The latest Billary controversy detailed in Schweitzers's book, Clinton Cash, has stirred emotions from many concerned citizens, yet all miss the point that really matters. Passionate points can be made about the "Clinton Blur" of donations to the Clinton Foundation, exorbitant fees for speeches by Bill, and coincidental business deals like Uranium One, which has resulted in Russia owning at least a quarter of US uranium sources. Uniformed and/or connected supporters of the Clinton's argue that this is a right-wing conspiracy, while others insist that it doesn't matter because Hillary will simply deny any involvement -- including deleting her own emails and facilitating the gun running to rebels (ISIS) by Ambassador Stevens in Benghazi, and that politics as usual will continue unabated. The point that most miss is the relationship between the erosion of confidence in govt and the vibrancy of the economy.
It doesn't matter if your concern is the fraud of the Clintons and how it helps your favorite Republican candidate. It also doesn't matter if you think it's a witch hunt that will blow over. What matters is the erosion of confidence in govt, and its impact on the economy. After all, our currency doesn't say "IN GOVERNMENT WE TRUST". Govt's that rely on a fiat currency are dependent on world confidence in the full faith and credit of the govt to meet its obligations. There is a reason that capital shies away from corrupt countries, and the US will come to realize that corruption carries no clout in the eyes of capital.
Economic prosperity and favorable living standards are dependent on attracting capital and talented people. The kryptonite of capital and intelligence is govt fraud and the unequal enforcement of the rule of law. The unbound self-interest of those in govt has resulted in all the branches of govt being owned by the moneyed interest, resulting in the rule of law being obfuscated. The confidence-draining mismanagement of govt resources, which leads to insolvency, also spawns more fraud and suppressing tactics that accelerates the death spiral of confidence that chases capital off the grid.
Many in the media can't help but address the money collecting tactics of police. Policemen themselves have even admitted that ticket writing is a major source of revenue for their city, and other policemen have been fired for not meeting their ticket quota. However, what the media fails to ask is "why" and "what are the consequences" of this money collecting harassment of citizens, and the even more deplorable tactic of feeding the prison industry. The answer of course is govt's are broke, and the hunt for cash is what's grinding the world economy to a halt.
If you are unaware, there is a prison industry, which is supported by corrupt judges and obedient police, that keeps our jails full, even though violent crimes have been falling for decades, exemplified by the fact that only 4% of prisoners in Federal jails are there for violent crimes. Citizens are railroaded and falsely held for decades, because govt views citizens as commodities to be sucked dry to protect their jobs, perks, and power.
If you need further details on why cops are needed as money collectors for bankrupt govts, you can consult our recent post or look into the govt pension problems. The state of Ilinois may be one of the worst, but the same problem exists at all levels of govt, where promises where made to win votes, but delivering on the promise is mathematically impossible (especially with ZIRP), which will result in defaults like Detroit and Stockton. However, since govt never goes down without a fight, they will first exhaust all of their money confiscation tactics. Whether it's the private sector who is tired of govt's hand in their pocket, or public employees who lose their pensions through bankruptcy, trust in govt will officially go down the tubes, and you will come to realize why the police have been arming themselves like they are the US Military.
People may ignore these issues, believing that it doesn't affect them -- until they get caught up in the frauds of govt (which is an increasing probability with increased insolvency). Even if you don't get affected directly, you are affected by the declining economy, which is the result of capital seeking safer jurisdictions and the reactive policies of govt that are afraid of declining revenues.
We have documented ad nauseam policies like FATCA and the NSA that are tracking and confiscating capital across the globe; and the Zero Interest Rate Policy (ZIRP) of Western Central Bankers, which is all about preventing interest expense from blowing up govt balance sheets (not stimulating the economy), which also "inconveniently" prevents retirees from living off their savings. All of this society destroying nonsense is all about protecting the interest of those in govt, at the expense of everyone else.
Capital has been getting off the grid ever since govt's self-serving response to the DOT.COM bust and the Clinton Administration gift to banksters through overturning Glass-Steagall, ushering in the age of transaction banking versus the more prudent and less lucrative relationship banking. The exponential rise in govt fraud over the last 15 years coincides with the decline in the velocity of money, which has declined worldwide by 50% since 2007, and will create air pockets that turn normal market volatility into frequent flash crashes that will provide an even better distraction for govt than the debate over same-sex marriage.
There are solutions, and even if just a small minority will open their mind, there is hope we can avoid the bloodshed that comes with revolutions. Europe will be the test case to determine if politicians are capable of putting citizens interests ahead of their own. Europe's misguided attempt to establish the United States of Europe with the formation of a common currency without a common debt has resulted in economic collapse and the potential war that the euro was supposed to prevent. Forcing a finite amount of blood from the economic stones of Greece, Spain, and the other bankrupt socialist states will only drive desperate people to take desperate actions, which will still not avoid the defaults that politicians and their bankster donors are trying to avoid.
Sorry, but if society-saving reforms are to be accomplished, banksters will need to accept haircuts, govt's must be prevented from deficit spending (which has resulted in accumulated interest expense representing 70% of all debt), and the remainder of the debt must be swapped for equity. The Marxist/Keynesian fantasy of deficit spending without any intention of paying anything back must be halted immediately to prevent a nightmare only equaled by the Dark Ages where banking disappeared.
No matter your political leanings, the following reforms (mostly provided by Armstrong during his Solution Conference) are the bare bones changes that must occur in the next 5-10 years if the US has any hope of not sending the serious capital East and setting the stage for 70 more years of decline.
- Eliminate police as revenue agents. No fines should be imposed without a jury trial and that is to be determined solely by a jury.
The risk of course is that no reform will happen under the remaining years of Obama's Dark Age, and that govt propaganda will prevail once again with the election of either a populist left-winger, who will destroy the economic-dependent banking industry and suck the last breath of life out of our entrepreneurial economy; or a right-wing nut job will get elected that will have us living in a police state, if he doesn't start WWIII first -- either way, the capital needed for growth will be scatter elsewhere.