Surviving The Lint Age

Or, how to oppress the honest and ruin commerce ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ April 12, 2024  |  [Sign Up]( Surviving The Lint Age “Paper money has had the effect in your state that it will ever have, to ruin commerce, oppress the honest, and open the door to every species of fraud and injustice.” —George Washington, 1st President of the United States [Reminder: In case you missed [our announcement]( The Essential Investor has merged with legacy contributors to Agora Financial. The new, larger, more inclusive project is called The Grey Swan Investment Fraternity. If you’re interested in the scope and benefits of our new endeavor, please see what prompted us to merge [here](. If you’ve been a member of The Essential Investor, keep an eye out for your new benefits.] Dear [Reader], April 12, 2024 – White Rural Rage “seems like a rather pointless book,” writes CC, a frequent Grey Swan correspondent. “The authors are preaching to the ‘elite’ and leftist bubbles. Calling the symptom ‘white rural rage’ merely focuses the anger that exists almost everywhere on one group. What about the crazies on the left?” We’re cherry-picking CC’s comments here to make a point. Otherwise, his analysis has been rather extensive. Kudos. Among his observations, CC notes that most of the data collected for the excerpt we included came from Chicago. “So maybe [the data sets] are not necessarily accurate, by which I mean they may be leaving out vital context. But it’s also interesting to note the percent of urban respondents who support political violence is almost as high as the rural percent. I guess the authors are among those who believe violence from one side is okay, but violence from another isn't.” “Do the authors even acknowledge something is also wrong with the far-left too?” CC wants to know. “Or do they ignore all that and only do the cliche thing and focus on the other side? Do the authors even try to acknowledge any deeper problems, as Matt Taibbi brilliantly illustrated?” “The simple root cause of all this is, of course,” CC writes answering his own questions and cutting to the chase, “fiat money and financialization.” And that’s the point. “When the money goes,” our co-author Bill Bonner said bluntly during one of our Wiggin Sessions with him last year, “the center cannot hold.” Why? Eons ago, early in our obsession with finance, economics, politics, and money, a friend and fellow writer, Larry Sullivan, gave us a small plaque which today sits on the office fireplace mantel: “The Lint Age” accompanied here by a whale-bone carving of a Greenland villager and his seal  The inscription, neatly printed on finely hewn cotton linters, helps illustrate CC’s point:            Rags make paper                 Paper makes money                      Money makes banks                             Banks make loans                                   Loans make poverty                                         Poverty makes rags To the list we add this: poverty also makes people angry. Anger, if our inbox is any indication, is largely directed on a faceless breed of elites – political, financial, academic and global – who, it is believed, fashioned the “system” to work in their favor. What’s left behind are ordinary folks who are trying to make ends meet in a currency that has one set value for global trade… but an entirely different set when it’s the currency you use to pay for gas, food, and energy, or try to finance a business, provide health care, pay college tuition, or negotiate “retirement.” Oof, How Did We Get Here? The facts of the case are even more confounding given that we’ve been snooping about for decades, with our deerstalker caps and dangling monocles, trying to unravel the mystery. (You can read the story in progression from [Demise of the Dollar]( through [Financial Reckoning Day]( and on to [Empire of Debt]( all three books are available in their third post-pandemic editions.) In our 2012 edition of[Financial Reckoning Day]( when we first encountered the Fed’s “new” policy of quantitative easing (QE) – or “credit easing,” as then Fed chairman Ben Bernanke tried to spoon-feed it to mainstream media – we were au courant. “Ah,” we thought. “Those are code words for printing money.” Rather than recapitalize the bankers following the financial crisis of 2008, the central banks planned to buy debt directly from the government. The plan permitted the government to finance its stimulus plans without putting pressure on the debt market. It also acted like a gush of wind on a stack of dollar bills. Historically speaking, when central banks buy their own government’s debt, they create money out of thin air for the purchase. The money supply increases. If they do enough of this money creation, the quantity of money overwhelms the quantity of goods and services that it can buy. Result: “Inflation, sometimes modified by the prefix hyper-.” “That is the Fed’s goal,” we wrote in [FRD](. “If they can cause the value of the dollar to drop against consumer goods and investment assets, they will spur people to get rid of dollars quickly. This will, according to the theory, not only reduce the burden of debt for individuals and the government but also increase economic activity. As of this writing, they have only begun this process, and it has not been very successful. But we have faith; in the end, they’ll get the hang of it.” Get the hang of it they did. Most of us have never experienced inflation at current rates in our adult lifetimes. Bernanke introduced “credit easing” during a speech at the London School of Economics on January 13, 2009. A friend was on scene. Terry Easton put a tough question to America’s central banker: “Aren’t your interventions just making the situation worse?” he wanted to know. Amid the blah . . . blah . . . blah . . . of Bernanke’s response was this: “The tendency of financial systems to boom and bust . . . is a very long-standing problem . . . but I think it’s very important for us to try to put out the fire . . . then think about the fire code.” What follows below is an excerpt from [Financial Reckoning Day]( putting Bernanke’s words into context. (Pre-order[Empire of Debt: We Came, We Saw, We Borrowed]( now available at[Amazon]( and[Barnes & Noble]( or if you prefer one of these sites:[Bookshop.org]( or [Target]( CONTINUED BELOW... >>ADVERTISEMENT<< 2024 – The Real Election Year Surprise In 2016, the October Election Surprise was Hillary Clinton’s email scandal… In 2020, the October Election Surprise was the suppression of all the dirty material on Hunter Biden’s “forgotten” laptop… Now, in 2024, we’re forecasting an October Election Surprise that almost no one sees coming — and this time it’ll be way more devastating than anything you’ve seen before. [Click here to learn about 2024’s real October Election Surprise »]( It’s not at all what you think. CONTINUED... The Collapse of Complex Societies Addison Wiggin, [Financial Reckoning Day,]( reimagined 3rd Edition In his 1988 book, The Collapse of Complex Societies, Joseph Tainter argued that all societies, like all organisms, are doomed. Tainter studied ancient Rome as well as the Mayan civilization. Tainter noticed that problems always blaze up. Each one—whether climatic, political, or economic—rings the firehall bell. And each solution – bailouts in ‘08 followed by quantitative easing (QE) and a decade of zero interest rate policy (ZIRP) – bring more challenges and take more resources.  Finally, the available resources are worn out. Tainter observed that when the costs become high enough, people seem to give up. By the end of the Roman era, for example, the burdens of empire were so heavy that people sold themselves into slavery to get free of them. So many people did so at one point that the authorities had to come up with another solution; They outlawed the practice. Henceforth, Roman citizens were required by law to remain free! An earlier philosopher, Giambattista Vico, writing in the 18th century, put the beginning of the decline of Rome roughly at the time of the Great Fire during Nero’s reign. Nero, partly to pay for his postfire reforms and reconstruction, began taking the gold and silver out of the coins. All civilizations go through three stages, Vico said: divine, heroic, and human. The divine period is ruled by the gods. The heroic period is marked by victories and statues. Then comes the human era. The coin of the realm in early periods is the gods’ money: gold. Later, people switch to money of their own invention: the kind of money you make from trees. This last stage, says Vico, is when popular democracy arises, along with rational thinking and what Vico delightfully calls the “barbarie della reflessione” – the barbarism of reflection. In earlier eras, people do what their gods and leaders ask of them. In the final era, they ask, “what’s in it for me?” Even as late as the early 1960s, John F. Kennedy could still appeal to heroic urge without drawing a laugh. “Ask not what your country can do for you,” he said in his inaugural address, “ask what you can do for your country.” Eleven years later, Richard Nixon, like Nero before him, began the process of debasing the money. That was a solution, too; the United States had spent too much. Nixon would worry about the fire code later. First he opened up with the firehose: He defaulted on America’s promise to exchange dollars for gold at the statutory rate. Barack Obama tried a Kennedy-esque appeal to civic high-mindedness in early 2009. We need to “insist that the first question each of us ask isn’t ‘what’s good for me?’ but ‘what’s good for the country my children will inherit?’” said the president-elect. But now, like Doric columns in a trailer park, the words are ornamental, not structural. They are the homage that one age pays to a better one. We are in the 21st century now. Barbarous reflections rise up like swamp gas. The whole place stinks of them. Bernanke and Obama offered solutions. But their plans to save the world from a correction were little more than a swindle of the next generation. They offered to bail out the mistakes of one generation with debt laid onto the next. “Regarding the current financial meltdown,” wrote Rony Teitelbaum regarding ‘08 and its aftermath, “it is very clear that two main factors underlie the political reactions to the crisis”:  The first being pressure originating from ties between the financial and the political elite, manifested by taxpayer bailouts of large institutions that continue to deliver bonuses to the executives and donate to political campaigns. For those of us who are not blind, these are clear signs of political corruption which would have made the worst Roman emperor blush. The second factor is political pressure originating from the mass public. The kind of solutions offered so far, and I may add which were received with very warm enthusiasm, were tax rebates and gasoline tax holidays. These are actions aimed at a public who “impatiently expected quick and obvious results…” to quote Cary’s description of Roman society in ad 300. Circa 2009, there was hardly a soul in the entire world who had not been corrupted by the barbarie della reflessione of the late imperial period. Both patricians and plebes are for bailouts. Both business and labor back stimulus programs. The taxpayers and the politicians who rule them are of one mind. Liberal, conservative, rich, poor, Republican, Democrat all speak with a single voice: “Screw the next generation!” The Golden Age of U.S. capitalism is over, in other words. In the space of half a century, it passed from gold, to silver, to paper . . . and is now somewhere between plastic and navel lint. So it goes, Addison Wiggin, The Wiggin Sessions P.S. It may be worth pointing out that Yellen, Trump, Powell, and Biden added their fair share of solutions to the pile. Now it’s so deep… the government will have a difficult time coming up with the cash just to cover the interest. P.P.S.  “I agree with your [and readers’] response to White Rural Rage,” CC wraps up his email. “I just wonder how bad the civil unrest is going to get when the debt bubble finally blows up.” “Could you do me a favor and watch the movie ‘Civil War’ and maybe give a review?” “I suspect it’s just some more Hollywood propaganda, as if there hasn’t been enough of that. Let me guess, the oh-so-democratic ‘good guys’ triumph over the evil far-right baddies at the end and everything is just peachy. Kumbaya!” The movie “Civil War” is opening tonight in four different cinemas between our house and Baltimore’s Inner Harbor. We’ll give one of them a go and report back with impressions on Monday. Have a good weekend. (Pre-order [Empire of Debt: We Came, We Saw, We Borrowed]( now available at [Amazon]( and[Barnes & Noble]( or if you prefer one of these sites:[Bookshop.org]( [Books-A-Million]( or [Target]( Please send your comments, reactions, opprobrium, vitriol and praise to: addison@greyswanfraternity.com. The Daily Missive from The Wiggin Sessions is committed to protecting and respecting your privacy. We do not rent or share your email address. By submitting your email address, you consent to The Wiggn Sessions delivering daily email issues and advertisements. To end your The Daily Missive from The Wiggin Sessions e-mail subscription and associated external offers sent from The Daily Missive from The Wiggin Sessions, feel free to [click here.]( Please read our [Privacy Statement.]( For any further comments or concerns please email us at feedback@wigginsessions.com. 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