Author: admin

Submitted by David Stockman via Contra Corner blog,

Capitalism gets into deep trouble when the price of financial assets becomes completely disconnected from economic reality and common sense. What ensues is rampant speculation in which financial gamblers careen from one hot money play to the next, leaving the financial system distorted and unstable—a proverbial train wreck waiting to happen.

That’s where we are now. And nowhere is this more evident than in the absurd run-up in the price of European sovereign debt since the Euro-crisis peaked in mid-2012. In that regard, perhaps Portugal is the poster-boy. It’s fiscal, financial and economic indicators are still deep in the soup, yet its government bond prices have soared in a triumphal arc skyward.

Unfortunately, the recent crashing landing of its largest conglomerate and financial group (Espirito Santo Group) is a stark remainder that its cartel-ridden, import-addicted, debt-besotted economy is not even close to being fixed. Notwithstanding the false claims of Brussels and Lisbon that it has successfully “graduated” from its EC bailout, the truth is that the risk of default embedded in its sovereign debt has not been reduced by an iota.

At the time of the 2011-2012 crisis, its central government was already sliding rapidly into a debt trap with a ratio of just under 100%. Self-evidently, the nation’s so-called EC bailout has only made its public debt burden dramatically worse. Today Portugal’s debt to GDP ratio is 129% and there is no sign of a turnaround.

But that has not deterred the rambunctious speculators in peripheral sovereign debt. Since mid-2012 and Draghi’s “whatever it takes” ukase, the price of Portugal’s public debt has soared. This means that leveraged speculators—-and they are all leveraged on repo or similar forms of hypothecated borrowings—-have made a killing, harvesting triple-digit gains on the thin slice of non-borrowed capital they actually have at risk in these carry trades.

As shown below, in response to this central bank induced bond buying campaign by fast money speculators, the 10-year Portuguese government bond yield has experienced a stunning plunge from 15% to 4% during the last 24 months. Among other things, this dramatic improvement virtually overnight in its fiscal financing costs has taught Portugal’s government a dangerously false lesson. Namely, that in the face of unsustainable fiscal profligacy all its takes is a little budgetary sleight of hand and fake austerity. In fact, nearly all of its fiscal improvement is owing to the one-time sale of state assets including the airport operator and various public utilities under financial arrangement which amount to little more than off-budget borrowing.

Moreover, regardless of the quality of its fiscal recovery measures, the sharp drop in its bond yield would ordinarily at least imply that Portugal has turned its chronic fiscal deficits on a dime, but that is not remotely the case, either.  Portugal has been burying itself in red ink for decades and despite being down from their crisis peak of 10% of GDP in 2010-2011, government deficits are shown are still running at the historic rate of 5% of GDP and will be lucky to break below that level in 2014 or anytime soon thereafter.

Needless to say, when a country’s nominal GDP is stuck on the flat-line, it can’t add 5% of annual output to the public debt each and every year without quickly being doomed by sheer arithmetic. That baleful fiscal math, in fact, is exactly the reason its bonds sold off so sharply in the first place, and why in the absence of massive central bank distortion of bond prices, Portugal would still be under the thumb of crushing yields on its monumental public debt.

So what is at work here is the opposite of is honest price discovery of the type that occurs on a genuine free market. There is virtually no logical basis for the bond market rally in Portuguese or other European sovereign debt. As detailed below, the whole thing is a central bank driven wave of short-term speculation and inflows of hot money which can reverse as quickly as it arrived following Draghi’s ukase.

in the meanwhile, the Wall Street and London sell-side continues to promote hairline and often transient  improvements as justification for the rally, which is to say, purchase of bonds and derivatives from their trading desks. In truth, the dismal facts of Portugal’s stunted economy and profligate fiscal practices have barely improved, but that does not prevent sell side ballyhoo from breaking out all over.

During recent quarters, for instance, Portugal’s real GDP has turned slightly upward, but the magnitude of improvement is laughably marginal—-certainly not remotely consistent with the massive gain in its bond prices. Thus, after three quarters of hairline gains, its real GDP in the Q2 2014 was a barely measureable 0.8% larger than the same quarter a year ago. And these rounding error gains, of course, have not yet made up a fraction of the deep shrinkage that occurred in the prior two years.

Indeed, despite all the sell-side drum-beating, Portugal’s real GDP is still 6% smaller than it was on the eve of the financial crisis in 2007. In that context, the galloping bond market rally during the past two years is insensible: a slight uptick from the bottom of a deeply depressed trend is no evidence whatsoever that Portugal’s battered national economy is being sustainably rejuvenated national economy, or that its capacity to service its spiraling debts has been improved in the slightest.  In short, the entire bond rally has noting to do with the fundamentals of Portugal’s fiscal and economic circumstances.

The real problem, of course, is that all sectors of the Portuguese economy buried themselves in debt during the years after it joined the EC and was able to access the cheap funding available in the euro bank and bond markets. Indeed, the explosive growth of debt was so extreme that it could be fairly labeled as a sheer financial orgy.  As shown below, during the 14 years between 1996 and 2010, for example, household sector debt increased by 6X at a time when the nominal GDP grew by less than 2X. Even after some modest liquidation during the last 4 years, household debt is still 5X larger than it was in the mid-1990s, yet Portugal’s nominal GDP has actually declines since the 2010 debt peak, meaning that the household leverage ratio is now worse than ever.

The same holds for non-financial business debt, which also soared by 6X after the turn of the century. As is evident below, there has been no progress whatsoever in reducing the enormous burden on the business sector.

Toss on top of this the still rising government debt burden and the implication is obvious. During the halcyon years of Europe’s debt orgy, Portugal went whole hog attempting to borrow its way to prosperity. Now its economy is crushed by the resulting balance sheet fiasco, and shows no signs that its devastating leverage ratios have been reduced by its so-called austerity program.

indeed, what all this fantastic borrowing did was to allow Portugal to finance a wholly unsupportable national life-style by importing vastly more goods and services than it exported, and financing the difference by means of the above borrowings in the euro debt markets.  During the decades leading up to it financial crisis, its current account deficit averaged between 6% and 12% of GDP—surely a dead-end trend if there ever was one.

Once again, however, the sell-side propaganda about the “turn” in Portugal’s current account is just another case of grasping at straws. In order to liquidate its towering debts, Portugal actually needs to run large trade surpluses for years to come in order to generate the means of pay down. But despite a modest uptick in exports which is inherently constrained by the faltering condition of the EC economies and the general world slowdown, it has barely made a dent in its level of imports. Stated differently, the Portuguese economy continues to live high on the hog as is its debt crisis had never really happened.

The fact is, away from Wall Street’s fatuous focus on superficial, hairline signs of recovery, Portugal’s real economy is still deep in the doldrums. Its industrial production index, for example, is down 5% from 2010 levels and 18 percent from turn of the century levels.

But the most telling indicator is its plunging labor force participation rate. As shown in the graph below, the dramatic plunge since 2000 is even more severe than the ballyhooed decline in the US figure. The reason is that Portugal’s work force has been out-migrating in droves or tumbling into its over-burdened social safety net.  Like, in the US, its recent hairline gains in the unemployment rate—still above 15%—are essentially attributable to a shrinking work force.

This is the crux of the matter. With a declining level of labor input and the unavoidable need for nominal wages—which were vastly inflated during the debt boom—to shrink in absolute terms to more sustainable levels, Portugal’s national income growth rate will flat-line for years to come under the best of circumstances, and will continue to decline in the face of another European and global recession.

Accordingly, there is no relief in sight for its towering leverage ratios in all sectors—government, households and business. In these circumstances, a 4% sovereign debt yield is nothing short of absurd.

The truth of the matter is therefore quite simply. Draghi ignited a short-term buying stampede with his mid-2012 pronouncement. This caused a hot money inflow—especially from dollar based Wall Street speculators and hedge funds. It certainly helped that the latter were drowning in liquidity owing to the Fed’s $85 billion per month of QE purchases and the ready availability of essentially zero cost repo financing. Indeed, the combination of QE3 and Draghi’s “whatever it takes” amounted to a bugle call to the financial hounds.

In short order, the impact was to drive both Euro bond prices and the Euro/USD exchange rate dramatically higher. In fact, between July 2012 and spring 2014, the euro rocketed from 120 to 140 or by nearly 17 percent. Not only did the resulting combo of a rising euro and soaring peripheral bond prices result in a tsunami of hot money into the euro markets, but it also laid the planking for today’s pathetic excuse that Europe is suffering from an economic affliction that can only be solved with an even more fantastic increase in ECB monetary intervention—-even beyond the financial repression it has in place today including negative deposit rates.

But there is no structural deflation in Europe—just the short-term impact on the rate of price change owing to a spike in the exchange rate that, ironically, resulted from Draghi’s pledge that he would run the printing press at some future date at whatever speed might be necessary to “save” the euro and prop up the sovereign debt of the EC periphery.

In truth, the current “deflationary” scare will soon abate as the euro moves through the 130 mark, and dollar-based speculators are forced to sell their peripheral bonds in order to avoid losses. The trend level of euro area inflation has been, and will remain, in the order of 2.2% per annum since 2000 as shown below. Other than the short-run exchange rate effects on the  rate of price change, the idea that Europe is suffering a deflationary crisis is absurd.

 

Accordingly, bond yields everywhere throughout the euro area are distorted beyond recognition.  In a recent post, EconMatters laid this out quite explicitly.  The data for all of the major European countries shown below truly describe the mother of all bond bubbles. This is central bank destruction at work on a monumental scale.

via Zero Hedge http://ift.tt/1r7HO5O Tyler Durden

…subject to change indeed…

 

 

Source: Cagle via Sunday Funnies

via Zero Hedge http://ift.tt/1r7HKCS Tyler Durden

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via Zero Hedge http://ift.tt/1nonUi0 williambanzai7

With China’s property developers slashing prices, piling on incentives, and still seeing sales slump; it is no surprise that demand from the top to the bottom across Asia is falling. As Reuters reports, even Singapore’s Sentosa Cove (the man-made island resort billed as Asia’s Monte Carlo) is eerily silent as the billionaires seem to be staying away with prices down over 20-30% in the past year. New mortgage business is down over 40% as “the rential can’t even cover the mortgage anymore.” As one analyst notes, “the tables have turned,” adding rather ominously that, “The way prices have fallen, it’s as if there is a global financial crisis.”

China’s property plunge continues…

 

Source: @M_McDonough

And appears to be spreading to Singapore… (as Reuters reports)

There’s an eerie silence at night in Sentosa Cove, the man-made island resort billed as Singapore’s answer to Monte Carlo and the only place in the country where foreigners can buy landed property.

 

Dozens of houses – complete with their own private yacht berths and multiple swimming pools – sit empty while few lights are on in the apartment blocks overlooking the marina, a few kilometres away from Sentosa’s giant casino.

 

Prices in the gated community, where Australian mining tycoons Gina Rinehart and Nathan Tinkler bought properties, fell around 20 percent in the past year as lending restrictions and taxes on foreign buyers burst a bubble in the Southeast Asian financial hub’s luxury real estate market.

 

…

 

“Some of the earlier buyers are likely to have bought at prices 20 to 30 percent above current prices,” said Christine Li, head of research at property consultancy OrangeTee.

 

“The rental can’t even cover the mortgage for these high-end investments – they want to offload but there are no takers.” 

 

…

 

Some in the luxury property industry fear foreign buyers have gone for good.

But the problems are growing rapidly…

United Overseas Bank, Singapore’s third-biggest lender, last month reported a doubling in its bad debt charges for the second quarter, saying a group of investors was struggling to service high-end property loans.

 

The number of residential properties being put up for sale at auction by banks after buyers defaulted on mortgages, known as mortgagee sales, quadrupled to 64 in the first half of this year from 16 in the second half of 2013, according to real estate agency Colliers.

 

“This is different from previous years, when owners’ sales dominated auctions,” said Joy Tan, head of auctions at DTZ.

 

“The tables have turned and we expect more mortgagee sales on the way.”

As bad as it gets…

“The way prices have fallen in Sentosa, it’s as if there is a global financial crisis,” said Alan Cheong, head of Singapore research at property firm Savills.

And finally – summing it all up perfectly…

“Sentosa happens to be a development targeted at a time when the world was leveraging up but now that we have deleveraged, there is a much smaller pool of people who can afford it,” Savills’ Cheong said.

 

That, combined with the end of the “easy money” seen before the 2008 financial crisis, may mean the quiet on Sentosa Cove’s streets is here to stay.

*  *  *
Nope, no state-sponsored mal-investment malaise here at all…

But do not fear – we are sure any fallout from this will be “contained”

via Zero Hedge http://ift.tt/1luKeLi Tyler Durden

Submitted by Ron Paul via The Ron Paul Institute for Peace and Prosperity,

Last week President Obama admitted that his administration has not worked out a strategy on how to deal with the emergence of the Islamic State in Iraq and Syria (ISIS) as a dominant force in the Middle East. However, as ISIS continues its march through Syria and Iraq, many in the US administration believe it is, in the words of Defense Secretary Chuck Hagel, a threat “beyond anything we have ever seen.”
 
Predictably, the neocons attacked the president’s speech. They believe the solution to any problem is more bombs and troops on the ground, so they cannot understand the president’s hesitation.
 
Chairman of the House Armed Services Committee Buck McKeon made it clear that fighting ISIS is going to cost a lot more money and will bring US forces back to Iraq for the third time. The post-Iraq, post-Afghanistan peace dividend disintegrates.

Mr. McKeon said last week:

ISIS is an urgent threat and a minimalist approach, that depends solely on FY15 funding or pinprick strikes that leave fragile forces in Iraq and Syria to do the hard fighting, is insufficient to protect our interests and guarantee our safety in time.

What does this mean in practice? If the neocons have their way, the Federal Reserve will “print” more money to finance another massive US intervention in the Middle East. In reality this means further devaluation of the US dollar, which is a tax on all Americans that will hit the poorest hardest.

A new US military incursion will not end ISIS; it will provide them with the recruiting tool they most crave, while draining the US treasury. Just what Osama bin Laden wanted!
 
McKeon and the other hawks act as if they had only recently become aware of the ISIS. Or if they noticed it, they pretend US policy had nothing to do with its rise.
 
McKeon also said last week, “ISIS threat was allowed to build and fester over a period of time.”
 
In fact, US regime change policy in Syria was directly responsible for the rise of ISIS over these past three years. As journalist Eric Margolis observed recently, the emergence of ISIS is the “mother of all blowback.” The neocons who want us to get tougher on ISIS, including a US attack on Syria, are the same ones who not long ago demanded that we support groups like ISIS to overthrow the Assad government in Syria. US-trained and funded “moderates” from the Free Syrian Army joined the Islamist militias including ISIS, taking US weapons and training with them.
 
Three years of supporting any force that might overthrow the secular government of President Assad has produced a new monster in the Middle East that neocons insist the US must slay.
 
Why can’t they just admit they were wrong? Why can’t the interventionists just admit that their support for regime change in Syria was a terrible and tragic mistake?
 
If ISIS is as big a threat as they claim, why can’t they simply ask Assad to help out? Assad has never threatened the United States; ISIS has. Assad has been fighting ISIS and similar Islamist extremist groups for three years.
 
Why does the US government insist on aligning with theocracies in the Middle East? If there is anything that contradicts the US Constitution and American values it is a theocratic government. I do not believe that a majority in the Middle East wants to live under such a system, so why do we keep pushing it on them? Is that what they call promoting democracy?
 
A lack of strategy is a glimmer of hope. Perhaps the president will finally stop listening to the neocons and interventionists whose recommendations have gotten us into this mess in the first place! Here’s a strategy: just come home.

via Zero Hedge http://ift.tt/1x2Uek2 Tyler Durden

While NATO is happy to provide Russia with geographical advice, we thought the following map of “the world” will help explain President Obama’s increased use of the term “isolated” when it comes to Russia…

 

 

h/t @PersonOfAwesome

via Zero Hedge http://ift.tt/W36D6D Tyler Durden

By EconMatters

 

Inflation Isn`t Moderating, It is Consolidating before the Next Leg Up

 

Lean Hogs

 

 

© EconMatters All Rights Reserved | Facebook | Twitter | Email Subscribe | Kindle

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Dispatches from Occupied Territory – Fear is the Mind Killer

By

Cognitive Dissonance

 

 

This is the third in a series of fictional explorations into an individual’s awakening to the suddenly unfamiliar world around and within her while still engulfed by the day to day insanity. These short stories in letter form are intended for the more sensitive and inquisitive reader who wishes to look more deeply within and explore in depth their beliefs and perceptions as well as how to cope with a world gone frighteningly mad. It is the author’s hope to accomplish this by way of an intimate and revealing first person correspondence between two long time friends as they discuss her ongoing awakening. The first two chapters may be found here.

 

 

Dear Marie,

 

It was good to hear you are beginning to settle in after several months of personal turmoil and distress. The shock and awe that results from first light, that initial rush of awareness and revelation as our awakening begins to take hold, is unlike anything we have ever experienced and can at times be very frightening and quite frankly revolting. When I began my awakening I was never quite sure whom I was angrier with, the lies and liars I discovered all around me or the most egregious liar of them all, the formerly complacent and complicit liar I found lurking within.

After the first wave of fear and nausea passes we tend to go numb as a sort of psychological defense mechanism to protect our psyche from an overload that could lead to severe psychosis. Underneath this unnatural calm there remain conflicting urges to flee the insanity, to pull the covers over our head and hide from the beast, and the growing wellspring of rage at the machine and the urge to strike back. This is a very dangerous time for us and it is important for us to seek guidance and balance or we can quite literally go off the deep end. Think of it as suddenly being shaken awake from an extremely frightening dream, only to realize the ‘reality’ you have awaken too is in many respects several orders of magnitude worse than the dream you just left.

This brings me to the thrust of your last few letters and the subject which presently disturbs you so deeply. I promised you I would get back to you on this, so without further delay here I am. You speak about the horrific realization that everything around us appears to be a bald faced lie with a macabre facade painted on the surface for the benefit of our denial. In particular you mention those private, public and governmental institutions you formerly trusted, even if only up to a certain point. Often what we describe as ‘trust’ is in reality a debilitating dependency hidden by deep denial. None the less it still feels terrible when it has been violated, particularly when we enabled the violation.

There is no way to adequately describe the shock one feels when a person first learns they are sleeping with the enemy and could easily become its next victim. In many respects by awakening you disturb the beast that lay beside you, thereby risking the potential to draw unwanted attention to yourself. We learn very early in life to keep our head down and to go about our business. So when we begin our awakening, in many respects we are doing just the opposite. To discover those we have blindly trusted have repeatedly violated us in the most personal and intimate ways is so far beyond disturbing that at times it escapes accurate description.

Suddenly we see very clearly how for decades there were dozens of warning signs we deliberately ignored or flat out denied. This ugly realization alone is the primary reason so many abandon their journey before they have even begun and rush headlong back into the warm embrace of blackout living and willful denial. Our personal revelation can bring on wave after wave of self revulsion and depression. However, nothing will be gained by loitering here for long. To pull out of this downward spiral we must make a deliberate conscious decision to abandon this self defeating paralysis and move towards healing and growth.

The emotions you describe in your letter all revolve around the emotions of violation and the fear this realization generates. Or should I say the fear you are programmed to experience. Before I speak of specifics we need to pull back and find the proper perspective if we are to reach a higher understanding. It is one thing to be lied to once and done, another entirely to be lied to continuously and in many cases (in retrospect) obviously. While in the first instance you might rightly be declared a victim, in the second you cannot, at least not in the purest sense of the word because it is much more complicated than black and white, right and wrong, victim and perpetrator.

In no way is what I am about to discuss to be construed as justifying or condoning their lies, cheating and theft. These people violated, and continue to violate, a public trust and their fiduciary duty, a much higher standard of conduct than simply holding up their hands and promising they will protect and serve. They should not, and will not, get a pass from me on this matter.

But (and you knew there was a ‘but’ coming Marie) we are discussing you and your reactions to these revelations and violations. Since you cannot personally make them do anything to reverse or rectify the wrongs they have perpetrated against you, this is all about you reaching a greater understanding of yourself and why you feel the way you do in order to begin the healing. I do not wish to discuss the specifics of who did what, when and where, or of the violations to you and me because as difficult as it may seem to understand, the specifics are immaterial at this point in the awakening process.  

Because we have been conditioned to do so, when we first discover the massive lies and conspiracies which are part and parcel of the world of the elite, the corporate and banking world and of course all levels of government, our first tendency is to dive into the minutia and details of the actual wrongdoing, along with the various cover stories and smoke screens. We want to believe if only the information about their heinous crimes were more widely known and disseminated the public would react in righteous indignation and throw the bums out, then burn them at the stake.

This is a mistaken belief that is tragically and endlessly repeated over and over by every newcomer and sadly perpetuated by many veterans as well. It is just another hamster wheel created to distract and exhaust us, a part of the social control system to keep us endlessly chasing phantoms rather than health and healing. Logic dictates if these people are able to pull off the level of crime, corruption and traitorous actions they clearly are capable of, they are obviously receiving protection from each other as well as from higher, more powerful people and entities. In other words, the system at this level protects its own so it can protect itself.

 

 

That is not to say you should abandon your research into the who, what, when, where and why of these events, as well as the overall corrupt business dealings they are engaged in and which are shrouded under the cloak of misdirection and layers of deceit. No real harm can come from a greater understanding of how the sociopaths and their enablers ply their craft and why we always fall for the same stupid misdirection dog tricks. Knowing ourselves and those around us is never a waste of time if our intentions and motives are squarely aligned with our actions.

And it is here, while searching for our real motives, that we find many of our own lies clouding our intentions and distorting our thinking. After overcoming the initial fear that comes from discovering our protector is in fact our tormentor and potentially our killer, a fear we must examine more closely, we then move on to the next stage, that of sounding the alarm. But first let us explore the fear, because as we awaken we will discover our fear, in all its forms and permutations, is behind nearly everything we do, and react to, on a daily basis.

Of utmost importance here Marie is for you to recognize, and then accept, that the dangers you speak of and write about have always been there. It is you who have changed, not your surroundings and most certainly not the machine. The government has always been your enemy and not your friend; those multinational corporations have always pursued power and profit first at yours and my expense; the education system is designed to condition and indoctrinate, not liberate your mind, and your family is just as asleep as you were and maybe even more so. This was always the case with the danger partially hidden behind an obscuring lace veil. The only difference now is you have looked into the abyss and are shocked by what you have found.  

What is the central difference in our mind between walking down the center aisle of our local supermarket and walking down a dark downtown street at 2 AM? I would argue that seen from the point of view of personal danger there isn’t much difference from moment to moment, though over longer periods of time there most certainly is. Yet in practice these two worlds are far removed from each other, with the supermarket perceived to be much safer than the darkened late night street.

It stands to reason you will act more openly and freely in the supermarket then on the street, particularly if you always shop at the market and rarely if ever walk the late night street. So the level of danger you feel is more perceptional than actual with the familiarity of the market, along with many other people present who are just like you, greatly reducing one’s perception of danger. It is not the actual danger that is alarming to us as it is our perceived proximity to danger that gets our blood racing. We use rationalization and subtle denial, in all its petty forms and functions, to distort our perception of many the dangers which in practice are always present and all around us.

Thus while shopping in the supermarket you aren’t overly concerned with who is behind you or walking past, who is standing next to you while you select a steak or reach for the frozen peas. Nor who is waiting in the checkout line directly behind you and within two feet of your purse. While this might all seem obvious, the point is you are not concerned to any great extent with your personal safety while in the supermarket, yet you would be on the late night street, even if statistically from moment to moment you might be equally as safe. People are robbed or assaulted in the supermarket and have their wallets and purses stolen while in the mall, retail store or parking lot.

On a day to day basis we go about our business giving very little thought to our personal safety or even to those around us. While we know crime does exist and we may even know a friend or family member who has been ‘victimized’, it all takes place at a distance from us physically, mentally and emotionally. We take for granted, barring extraordinary circumstances, that we are not presently in danger. In many ways this is a naïve approach to life and it certainly sets us up for a real shock to the system when the inevitable violation occurs.

But since we are not trained or conditioned to view the world much beyond the next few hours, maybe days at the most, we simply assume what happened last minute will happen this minute and again during the next. And make no mistake about it Marie, how we are trained to see and perceive reality makes all the difference when creating and interacting with reality.

The odds are very high nothing will happen to us from moment to moment, which simply acts as real time confirmation of our conditioned bias. But it also breeds complacency within us and the emotional perception of safety we so desperately desire when we do not wish to assume responsibility for our own personal safety or sovereignty.

This is why we often bemoan the lack of police or some other authority figure when the inevitable happens. While intellectually we know the police react to crime, not prevent crime, since we have sub contracted out the responsibility for our personal and emotional safety, clearly it must be the sub contractor’s fault when we are harmed. It does not matter if the sub contractor was incapable of doing the job in the first place or even wanted to do so. Since we have abdicated our own personal responsibility we must now find emotional cover when things go wrong. And they always go wrong, thus proving the lie we can avoid accountability in the first place.

 

 

Sitting there while reading this, you might be tempted to intellectualize this discussion and claim you don’t engage in this behavior. And it is so easy to explain it all away because everyone else is doing the same thing at the same time. But Marie we have talked in the past about how in practice many of our decisions are emotional or impulse based and only afterwards do we rationalize them, thus validating our own ‘intelligent’ choices. This in and of itself is the core function of denial, separating the emotional animal from the rational being as if they are two different entities, when in reality they are just two dissimilar faces of the same beast.

Before moving on let me emphasize once again that all of us to some extent or another expect external authorities to protect and serve us. We have been conditioned to believe this is why we pay our taxes instead of those taxes being tribute to the state the payments really are. That is supposedly why we gather as large loosely connected tribes within clearly defined physical and cultural borders, for our collective and individual benefit and self defense.

But this also leaves us particularly vulnerable to the collective as well as to individuals within the collective who do not abide by the rules and who, while doing so, are protected by the collective to further other people’s individual or collective goals. This is the corrosive effect of systemic and wide ranging corruption, to turn nearly all ‘law abiding’ members of the collective into a pool of captive victims waiting to be exploited. For those individuals who depend upon the collective for sustenance, protection and emotional support, thereby becoming dependents of the collective, they are seen as little more than fish in a crowded pond to the predators.

I contend this love/hate relationship is responsible for much of the underlying fear we experience from day to day. While we rarely acknowledge our vulnerability to the collective, on a subconscious level it is blatantly obvious, thus we always live in a state of low level fear and apprehension. But our fear is hidden from view because it has been culturally assimilated by us within us. It is given different, more pleasant sounding names in order to be widely accepted as part of modern life, thus natural, normal and no big deal.  

For example, while we are conditioned to believe the local police are there “To Protect and To Serve” in reality they are the local armed enforcement division of the protection scam called government. They are the armed revenue generating agents of the local tax ‘authority’ and the private security force for the financial elite. They protect the property of those who control their salaries while violently subduing peaceful protestors of the elite in response to their agent provocateurs inciting a riot.

When we see flashing lights in our rearview mirror we can safely say our heart does not leap for joy with the prospect of another encounter with those who protect and serve, but rather a rush of fear flashes over us as we quickly assess what the damages will be during this latest bald faced extortion exercise. After the officer has pulled us over and run our plates for wants, warrants and outstanding protection payments, he doesn’t walk to our car with a hand casually draped over his service weapon because he wants to give us a warm welcoming hug.

When the IRS comes calling with a notice of extortion demanding payment, saying we owe more of our ‘voluntary tax’ than we have declared, suddenly we realize the IRS has the legal right to assume we are guilty while the burden of proof of our innocence falls upon us. Worse, if we protest too much we are hauled into a special ‘tax’ court where the rules of evidence and self incrimination are stacked against us. It is then we realize the smart move is just to pay the cost of defense (the penalties) plus the original levy rather than fight the rigged system. Chalk up another personal violation.

But even these examples are obvious when given serious thought and a clear eyed assessment of what is really going on. What is chillingly frightening to you is the realization nearly everything you believed in, the basis by which you lived your life and pursued your interests, vocation and entertainment, is the polar opposite of what you thought was true and correct. Worse, not only is your government not your protector but it might just be your mortal enemy.

Essentially you are discovering you live in a dream world Marie and most of what you believed real is not only false and fake, but deliberately conceived to deceive our perception of reality in order to control and exploit. This strikes to the very heart of what we are conditioned to believe “We the People” are as well as our small part in this promoted reality. Rather than the shining beacon of global truth, justice and the American Way, you are beginning to recognize those who run this country are true psychopaths and ‘our’ country is closer to a banana republic than a representative republic. Worse, it appears we are the biggest rotten banana in the global bunch.

Relatively early in life, say around mid to late teens, we have already created an internal world view which, while flexible enough to be changed slightly to accommodate the movable feast of world events, is still firmly anchored in cement by fundamental ‘beliefs’ indoctrinated into us from birth by well meaning fellow ‘believers’ and/or captive wage slaves dependent upon the machine to create their reality and feed their family.

The propagandized illusion of national wholesomeness and moral certainty, while increasingly under assault by the growing mass awareness that something stinks in the wood pile, basically remains intact precisely because our semi flexible worldview accommodates selective reasoning, denial and narcissistic fantasies. But when viewing the full Monty of the police state and its control apparatus, combined with the clarity of a growing awakening, nearly all of us suffer some sort of breakdown on both a psychic and spiritual level, leaving us isolated and broken and desperate for fellow support and affirmation.

For nearly all of us this is simply too much to bear and we rapidly retreat to the sweet bliss of feigned ignorance. Don’t ask, don’t tell works quite well for most individuals who have previously peaked into the abyss and are desperate to forget not only what they saw, but the social implications it has for them. Obviously an emotional and psychological transition must take place here if we are not only to recover our feet, but to move forward towards recovery and rejuvenation.

And it is here dear Marie that I return to the subject of sounding the alarm. By this I mean any attempt by us to warn and/or rally those around us in order to facilitate systemic change and reform as well as to develop allies for personal protection and empowerment. Our instinct when leaving one tribe is to either join or create another one if for no other reason than to replace the collective affirmation we no longer receive from the tribe we abandoned.

As in all things in life our intent is often more important that our actions. If we are sounding the alarm out of personal fear, then fear is precisely what we will project, consciously and subconsciously, when talking to others. Since the people we talk to also harbor an internal discomfort and disconnect which they do not acknowledge, thus they are on edge if only on a subconscious level, they will sense our projected fear and react with revulsion and rejection. Nobody wants to get too close to the crazy person, especially when that person is proclaiming ‘truths’ contrary to their consensus belief.

Because of this projected fear, along with the prevailing denial of those being ‘warned’, many newly awakened make almost no headway when sounding the alarm which in turn increases their sense of isolation and desperation and thereby their fear. It is a vicious positive feedback loop which usually ends in emotional exhaustion and possibly even a mental breakdown. At the very least many become depressed and despondent which, when combined with their inevitable social withdrawal, further encourages others to label them as malcontents or even mentally ill. 

Marie……this is why we must suppress the instinct to fight or flight and immediately begin the work within. Only after we have come to grips with this terrible emotional trauma and are settled not only with our prior participation, but also the inevitable personal changes we must enact if we are to embody what must be done in order to facilitate our partial or full withdrawal from the insanity, can we move forward with our life. How much and to what extent only you can determine, but certainly no settled decision can be made until and unless you have begun the personal soul searching work of self discovery.

Many of the newly awakened, as well as countless veterans, spend nearly all their time bargaining with their awakening instead of focusing on their healing. For far too many the awakening itself is the nightmare rather than what they are awakening to. While some will claim otherwise, often those who are awakening just want the system to be ‘fixed’ so they can go back to sleep. I know many who feel it is an injustice they must be the ones who are awakening, thus the carrier of the burden of contrary information and knowledge, rather than recognizing the wonderful gift they have been bestowed.

Once you arrive at a fork in the road you must make a decision. Make a choice, be settled with it and move on. If need be Marie you can always revisit that decision, though oftentimes if you attempt to do so you will find yourself so fundamentally changed from the journey itself, either you won’t need to revisit or once back there the same choices will no longer be there. It is only when we continue to bargain with our ‘self’, either before, during or after our (in) decision, that the damage is done and reinforced. It is this constant state of tension, this unwillingness to seek centering and to be settled in our new role in life, that exaggerates and inflames our fear and isolation.

Obviously this is easier said than done and ultimately no matter how much encouragement and support you receive along the way, your journey is a solo affair. As difficult as it may seem for you now, please recognize you have entered the beginning of the end of your mindless dependency upon the collective machine and external authority. From this point forward how well you handle yourself and your recovery depends entirely upon how willing you are to step away from the herd and explore the space within. I promise you this much; once you recognize the only thing you have to fear is fear itself the emotional release you experience will be life altering.

Go ahead and take that first step. If you are committed and have faith the process will be life changing and healing, it will be all that and so much more.

Beside you always,

 

Jonathan

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Cognitive Dissonance

09-01-2014     

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