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Today the Meltdown Became Obvious

Posted June 10, 2022

Jeffrey Tucker

American’s capacity for denial is truly a thing to behold. For at least 27 months, it should have been obvious that we were headed for a grave crisis. Not only that: the crisis was already here in March 2020. For weird reasons, some people, many people, imagined that you could just shut down an economy and turn it back on without consequence. And yet here we are. 

Historians of the future, if there are any intelligent ones among them, will surely be aghast at our astounding stupidity. Congress enacted decades of spending in just two years and figured it would be fine. The printing presses at the Fed ran at full tilt. No one cared to do anything about the trade snarls or supply-chain breakages. And here we are. 

Our elites had two years to fix this unfolding disaster. They did nothing. Nothing! Now we face terrible, grim, grueling, exploitative inflation, at the same time we are plunging into recession again, and people sit around wondering what the heck happened. I will tell you what happened: the ruling class destroyed the world we knew. It happened right before our eyes. And here we are. 

Every Man for Himself! 

The stock market reeled on the news that the European Central Bank will attempt to do something about the inflation wrecking markets. So of course the financial markets panicked like an addict who can’t find his next hit of heroin. Also the bad news is everywhere. Even in the midst of very tight labor markets and very low unemployment (mostly mythical), companies have started to lay off workers. Why? To prepare for the recession that everyone knows is in the works. 

And get this: high flying tech giants are curbing their enthusiasm too. Facebook apparently got tricked into paying bigtime news outlets to let FB users have free access to articles — no doubt to those that reinforced government propaganda, since Mark Zuckerberg volunteered his entire company to be messengers for the regime back in 2020. FB got robbed and is now rethinking. No more freebies! 

This might as well be the theme of American life. No more charity. No more kindness. No more doing something for nothing. In inflationary times, everyone becomes more grasping. Morality takes a back seat and generosity is no more. It’s every man for himself, if we can still use that word these days. 

Courting Disaster 

There was something of a psychological break that hit this morning on the news of the CPI. It was not better than last month. It was not the same as last month. It was worse: 8.6% year-over-year, the worst it has been in 40 years. Honestly, everyone sort of knew this already in their heart of hearts but there is something about the official announcement that codified it. 

But let’s say we stack the data at two years rather than one year. What does it look like? It comes in at 13.6%. We have never seen anything like that. And it is truly starting to hurt as never before. Gas is above $5 and rents are more than $2,000 a month on average. The raises at work have stopped coming too. On the contrary, employers are expecting more productivity for ever less money in real terms. 

Prices have a very long way to go to wash out the paper sloshing around the world economy. Here is the wave of printing compared with current price trends. No way is this getting better before it gets much worse. 

chart

Put it all together, especially with declining financials, and this is why it feels like the walls are closing in. It’s because they are. And there truly is no way out for anyone at this point. 

What drives me absolutely bonkers is that anyone would be shocked by any of this. It was all in the cards, an outcome guaranteed by ghastly policy over two presidential administrations, all enacted by a government that knows nothing about economics and cares nothing for basic commercial and human rights. You dispense with these things and you court disaster. 

And this is how you get the worst consumer confidence rating ever recorded. 

chart

The Pace of Change 

What makes today different from the 1970s is the pace at which this has all unfolded. Even a year ago, administration officials were claiming that everything would be just fine. Many people believed them, despite every bit of data pointing to exactly the opposite. Truly it feels like our lords and masters believe that their fantasies are more reality than reality itself. They say it and it somehow becomes true. 

Can you imagine that only last month, the Biden administration concocted the idea of establishing a “Disinformation Governance Board”? Crazy stuff. It was designed to script the truth to all social media and mainstream media outlets, censoring all dissent. The plan blew up only because it was too overtly Orwellian for public consumption. What matters here is the intent, which is nothing short of totalitarian. 

Politics is good fun for many people, a real sport and a good distraction from real life. But politics becomes a very serious business once personal finance makes the good life ever less viable. Right now everyone is searching for someone to blame and most people have hit on the old dude in the White House, who they somehow believe should do something about all these problems despite a lifelong career of knowing nothing and doing nothing about anything. He made his career as a talker and now he can barely do that anymore. 

What an astounding thing to see unfold before our eyes, and so quickly! The “malaise” of 1979 was a long time coming but the meltdown of 2022 has hit many people like a hurricane that somehow evaded detection from the radar. 

The long period of denial seems suddenly over. The masses are fuming in anger. The crime everywhere these days is not incidental or accidental. It is a mark of civilizational decline. Something has to give and will give at some point. The ruling class in this country and their friends around the world have caused tremendous wreckage. There will be hell to pay. 

And yet, what do our rulers have to say to us? They tell us to rely more on wind and sun — Janet Yellen’s exact words to the Senate two days ago. I used to think she was a smart cookie but I guess power turns even good minds to mush. 

Mush is exactly what they have created out of a once prosperous and hopeful nation. 

Regards,

Jeffrey Tucker

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