Money for Nothing

And Nothing for Money [The Daily Reckoning] December 16, 2023 [WEBSITE]( | [UNSUBSCRIBE]( Money for Nothing Saratoga Springs, New York Editor’s note: It’s the sovereign individual against the Washington “blob,” says James Howard Kunstler. Who will win? And what does it have to do with the Fed’s digital dollar? James breaks it all down for you today. [James Howard Kunstler] JAMES HOWARD KUNSTLER Dear Reader, “Society lives and acts only in individuals… Everyone carries a part of society on his shoulders; no one is relieved of his share of responsibility by others. And no one can find a safe way out for himself if society is sweeping toward destruction. ” — Ludwig von Mises Remember, you are a sovereign individual and the blob in our nation’s capital city is an undifferentiated mass of feckless protoplasm. You contain a cosmos of ideas and aspirations. The blob is an agglomeration of sham and failure. The blob stands for itself, not for our country. You and I can stand for our country. Remember, also, that the economy of our country at its best was the sum of choices made by sovereign individuals, while the economy of the blob is a gelatinous buildup of unsound hypotheses having nothing to do with the pursuit of happiness. We sense this in the menacing rumors of a Federal Reserve digital currency, which entails the rehypothecation of our hopes and dreams into the blob’s trash-stream, turning everything we do into garbage. The Fed digital currency will be used to cover up the failure of end-state financialization of the economy. Finance, you understand, used to be a module of the economy, with a particular role to play. The purpose of finance, formerly, was to marshal surplus wealth from prior productive activity to make new productive activity possible. Financialization, however, does not do that. Financialization was an effort to replace the economy of real production with a hologram of production. One Big Racket Financialization is a racket — and a racket, remember, is an effort to get something for nothing, that is, dishonestly. The blob feeds and thrives on dishonesty, its favorite food. Financialization seeks to replicate value not from wealth-producing activity but from things that only claim to represent wealth: stocks, bonds, currencies and anything else that can pretend to hold value, clear up to notions and wishes. Its operations are based on “derivatives” because they aim to derive additional “wealth” from things that signify wealth, but which are not wealth itself. Each iteration of a derivative further abstracts its value from the real things originally signified, such as revenue-producing businesses, interest-bearing loans, leases and contracts for delivery of commodities. [You have (1) item on hold at our warehouse:]( Item #: [51987]( Status: On hold Value: Approx. $300 Claim by date: 12/18 at 11:59 PM Our Head of Customer Experience will show you what you need to do. [Click Here Now]( Derivatives can be understood as false wealth, and when enough of them accumulate in a financialized economy, they will blow up the economy, spewing wreckage across an economic landscape. Many observers of that landscape await such a blowup at any time now. They say it can take the form of a stock market crash, a bond market failure, bank shutdowns and disorders in money (currencies). All of that can impoverish and immiserate a lot of people. We are living through a corrosive early phase of that now, the overture of a big blowup itself. The effects are felt keenly through the middle classes, who struggle in futility to pay their bills, keep their cars running and feed their children. Two Ways of Going Broke The financialized economy was primed to blow up in September of 2019 when symptoms of severe distress materialized in an arcane corner of the system known as the reverse repo market where banks loan each other money on extremely short term, usually overnight, to provide so-called “liquidity” — meaning the appearance of solvency. The crisis expressed itself as a dangerously sharp rise in interest rates. The Fed came up with enough liquidity to paper over the crisis, and then, miraculous to relate, the COVID-19 “emergency” a few months later gave them cover to “print” trillions of dollars and distribute the “money” rapidly into the on-the-ground economy where people bought the things of daily life. The result of that monetary mischief was today’s inflation. Inflation, of course, is one way of going broke. You have a lot of money that is increasingly worthless. The other way of going broke is deflation, where you have no money. In the aggregate of a deflation, nobody will have any money, so at least you’ll have company in the misery of being broke. My guess is that a grievous deflation is where the current situation is headed. [Biden Admin Furious Over This New “Alternative” Currency]( Take a close look at this photo: [Click here for more...]( What you see here is a new “alternative” currency that’s taking America by storm… One which could ruin Biden’s CBDC plans. It’s already popping across the nation… including Utah, New Hampshire and Nevada. If you’re worried about Biden Bucks then you must watch this short 2-minute video where Jim Rickards breaks down how this “alternative” currency works… [Click Here To Learn More]( Deflations are provoked when people and companies can’t meet their debt obligations — can’t “service” their loans (pay interest), or pay back contracted sums of borrowed money, or simply can’t pay their bills. Every loan that goes bad causes some money to disappear — poof! — and when a whole lot of that happens there is no money. Enter the Fed’s Digital Currency The Federal Reserve digital currency is a kind of last-resort way around that. It is a simple way for the system to pretend there is a lot of money around when there really isn’t any. It has the huge additional advantages, by way of computerized accounting, to allow the authorities to control what everybody spends their money on, especially the ability to block the purchase of this or that: a train ticket, gasoline, meat, if the authorities feel like it. It also enables the authorities to extract taxes, duties and penalties at will, without any cooperation from the citizen. A Fed digital currency would be a giant step into the worst kind of exquisitely targeted tyranny. The excuse, of course, would be a “national emergency.” A digital currency would likely first be tested among the most indigent in society, those with little or no income. It already is, actually, in the debit cards currently issued to illegal border-jumpers. Their card accounts are refilled monthly, making this the equivalent of a guaranteed basic income. Next, this privilege will be extended to the lower economic ranks of American citizens, and so on upward, until the whole middle class and even the higher levels are enlisted, and then the authorities will have the ability to push everyone around. That’s the hypothesis, anyway. I don’t believe it’s going to work. The authorities have underestimated the number of citizens who know what it means to be sovereign individuals. They will decline to be pushed around. They might even push back, start stomping on the blob’s tentacles as it reaches across the land. The citizens of one region or another of our country might go so far as to establish their own money, which would make them sovereign regions of sovereign individuals. That is going to be a problem that the blob and blobism cannot overcome. Regards, James Howard Kunstler for The Daily Reckoning [feedback@dailyreckoning.com.](mailto:feedback@dailyreckoning.com) Editor’s note: As a Daily Reckoning reader, you have [(1) item]( on hold at our warehouse: It’s called [Item #: 51987.]( Its value: Approx. $300. Its claim-by date: 12/18 at 11:59 PM. To see how to claim yours, simply [click here.]( our head of customer experience will show you what you need to do. Remember, this offer expires at 11:59 p.m. on Monday, Dec. 18. Please make sure to read and respond before then. [Go here now.]( Thank you for reading The Daily Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:feedback@dailyreckoning.com) [James Howard Kunstler] [James Howard Kunstler]( is perhaps best known for his 2005 book [The Long Emergency]( which predicted the financial meltdown and the implications of the peak oil problem. His 1993 book, [The Geography of Nowhere]( about the fiasco of suburbia, is a campus cult classic among the architecture and urban planning students. [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2023 Paradigm Press, LLC. 1001 Cathedral Street, Baltimore, MD 21201. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your The Daily Reckoning e-mail subscription and associated external offers sent from The Daily Reckoning, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. 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