” are addicted to and dependent upon.

And this, I suspect, is what truly holds so many people back.

For to break from the herd and look squarely in the mirror requires a fearless self examination and assessment, precisely what we are conditioned to avoid at all costs in our mindless pursuit of self absorbed consumerism. The promoted myth is simple enough; when we exit the education indoctrination system the only remaining items left to pursue are specific skills required to further our ‘career’, which in turn provides the money to pay the debts that support the self destructive consumer lifestyle.

Turning our back on this meme and consciously choosing a life of more focused labor and dedication to self sufficiency and independence is not aligned with the bargain we struck with the system back when we entered grade school all those years ago. I made a deal with the devil in return for a life of leisure when I hit age 65. To question this fundamental ‘truth’ requires us to question everything, something very few of us are willing to do.

Are you?


Why do we wait for the next crisis, when we know its all a fraud?

That the whole ‘financial’ system is a fraud concocted and designed by the central banks is no more a big secret, and yet what they keep on doing is to maintain the deception. The rotten system should have collapsed yesterday, but the tomorrows of the collapse is still being projected and discussed by the financial prophets.

“The markets can remain irrational longer than you can remain solvent.” – John Maynard Keynes

A new monetary order will only emerge from the next crisis



Most investors tend to focus on the current business cycle or the next possible downturn, few think in terms of eras.

The current era began with the collapse of Bretton Woods and its replacement with a fiat currency system that provided policymakers with enormous latitude in setting policy and accumulating debt. The growing imbalance created by numerous attempts to mitigate the downside of the business cycle is leading to recurrent crises. The most severe began nearly ten year ago and is still unfolding, with the emerging markets its latest epicentre.

While there is little disagreement on how the crisis has developed, there is a big split on what it means or what happens next. Some believe this is a banking crisis that has largely been addressed and, in time, the system will revert to equilibrium. The opposing view is that this is largely an insolvency problem resulting from an excess of supply relative to demand combined with a mountain of debt collateralised with overinflated assets. Disinflation, weak capex, and currency wars are just symptoms of this broader malaise.

True reform is difficult, so instead policymakers have been experimenting with how far they can push monetary policy. But monetary policy is not well suited to dealing with the problems that we currently confront (for all of central bankers’ efforts we still have anaemic growth in the developed world and emerging markets in varying states of crisis). All that has been done is buy time, but even that comes with the collateral damage of distorted asset prices and ever more debt.

There is a popular saying that if you want to get out of a hole, you should first stop digging. Monetary policy is providing the shovels for the global economy to carry on digging an ever deeper hole.

The most charitable explanation for the actions of policymakers is that they have been guilty of reacting to outmoded models. The goal of any interest rate cut is to stimulate demand. The working assumption of policymakers is that lower interest rates act as an incentive to consumption and a disincentive to savings.

Unfortunately, this relationship seems to have broken down. This may be partly a function of demographics and partly psychology. In the aftermath of the Great Depression, regardless of the interest rate, people refused to spend. They were so worried about another downturn that they rebuilt their savings. John Maynard Keynes became a Keynesian when he realised that monetary policy was not sufficient to stimulate demand under these conditions.

We are reaching the limits of monetary policy. In all likelihood interest rates will head further into negative territory. When that fails, the probable conclusion will be a fiscal expansion that is likely to be monetised. The mindset shift towards such an outcome has become more established in academic circles and another crisis will quickly spread it to policymakers.

It is possible that the ultimate goal is to generate enough inflation to act as a wealth transfer between generations and from savers to borrowers. This may well be the democratically acceptable way of defaulting on debt. But it may prove more difficult to create inflation in the current environment.

Even if it this may take longer than hoped for, inflation is a monetary phenomenon and in a fiat currency system policymakers will eventually succeed in creating it. In such an environment the best thing you can do is try to identify assets that will perform reasonably well regardless of the future course of policy and its impact on growth and inflation rather than try to maximise return in the shorter term.

Ideally such an asset should possess two key characteristics: good cash flow visibility and stability; and an embedded inflation hedge. That tends to lead you to hard assets rather than financial assets; though there are parts of securities markets that also have these attributes.

While demographics, debt accumulation and globalisation were all supportive of growth in the 1980s and 1990s, those tailwinds have reversed and are increasingly headwinds. This is an interlocking problem with no easy way out. There are steps that can be taken that would help. Reform of the social contract between generations is clearly needed. Productivity also needs to increase though this is proving very difficult to achieve in the developed world.

The challenges we currently confront are profound and intractable and it seems likely that we are approaching the end of an era. A new monetary order will eventually emerge but it is still difficult to discern its outlines. In academic circles there are already debates around what form this will take.

These range from relatively modest evolution, for example using the IMF’s special drawing rights as an anchor for exchange rates, to radical proposals such as an end to fractional reserve banking. One thing seems to be certain; the new order will arise only after another significant crisis as the political system seems incapable of implementing true reforms without it.

Robert Louis Stevenson wrote: “Sooner or later everyone sits down to a banquet of consequences.” That moment is coming.


When They Start Praising the Fed, You Know We’re Headed for Disaster



The Fed’s Amazing Self-Fulfilling Forecast … The Federal Reserve’s track record of economic forecasting is a lot better than many observers recognize. It might also offer some insight into the central bank’s approach to managing the recovery.  -Bloomberg

This Bloomberg article makes the point that the Federal Reserve is competent.

Worrisomely, such articles tend to appear at the top of the business cycle. For proponents of central banking any gradually, sustained upturn is an excuse to celebrate central bank supervision.

This sort of propaganda is endlessly present at Bloomberg. Let the last cyclical economic disaster finally begin to fade from memory and Bloomberg columnists proclaim Fed competence once again.

In fact, we would have a hard time recalling when the Bloomberg editorial section criticized the central bank paradigm itself.  They are much more apt to either minimize Fed power (so as to make the facility more palatable) or in some sense endorse it.

This article argues that starting in 2011, the Fed brought policies in line with action and its handling of the economy became far more competent.


From 2011 through 2015, the Fed managed the economy with two complementary goals: Get the unemployment rate down to 5 percent (from near 10 percent) and keep inflation in a range between 1 percent and 2 percent.

It adjusted monetary policy in response to shocks in order to achieve these complementary goals. In other words, the forecast for unemployment and inflation was accurate because the Fed made it so.

This raises another question: Could the Fed have achieved better growth and gotten interest rates back up to normal more quickly if it had aimed for a sharper decline in the unemployment rate and allowed inflation to run above target?

The basic thrust of these observations is that Fed officials finally figured out the right approach to the economy after fumbling around.

What would that right approach be? Presumably aggressive easing using such unusual methods as “quantitative easing.”

The article also provocatively if the Fed might have run the monetary engines even harder to  create more jobs. Answer: This question will be studied for years to come.

No, it probably won’t. Once the next crash comes, probably sooner rather than later, Fed “management” will be revealed for the disaster it is. Short term arguments for Fed competence always come unstuck.

These are cyclical arguments in fact.

They usually occur toward the top of whatever bubble the Fed is currently engaged in blowing.

We remember articles during the Greenspan era proclaiming that the Fed had basically abolished the business cycle. Then 2001 happened.

Ben Bernanke was very confident about the Fed’s economic management right up until the 2007-2008 unraveling.

And now, again, we begin to see articles promoting the Fed’s management skills regarding a particularly stubborn business cycle.

But central banks do not have management skills. All that central banks do is exacerbate cycles already present in the economy.

Any modern economy would likely have some sort of cycle. Central banks considerably exacerbate those cycles. Additionally, central banks homogenize monetary policy.

Regional cycles are far preferable to national cycles because during a regional downturn, people can go elsewhere. Once the cycle is nationalized, people’s employment options are considerably lessened.

As central banking becomes more internationalized – as the Bank for International Settlements increasingly coordinates monetary policy – what was once local becomes global.

The disasters associated with a truly international central banking regime are evident and obvious. The downturns will be all encompassing.

There literally will be no place to go to avoid an economic collapse.

Speculating about how central banking success only encourages this homogenization by giving people the false impression that monetary management of an economy is viable.

It is not. The successes that are identified are inevitably ephemeral. Always we see articles of this sort, celebrating central bank management at a time when money printing has finally managed to generate asset bubbles.

These asset bubbles are mistaken for a “recovery.” But there are never any “recoveries” in a modern, central bank environment, only asset expansions propelled by misaligned interest rates and monetary debasement.

Conclusion: When we read articles like this one, we become painfully aware that we are probably approaching the top of the economic cycle. When it once again turns down, as it certainly will, these articles become signposts on the path to disaster.


#Microsoft’s ‘Deceitful’ #Windows10 upgrade

Microsoft said in a statement: “With the free Windows 10 upgrade offer ending on 29 July, we want to help people upgrade to the best version of Windows.

Right, the best spyware version!


Microsoft criticised over ‘deceitful’ Windows 10 upgrade

Microsoft have now labelled the update as ‘recommended’

An alteration to Microsoft’s Windows 10 upgrade pop-up box has been heavily criticised by customers as “deceitful” and “nasty”.

For the last six months, Windows 7 and Windows 8 users have been presented with an upgrade pop-up box asking users to either “Upgrade Now” or “Upgrade Later”.

The only way to skip the upgrade was to click the red “X” icon in the top right hand corner, typically used to close windows.

However, an alteration to the Windows 10 upgrade alert now means if a user dismisses the box with the “x” icon, rather than closing the window, it now activates the upgrade, the BBC reports.

The change occurred as Microsoft have now labelled the update as “recommended” and most users PCs are programmed to accept this type of update for security purposes.

Microsoft has said the upgrade can still be halted when the programmed time for it to begin appears.

The modification has been dubbed a “nasty” and “deceitful new update” by Brad Chacos, PC World website senior editor.

Video – Microsoft: Imagining the future for NFL fans

Mr Chacos wrote: “I’ve long been a vocal critic of the heavy-handed tactics that Microsoft’s been using to force people into the upgrade.

“Deploying these dirty tricks only frustrates long-time Windows users who have very valid reasons to stick with operating systems they already know and love.”

A number of social media users have also vocalised their frustration with the change.

Trevor Darby said: “Work at a repair shop. So many customers called complaining about how they hit the “X” as usual and got upgraded to Windows 10.”

Another user said: “Very disappointed with Microsoft the way they’re tricking people into Windows 10 upgrades. Sorry, it’s not right.”

Microsoft said in a statement: “With the free Windows 10 upgrade offer ending on 29 July, we want to help people upgrade to the best version of Windows.

“As we shared in October, Windows 10 will be offered as a ‘recommended’ update for Windows 7 and 8.1 customers whose Windows Update settings are configured to accept ‘recommended’ updates.

“Customers can choose to accept or decline the Windows 10 upgrade.”


Bill Gates of hell: Windows 10 hijacking computers
Read more at http://www.wnd.com/2016/05/bill-gates-of-hell-windows-10-hijacks-computers/#iVqTVid8rohrHvuD.99


We’re in the Eye of a Global Financial Hurricane


Charles Hugh Smith

The only “growth” we’re experiencing are the financial cancers of systemic risk and financialization’s soaring wealth/income inequality.

The Keynesian gods have failed, and as a result we’re in the eye of a global financial hurricane.

The Keynesian god of growth has failed.

The Keynesian god of borrowing from the future to fund today’s consumption has failed.

The Keynesian god of monetary stimulus / financialization has failed.

Every major central bank and state worships these Keynesian idols:

1. Growth. (Never mind the cost or what kind of growth–all growth is good, even the financial equivalent of aggressive cancer).

2. Borrowing from the future to fund today’s keg party, worthless college diploma, particle board bookcase, stock buy-back, etc. (oops, I mean “investment”)–a.k.a. deficit spending which is a polite way of saying this unsavory truth: stealing from our children and grandchildren to fund our lifestyles today.

3. Monetary stimulus / financialization. If private investment sags (because there are few attractive investments at today’s nosebleed valuations and few attractive investments in a global economy burdened with massive over-production and over-capacity), drop interest rates to zero (or below zero) to “stimulate” new borrowing… for whatever: global carry trades, bat guano derivatives, etc.

Here is my definition of Financialization:

Financialization is the mass commodification of debt and debt-based financial instruments collaterized by previously low-risk assets, a pyramiding of risk and speculative gains that is only possible in a massive expansion of low-cost credit and leverage.

That is a mouthful, so let’s break it into bite-sized chunks.

Home mortgages are a good example of how financialization increases financial profits by jacking up risk and distributing it to suckers who don’t recognize the potential for staggering losses.

In the good old days, home mortgages were safe and dull: banks and savings and loans institutions issued the mortgages and kept the loans on their books, earning a stable return for the 30 years of the mortgage’s term.

Then the financialization machine revolutionized the home mortgage business to increase profits. The first step was to generate entire new types of mortgages with higher profit margins than conventional mortgages. These included no-down payment mortgages (liar loans), no-interest-for-the-first-few-years mortgages, adjustable-rate mortgages, home equity lines of credit, and so on.

This broadening of options (and risks) greatly expanded the pool of people who qualified for a mortgage. In the old days, only those with sterling credit qualified for a home mortgage. In the financialized realm, almost anyone with a pulse could qualify for an exotic mortgage.

The interest rate, risk and profit margins were all much higher for the originators. What’s not to like? Well, the risk of default is a problem. Defaults trigger losses.

Financialization’s solution: package the risk in safe-looking securities and offload the risk onto suckers and marks. Securitizing mortgages enabled loan originators to skim the origination fees and profits up front and then offload the risk of default and loss onto buyers of the mortgage securities.

Securitization was tailor-made for hiding risk deep inside apparently low-risk pools of mortgages and rigging the tranches to maximize profits for the packagers at the expense of the unwary buyers, who bought high-risk securities under the false premise that they were “safe home mortgages.”

Financialization– which can only expand to dominate an economy if it is supported by a central bank bent on expanding credit–has two inevitable and highly toxic consequences:

Risk seeps into every nook and cranny of the financial system, greatly increasing the odds of a systemic domino reaction in financial meltdowns. This is precisely what we saw in the 2008-09 Global Financial Meltdown (GFM): supposedly “contained” subprime mortgages toppled dominoes left and right, bringing the entire risk-saturated system to its knees.

Extraordinary wealth and income inequality, as those closest to the central bank money/credit spigots can scoop up income-producing assets first at much lower costs than Mom and Pop Main Street investors.

The rising anger of the masses left behind by the central bank / financialization wealth harvesting machine is the direct result of Keynesian monetary stimulus that rewards debt-based speculative gambles by those closest to the cheap-credit spigots.

As I explain in my book Why Our Status Quo Failed and Is Beyond Reform, the only possible output of central bank monetary stimulus is financialization, and the only possible output of financialization is unprecedented wealth and income inequality.

The global financial system is in the eye of an unprecedented hurricane. While central bankers are congratulating themselves on their god-like mastery of Nature, and secretly praying to the idols of the Keynesian Cargo Cult every night, the inevitable consequence of borrowing from the future, the obsession with “growth” at any cost and financialization /monetary stimulus, a.k.a. the rich get richer thanks to central banks is systemic collapse.

Don’t fall for the mainstream media and politicos’ shuck-and-jive that all is well and “growth” will return any day now. The only “growth” we’re experiencing are the financial cancers of systemic risk and financialization’s soaring wealth/income inequality.


Your brain is not a computer


The empty brain

Your brain does not process information, retrieve knowledge or store memories. In short: your brain is not a computer

by Robert Epstein

No matter how hard they try, brain scientists and cognitive psychologists will never find a copy of Beethoven’s 5th Symphony in the brain – or copies of words, pictures, grammatical rules or any other kinds of environmental stimuli. The human brain isn’t really empty, of course. But it does not contain most of the things people think it does – not even simple things such as ‘memories’.

Our shoddy thinking about the brain has deep historical roots, but the invention of computers in the 1940s got us especially confused. For more than half a century now, psychologists, linguists, neuroscientists and other experts on human behaviour have been asserting that the human brain works like a computer.

To see how vacuous this idea is, consider the brains of babies. Thanks to evolution, human neonates, like the newborns of all other mammalian species, enter the world prepared to interact with it effectively. A baby’s vision is blurry, but it pays special attention to faces, and is quickly able to identify its mother’s. It prefers the sound of voices to non-speech sounds, and can distinguish one basic speech sound from another. We are, without doubt, built to make social connections.

A healthy newborn is also equipped with more than a dozen reflexes – ready-made reactions to certain stimuli that are important for its survival. It turns its head in the direction of something that brushes its cheek and then sucks whatever enters its mouth. It holds its breath when submerged in water. It grasps things placed in its hands so strongly it can nearly support its own weight. Perhaps most important, newborns come equipped with powerful learning mechanisms that allow them to change rapidly so they can interact increasingly effectively with their world, even if that world is unlike the one their distant ancestors faced.

Senses, reflexes and learning mechanisms – this is what we start with, and it is quite a lot, when you think about it. If we lacked any of these capabilities at birth, we would probably have trouble surviving.

But here is what we are not born with: information, data, rules, software, knowledge, lexicons, representations, algorithms, programs, models, memories, images, processors, subroutines, encoders, decoders, symbols, or buffers – design elements that allow digital computers to behave somewhat intelligently. Not only are we not born with such things, we also don’t develop them – ever.

We don’t store words or the rules that tell us how to manipulate them. We don’t create representations of visual stimuli, store them in a short-term memory buffer, and then transfer the representation into a long-term memory device. We don’t retrieve information or images or words from memory registers. Computers do all of these things, but organisms do not.

Computers, quite literally, process information – numbers, letters, words, formulas, images. The information first has to be encoded into a format computers can use, which means patterns of ones and zeroes (‘bits’) organised into small chunks (‘bytes’). On my computer, each byte contains 8 bits, and a certain pattern of those bits stands for the letter d, another for the letter o, and another for the letter g. Side by side, those three bytes form the word dog. One single image – say, the photograph of my cat Henry on my desktop – is represented by a very specific pattern of a million of these bytes (‘one megabyte’), surrounded by some special characters that tell the computer to expect an image, not a word.

Computers, quite literally, move these patterns from place to place in different physical storage areas etched into electronic components. Sometimes they also copy the patterns, and sometimes they transform them in various ways – say, when we are correcting errors in a manuscript or when we are touching up a photograph. The rules computers follow for moving, copying and operating on these arrays of data are also stored inside the computer. Together, a set of rules is called a ‘program’ or an ‘algorithm’. A group of algorithms that work together to help us do something (like buy stocks or find a date online) is called an ‘application’ – what most people now call an ‘app’.

Forgive me for this introduction to computing, but I need to be clear: computers really do operate on symbolic representations of the world. They really store and retrieve. They really process. They really have physical memories. They really are guided in everything they do, without exception, by algorithms.

Humans, on the other hand, do not – never did, never will. Given this reality, why do so many scientists talk about our mental life as if we were computers?

In his book In Our Own Image (2015), the artificial intelligence expert George Zarkadakis describes six different metaphors people have employed over the past 2,000 years to try to explain human intelligence.

In the earliest one, eventually preserved in the Bible, humans were formed from clay or dirt, which an intelligent god then infused with its spirit. That spirit ‘explained’ our intelligence – grammatically, at least.

The invention of hydraulic engineering in the 3rd century BCE led to the popularity of a hydraulic model of human intelligence, the idea that the flow of different fluids in the body – the ‘humours’ – accounted for both our physical and mental functioning. The hydraulic metaphor persisted for more than 1,600 years, handicapping medical practice all the while.

By the 1500s, automata powered by springs and gears had been devised, eventually inspiring leading thinkers such as René Descartes to assert that humans are complex machines. In the 1600s, the British philosopher Thomas Hobbes suggested that thinking arose from small mechanical motions in the brain. By the 1700s, discoveries about electricity and chemistry led to new theories of human intelligence – again, largely metaphorical in nature. In the mid-1800s, inspired by recent advances in communications, the German physicist Hermann von Helmholtz compared the brain to a telegraph.

The mathematician John von Neumann stated flatly that the function of the human nervous system is ‘prima facie digital’, drawing parallel after parallel between the components of the computing machines of the day and the components of the human brain

Each metaphor reflected the most advanced thinking of the era that spawned it. Predictably, just a few years after the dawn of computer technology in the 1940s, the brain was said to operate like a computer, with the role of physical hardware played by the brain itself and our thoughts serving as software. The landmark event that launched what is now broadly called ‘cognitive science’ was the publication of Language and Communication (1951) by the psychologist George Miller. Miller proposed that the mental world could be studied rigorously using concepts from information theory, computation and linguistics.

This kind of thinking was taken to its ultimate expression in the short book The Computer and the Brain (1958), in which the mathematician John von Neumann stated flatly that the function of the human nervous system is ‘prima facie digital’. Although he acknowledged that little was actually known about the role the brain played in human reasoning and memory, he drew parallel after parallel between the components of the computing machines of the day and the components of the human brain.

Propelled by subsequent advances in both computer technology and brain research, an ambitious multidisciplinary effort to understand human intelligence gradually developed, firmly rooted in the idea that humans are, like computers, information processors. This effort now involves thousands of researchers, consumes billions of dollars in funding, and has generated a vast literature consisting of both technical and mainstream articles and books. Ray Kurzweil’s book How to Create a Mind: The Secret of Human Thought Revealed (2013), exemplifies this perspective, speculating about the ‘algorithms’ of the brain, how the brain ‘processes data’, and even how it superficially resembles integrated circuits in its structure.

The information processing (IP) metaphor of human intelligence now dominates human thinking, both on the street and in the sciences. There is virtually no form of discourse about intelligent human behaviour that proceeds without employing this metaphor, just as no form of discourse about intelligent human behaviour could proceed in certain eras and cultures without reference to a spirit or deity. The validity of the IP metaphor in today’s world is generally assumed without question.

But the IP metaphor is, after all, just another metaphor – a story we tell to make sense of something we don’t actually understand. And like all the metaphors that preceded it, it will certainly be cast aside at some point – either replaced by another metaphor or, in the end, replaced by actual knowledge.

Just over a year ago, on a visit to one of the world’s most prestigious research institutes, I challenged researchers there to account for intelligent human behaviour without reference to any aspect of the IP metaphor. They couldn’t do it, and when I politely raised the issue in subsequent email communications, they still had nothing to offer months later. They saw the problem. They didn’t dismiss the challenge as trivial. But they couldn’t offer an alternative. In other words, the IP metaphor is ‘sticky’. It encumbers our thinking with language and ideas that are so powerful we have trouble thinking around them.

The faulty logic of the IP metaphor is easy enough to state. It is based on a faulty syllogism – one with two reasonable premises and a faulty conclusion. Reasonable premise #1: all computers are capable of behaving intelligently. Reasonable premise #2: all computers are information processors. Faulty conclusion: all entities that are capable of behaving intelligently are information processors.

Setting aside the formal language, the idea that humans must be information processors just because computers are information processors is just plain silly, and when, some day, the IP metaphor is finally abandoned, it will almost certainly be seen that way by historians, just as we now view the hydraulic and mechanical metaphors to be silly.

If the IP metaphor is so silly, why is it so sticky? What is stopping us from brushing it aside, just as we might brush aside a branch that was blocking our path? Is there a way to understand human intelligence without leaning on a flimsy intellectual crutch? And what price have we paid for leaning so heavily on this particular crutch for so long? The IP metaphor, after all, has been guiding the writing and thinking of a large number of researchers in multiple fields for decades. At what cost?

In a classroom exercise I have conducted many times over the years, I begin by recruiting a student to draw a detailed picture of a dollar bill – ‘as detailed as possible’, I say – on the blackboard in front of the room. When the student has finished, I cover the drawing with a sheet of paper, remove a dollar bill from my wallet, tape it to the board, and ask the student to repeat the task. When he or she is done, I remove the cover from the first drawing, and the class comments on the differences.

Because you might never have seen a demonstration like this, or because you might have trouble imagining the outcome, I have asked Jinny Hyun, one of the student interns at the institute where I conduct my research, to make the two drawings. Here is her drawing ‘from memory’ (notice the metaphor):

And here is the drawing she subsequently made with a dollar bill present:

Jinny was as surprised by the outcome as you probably are, but it is typical. As you can see, the drawing made in the absence of the dollar bill is horrible compared with the drawing made from an exemplar, even though Jinny has seen a dollar bill thousands of times.

What is the problem? Don’t we have a ‘representation’ of the dollar bill ‘stored’ in a ‘memory register’ in our brains? Can’t we just ‘retrieve’ it and use it to make our drawing?

Obviously not, and a thousand years of neuroscience will never locate a representation of a dollar bill stored inside the human brain for the simple reason that it is not there to be found.

The idea that memories are stored in individual neurons is preposterous: how and where is the memory stored in the cell?

A wealth of brain studies tells us, in fact, that multiple and sometimes large areas of the brain are often involved in even the most mundane memory tasks. When strong emotions are involved, millions of neurons can become more active. In a 2016 study of survivors of a plane crash by the University of Toronto neuropsychologist Brian Levine and others, recalling the crash increased neural activity in ‘the amygdala, medial temporal lobe, anterior and posterior midline, and visual cortex’ of the passengers.

The idea, advanced by several scientists, that specific memories are somehow stored in individual neurons is preposterous; if anything, that assertion just pushes the problem of memory to an even more challenging level: how and where, after all, is the memory stored in the cell?

So what is occurring when Jinny draws the dollar bill in its absence? If Jinny had never seen a dollar bill before, her first drawing would probably have not resembled the second drawing at all. Having seen dollar bills before, she was changed in some way. Specifically, her brain was changed in a way that allowed her to visualise a dollar bill – that is, to re-experience seeing a dollar bill, at least to some extent.

The difference between the two diagrams reminds us that visualising something (that is, seeing something in its absence) is far less accurate than seeing something in its presence. This is why we’re much better at recognising than recalling. When we re-member something (from the Latin re, ‘again’, and memorari, ‘be mindful of’), we have to try to relive an experience; but when we recognise something, we must merely be conscious of the fact that we have had this perceptual experience before.

Perhaps you will object to this demonstration. Jinny had seen dollar bills before, but she hadn’t made a deliberate effort to ‘memorise’ the details. Had she done so, you might argue, she could presumably have drawn the second image without the bill being present. Even in this case, though, no image of the dollar bill has in any sense been ‘stored’ in Jinny’s brain. She has simply become better prepared to draw it accurately, just as, through practice, a pianist becomes more skilled in playing a concerto without somehow inhaling a copy of the sheet music.

From this simple exercise, we can begin to build the framework of a metaphor-free theory of intelligent human behaviour – one in which the brain isn’t completely empty, but is at least empty of the baggage of the IP metaphor.

As we navigate through the world, we are changed by a variety of experiences. Of special note are experiences of three types: (1) we observe what is happening around us (other people behaving, sounds of music, instructions directed at us, words on pages, images on screens); (2) we are exposed to the pairing of unimportant stimuli (such as sirens) with important stimuli (such as the appearance of police cars); (3) we are punished or rewarded for behaving in certain ways.

We become more effective in our lives if we change in ways that are consistent with these experiences – if we can now recite a poem or sing a song, if we are able to follow the instructions we are given, if we respond to the unimportant stimuli more like we do to the important stimuli, if we refrain from behaving in ways that were punished, if we behave more frequently in ways that were rewarded.

Misleading headlines notwithstanding, no one really has the slightest idea how the brain changes after we have learned to sing a song or recite a poem. But neither the song nor the poem has been ‘stored’ in it. The brain has simply changed in an orderly way that now allows us to sing the song or recite the poem under certain conditions. When called on to perform, neither the song nor the poem is in any sense ‘retrieved’ from anywhere in the brain, any more than my finger movements are ‘retrieved’ when I tap my finger on my desk. We simply sing or recite – no retrieval necessary.

A few years ago, I asked the neuroscientist Eric Kandel of Columbia University – winner of a Nobel Prize for identifying some of the chemical changes that take place in the neuronal synapses of the Aplysia (a marine snail) after it learns something – how long he thought it would take us to understand how human memory works. He quickly replied: ‘A hundred years.’ I didn’t think to ask him whether he thought the IP metaphor was slowing down neuroscience, but some neuroscientists are indeed beginning to think the unthinkable – that the metaphor is not indispensable.

A few cognitive scientists – notably Anthony Chemero of the University of Cincinnati, the author of Radical Embodied Cognitive Science (2009) – now completely reject the view that the human brain works like a computer. The mainstream view is that we, like computers, make sense of the world by performing computations on mental representations of it, but Chemero and others describe another way of understanding intelligent behaviour – as a direct interaction between organisms and their world.

My favourite example of the dramatic difference between the IP perspective and what some now call the ‘anti-representational’ view of human functioning involves two different ways of explaining how a baseball player manages to catch a fly ball – beautifully explicated by Michael McBeath, now at Arizona State University, and his colleagues in a 1995 paper in Science. The IP perspective requires the player to formulate an estimate of various initial conditions of the ball’s flight – the force of the impact, the angle of the trajectory, that kind of thing – then to create and analyse an internal model of the path along which the ball will likely move, then to use that model to guide and adjust motor movements continuously in time in order to intercept the ball.

That is all well and good if we functioned as computers do, but McBeath and his colleagues gave a simpler account: to catch the ball, the player simply needs to keep moving in a way that keeps the ball in a constant visual relationship with respect to home plate and the surrounding scenery (technically, in a ‘linear optical trajectory’). This might sound complicated, but it is actually incredibly simple, and completely free of computations, representations and algorithms.

We will never have to worry about a human mind going amok in cyberspace, and we will never achieve immortality through downloading

Two determined psychology professors at Leeds Beckett University in the UK – Andrew Wilson and Sabrina Golonka – include the baseball example among many others that can be looked at simply and sensibly outside the IP framework. They have been blogging for years about what they call a ‘more coherent, naturalised approach to the scientific study of human behaviour… at odds with the dominant cognitive neuroscience approach’. This is far from a movement, however; the mainstream cognitive sciences continue to wallow uncritically in the IP metaphor, and some of the world’s most influential thinkers have made grand predictions about humanity’s future that depend on the validity of the metaphor.

One prediction – made by the futurist Kurzweil, the physicist Stephen Hawking and the neuroscientist Randal Koene, among others – is that, because human consciousness is supposedly like computer software, it will soon be possible to download human minds to a computer, in the circuits of which we will become immensely powerful intellectually and, quite possibly, immortal. This concept drove the plot of the dystopian movie Transcendence (2014) starring Johnny Depp as the Kurzweil-like scientist whose mind was downloaded to the internet – with disastrous results for humanity.

Fortunately, because the IP metaphor is not even slightly valid, we will never have to worry about a human mind going amok in cyberspace; alas, we will also never achieve immortality through downloading. This is not only because of the absence of consciousness software in the brain; there is a deeper problem here – let’s call it the uniqueness problem – which is both inspirational and depressing.

Because neither ‘memory banks’ nor ‘representations’ of stimuli exist in the brain, and because all that is required for us to function in the world is for the brain to change in an orderly way as a result of our experiences, there is no reason to believe that any two of us are changed the same way by the same experience. If you and I attend the same concert, the changes that occur in my brain when I listen to Beethoven’s 5th will almost certainly be completely different from the changes that occur in your brain. Those changes, whatever they are, are built on the unique neural structure that already exists, each structure having developed over a lifetime of unique experiences.

This is why, as Sir Frederic Bartlett demonstrated in his book Remembering (1932), no two people will repeat a story they have heard the same way and why, over time, their recitations of the story will diverge more and more. No ‘copy’ of the story is ever made; rather, each individual, upon hearing the story, changes to some extent – enough so that when asked about the story later (in some cases, days, months or even years after Bartlett first read them the story) – they can re-experience hearing the story to some extent, although not very well (see the first drawing of the dollar bill, above).

This is inspirational, I suppose, because it means that each of us is truly unique, not just in our genetic makeup, but even in the way our brains change over time. It is also depressing, because it makes the task of the neuroscientist daunting almost beyond imagination. For any given experience, orderly change could involve a thousand neurons, a million neurons or even the entire brain, with the pattern of change different in every brain.

Worse still, even if we had the ability to take a snapshot of all of the brain’s 86 billion neurons and then to simulate the state of those neurons in a computer, that vast pattern would mean nothing outside the body of the brain that produced it. This is perhaps the most egregious way in which the IP metaphor has distorted our thinking about human functioning. Whereas computers do store exact copies of data – copies that can persist unchanged for long periods of time, even if the power has been turned off – the brain maintains our intellect only as long as it remains alive. There is no on-off switch. Either the brain keeps functioning, or we disappear. What’s more, as the neurobiologist Steven Rose pointed out in The Future of the Brain (2005), a snapshot of the brain’s current state might also be meaningless unless we knew the entire life history of that brain’s owner – perhaps even about the social context in which he or she was raised.

Think how difficult this problem is. To understand even the basics of how the brain maintains the human intellect, we might need to know not just the current state of all 86 billion neurons and their 100 trillion interconnections, not just the varying strengths with which they are connected, and not just the states of more than 1,000 proteins that exist at each connection point, but how the moment-to-moment activity of the brain contributes to the integrity of the system. Add to this the uniqueness of each brain, brought about in part because of the uniqueness of each person’s life history, and Kandel’s prediction starts to sound overly optimistic. (In a recent op-ed in The New York Times, the neuroscientist Kenneth Miller suggested it will take ‘centuries’ just to figure out basic neuronal connectivity.)

Meanwhile, vast sums of money are being raised for brain research, based in some cases on faulty ideas and promises that cannot be kept. The most blatant instance of neuroscience gone awry, documented recently in a report in Scientific American, concerns the $1.3 billion Human Brain Project launched by the European Union in 2013. Convinced by the charismatic Henry Markram that he could create a simulation of the entire human brain on a supercomputer by the year 2023, and that such a model would revolutionise the treatment of Alzheimer’s disease and other disorders, EU officials funded his project with virtually no restrictions. Less than two years into it, the project turned into a ‘brain wreck’, and Markram was asked to step down.

We are organisms, not computers. Get over it. Let’s get on with the business of trying to understand ourselves, but without being encumbered by unnecessary intellectual baggage. The IP metaphor has had a half-century run, producing few, if any, insights along the way. The time has come to hit the DELETE key.


Fed Up with the Fed

…this of course is not only peculiar to the US, but across the entire world where the central banks are printing useless paper, or fiat money if you prefer.


by Charles Hugh Smith

Destroying our ability to discover the real cost of assets, credit and risk has not just crippled the markets–it’s crippled the entire economy.

Is anyone else fed up with the Federal Reserve? To paraphrase Irving Fisher’s famous quote about the stock market just before it crashed in 1929, we’ve reached a permanently high plateau of Fed mismanagement, Fed worship and Fed failure.

The only legitimate role for a central bank is to provide emergency liquidity in financial panics to creditworthy borrowers. Once the bad debt (credit extended to failed enterprises and uncreditworthy borrowers) is written off, the system resets as asset valuations adjust to reality–how ever unpleasant that might be for the credulous participants who believed the ever-present permanently high plateau shuck and jive.

Just to state the obvious: Fed policies are not just insane, they’re destructive:

— Bringing future sales/demand forward by lowering interest rates to zero just digs a gigantic hole in future sales/demand. Funny thing, the future eventually becomes the present, and instead of a brief recession of low demand we get an extended recession of weak demand and over-indebted households and enterprises.

— Enabling massive systemic speculation by those closest to the Fed’s money spigot is insane and destructive, as capital is no longer allocated on productive returns and risk but on the speculative gains to be reaped with the Fed’s free money for financiers

— Buying assets to artificially prop up markets completely distorts the markets’ ability to price assets based on real returns and real risk.

Manipulating interest rates creates a hall of mirrors economy in which nobody can possibly discover the real price and risk of borrowing money. What would mortgage rates be without the Fed and the federal housing agencies (Freddie and Fannie Mac and the FHA) pumping trillions of dollars of federally backed mortgages into the housing market?

Nobody knows, because the mortgage market in America has been effectively taken over by the central bank and state.

The Fed’s entire policy boils down to obscuring the real price of assets, credit and risk with a tsunami of debt. The Fed’s “solution” to the economy’s structural ills is: don’t worry about risk, valuation or costs–just borrow more money for whatever you want: new houses, vehicles, stock buy-backs, Brazilian bonds, worthless college degrees, it doesn’t matter: there’s plenty of credit for everything.

The only thing that matters is your proximity to the Fed money spigot. If you’re a poor student, you get a high-cost student loan from the Fed’s flood of credit. If you’re a corporation or fiancier, well, the sky’s the limit: how many billions do you want to borrow or skim for stock buybacks or speculative carry trades?

The Fed’s control of the machinery of obfuscating price and risk has made us all members of the Keynesian Cargo Cult. Now we all dance around the Fed’s idols, beseeching the Fed the save us from our financial sins. We study the tea leaves of the Fed’s announcements, and hold our breath lest the worst happen–gasp–the Fed might push interest rates up a quarter of a percent.

This is of course totally insane.

Destroying our ability to discover the real cost of assets, credit and risk has not just crippled the markets–it’s crippled the entire economy. Wake up, America, and stop worshipping the false gods of the Fed. The sooner we smash the Fed’s idols and strip away their power to enrich the few at the expense of the many, the better off we’ll be.

My new book is #2 on Kindle short reads -> politics and social science: Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle ebook, $8.95 print edition) For more, please visit the book’s website.