Leaked medical conference documents have warned that hospitals across the United States are preparing for 96 million coronavirus infections. Not only that, but the same document wants hospitals to make preparations for 480,000 deaths from this outbreak.
the American Hospital Association (AHA) conference in February reveal that US hospitals are preparing for:
96 million coronavirus infections
4.8 million hospitalizations from the infection
480,000 deaths in the United States
According to Business Insider, these leaked documents are telling. Dr. James Lawler, a professor at the University of Nebraska Medical Center, presented the harrowing “best guess” estimates of the extent of the outbreak to hospitals and health professionals as part of the AHA webinar called What Healthcare Leaders Need to Know: Preparing for the COVID-19 on February 26.
These documents paint a bleaker picture for those who are over the age of 60. According to the leaked documents:
“People aged 80 and over have a 14.8% chance of dying if they contract the infection, the slides revealed. The risk declines with youth, though those aged 70-79 and 60-69 are still placed at a significant risk, with 8% and 3.6% mortality rates respectively.” –Business Insider
Additionally, it’s worth noting thatDr. Lawler’s estimate of 480,000 deaths would indicate a death rate of just half a percent (0.5%), which is significantly lower than death rates being reported by the WHO (3.4%) and the nation of Italy (5%). If the death rate in the United States reached just 2% while 96 million Americans are infected, that would result in 1.92 million deaths.
The United States has fewer than one million hospital beds, and they are typically around 75% occupied by existing patients, unrelated to the coronavirus.Natural News has calculated that U.S. hospital beds will be overrun by May 30th if nothing is done to stop the exponential spread of the coronavirus.
Mike Adams, aka, the Health Ranger at Natural News, has a new video out presenting the math and statistics found in these leaked documents.
As Alt-Market’s Brandon Smith notes, it is also likely that hospitals are prepping for only 480,000 deaths because that is the maximum number of terminally ill patients their facilities can handle anyway.
If Italy is any indication and this virus does not burn out soon, the death rate will probably be between 3%-5%. The real number of infected versus dead will not be accurately calculated for another year at least…
Watch Live: Task Force Unveils ‘Details’ Of Trump’s Coronavirus-Impact Bailout Plan
Update (1729ET): Barely more than a minute after our last update, Javers reported that they’re setting up the Vice Presidential seal at the podium in the press room, indicating that Trump will not be joining the task force this evening.
And… now they’re setting up the vice presidential seal and flag. Good indicator we are NOT about to hear from POTUS. Aides caution he could always come in late, though, so stand by. pic.twitter.com/rX5JjYkdQ5
Update (1727ET): Eamon Javers just tweeted that nobody is sure whether President Trump is coming to the press conference tonight.
That was basically the impression we had. Trump did promise to release the details of the plan ‘tonight’. But if there aren’t any details to release…well.
GIven his showman instincts, a surprise appearance isn’t out of the question.
As of right now, aides will not say whether or not President Trump will be coming to the 5:30 press briefing to unveil his economic plan. POTUS said last night that he would have a news conference today to announce major and dramatic economic plans. That has not happened yet.
Last night, as the White House scrambled think of something, anything that they could say that might calm anxious markets (and increasingly anxious workers and business owners), President Trump dropped in on the task force’s press briefing (VP Pence, the task force’s nominal head, was supposed to lead) and told reporters that the administration was planning a stimulus package aimed at helping Americans cope with the economic fallout from the outbreak.
Trump has already signed an $8.3 billion stimulus package into law, but that money’s been earmarked to help the CDC and states fight the outbreak via testing and accomplish urgent priorities like rapidly expanding bed capacity to handle the soon to be overwhelming numbers of patients with life-threatening pneumonia who will be flooding emergency rooms – at least, that’s according to the most dire predictions of states and the CDC.
Now, he needs to convince markets that the administration is going to come through with the fiscal stimulus that every analyst, economist and armchair trader with a twitter account believes is necessary to save the US economy – if not the whole global economy – from sliding into a brutal recession.
With markets finishing in the green on Tuesday, the sense of urgency has slackened somewhat. Still, reporters are claiming that there is no plan, and that Trump essentially pulled the payroll tax cut idea out of his ass, failing to run it by his staff and senior administration officials, as well as the Congressional Republican leadership.
But since President Trump promised earlier to unveil the ‘details’ of his plan tonight, it appears he will be joining the task force to lay out the broad strokes of a ‘plan’ that’s reportedly nowhere near finished.
Will Trump start a war with fellow Republicans at a time of urgent national crisis, with his electoral future on the line? Hopefully, for his sake, his advisors have made clear just how important it is to convey to the public that this is a serious problem that Trump and his administration are meeting with serious solutions.
During a tweet sent a few hours ago, Trump praised the task force, and notably omitted any reference to the media conspiracy he alleges is being orchestrated to blame him for the outbreak.
The press conference is set to begin at 5:30, but like most Trump Administration press briefings, we suspect it will be late. Will Trump and the White House task force manage to restore confidence in the market and stop today’s rally from being just a dead cat bounce?
Former Vice President Joe Biden, the leading contender for the Democratic presidential nomination, today got into a heated argument with a Detroit autoworker who challenged his support for a new federal “assault weapon” ban. Even leaving aside Biden’s reference to an “AR-14” when he meant “AR-15,” the conversation revealed both the illogic of his proposal and the suspicions it understandably arouses among many gun owners.
Cellphone video of the encounter shows a bearded man in a hard hat accusing Biden of “actively trying to end our Second Amendment right and take away our guns.” Biden denied the charge. “You’re full of shit,” he said. “I support the Second Amendment. The Second Amendment, just like now, if you yelled fire, that’s not free speech…I have a shotgun. I have a 12-gauge, a 20-gauge. My sons hunt….I’m not taking your gun away at all.”
It is true that Biden’s proposal—like the 1994 federal “assault weapon” ban, which expired in 2004—does not include confiscation of guns Americans already own. Instead he would give owners of the targeted firearms a choice: They could sell their guns to the federal government, or they could register them under the National Firearms Act (NFA), following the same procedure, including a background check and a $200 tax, that applies to machine guns. Unlike former presidential candidate Beto O’Rourke, Biden is not threatening to “take your AR-15.”
But state requirements for registration of “assault weapons” have been honored mostly in the breach, and Biden’s plan is likely to be even less successful now that talk of confiscation is in the air. When the government does not know who owns the guns it decides to ban, it can neither force people to register them nor seize them. It is perfectly rational for gun owners to worry that the first step will eventually lead to the second.
During the exchange in Detroit, Biden himself muddied the legal impact of his proposal. “Are you able to own a machine gun?” he asked. “No, machine guns are illegal,” the autoworker replied. “That’s right,” Biden confirmed. “How are AR-15s legal?”
It’s not actually true that “machine guns are illegal.” While new production for civilian use has been banned since 1986, machine guns owned before then can be legally possessed and transferred as long as the NFA’s requirements are followed. On one hand, Biden wants to treat “assault weapons” the same way machine guns are treated, which he says shows he does not favor confiscation. On the other hand, he erroneously says no civilian is legally “able to own a machine gun,” which contradicts his first point.
Biden argues that machine guns “are rarely used in crimes” because of the restrictions imposed by the NFA. But even without those restrictions, “assault weapons” also are used in a very small share of gun homicides. In 2018, according to the FBI’s numbers, rifles in general—only a subset of which would qualify as “assault weapons”—accounted for 4 percent of guns used in firearm homicides where the type of weapon was specified. Handguns, by contrast, accounted for 93 percent of the weapons used in those cases. A tally by Sen. Dianne Feinstein (D–Calif.), who sponsored the original “assault weapon” ban and has introduced a new, stricter version that is probably similar to what Biden favors, suggests that the firearms she considers intolerable were used in something like 0.5 percent of gun homicides from 2004 through 2011.
The argumentative autoworker raised that point with Biden, noting that handguns are much more commonly used in homicides than the firearms he wants to ban. “Why are you advocating for [a ban on] assault rifles?” he wondered. Biden did not answer.
There is a good reason for that. Biden has conceded that the 1994 “assault weapon” ban had no impact on the lethality of legal firearms, which remained “just as deadly.” He says he would fix that problem, but it is hard to see how, since “assault weapons” are an arbitrarily defined category of firearms distinguished by military-style features that make little or no difference in the hands of a murderer. No amount of tinkering with the list of forbidden characteristics can ban guns that are effective in mass shootings without also banning guns that are commonly used for self-defense and other legal purposes, which would clearly violate the Second Amendment.
Biden wants us to believe that owning an AR-15 is constitutionally analogous to “falsely shouting fire in a theatre and causing a panic,” which is “not free speech.” But he cannot explain why. The Supreme Court has said the Second Amendment guarantees the right to own firearms “in common use” for “lawful purposes,” a standard that so-called assault weapons easily satisfy, since they are among the most popular rifles sold in the United States.
Today Biden repeatedly asked his interlocutor whether anyone really needs a magazine that holds “100 rounds,” which is doubling misleading. First, the issue of ammunition capacity is distinct from the definition of “assault weapon,” since a gun could fall outside Feinstein’s criteria and still accept a 100-round magazine. Second, Biden’s proposal to ban “high-capacity magazines,” assuming it is similar to Feinstein’s, draws the line at 10 rounds, not 100. That rule would ban magazines commonly used for self-defense.
To show that he supports the Second Amendment, Biden noted that he owns shotguns and that “my sons hunt,” which is not exactly reassuring for anyone who values the right to armed self-defense. Biden also has said that if you must keep a firearm for home defense, a shotgun is the way to go—questionable advice that has been rejected by the millions of Americans who own handguns for that purpose, a choice the Supreme Court has recognized as constitutionally protected. Feinstein seems to share Biden’s affection for shotguns, hundreds of which are included in her bill’s gratuitous list of specifically exempted firearms.
Since even shotguns are more commonly used in homicides than “assault weapons” are, the constitutional or public safety distinction that Biden and Feinstein have in mind is rather mysterious. If Biden wants gun owners to believe him when he says he respects the Second Amendment, he will have to do a better job of explaining which rights he thinks it protects and why.
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It’s almost never a good idea to use a public health crisis to score points against your political opponents—and if you’re going to do it, you really ought to try to describe the situation accurately.
Actually, that second part applies even when there’s no public health crisis.
It has, however, become fashionable for certain elements of the Very Online Left to use the ongoing coronavirus outbreak as evidence that libertarians either don’t actually exist or that we quickly abandon our principles in the face of a pandemic. This recent outbreak of libertarian bashing—which makes only slightly more sense than the claims made by some on the right that libertarians are secretly running everything in Washington, D.C. and plotting to get your kids addicted to porn—seems to have started with a pithy tweet from Atlantic writer Derek Thompson on March 3. But it’s become a ubiquitous online “take” since Sunday afternoon, when Bloomberg opinion writer Noah Smith logged on.
Libertarians: Government sucks, let's hollow out the civil service
*Pandemic comes, hollowed-out civil service is unable to respond effectively*
The take may have achieved its final form—at least let’s hope so—with The Atlantic‘s publication on Tuesday of an 800-word piece from staff writer Peter Nicholas carrying the headline (sigh) “There Are No Libertarians in a Pandemic.”
Nicholas tries to get away with this nonsense by setting up a false dichotomy. Trump is campaigning against socialism, you see, and libertarians also dislike socialism—so therefore the Trump administration must be libertarian. Right? Therefore, when Trump starts talking like a socialist himself—by promising coronavirus bailouts and the repurposing of disaster recovery funds to cover people who come down with COVID-19—it is proof positive that the libertarian world has abandoned its commitment to smaller government. Voila!
Perhaps TheAtlantic‘s editorial staff has self-quarantined from its duties—how else to explain how an otherwise thoughtful publication could allow a headline that confuses libertarianism with anything that the Trump administration is doing? For that matter, maybe Smith and Thompson believe that an army of strawmen are an effective defense against COVID-19. I hope it works out for them.
As a libertarian in a pandemic, let me first assure you that we do in fact still exist.
And, in fact, it is the free market—and, to a lesser extent, its defenders—who will help you survive the new coronavirus. All those groceries you’re stocking up on in advance of the expected collapse of civilization? They didn’t end up on grocery store shelves because government officials ordered it to happen or because someone was feeling particularly generous today. That gallon jug of hand sanitizer delivered to your front door less than 48 hours after you ordered it online? It didn’t show up because Trump tweeted it into existence or because the surgeon general is driving a delivery truck around the country.
Bottled water? Face masks? They’re available because someone is turning a profit by making and selling them. The first latex gloves were invented in the 1880s but the disposable variety that are so useful right now have “only been available since 1964, as innovated by the private company Ansell, founded by Eric Ansell in Melbourne, Australia. Thank you international trade,” notes Jeffrey Tucker, editorial director of the American Institute for Economic Research.
Sure, one consequence of the success of private enterprise in reshaping the world is an interconnected planet that allows for something like COVID-19 to spread more rapidly than would have been possible in the past. But modern technology has also allowed doctors, private enterprises, and (yes) governments to respond more quickly than ever before.
It also means that you’ll have access to nearly every piece of film, television, and music ever recorded by human beings if you have to self-quarantine for a week or two. It means that humans have the ability to live far healthier lives than they did in 1918, when a global flu pandemic killed 50 million people. The people who live through the current coronavirus outbreak because of stronger immune systems made possible by steady diets won’t show up on any list of statistics after the coronavirus has passed, but capitalism is at least partially to thank for their survival.
In short, if you had to pick any time in human history to live through a global pandemic, you’d be incredibly foolish not to pick the current time. And the reason you’d pick this moment in history probably has less to do with who is running the White House, the Centers for Disease Control and Prevention, or the World Health Organization, and more to do with the technological and medical advances made possible by free enterprise.
“What is the mighty contribution of government these days?” asks Tucker. “To order quarantines but not to tell you whether you can step outside, how you will get groceries, how long it will last, who you can invite in, and when it will all end. Don’t try to call the authorities. They have better and bigger things to worry about than your sorry plight that is causing you sleepless nights and endless worry. Thank goodness for digital technology that allows you to communicate with friends and family.”
Yeah, there are libertarians in a pandemic. We’re the ones willing to acknowledge how much more all of this would suck if the market didn’t exist.
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Jefferies Board Approved Massive Executive Bonuses Despite Firm’s $182 Million WeWork Write Down
Bringing back memories of 2008, WeWork’s dramatic collapse leading up to its IPO didn’t deter bankers at Jefferies from taking bonuses – rather, it encouraged them.
After Jefferies wrote down the stake of its WeWork holdings by $182.3 million last year, its board authorized $10.7 million in cash payouts to its CEO and three of his top lieutenants, according to Bloomberg, who cited a regulatory filing.
Better yet, writing down WeWork’s IPO wound up cutting into an earnings ratio that would have been effectively denied senior management their payouts. But the board used the excuse that WeWork’s valuation collapse was “completely unanticipated and dramatic” and made with the bonuses anyway. Maybe someone should tell them that’s what can happen when you’re making investments for a living.
In the past, Jefferies’ board had said there should be a “strong link between executive compensation and performance.” It appears as though that is only true in cases where executives are entitled to their bonuses.
Without the collapse of WeWork, executives would have met the ratio parameters necessary to get their bonuses. Occasionally, directors have discretion over adjusting bonus awards for unforeseen circumstances, which can sometimes draw criticism from proxy firms and investors.
The bonuses were issued to CEO Richard Handler, President Brian Friedman, Chief Financial Officer Teresa Gendron and General Counsel Michael Sharp. For the year, Handler was paid $43 million in stock, $1 million in a cash salary and a $4.5 million bonus. The bonuses are generally linked to a metric that compares the firm’s net income to book value and the bank posted a 5.89% return for 2019, which was short of the company’s 6% bonus threshold.
Without WeWork, the ratio would have been 7.74%. So, like every company does now with non-GAAP earnings “ex-items”, Jefferies simply played pretend and acted as though WeWork, the largest IPO blowup story possible of the last decade, never happened.
The Board defended the payouts citing hiring a new class of investment bankers that’s 49% female and avoiding regulatory scrutiny for the year. A spokesman for Jefferies declined to comment to Bloomberg. We wonder why.
What a week we just had in the precious metals market.
From a huge drop last Friday – which in the past would have presaged further declines the following week – to a significant rebound in the gold price, coupled this time with a major drop in the US dollar – which I will argue may be the signal for a switch to inflationary conditions.
First the chart
We see the nice deflationary trend of the past 18 months looks to have been decisively broken by last week’s action.
Although it will be a few weeks before we can be absolutely sure, last week suggests that we are about to embark on another bout of inflation, no doubt as carefully calibrated by the Masters of the Universe as they can fill a shot-glass of whiskey from a pool of liquidity the size of a football field. Either, like a small child pouring very carefully, they have poured only too much, or they have sloshed out enough whiskey to fill a large swimming pool, and we are about to see what happens when it all lands in a shot glass.
Now, why the need for some liquidity?
Another chart:
This graph plots the gold-copper ratio against its rate of change. I typically interpret this ratio as an indicator of the real world preference between bricks and mortar and financials. When the ratio is low, it’s a sign that people would rather make refrigerators than chase derivatives.
Rate of change is the vertical axis. Near the top of the chart means that the plot is shifting towards the right at high speed. Currently, the system is moving toward the right (ratio is increasing) at the fastest rate in the last couple of years.
To me, this means the real economy is degrading very quickly.
Thus the Fed may feel pressured to pump out some liquidity.
If we are moving into an inflationary cycle, then one consequence, according to this recent post, is a decrease in the gold-silver ratio. Given that moves tend to get larger as liquidity sloshes around the system, the gold-silver ratio could hit a significant low, implying a new all-time high for the silver price (in fiat terms).
Normally I would wait a few weeks to have greater certainty, but if there is a swimming pool full of whiskey heading for a shot glass I want to get as close to ground zero as possible with a bucket.
It’s almost never a good idea to use a public health crisis to score points against your political opponents—and if you’re going to do it, you really ought to try to describe the situation accurately.
Actually, that second part applies even when there’s no public health crisis.
It has, however, become fashionable for certain elements of the Very Online Left to use the ongoing coronavirus outbreak as evidence that libertarians either don’t actually exist or that we quickly abandon our principles in the face of a pandemic. This recent outbreak of libertarian bashing—which makes only slightly more sense than the claims made by some on the right that libertarians are secretly running everything in Washington, D.C. and plotting to get your kids addicted to porn—seems to have started with a pithy tweet from Atlantic writer Derek Thompson on March 3. But it’s become a ubiquitous online “take” since Sunday afternoon, when Bloomberg opinion writer Noah Smith logged on.
Libertarians: Government sucks, let's hollow out the civil service
*Pandemic comes, hollowed-out civil service is unable to respond effectively*
The take may have achieved its final form—at least let’s hope so—with The Atlantic‘s publication on Tuesday of an 800-word piece from staff writer Peter Nicholas carrying the headline (sigh) “There Are No Libertarians in a Pandemic.”
Nicholas tries to get away with this nonsense by setting up a false dichotomy. Trump is campaigning against socialism, you see, and libertarians also dislike socialism—so therefore the Trump administration must be libertarian. Right? Therefore, when Trump starts talking like a socialist himself—by promising coronavirus bailouts and the repurposing of disaster recovery funds to cover people who come down with COVID-19—it is proof positive that the libertarian world has abandoned its commitment to smaller government. Voila!
Perhaps TheAtlantic‘s editorial staff has self-quarantined from its duties—how else to explain how an otherwise thoughtful publication could allow a headline that confuses libertarianism with anything that the Trump administration is doing? For that matter, maybe Smith and Thompson believe that an army of strawmen are an effective defense against COVID-19. I hope it works out for them.
As a libertarian in a pandemic, let me first assure you that we do in fact still exist.
And, in fact, it is the free market—and, to a lesser extent, its defenders—who will help you survive the new coronavirus. All those groceries you’re stocking up on in advance of the expected collapse of civilization? They didn’t end up on grocery store shelves because government officials ordered it to happen or because someone was feeling particularly generous today. That gallon jug of hand sanitizer delivered to your front door less than 48 hours after you ordered it online? It didn’t show up because Trump tweeted it into existence or because the surgeon general is driving a delivery truck around the country.
Bottled water? Face masks? They’re available because someone is turning a profit by making and selling them. The first latex gloves were invented in the 1880s but the disposable variety that are so useful right now have “only been available since 1964, as innovated by the private company Ansell, founded by Eric Ansell in Melbourne, Australia. Thank you international trade,” notes Jeffrey Tucker, editorial director of the American Institute for Economic Research.
Sure, one consequence of the success of private enterprise in reshaping the world is an interconnected planet that allows for something like COVID-19 to spread more rapidly than would have been possible in the past. But modern technology has also allowed doctors, private enterprises, and (yes) governments to respond more quickly than ever before.
It also means that you’ll have access to nearly every piece of film, television, and music ever recorded by human beings if you have to self-quarantine for a week or two. It means that humans have the ability to live far healthier lives than they did in 1918, when a global flu pandemic killed 50 million people. The people who live through the current coronavirus outbreak because of stronger immune systems made possible by steady diets won’t show up on any list of statistics after the coronavirus has passed, but capitalism is at least partially to thank for their survival.
In short, if you had to pick any time in human history to live through a global pandemic, you’d be incredibly foolish not to pick the current time. And the reason you’d pick this moment in history probably has less to do with who is running the White House, the Centers for Disease Control and Prevention, or the World Health Organization, and more to do with the technological and medical advances made possible by free enterprise.
“What is the mighty contribution of government these days?” asks Tucker. “To order quarantines but not to tell you whether you can step outside, how you will get groceries, how long it will last, who you can invite in, and when it will all end. Don’t try to call the authorities. They have better and bigger things to worry about than your sorry plight that is causing you sleepless nights and endless worry. Thank goodness for digital technology that allows you to communicate with friends and family.”
Yeah, there are libertarians in a pandemic. We’re the ones willing to acknowledge how much more all of this would suck if the market didn’t exist.
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Tonight’s Primary: Sanders Needs Big Win In Michigan Tonight Or Biden Takes The Cake
Six states are holding primaries today – with Michigan awarding the most delegates, followed by Washington State, Missouri, Mississippi, Idaho and North Dakota. Results are expected to begin rolling in around 8 p.m. Eastern time.
Former VP Joe Biden has 664 delegates under his belt going into tonight’s voting, while Sen. Bernie Sanders (I-VT) trails with 573. After Sanders’ lost an early delegate lead on Super Tuesday, the Vermont democratic socialist needs a big win in Michigan to put him back in the game with its 125 delegates. If that doesn’t happen, it’s curtains for Bernie.
As the NY Post notes, Sanders won Michigan in 2016 in a stunning victory over Hillary Clinton by 18,000 votes. That said, “there are doubts Sanders can recreate that victory, with speculation rampant that Michigan this time could sound the death knell for his campaign.“
The reality of the situation is not lost on PredictIt betters, who have Biden sharply in the lead as the likely Democratic nominee.
WTI Maintains Gains Despite Much Bigger Than Expected Crude Build
Oil prices screamed higher (partly in response to investors’ rising skepticism about the escalating war of words between key oil exporters Saudi Arabia and Russia) bouncing after yesterday’s carnage. Today’s most notable headline was OXY cutting its dividend (by 86%), but that failed to worry bullish oil machines who bought with both hands and feet today.
Bloomberg’s Liam Denning noted:
Oxy’s decision to stretch itself to beat Chevron Corp. in a bid battle for Anadarko Petroleum Corp. left it vulnerable in an industry not exactly famed for its stability. This is just damage control on a grand scale.
API
Crude +6.407mm (+1.9mm exp)
Cushing +364k
Gasoline -3.091mm (-2.1mm exp)
Distillates -4.679mm (-1.8mm exp)
API was expected to report a continued trend from last week – more builds for crude and draws for products – but the data was more extreme with a much bigger than expected crude build and much bigger than expoected product draws…
Source: Bloomberg
WTI hovered around $34.60 ahead of the print and dipped very modestly
Oil prices are likely to come back under pressure unless Moscow and Riyadh agree to another round of production cuts, according to Harry Tchilinguirian, head of commodity strategy at BNP Paribas.
“If the oil market has to contend with both a positive supply shock and a negative demand shock, then prices are going to be extremely weak,” Mr. Tchilinguirian said.
Neither Riyadh nor Moscow stand to benefit from oil prices remaining at current levels or dropping lower, traders said, despite the production threats.
“All the Saudis are going to do is escalate to negotiate,” said Edward Marshall, commodities trader at Global Risk Management. “The Saudis have downplayed the necessity of a meeting, but I don’t think it’s in anyone’s interest to go lower, although it certainly can.”
But in order for prices to move even lower and stay there, “we need to see storage tanks being filled at a greater level than we originally thought following the coronavirus outbreak,” Mr. Marshall said.
The last week has seen The Dow make several 1000-point-plus swings which were more than a little startling for many investors, veering dangerously close to a precipice which has 1929 written all over it. Across the internet, panicky discussion has erupted over whether this foretells another 1987 collapse as Donald Trump warned, or something more akin to Black Tuesday of 1929. Others have pondered whether this is more similar to a 1923 Weimar hyperinflation where Germans became millionaires overnight (not much to celebrate when bread costs billions).
The fact of the oncoming collapse itself should not be a surprise- especially when one is reminded of the $1.5 quadrillion of derivatives which has taken over a world economy which generates a mere $80 trillion/year in measurable goods and trade. These nebulous bets on insurance on bets on collateralized debts known as derivatives didn’t even exist a few decades ago, and the fact is that no matter what the Federal Reserve and European Central Bank have attempted to do to stop a new rupture of this overextended casino bubble of an economy in recent months, nothing has worked. Zero to negative percent interest rates haven’t worked, opening overnight repo loans of $100 billion/night to failing banks hasn’t worked- nor has the return of quantitative easing which restarted on October 17 in earnest. No matter what these financial wizards try to do, things just keep getting worse.
Rather than acknowledge what is actually happening, scapegoats have been selected to shift the blame away from reality to the point that the current crisis is actually being blamed on the Coronavirus!
Deeper than Corona
Let me just state outright:
That while the coronavirus may in fact be the catalyzer for the oncoming financial blowout, it is the height of stupidity to believe that it is the cause, as the seeds of the crisis goes deeper and originated much earlier than most people are prepared to admit.
To start getting at a more truthful diagnostic, it is useful to think of an economy in real (vs purely financial) terms – That is: Simply think of the economy as total system in which the body of humanity (all cultures, nations and families of the world) exist.
This co-existence is predicated on certain necessary powers of production of food, clothing, capital goods (hard and soft infrastructure), transportation and energy production. After raw materials are transformed into finished goods, these physical goods and services move from points A to B and are consumed. This is very much akin to the metabolism that maintains a living body.
Now since populations tend to grow geometrically, while resources deplete arithmetically, constant demands on new creative discoveries and technological application are also needed to meet and improve upon the needs of a growing humanity. This last factor is actually the most important because it touches on the principled element that distinguishes humanity from all other forms of life in the ecosystem which Lincoln identified wonderfully in his 1859 Discoveries and Inventions Speech:
“All creation is a mine, and every man, a miner. The whole earth, and all within it, upon it, and round about it, including himself, in his physical, moral, and intellectual nature, and his susceptibilities, are the infinitely various “leads” from which, man, from the first, was to dig out his destiny… Man is not the only animal who labors; but he is the only one who improves his workmanship. This improvement, he effects by Discoveries, and Inventions.”
During a 1994 address to Russian scientists in Moscow, a modern adherent to Lincoln’s system (the late economist Lyndon LaRouche) addressed this concept from a modern perspective by asking:
“Mankind is different than any other animal; how do we prove this? And how does that bear on this question of technology? If the hominids-mankind-were higher apes or animals, we would have the population potential (approximately) of higher apes, baboons (which some people behave like), or chimpanzees. In that case, in the past 2 million years of the interglacial period, at no time would the human population of this planet have exceeded 10 million persons approximately… we have increased the world population to 5.3 billion people. Twenty or twenty-five years ago, we had the basis for, in a normal fashion, going to 25 billion people, without any great problem. In the past 30 years, we have destroyed so much of the planet’s productive technology and productive capacity, that we are in a disaster.”
What these men laid out in their own manner are not mere hypotheses, but elementary facts of life which even the most ardent money-worshipper cannot get around.
Of course money is a perfectly useful tool to facilitate trade and get around the awkward problem of lugging bartered goods around on your back all day, but it really is just that: a supporting element to a physical process of maintenance and improvement of trans-generational existence. When fools allow themselves to loose sight of that fact and elevate money to the status of a cause of all value (simply because everyone wants it), then we find ourselves far outside the sphere of reality and in the Alice in Wonderland world of Alan Greenspan’s fantasy world where up is down, good is evil, and humans are little more than vicious monkeys.
So with that in mind, let’s take this concept and look back upon today’s crisis.
Greenspan and the Controlled Disintegration of the Economy
When Alan Greenspan confronted the financial crisis of October 1987, markets had collapsed by 28.5% and the American economy was already suffering from a decay begun 16 years earlier when the dollar was removed from the fixed exchange rate and was “floated” into a world of speculation. This departure from the 1938-1971 Industrial growth model ushered in a new paradigm of “post-industrialism” (aka: nation stripping) under the new logic of “globalization”. This foolish decision was celebrated as the consumer-driven, “white collar society” which would no longer worry about “intangible things” like “the future”, infrastructure maintenance, or “growth”. Under this new paradigm, if something couldn’t generate a monetary profit within 3 years, it wasn’t worth doing.
Paul Volcker (Greenspan’s predecessor at the Federal Reserve) exemplified this detachment from reality when he called for the “controlled disintegration of society” in 1977, and acted accordingly by keeping interest rates above 20% for two years which destroyed small and medium agro industrial enterprises across America (and the world). Greenspan confronted the 1987 crisis with all the gusto of a black magician, and rather than re-connect the economy to physical reality and rebuild the decaying industrial base, he chose instead to normalize “creative financial instruments” in the form of derivatives, which quickly grew from several billion in 1988 to $2 trillion in 1992 to $70 trillion in 1999.
When Bill Clinton repealed Glass-Steagall bank separation of commercial and investment banks as his last act in office in 1999, speculators had un-bounded access to savings and pensions which they used with relish and went to town gambling with other people’s money. This new bubble continued for a few more years until the $700 trillion derivatives time bomb found a new trigger and the subprime mortgage market nearly burned the system down. Just like in 1987, and the collapse of the Y2K bubble in 2001, the Mammon worshipping wizards in the ECB and Fed solved this crisis by creating a new system of “bailout” which continued for another decade.
Today, western economies have been hollowed out of the very life blood that caused value by supporting human life in the first place.
The Ugly Truth of Today’s Crisis
New “sub-prime” bubbles have been created in the Corporate Debt sector which has risen to over $13.8 trillion (up 16% from the year earlier). A quarter of which is considered junk, and another half graded at BB by Moodies (a step above junk).
Household debt, student and auto debt has skyrocketed and since wages have not kept up with inflation causing even more unpayable debts have been incurred in desperation. Industrial jobs have collapsed consistently since 1971, and low paying service jobs have taken over like a plague.
The last report from the American Society of Civil Engineers concluded that America desperately needs to spend $4.5 trillion just to bring its decayed infrastructure up to safety levels. Roads, bridges, rail, dams, airports, schools all received near failing grades with the average age of Dams clocking in at 56 years, and many water pipes over 100 years old, and transmission/distribution lines are well over 60 years. The factories which once supplied those infrastructure needs are long outsourced, and much of the productive workforce that had that living knowledge to build a nation are retired or dead leaving a deadly generation knowledge gap in its place filled with millennials who never knew what a productive economy looked like (and aging baby boomers who have tried hard to forget what it was).
American farmers have probably been the most devastated in all this with dramatic population losses across the entire farm belt of America and the average age of farmers now 60 years. It was recently reported that 82% of U.S. Agricultural family income comes from off farms, as mega cartels have taken over all aspects of farming (from equipment/supplies, packaging and the even the actual farming in between).
Why was this permitted to happen? Well besides the obvious intention to induce “a controlled disintegration of the economy” as Volcker so coldly stated, the idea was always to create the conditions described by the late Maurice Strong (sociopath and Rothschild cut-out extraordinaire) in 1992 when he rhetorically asked:
“What if a small group of world leaders were to conclude that the principal risk to the Earth comes from the actions of the rich countries? And if the world is to survive, those rich countries would have to sign an agreement reducing their impact on the environment. Will they do it? The group’s conclusion is ‘no’. The rich countries won’t do it. They won’t change. So, in order to save the planet, the group decides: Isn’t the only hope for the planet that the industrialized civilizations collapse? Isn’t it our responsibility to bring that about?”
How do we get back to health?
Like any addict who wakes up one morning at rock bottom with the sudden terror that his death is nigh, the first step is admitting we have a problem.
This means simply: acknowledging the true nature of the current economic calamity instead of trying to blame “coronavirus” or China, or some other scapegoat.
The next step is begin to act on reality instead of continuing to take heroine (a fine metaphor for the addiction to derivatives speculation).
An obvious first step to this recovery involves restoring Glass-Steagall in order to 1) break up the Too Big to Fail banks and 2) impose a standard of judging “false” value from “legitimate” value which is currently absent from the modern psycho that lost all sense of needs vs wants. This would allow nations to re-create a purge of the unpayable fictitious debt and other claims from the system while preserving whatever is tied to the real economy (whatever is directly connected to life). This process is sort of akin to cutting a cancer.
At this point nation states will have re-asserted their true authority over the pirates of private finance controlling the Trans-Atlantic financial system like would-be gods of Olympus (unbounded perverted vices and all).
President Trump and other sane patriots from both parties of America would then have to figure out how to start the long but vital process of forcing credit to regenerate the destroyed productive base of America and Europe with a focus on advanced infrastructure, science and technological progress. This later investment into space science, atomic power, and transportation (high speed and magnetic levitation) would drive new breakthroughs necessary to overcome the current “limits to growth” that Green New Dealing oligarchs believe justify reducing the world population to less than two billion.
Where Franklin Roosevelt had to drive this process solo in the 1930s, today’s America luckily has a China-Russia alliance that have created a powerful “New Deal” of win-win cooperation in the form of the evolving Belt and Road Initiative with invitations for western nations to jump on board.
