Jun 082016
 June 8, 2016  Posted by at 2:18 pm Finance Tagged with: , , , , , , , ,

Fred Stein Evening, Paris 1934

Two months ago, there was a referendum in Holland about an association agreement between the EU and Ukraine. A relatively new Dutch law states that with an X amount of signatures a referendum can be ‘forced’ by anyone. Before, during and -especially- after the vote, its importance was -and is actively being- pooh-poohed by both the Dutch government and the EU. That in itself paints the issue better than anything else. Both the call and the subsequent support for the referendum stem from resistance against exactly that attitude.

The Dutch voted No to the EU/Ukraine agreement. It was with a turnout not much above the validity threshold, but a large majority of those who did vote agreed they want no part of the deal. This puts Dutch PM Rutte in an awkward position, he can’t be seen ignoring the population. Well, at least not openly. The EU can’t validate the agreement, and with Holland still holding the chair of the Union until July 1, a meeting on the topic has been pushed forward until the last weekend of June. With Rutte still in charge, but only just, and with the June 23 UK Brexit vote decided.

Brussels is frantically looking for a way to push through the agreement despite the Dutch vote, and likely some sort of bland compromise will be presented, which Rutte’s spin doctors will put into words that he can -with a straight face- claim honor the vote while at the same time executing what that same vote specifically spoke out against.

The EU will claim that since 27 other nations did ‘ratify’ the agreement, the 67% of the 32% of Dutch voters who bothered to show up should not be able to block it. As they conveniently fail to mention that nobody in the other 27 countries had a chance to vote on the issue. Just imagine a Brexit-like vote in all 28 EU nations on June 23. Brussels knows very well what that would mean. There’s nothing it finds scarier than people having an active say in their lives.


All this is a mere introduction for what is a ‘western world wide’ trend that hardly anybody is able to interpret correctly. It what seems to many to be a sudden development, votes like the Dutch one are ‘events’ where people vote down incumbents and elites. But these are not political occurrences, or at least politics doesn’t explain them.

In the US, there’s Trump and Bernie Sanders. In Britain, the Brexit referendum shows a people that are inclined not to vote FOR something, but AGAINST current political powers. In Italy, a Five-Star candidate is set to become mayor of Rome, something two Podemos affiliated -former- activists have already achieved in Barcelona and Madrid.

All across Europe, ‘traditional’ parties are at record lows in the polls. As is evident when it comes to Brexit, but what when you look closer is a common theme, anything incumbents say can and will be used against them. (A major part of this is that the ’propaganda power’ of traditional media is fast coming undone.)

The collapse of the system doesn’t mean people swing to the right, as is often claimed, though that is one option. It means people swing outside of the established channels, and whoever can credibly claim to be on that outside has a shot at sympathy, votes, power, be they left or right. Whatever else it is they may have in common, first and foremost they’re anti-establishment.


To understand the reason all this is happening, we must turn our heads and face economics. Or rather, the collapse of the economy. Especially in the western world – the formerly rich world-, there is no such thing as separate political and economic systems anymore (if there ever were). There is more truth in Hazel Henderson’s quote than we should like: “economics [..] has always been nothing more than politics in disguise”.

What we have is a politico-economic system, with the former media establishment clinging to (or inside?!) its body like some sort of embedded parasite. A diseased triumvirate.

With the economy in irreversible collapse, the politico part of the Siamese twin/triplet can no longer hold. That is what is happening. That is why all traditional political parties are either already out or soon will be. Because they, more than anything else, stand for the economic system that people see crumbling before their eyes. They represent that system, they are it, they can’t survive without it.

Of course the triumvirate tries as hard as it can to keep the illusion alive that sometime soon growth will return, but in reality this is not just another recession in some cycle of recessions. Or, at the very minimum this is a very long term cycle, Kondratieff style, . And even that sounds optimistic. The system is broken, irreparably. A new system will have to appear, eventually. But…

‘Associations’ like the EU, and perhaps even the US, with all the supranational and global entities they have given birth to, NATO, IMF, World Bank, you name them, depend for their existence on an economy that grows. The entire drive towards globalization does, as do any and all drives toward centralization. But the economy has collapsed. So all this will of necessity go into reverse, even if there are very powerful forces that will resist such a development.


Despite what the media try to tell you, as do the close to 100% manipulated economic data emanating from various -tightly controlled- sources, the economy is not growing, and it hasn’t for years; the only thing that grows is debt. And you can’t borrow growth.

You can argue in fascinating philosophical debates about when this started, arguments can be made for Nixon’s 1971 abolishment of the -last vestiges of- the gold standard anywhere up to Clinton’s 1998 repeal of Glass-Steagall, or anything in between -or even after.

It doesn’t matter much anymore, the specifics are already gathering dust as research material for historians. The single best thing to do for all of us not in positions of politico/economic power is to recognize the irreversible collapse of the system. Since we all grew up in it and have never known anything else, that is hard enough in itself. But we don’t have all that much time to lose anymore.

The whole shebang is broke. This can easily be displayed in a US nominal debt vs nominal GDP graph:



That’s really all you need to know. That’s what broke the shebang. It is easy. And even if a bit more of the ‘surplus’ debt had been allowed to go towards the common man, it wouldn’t have made much difference. We’ve replaced growth with debt, because that is the only way to keep the -illusion of- the politico-economic system going, and thereby the only way for the incumbent powers to cling on to that power.

And that is where the danger lies. It’s not just that the vast majority of westerners will become much poorer than they are now, they will be forced to face powers-that-be that face the threat of seeing their powers -both political and economic- slip sliding away and themselves heading towards some sort of Marie-Antoinette model.

The elites-that-be are not going to take that lying down. They will cling to their statuses for -literally- dear life. That right there is the biggest threat we all face (including them). It would be wise to recognize all these things for what they really are, not for what all these people try to make you believe they are. Dead seriously: playtime is over. The elites-that-be are ready and willing to ritually sacrifice you and your children. Because it’s the only way they can cling on to their positions. And their own very lives.

It may take a long time still for people to understand the above, but it’s also possible that markets crash tomorrow morning and bring the facades of Jericho down with them. Waiting for that to happen is not your best option.

Home Forums The Only Thing That Grows Is Debt

This topic contains 10 replies, has 8 voices, and was last updated by  Realitychecker 4 years, 7 months ago.

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    Fred Stein Evening, Paris 1934 Two months ago, there was a referendum in Holland about an association agreement between the EU and Ukraine. A relative
    [See the full post at: The Only Thing That Grows Is Debt]


    Ken Barrows

    The disappointing part is not the politicians. They have sold out and have to cobble together a diverse coalition. Rather, it’s the media that is woefully inadequate. These folks went to journalism school but don’t know how to ask difficult questions.


    Journalists like politicians, economists and bankers are all part of one and the same system. And that system is -walking- dead.



    In the U.S. , the disconnect between the provision of the government services which are the platform for having an economy in a long-term stable city/county/state/nation, including infrastructure building and the perpetual maintenance/improvement of these high value/high cost assets, AND the tax and fee revenue to cover these organizational and built-environment costs by the “No new taxes” mindset has led to more and more debt as the solution. The stimulus effect of debt money is long gone and now it is an ever growing burden and oppression. Still, we must invest in war – the greatest waste of resources, that which destroys what has taken centuries to build – look at Allepo. With easy credit everyone’s wishes can be met in the short-term. The short-term is long gone. I learned public budgeting and management in 1973. Jimmy Carter used it in Georgia. Real cost calculations conflict with optimism, so put it on the credit card. At some point our fragile economies will drink to fit their uninflated reality. TAE has been teaching this from the start. Unlearning the cover stories is not easy, given the mental environments we coexist within.



    “The Only thing That Grows Is Debt” – all based on fraudulent debt-based monetary system.

    So where is the article exposing the Architects of the debt-money Ponzi scheme that either 1. grows or 2. blows up such that the Architects bankrupt and asset strip society?
    Are we to pretend these PEOPLE don’t exist?
    Are we to ignore THE ROOT CAUSE? Pretend it doesn’t exist, despite it being brought up all the time in the comments section?

    >>Journalists like politicians, economists and bankers are all part of one and the same system. And that system is -walking- dead.<<

    And what, exactly, makes you think that killing the system isn’t part of their plan to consolidate power and resources to better implement Feudalism 2.0 without all this pesky “human freedom” nonsense and the extra baggage of 7 billion people? What makes you think these people don’t enjoy seeing humans degraded into total immoral morons? Or do you pretend the Debt-Money Monopolists don’t exist so that you don’t have to ever call them out and risk the consequences?
    Debt-Money Tyranny is working fantastically well from my vantage point. Telling an aggressor that he’s an idiot for hitting your face because eventually his hand will hurt has not been a successful strategy in the past. Maybe he likes the pain of whooping your behind. A lot.



    >>The disappointing part is not the politicians. They have sold out and have to cobble together a diverse coalition. Rather, it’s the media that is woefully inadequate. These folks went to journalism school but don’t know how to ask difficult questions.<<

    Hi Ken, the media personalities are hired to do what their paymasters tell them to do. WHO are their paymasters? The Debt-Money Monopolists, of course. Would you pay someone to investigate your con so that society turned against you and you ended up in prison for treason?
    You see, it isn’t complex at all. This is basic stuff.
    Paul Krugman is NOT a liberal. He’s a fraud. He KNOWS the debt-money fraud AND CONCEALS IT FROM HIS AUDIENCE FOR THE MODERN DAY EQUIVALENT OF 30 SHEKELS OF SILVER.

    Krugman to Lietaer: “Never touch the money system!”

    “You are killing yourself academically if you touch the money system.”
    ~Paul Krugman

    Steve Keen conceals the exact same debt-money fraud as does Paul Krugman… when he was called out on his apologism he babbled incoherently and stopped responding because his dissembling was exposed for all to see. Steve Keen is NOT interested in killing himself academically. He’s constrained in what he can say and he KNOWS what subjects to avoid.

    Read the comments section here:

    The Principal And Interest On Debt Myth

    These actors are controlled opposition who value their own paycheck more than the truth. They’ve chosen mammon over integrity. They fulfill the agenda of the Debt-Money Monopolists as expressed by Zbigniew Brzezinski…

    “In the technotronic society the trend would seem to be towards the aggregation of the individual support of millions of uncoordinated citizens, easily within the reach of magnetic and attractive personalities exploiting the latest communications techniques to manipulate emotions and control reason.”
    ― Zbigniew Brzeziński, Between Two Ages: America’s Role in the Technetronic Era



    There is a murmur now that if the Brexit vote is positive that Parliament will simply ignore it.


    I believe total debt can double and then double again. There is no way of telling when the game will be up. Nobody wants it to end.

    It was a milestone day as the ECB bought its first corporate debt, thus monetizing it. I can envision the day when central bank will stop monetizing soverign debt and monetize only corporate debt. Austerity for governments and unlimited liquidity for corporations, or aternately corporations become even more, the new sovereigns..



    “You are killing yourself academically if you touch the money system.”
    ~Paul Krugman

    >>I believe total debt can double and then double again.<<
    Based on what?
    >>There is no way of telling when the game will be up. Nobody wants it to end.<<
    I believe bankrupting and asset stripping nearly everyone is EXACTLY what the Debt-Money Monopolists eventually want – and they do that by putting an end to this debt-based money Ponzi scheme.

    >>It was a milestone day as the ECB bought its first corporate debt, thus monetizing it.<<
    No they didn’t. Monetization is when debt is bought with debt-free money. The ECB contract is to pay back the debt and ordinary Europeans are on the hook for every penny.

    >>I can envision the day when central bank will stop monetizing soverign debt and monetize only corporate debt.<<
    They haven’t monetized either. They’ve transferred very real debts from their corporate fronts to ordinary people via their vassal governments controlled by their quisling politicians. Is this not obvious?

    >>Austerity for governments and unlimited liquidity for corporations, or aternately corporations become even more, the new sovereigns..<<
    This is correct with some clarifications. The Debt-Money Monopolists are the sovereigns and they roll their corporate fronts up under their sovereign power. An ordinary person that incorporates is being prepped for their economic hanging. But don’t trick yourself into thinking that the Debt-Money Monopolist Mega-Corporate Fascist Empire debts that are wiped off their balance sheet aren’t still debts – they are. And ordinary people are expected to PAY, WITH INTEREST. That isn’t monetization – by any definition of the word. It is financial warfare and treason of the highest order. Which is why I don’t understand why bloggers run interference for these people.

    “Our lives begin to end the day we become silent about things that matter.”
    ~Martin Luther King, Jr.

    “History will have to record that the greatest tragedy of this period of social transition was not the strident clamor of the bad people, but the appalling silence of the good people.”
    ~Martin Luther King, Jr.

    “You are killing yourself academically if you touch the money system.”
    ~Paul Krugman


    Doc Robinson

    That graph is bad news, but perhaps not as bad as it appears (at face value), since GDP corresponds to individual years, while the debt levels are cumulative. It seems that a better comparison to cumulative debt would look at cumulative production (not just the production for any given year.)

    For example, from 1990 to 2015, it looks like the total debt increased by roughly $45 trillion, while GDP increased from roughly $7 trillion to $18 trillion PER YEAR. From some ballpark calculations based on that graph, the total production during the 25 year period was roughly $310 trillion (or about $135 trillion more than what would have been produced during that period if there was zero growth since 1990).

    In other words, it looks like roughly $135 trillion is the increase in total production (above the 1990 level) during the past 25 years, which corresponds to a $45 trillion increase in total debt (above the 1990 level). $135 trillion more production for $45 trillion more debt.

    Which means roughly $3 more production for every $1 more debt (since 1990). Looking at it this way, production is increasing faster than debt, which seems to contradict the assertion that “The Only Thing That Grows is Debt.”

    [Again, these are rough calculations which take that graph at face value. What goes into those “growth” numbers is another matter entirely.]



    Writing that cuts to the bone. Thank you.



    The title of this article is spot on, debt is just about the only thing growing, given that the real wealth creating growth needed to repay these debts is steadily fading away. Tim Morgan recently posted an excellent overview of the situation facing us all on his “Surplus Energy Economics” blog entitled “End-Game”.


    He identifies three key reasons why real wealth creating growth is fading, the first is declining net, or surplus, energy, the second is escalating debt, and the third are policies adopted to try and stimulate growth, which have only served to sabotage it!

    These factors when combined together make a major financial crisis inevitable that will be one that dwarfs all previous crises. The reason is very simple, increasing global debt to record levels combined with a diminishing ability to repay them has effectively transformed the entire global financial system into a giant Ponzi scheme, and such schemes always end in disaster.

    He goes onto identifies the first Nemesis of the current political/economic system describing four potential triggers, namely risk 1 “China”, risk 2 “Equity market exposure” (especially in the US), Risk 3 “Capital flows and the $7 trillion gamble”, and risk 4 “The failure of “kamikaze economics” (often referred to as Abenomics).

    The second Nemesis is now becoming increasingly apparent, namely “The populist backlash”. This is being reflected in the EU with the impending Brexit referendum and in the US with the nomination of Donald Trump as the Republican candidate for the upcoming Presidential election; both represent early harbingers of things to come, so to paraphrase the alleged Chinese curse, “We all live in interesting times”.

    I doubt anything in Tim’s latest blog will come as a great surprise to regular readers of TAE, but it does provide a clear and comprehensive analysis of what is going wrong and what the consequences will be.

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