'It's The Pace Of Change' That Is Ominous. Biblical Birth Pains

It's The Pace Of Change That Kills You

by Chris Martenson

And it has now sped up beyond our means to control it

Financially, the latest and most head-spinning change concerns the explosive proliferation of debts with negative interest rates.

Unheard of since the Mesopotamian invention of debt in 2,400 BC, negative interest rates have suddenly appeared on the financial landscape like a new mutant species, an invader without natural predators, gaining a sudden foothold and then spreading rapidly.

It’s as if a virulent chestnut blight landed in a virgin forest of corporate and sovereign debt.

From literally ‘none’ ten years ago, to more than $17 trillion now. And up from a ‘mere’ $6 trillion in the past ten months alone:

Is this a new, permanent trend?  We don’t know yet.

But the pace of change is sure intensifying.

First, Switzerland gave negative rates a tentative go. Then Denmark timidly followed. But eventually, the entire Euro complex followed with gusto, with most countries’ rates crossing below the 0%-boundary in late 2014:

Whatever the final repercussions are, one fact is clear: the world’s central banks are completely, 100% responsible for these bizarro-world negative interest rates.

They try to pretend that the $20+ trillion money printing spree they engineered after 2008 isn’t a root cause. Instead, they claim “the markets” are responsible. But this is as weak a defense as Ted Bundy claiming his victims all killed themselves. It’s just not a credible defense.

Again, it’s worth noting just how unusual this all is.  It has never been done before.

5,000 years of accumulated knowledge is being chucked out the window by activist central bankers who assume they know best.

...now is the time to ask stiff questions of the central bankers, and to not let them avoid answering.  And to keep asking until we either receive reasonable responses, or clarify that they have no good answers to give.

Here are questions I would love to hear posed to Chairmen Powell, Draghi or Kuroda:

• “Your actions were designed to spike the prices of stocks and bonds and you’ve succeeded. This has led to an enormous wealth gap.  What’s ‘too far’ in your view?  Right now 5 people have as much wealth as the bottom half, by which we mean 3.8 billion humans.  Is ‘too far’ when those same five individuals own as much as the bottom 75%? The bottom 90%? Or is it your aim that these top five individuals should actually possess everything in the world with everyone in their debt?”
• “5,000 years of financial trial and error has firmly established that saved capital deserves a positive rate of return. You are now certain that negative interest rates are what the world needs.  What empirical data do you rely on to make that assessment? What happens if you’re wrong?”
• “All investment decisions depend upon an assumed rate of return. Pensions, for example, require matching future liabilities with current assets and an assumed rate of return.  Now that central banks are certain that negative yielding debt is just what the doctor ordered, and under the principle of “you break, it you buy it“, we’re wondering what responsibilities the central banks are prepared to assume here for broken pensions?”
• “Same question as above, but for savers and endowments.”
• “Money is not actual wealth, but a claim on real wealth. More importantly, it’s a social contract.  Central bankers are monkeying with that social contract and the effects are obvious.  Corporations are incentivized to make returns by financially engineering their balance sheets and rigging their share counts instead of taking actual risks, hiring more people, and investing in R&D.  Can we not just take this all the way to the end and propose eliminating risk for everyone and just give everybody money without anyone performing any work at all?  Obviously not, but we’re also obviously somewhere along that path.  The question is, how far is ‘too far’ and what criteria are you using to determine that?”
• “Endless growth is not possible on a finite planet. Your policies are all geared towards stoking the fastest economic growth possible.  Do central banks have any responsibility to future generations and leaving behind a world worth inheriting?”

While it’s possible that central bankers are competent, benevolent experts doing their best, it’s equally possible they are the largest economic and social vandals in all of history.

So many things are changing. And the rate of change is speeding up, too.  It’s barely possible to fashion a comprehensive plan for what to do about it.  It’s probably too much to expect that anyone in power would have the necessary broad-based systems thinking required to concoct a reasonable plan forward.

The central bankers are continuing to lower interest rates. Politicians squabble about marginal, ultimately unimportant distractions. And universities enforce spaces safe from micro-aggressions so that nobody is ever offended (leaving them woefully unprepared for what’s coming next).

Everybody is still busy doing the very same things that have moved us away from what has served us well for 5,000 years: positive interest rates and a stable climate.

The rate of change is accelerating.  Things are speeding up.  That’s how exponential systems behave.  It’s not surprising to those who understanding it, but it’s shocking to behold.

It’s dead simple at this point to conclude that we’re on course for a massive financial accident.  And a major ecological upheaval that will make it difficult, if not impossible, to feed everyone, too.

If we don’t change direction, dramatically and soon, those eventualities are about as close to guaranteed outcomes as you can get.

Will society make the necessary change in time? I doubt it. Don’t you?

Our signposts along the way for timing the arrival of the next crisis will come from closely tracking the pace of change in developments from here.

And for me, recent events have accelerated to the point that I’m no longer comfortable residing in my current location.

In Part 2, ALERT: Time To Relocate, I explain the factors compelling me to leave my community of 15+ years for a safer, more resilient and liberty-respecting location. And I share the qualities I’ve prioritized highest when evaluating the new property to relocate to.

Those who have followed me for years know that I very rarely issue Alerts.  I only do so when I arrive at important conclusions that cause me to take major action in my own life.

The pace of change in world developments is now high enough for me to undertake big life change like this.