January 30, 2015

Weekend Economists Celebrate Groundhog Day With George January 30-Feb. 1, 2015

Groundhog Day (Monday) is the first day of Solar Spring--halfway between the Solstice and the Equinox. It may not feel like it, but the sun is coming back from the southern hemisphere to warm the frozen North, the days are getting longer, the onions and potatoes are sprouting in your cupboard...

The earth, being a rather slow-moving system thermally, takes a while to warm up, so mortals call March 21st the first day of Spring, 6 weeks from now.

Just ignore them! Celebrate the real Spring!

We in the Midwest really need something to celebrate. It's going to be well below 20F (without the added windchill) for most of next week here in Michigan, and 6 inches of snow are predicted for Saturday night. We need the snow, because this polar vortex is killing the plants, especially my roses, again, because they have no protective blanket of fluffy snow....

(Demeter's Spring Soliloquy interrupted by nudging from the audience)

Who is George, you ask? A public figure who elicits strong opinion...from people of every persuasion!


This picture is shy--click to see!

The first is from a site that supports Obama, the second hates Wikileaks and advocates against a so-called "radical revolution", the third site accuses Soros of conspiring with Obama and Hillary to destroy Americans' rights, the 4th proposes to defeat Communism....NOW!

We will pause in the weekend's Spring bacchanal now and then to explore how this one man pissed off so many...and he did it "economically"!

January 28, 2015

Follow-Up on Monday's Caribbean Energy Security Summit

Caribbean Energy Security Summit Joint Statement (FROM WHITE HOUSE)

http://www.whitehouse.gov/the-press-office/2015/01/26/caribbean-energy-security-summit-joint-statement

The Governments of Antigua and Barbuda, Aruba, Bahamas, Barbados, Belize, Canada, Colombia, Curacao, Dominica, Dominican Republic, France, Germany, Grenada, Guyana, Haiti, Jamaica, Mexico, New Zealand, Spain, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname, Trinidad and Tobago, United Kingdom, United States, together with the Caribbean Community (CARICOM) Secretariat, Caribbean Development Bank, European Union, Inter-American Development Bank Group, International Renewable Energy Agency, Organization of American States, and the World Bank Group:

1. Recognizing that energy security, access to energy, economic development, environmental and climate goals benefit from and contribute to sustainable, modern, clean and diversified energy sectors;

2. Reaffirming our commitment to support access to sustainable, reliable, and affordable energy services, with a particular focus on cleaner alternative energy resources , for all citizens in the region;

3. Recognizing that increased energy efficiency and more diversified, and clean energy sources can lead to improved energy security, increasing self-sufficiency, economic growth, and climate resilience as well as reducing greenhouse gas emissions;

4. Recognizing that cost-effective, alternative, and renewable energy sources, can reduce energy costs, while at the same time providing increased options for countries to diversify their energy matrices;

5. Recalling the commitment at the Fifth Summit of the Americas in 2009 to expand cooperation on energy and climate change, including through the Energy and Climate Partnership of the Americas (ECPA); and at the Sixth Summit of the Americas in 2012 to accelerate energy integration to provide every person access to the electricity they need through the Connecting the Americas 2022 (Connect 2022) initiative;

6. Recalling the outcome of the Third International Conference on Small Island Developing States (SIDS Conference), September 2014, and the commitments taken under the SIDS Accelerated Modalities Of Action Pathway;

7. Recognizing that, although legal and regulatory reforms have been implemented in some countries to introduce renewable energy technologies and sustainable energy management approaches to attract the required investment in the Caribbean energy sector, in principle, more work on policy and regulatory issues is required to fully embrace the opportunities derived from sustainable energy;

8. Recalling national and regional energy plans, including the CARICOM Energy Policy and Caribbean Sustainable Energy Roadmap and Strategy (C-SERMS), adopted by CARICOM in March of 2013, and the commenced negotiations in the Dominican Republic for a National Pact on Energy;

9. Recognizing that lowering energy costs can increase competitiveness in tourism, manufacturing and various other sectors of the Regional economies;

10. Recognizing that the private sector has an important role to play in developing the energy sector in the region, and that there is potential for greater public-private partnerships;

11. Recognizing the synergies and benefits of regional cooperation for the strengthening of the energy sector;

12. Noting that this strategy is in line with the objectives of the Sustainable Energy for All (SE4ALL) initiative;

13. Recognizing the advances already made by several countries in diversifying their energy mix;

14. Recognizing our actions should support reaching a new international climate change agreement at the December 2015 UNFCCC negotiations in Paris;

15. Recalling the invitation at the UNFCCC Twentieth Conference of Parties to communicate intended nationally determined contributions well in advance of Paris in a manner that facilitates clarity, transparency and understanding; and

16. Recognizing the Caribbean is a particularly vulnerable region to climate change and has been an advocate in the fight against climate change.

We state our commitment to support the Caribbean’s transformation of the energy systems of Caribbean states, to share lessons learned through new and expanded regional information networks, to report progress in relevant fora, and to pursue the following in accordance with national laws:

1. Comprehensive, planning-based and research-driven approaches to energy transition, including implementation of pilot and demonstration projects, based on successful models so that individual clean energy projects are part of a fully integrated, climate-resilient energy transition plan toward clean sustainable energy for all.

2. For Caribbean countries, necessary and specific reforms , including recommendations from the 2013 CARICOM Energy Policy and the outcome of the 2015 Dominican Energy Pact, to support policy and regulatory environments that facilitate the introduction of new technologies favoring sustainable and clean energy that provide legal certainty for investors and improved predictability in price and supply for users.

3. Where viable, alignment of national legal and regulatory approaches to facilitate greater clean energy investment throughout the region, provided that countries can access finance and other resources on affordable terms, to set the stage for future electrical interconnection in keeping with the goals of Connect 2022.

4. Where technically and commercially feasible, promote and develop affordable: (i) no- or lower carbon electricity generation through wind, solar, geothermal power, hydropower, bioenergy, ocean energy, energy recovery from waste, and other clean energies; and (ii) energy efficiency measures. Recognizing also, that alternative fuels, such as natural gas, can play a useful bridging role.

5. Open, transparent, competitive and criteria-based processes, including liberalization where cost effective, to procure energy investment and facilitate access to finance for cleaner and climate resilient energy projects and infrastructure.

6. Data and energy information exchange and coordination with, between, and among countries and stakeholders to minimize duplication and enable the monitoring and evaluation of energy projects to maximize the impacts of efforts toward fully integrated, low carbon and climate-resilient energy transition plans.

The White House Office of the Press Secretary

For Immediate Release January 26, 2015


ORIGINAL POST: http://www.democraticunderground.com/110836488

January 25, 2015

When Liberals Were Organized by Julian E. Zelizer AMERICAN PROSPECT

http://blog.prospect.org/article/when-liberals-were-organized

Progressives seeking a model for an effective Congress could learn from the nearly forgotten history of the Democratic Study Group...When Republicans took control of the House of Representatives in 1994 for the first time in 40 years, one of Speaker Newt Gingrich’s earliest moves was to end the public funding for the Democratic Study Group (DSG), a caucus of liberal Democrats that had been created in 1959. It was one of Gingrich’s shrewdest maneuvers. As Kansas Republican Pat Roberts, a staunch conservative then and now, wrote in an internal memo, “The demise of the DSG severely damages the power structure of the House Democrats.”

Roberts was right. The DSG is almost forgotten today, but its history suggests lessons for the current generation of Democrats. Since 1994, congressional liberals have failed to replicate a powerful, independent organization like the Democratic Study Group. They have been dependent on a House leadership that is sometimes but not always sympathetic to their goals. The closest thing to a DSG, the Congressional Progressive Caucus, has been a pale imitation of its predecessor, a fragile informal coalition that has lacked the same kind of leadership, money, publications, communications strategy, or clout. As liberals prepare for the start of the 114th Congress and hope for stronger Democratic returns in 2016, they would benefit from looking back at the history of the DSG to see just how much a vibrant and robust caucus can offer.



Americans may think of the 1960s as a liberal heyday. In fact, a powerful conservative undertow persisted, especially on Capitol Hill. However, liberal Democrats of that era organized effectively—on the streets, in the workplace, and notably in the halls of Congress...Throughout the 1950s and early 1960s, obstructionist committee chairmen dominated Congress. Southern Democrats, often with safe seats in the one-party region of Dixie, wielded disproportionate power via the committee system. In a conservative coalition with Republicans, they used their power to block key liberal measures on civil rights, education, health care, and union protections.


The Obstructionist: Rules Committee Chairman Howard Smith of Virginia

House Rules Committee Chairman Howard Smith of Virginia, a lanky southerner in his late seventies when President Kennedy took office in 1961, used every available procedural tool to stifle liberal proposals. Once, when “Judge” Smith (an honorific from his onetime service on the bench) said that he couldn’t return to Washington for a vote on a civil rights bill in 1957 because there was a fire in his Virginia barn, Speaker Sam Rayburn quipped, “It’s the first time a man tried to burn down his barn in order to stop the legislative process.” The Speaker might have derided Smith’s tactics, but Rayburn and the rest of the leadership were deferential to the southern committee chairs. As a result of such obstructionism, the liberal agenda languished in the 1950s despite a Democratic majority in Congress and a moderate Republican president. Among liberals and political scientists, talk of a dysfunctional and deadlocked Congress was commonplace. Southern Democrats were famous for parliamentary prowess; liberals were known for their chronic disarray. Missouri Representative Richard Bolling, among the shrewdest liberal strategists of the era, observed, “One of the greatest weaknesses of the North, East, and West group in the Democratic Party is the great lack of legislative technicians. The obscure congressman from the South knows the tools of the trade pretty well … Ideals are like the stars—you use them to guide you, but you never reach them. Learn the methods that get you there.” The number of liberals in the House had steadily grown during Dwight Eisenhower’s presidency. Toward the end of the decade, a liberal coalition of northern and western Democrats resolved to organize.

On January 8, 1957, Congressmen Eugene McCarthy of Minnesota, Lee Metcalf of Montana, and Frank Thompson of New Jersey released the “Liberal Manifesto,” calling for the government to do more to ensure civil rights, adequate health care, access to education, and affordable housing. The Manifesto blasted the obstructionist tactics of the southerners. With the support of about 80 members from some 20 states, one of the first projects of “McCarthy’s Mavericks” was to provide assistance to liberals who were running in the 1958 midterm elections. The elections were a huge success for liberals. Republicans lost 48 seats in the House and 13 in the Senate. The new, younger liberals had little patience with the Dixiecrats. The road to the Great Society started with them. When Congress convened in 1959, they officially formed as a caucus, the Democratic Study Group.

From its founding, the DSG lobbied the Democratic leadership to appoint liberals to serve on influential committees, to support procedural reforms that would weaken committee chairmen, and to back legislation to expand the role of the federal government. The DSG regularly assembled task forces to develop legislation on key issues. The leaders created their own whip system, with 12 Democrats assigned to check on promised votes. They produced and disseminated first-rate research for members and the press, exposing conservative tactics and offering weekly legislative updates on their key issues. In the committee era of Congress, this kind of information was both novel and crucial, since so much of the legislative process was secretive and committee chairs retained tight control over staff and data. The political scientist James Sundquist described the DSG as “the most elaborately organized ‘party within a party’ in the history of the House of Representatives.” When the Rules Committee bottled up a civil rights bill in 1960 (though it was extremely mild), members of the DSG sought to force it out of committee through a “discharge petition,” a process requiring 218 votes. Chairman Smith was counting on the fact that the signatures on a discharge petition were kept secret. Engaging in guerrilla warfare, the DSG leaked the names of those who had signed the petition to the New York Times so that civil rights organizations could pressure the non-supporters. The strategy worked, and the bill made it through committee and was passed by Congress. “The importance of the Democratic Study Group,” wrote Robert Remini, the late historian of the House, “cannot be emphasized too strongly in the ongoing struggle to safeguard civil rights.”


MUCH MORE AT LINK--AN IMPORTANT READ---OCCUPY CONGRESS!


About the Author

Julian E. Zelizer is a political historian at Princeton University and a fellow at New America. His new book, published by Penguin Press, is The Fierce Urgency of Now: Lyndon Johnson, Congress, and the Battle for the Great Society.

January 24, 2015

Michigan Historical Center Celebrates State’s 178th Birthday

http://detroit.cbslocal.com/2015/01/24/michigan-historical-center-celebrates-states-178th-birthday/

The Michigan Historical Center is celebrating the state’s 178th birthday with activities focusing on pioneer life in early Michigan.

Statehood Day events are scheduled to take place Saturday in Lansing. Admission to the Michigan Historical Museum for Statehood Day is free, courtesy of the Michigan History Foundation. Michigan became the nation’s 26th state on Jan. 26, 1837.

Activities include playing with toys that children would have enjoyed in 1837; turning wool into yarn; learning about quilt making; exploring Native American life; and snacking on a Michigan birthday cookie.

In the Archives of Michigan on the second floor, visitors can view statehood documents, including Michigan’s first constitution. An exhibit “Conceived in Liberty” examines Michigan’s role at the end of the Civil War and the two decades following.

Online:

http://www.michigan.gov/mhc

HAPPY BIRTHDAY, MICHIGAN!

January 23, 2015

Weekend Economists' Demeter Film Award Reveal January 23-25, 2015

The Envelope please....



TCM’s Rob Nixon on the film:

Jewison recounts the eventful preview screening for a Russian audience in This Terrible Business Has Been Good to Me: An Autobiography:



http://altscreen.com/05/25/2011/thursday-editors-pick-the-russians-are-coming-the-russians-are-coming-1966/

Tony Shaw for the journal Film History:



Alan Arkin recalls his work on the film:



Robert Alden was enraptured upon the film’s initial release, as he wrote in The New York Times:

January 23, 2015

7 things the middle class can't afford anymore

http://www.usatoday.com/story/money/personalfinance/2014/10/25/cheat-sheet-middle-class-cant-afford/17730223/

1. Vacations
   
   
2. New vehicles
   
   
3. To pay off debt
   
   
4. Emergency savings
   
   
5. Retirement savings
   
   
6. Medical care
   
   
7. Dental work

DETAILS AT LINK

January 22, 2015

Sounds like the condo board--or the Democratic Party!

January 22, 2015

The Logic of Surveillance FEB. 2013 by Ian Welsh

http://www.ianwelsh.net/the-logic-of-surveillance/

Surveillance is part of the system of control. “The more surveillance, the more control” is the majority belief amongst the ruling elites. Automated surveillance requires fewer “watchers”, and since the watchers cannot watch all the surveillance, long term storage increases the ability to find some “crime” anyone is guilty of. When you add in recognition systems based on face, gait or other criteria, you have the theoretical ability to track people from the moment they leave their homes till they return. Other measures make it possible to see what people are doing inside their own homes (IR heat maps, for example). A world in which everyone is tracked all the time is very possible.

Quis custodiet ipsos custodes

This is one of the biggest problems the current elites face: they want the smallest enforcer class possible, so as to spend surplus on other things. The enforcer class is also insular, primarily concerned with itself (see Dorner) and is paid in large part by practical immunity to many laws and a license to abuse ordinary people. Not being driven primarily by justice or a desire to serve the public and with a code of honor which appears to largely center around self-protection and fraternity within the enforcer class, the enforcers’ reliability is in question: they are blunt tools and their fear for themselves makes them remarkably inefficient.

Surveillance expands the reach of the enforcer class and thus of the elites. Every camera, drone and so on reduces the number of eyes needed on the ground. The Stasi had millions of informers; surveillance reduces that requirement and the cost of the enforcer class.

The reliance on surveillance is however a weakness, one of many. One of the simplest ways to reduce the power and reach of the oligarchy is to destroy surveillance equipment, much of which is very easy to reach. I have frequently said that we will know that people are becoming more serious when they start destroying surveillance equipment, when it becomes an ethical imperative to do so; ideally when people believe that blanket surveillance is an ethical wrong....

MUST READ!

January 20, 2015

Did a Russian Parliamentarian Just Commit Treason?

http://landdestroyer.blogspot.mx/2015/01/did-russian-parliamentarian-just-commit.html

An interesting thing happened in Washington recently... a relatively small, little publicized event took place at the Center for Strategic and International Studies (CSIS), a prominent liberal-leaning think tank in Washington. The event, “Russia’s Opposition in a Time of War and Crisis,” featured prominent Russian liberal opposition parliamentarian (member of the Russian Duma) Ilya Ponomarev, a noted critic of Russian President Putin, providing a detailed presentation regarding the current political climate in Russia, and the potential for the ousting or overthrow of the Russian government. Yes, you heard that right. A Russian elected official came to the United States to give a talk about how best to effect regime change in his own country. At this point, the question is not so much whether what Ponomarev did was improper. The much more pressing issue is whether or not, by making this presentation in Washington precisely at the moment of heightened tensions between the US and Russia, Ponomarev has committed treason. While this may seem a rather extreme characterization, it is in fact quite appropriate.

What Is Treason and Does It Apply?

If we define treason as “the offense of acting to overthrow one’s government or to kill or harm its sovereign,” then Ponomarev’s actions seem to tread very close to the threshold for treason. Moreover, the fact that such a presentation was delivered at CSIS – a think tank rife with “strategic planners” and proponents of the use of “soft power” to expand US hegemony – is instructive as it provides a window into both Ponomarev’s thinking and, perhaps more importantly, that of the political establishment in the US...During his presentation, Ponomarev touched on a number of critical issues related to Russia’s domestic political situation, trying to illustrate for the attendees that the political reality in Russia, despite the simplicity of the western corporate media narrative, is rather complex. Though he described the Putin-led government as “Bonapartist,” he noted that “Putin is Russia’s only reliably working institution.” While the veracity of that statement is debatable, it does seem interesting that an elected Russian lawmaker would go to a foreign country under the auspices of wanting to help his country move forward, and then proceed to advocate the overthrow of the “only reliable institution.” Would this not be a thinly veiled attempt to advocate for destabilization, putsch, or something similar?

The most significant portion of Ponomarev’s presentation centered on a slide titled “Conditions for the Change of Power in Russia,” which laid out essentially a roadmap or blueprint for regime change in Russia. Ponomarev’s slide outlined what he believes to be the essential elements for successful overthrow of the democratically elected government. These include:


Organized street protest (versus spontaneous one)
Appealing vision of the future presented to the majority of Russians
Leader, acceptable for all protesters and the elites
Access to some financial resources
Part of the elites should support the revolution
Trigger event

Examining these points, it is clear that Ponomarev is not merely “informing” the assembled policymakers, journalists, and guests about what should happen, but rather is making a case for what must be made to happen. This is no educational exercise, but a thoughtfully crafted appeal to the political establishment of the US to support Ponomarev and his faction both financially and politically. Of course the prescription above is nothing new to keen political observers who have followed the development of the crisis in Ukraine, and who have knowledge of how “soft power” works, and the concept of the “color revolution.” What Ponomarev is describing has happened more than a few times before. What is particularly troubling this time is that a sitting parliamentarian, himself a beneficiary of the democratic electoral process, is openly advocating an anti-democratic, unconstitutional overthrow of his own government. And Ponomarev is perfectly aware of this fact. Indeed, he included in the slide entitled “Conditions for the change of power in Russia” the following points:

Unlikely – elections
Likely – revolution (non-violent or violent)
Compromise with the current elites increases probability of non-violent changes, but decreases the probability of successful reforms in the future


Here, Ponomarev is openly acknowledging a number of critical points. First, that regime change is unlikely to come through elections. This is a blatant admission that not only is Putin democratically elected and wildly popular, but that the opposition will never have anything close to enough popular support to defeat him. In other words, Ponomarev is tacitly saying that Putin must be overthrown precisely because the Russian people support him, and will likely continue to do so. Imagine: a democratically elected politician from a country supposedly run by an “authoritarian dictator” comes to the US – allegedly the world’s great champion of democracy – to advocate an anti-democratic regime change scenario. The hypocrisy is beyond words.

Second, and this is crucial to the question of treason, is the fact that Ponomarev is advocating “non-violent or violent revolution” in collaboration with a foreign power. Here the propagandists and assorted mouthpieces for the Empire might argue that CSIS is a private institution that is not affiliated with the US Government. One would have to painfully naïve about the nature of power in the US and how it functions to believe such a line of argument. CSIS, with its long association with individuals such as Zbigniew Brzezinski who come from the uppermost echelons of power, is one of a small number of hugely influential think tanks that directly impact US foreign policy. CSIS, along with the Rand Corporation, Council on Foreign Relations, and a handful of other groups, are a useful barometer for measuring the pulse of the US establishment, and for individuals such as Ponomarev to get close to the levers of US power.

Therefore, it could be argued that Ponomarev is openly collaborating with a foreign government – in this case through the nominal intermediary of CSIS – to bring about the overthrow of his own government. I would refer readers back to the above-referenced definition of treason.

MUCH MORE--THE AUTHOR NAMES NAMES....VERY SIGNIFICANT REPORT

Eric Draitser is an independent geopolitical analyst based in New York City, he is the founder of StopImperialism.org and OP-ed columnist for RT and frequent contributor to “New Eastern Outlook.”

January 19, 2015

The End Of The World Of Finance As We Know It

http://www.theautomaticearth.com/the-end-of-the-world-of-finance-as-we-know-it/

...The basic underlying argument then and now is that financial markets have been distorted to such an extent by the activities, the interventions, of central banks – and governments -, that they can no longer function, period. What we’ve seen since 2008 – not that things were fine and rosy before that – is that all ‘private’ losses were taken over by the public sector, just so the private sector didn’t have to fess up to what it lost, and the appearance of a functioning market system could be upheld. And those who organized this charade were dead on in thinking that as long as Dow and S&P numbers would look good, and they said ‘recovery’ in the media often enough, people would believe there still was a functioning financial marketplace. And they did. But those days are over. Or at least, they soon will be.

What I mean by that is that the functioning marketplace is long gone, and only now people’s beliefs, too, about it are changing, being forced to change, and soon quite radically. The entire idea that ruled the world of finance and kept it -seemingly – standing upright is crumbling fast. And we’re going to have to find a way to deal with that. As of today, we have none, we come up zero. The overriding narrative – which overrides every other thought – is that we’re on our way back to recovery. And then we’ll get back to becoming ever richer, live in ever bigger homes and drive ever bigger, smarter and faster cars. Or something in that vein.

The downfall of finance can be traced back to all sorts of points in history. Think Nixon the gold standard in 1971, for example. But the repeal of Glass-Steagall in 1998, under Bill Clinton, is undoubtedly one of the major ones. Once deposit-taking banks were -again – allowed to use those deposits to ‘invest’ – read: gamble with -, it was only a matter of time before the train went off the tracks in spectacular fashion. It now seems to stupid to be true, but Alan Greenspan, Bob Rubin and Larry Summers, the guys who had pushed so hard for the repeal – and got it -, were once featured on the cover of TIME as The Men Who Saved The World. While what they did was the exact opposite: they threw the world into a financial abyss. It took a while, sure, but then, 16-17 years is not all that long. Plus, it took just 2 years for the dotcom bubble to burst, and 6-7 more for Bear Stearns, AIG and Lehman to be whack-a-moled. The rest would have followed, but then the central banks stepped in. And now, 6 years and $50 trillion later, their omnipotence is being exposed as impotence. Which means there’s nothing left to keep up appearances. We’ll all have to leave the theater of dreams and step out into the blinding cold faint light of another morning. No choice. And we’ll figure out at some point that we’ve paid all we had just to watch the show.

No. 1) The Swiss National Bank this week threw in the towel, bankrupted a lot of foreign exchange brokers and investors and destroyed a few hundred thousand Swiss jobs in the process. And that was not the first sign that the game was up, the oil price collapse started it. Or, to be precise, made the collapse visible for the first time to most – even if they didn’t recognize it for what it was-. Central banks are pushing on a string, a concept long predicted: they have become powerless to stop financial markets events from taking their natural course of boom and bust.

No. 2) The Bank of Japan. From Asian Nikkei:



All the BOJ can do by now, all that’s left to do, is get out of the way. As it should have done right off the bat, before it started intervening 20 years ago. All central banks should have gotten, and stayed, out of the way. Butt out. They have no role to play in financial markets, and should never have been allowed to assume one. They can only do harm. Free markets may not be ideal, but central bank intervention is a certified lot worse.

No. 3) The Fed:



No. 4) The ECB. Which is supposed to come with a $1 trillion or so QE package this week. Which has long been priced in by the markets and will have no other effect than to bring down the euro further. QE everywhere is always only a game that shifts wealth from the public to the private sector, which is another way of saying from the poor to the rich. But then you end up with the poor getting so much poorer, you don’t have a functioning real economy anymore, and therefore no functioning financial markets either. The problem today is not one of lending, but of borrowing. Banks, even if they would want to, cannot lend to people too poor to borrow. Or spend, for that matter. And if people in the real economy, which accounts for 60-70% of GDP in developed nations, don’t spend, because they simply either don’t have the money or have no expectations of getting any, deflation sets in and central bankers are revealed as the impotent old farts they are. But that will by no means conclude the story. The effects of the ill-fated megalomaniac central bank policies will reverberate through our societies for decades, if only because $50 trillion is a lot of money. Much of it may have gone somewhere, in some zero sum game, but most of it just went up in the thin air of wagers like the ones the forex trade is made of. People keep asking where did the money go, well, nowhere, or rather it went back to the virtual state it came from.

The difference between the past 6 years and today is that central banks can and will no longer prop up the illusionary world of finance. And that will cause an earthquake, a tsunami and a meteorite hit all in one. If oil can go down the way it has, and copper too, and iron ore, then so can stocks, and your pensions, and everything else.

Perhaps Yellen et al are not all that crazy for cutting QE, and soon raising interest rates. Perhaps that’s the only sane thing left to do, as sane as the Swiss cutting their euro-peg. That doesn’t mean the Fed understands what’s going to happen to the US economy because of it, but it may just mean they have an inkling of the lack of alternatives. Japan is gone, it’s borrowed itself into oblivion. China’s ‘miracle’ was debt-financed to a much larger degree than anyone wishes to admit. Europe will end up seeing its union falling apart, because it could only ever be held up in times of plenty, and those times are gone. And the US won’t make it too long either on people making a ‘living’ flipping their neighbor’s burgers. But the central bank bills will still come due all over. That’s the bummer about deflation: your wealth evaporates, but your debt does not.