July 10, 2011
We are sitting in our favorite café in Paris…listening to the Beach Boys and reflecting on the decline of the US Empire. Back in the ’60s, the Beach Boys celebrated a country that was young, growing, optimistic…and a winner. Now, what we see is the whole kit-and-kaboodle of life in the US giving way to desperation, delusion and an irresistible impulse to commit imperial suicide. The economy turns sour. The military becomes malignant. Households are corrupt, bankrupt and dependent. Even the churches sing their hallelujahs to Caesar now.
What’s “imperial suicide?” It’s what empires do. If no other empire arises to kill them…they kill themselves. China will probably eventually crush the US militarily. But that is far in the future. The US can’t wait. It lets the zombies run wild.
At home, Congress debates a “debt ceiling” measure, as if it made any difference. They’ve raised the ceiling 93 times since they first imposed a debt ceiling 94 years ago. What are the odds that they will hold the line this time?
Zilch. Instead, they’ll continue borrowing and spending until the nation goes broke. Count on it.
The US economy was a free-market success story for a hundred years…from the end of the US War Between the States to the end of the Vietnam War. It was the richest, fastest-growing, most innovative, most competitive, and most admired economy in the world. But then, in 1971, Richard Nixon replaced a more-or-less solid dollar, vaguely backed by gold, with a pure paper dollar, backed by nothing but the good intentions of government employees.
As the money went, so went the nation. Our friend and colleague Byron King opines:
The problem with the US over the last 40 or 50 years is that there’s too much free money…
We raise three generations of population who are untied from the basics of monetary education – millions of minds poisoned by
Economics 101 in universities across the land. “Elastic currency,” courtesy of the Fed.
Media & political classes are no smarter than the dummies who walk the land, so they make policy based on “free” money from the Fed… Deficits don’t matter.
Currency circulates and inflates the general price levels… People learn to live with it. Even make a virtue of it, doing things like “buy as much house as you can afford; the market will rise and you’ll make money.” That kind of idiocy.