“Out of these windows, we will view the collapse of financial history. One step closer to economic equilibrium.” – Fight Club
What do you call a man in debt? Owen.
After 9-11, sales of the Jenga® game really dropped.
I’m not sure why, but in 2002 people had to play Jenga® the old-fashioned way – by stacking dishes in the sink.
But the game of Jenga™ is a pretty good analogy for our economy right now. Jenga© is based on taking one piece from the lower part of the structure and putting it on top. As the game progresses, everyone can see that the structure becomes weaker and more unstable. The game always (at our house) ends the same way: the tower, which now seems ridiculously tall, sways a little bit, becomes unbalanced, and topples.
The pieces then go everywhere, and we leave them on the floor for the herds of stray free-range toddlers in our neighborhood to eat. We’re givers that way.
The economy (to me) looks exactly like a game of Jenga™, seemingly impossibly stretched out and tall.
Pro-tip on how to pick-up women: lift with your legs, not your back.
Examples?
Well, let’s talk about when we turned money into cash. The dollar used to be bound to actual, physical commodities – gold and silver. I guess you could call it an either-ore situation. Gold was always the preferred, but people who wanted looser money (i.e., inflation) fought to get silver in there, too. In fact, silver was actually part of the money supply, making up a portion of many coins up until the 1960s when one Jenga© block was pulled and set on top.
Nixon pulled another when he ended the ability of foreign nations to bring piles of dollars and walk away with piles of gold. He made the tower even shakier as he threw gold out, entirely as a standard. The good news was that Americans could once again own gold. The bad news was that dollars were no longer money – they were cash – not backed by anything.
And could be printed at will. Another Jenga™ piece on top. The tower becomes a bit wobblier. And wobblier still as Nixon and Ford and Carter start printing. I mainly blame Nixon, since he got the ball going, and it took the hand of Reagan reaching out to steady the tower, though that created the very deep 1982 recession.
What was Bob the Builder© called during a recession? Bob.
Reagan, though, added his bit as well. Sure, it made sense to try to spend the Russians into the ground – after the 1982 recession the economy came roaring back as The Wealth Pump started in earnest and the stock market soared. But during this time, the market cheered as jobs left the United States. In many cases, the jobs were subsidized by the country taking them. They wanted to build up the industrial expertise so that they could make world-class products and were willing to pay for their economy and workers to learn how to do it.
Remember George H. W. Bush’s advisors saying they didn’t care if the economy made computer chips or potato chips?
Pepperidge Farms© remembers™.
Because it does matter. Potato chips or computer chips don’t matter if you’re a banker making a loan, but if you’re trying to create the greatest value with the economy? It sure as hell does matter.
One step closer to living in the Prime® Pod™.
On the government side, fiscal responsibility seemed to come back for a bit with Bill Clinton. Now, don’t thank Bill – it was entirely based on Newt Gingrich stopping all the nonsense for a few years that primed the pump of the economy. While Hillary is an ideologue, Bill was always in it for the hot chicks. Sure, there were shenanigans, but the Jenga™ players were mostly playing it safe during that time period.
But when the recession hit in 2000? George W. Bush really wanted to open the floodgates, so he started stacking as high and as fast as he could. War helped him move a few Jenga™ pieces, and low interest rates in his “everyone who breathes should own a McMansion” policy fueled an amazing set of bubbles that ended up including housing, natural gas, crude oil, and what was left of my hair.
The path out of the Great Recession was a simple one. Print more money. People aren’t buying United States Bonds? Heck, the Fed® can buy them now. We can also pay Wall Street to launder all the bad debt and make sure that irresponsible bank vaults get filled to the top with cash.
Is it just me, or does Janet Yellin look exactly like Benny Hill?
Because, why not?
Obama took some Jenga™ pieces from the very bottom and put them up top because he wanted to get health care into the system.
Trump didn’t add too many blocks to the top of the board, at first. Trump was mainly because he was focused on deals – immigration, trade, covfefe. But he couldn’t make a deal with COVID. His instincts were bad and his solution was just to stack more blocks up top by printing money and cramming it down people’s throats as fast as he could.
Biden doubled down on that strategy: importing illegals by the truckload to paper over the economy that no longer serves its citizens, spending billions to “reduce inflation” and now nobody wants to buy the bonds. Thankfully, the banks are scrambling to create weird new structures so they can pretend that the loan that they made at 4% isn’t costing them when they’re giving 5.5% on CDs.
Anyone else feel comforted that the banks have a really complicated strategy to avoid reality?
The tower is now, really, really tall. And really, really shaky.
And these things never end slowly – they end either with mass social unrest, a big war, or both when the tower finally collapses. And others have just given up.
When 4Chan is smarter than the Fed®.
For clarity’s sake, Hasbro™ (the owner of the Jenga® trademark) had nothing to do with this post. I’m sure they’d rather people look at Jenga® and think about the 9-11 than have them look at Jenga® and think about our economy.
Well, technically, up and to the right is Positive slope, so, yeah, that would be a good thing, wouldn’t it?
Says the math-illiterate.
Should be! For someone. Maybe not me.
Banks make the rules using make believe “money” so it is pretty easy for them to simply change the rules for how they handle their make believe “money”. Why not when most “money” doesn’t exist and never has existed anywhere but in a computer.
It’s all a game that the Money Masters have created to benefit . . . the Money Masters. Odd, that.
As Hemingwy noted, “Gradually, then suddenly.”
Hemmingway’s full quote is eye opening:
“How did you go bankrupt?” Bill asked.
“Two ways,” Mike said. “Gradually and then suddenly.”
“What brought it on?”
“Friends,” said Mike. “I had a lot of friends. False friends. Then I had creditors, too. Probably had more creditors than anybody in England.”
When the false friends and creditors rush in to cash out their US T-Bills as to get SOME Value out of a failing dollar the hyperinflation will be far more painfilled than Weimar Germany.
SNIP According to the Federal Reserve and U.S. Department of the Treasury, foreign countries held a total of 7.4 trillion U.S. dollars in U.S. treasury securities as of April 2023 1. Of the total 7.6 trillion held by foreign countries, Japan and Mainland China held the greatest portions, with China holding 868.9 billion U.S. dollars in U.S. securities 1. Other foreign holders included oil exporting countries and Caribbean banking centers.
Go long getting OUT OF DEBT As the Great Depression saw Bankers (Blackrock anybody) buying homes and farms on the courthouse steps GUARDED by Sheriffs for pennies on the dollar on debts and tax liens. Long supportive trusted family and friends as the smarter families got to decide what farms and homes were best for multi-generation family survival and what homes to LET GO as to keep ENOUGH money for taxes-debts paid. Go Long family gardens and chickens.
Going to get ugly when the Powers that Be decide to allow the crash OR it happens anyway despite their efforts.
Exactly.
America has Jenga, Argentina has Javier – who is showing us a preview of what is coming soon to America by devaluing their peso by over 50% now that he has taken over their presidency. Javier wants to dump the peso and use a stronger currency: the US dollar. Very soon we’re gonna have to use that one weird little trick ourselves. The “stronger currency” will be gold.
https://www.foxnews.com/world/javier-milei-newly-elected-argentinian-president-begins-shock-therapy-devaluing-peso-against-dollar
We do not have enough gold to run an economy
We do if gold were priced at its true value instead of its current manipulated and suppressed price.
The major appeal of gold is that is cannot be printed. The supply of gold in the world increases by around 2% per year. This compares with the Federal Reserve, which has increased the number of dollars in circulation by 40% in under four years since COVID. And you wonder where inflation and 32 trillion dollars of Federal debt comes from?
It will take a mental shift to price things in “grams of gold” instead of “number of dollars”. But when you do…well, see for yourself. Which form of money has had greater stability and less violent fluctuations in value since 1985, gold or dollars?
https://www.statista.com/statistics/262860/uk-brent-crude-oil-price-changes-since-1976/
https://ingoldwetrust.report/chart-gold-oil-ratio/?lang=en
That COVID spike in the gold chart had a lot more to do with oil panic than gold itself…
The 2% per year growth in gold supply by mining matches the true US GDP growth a LOT closer than whatever the hell the Fed is doing with its printing presses. You can create a functioning economy based on gold as money: with fiat paper, as we are learning, not so much.
https://www.statista.com/statistics/188165/annual-gdp-growth-of-the-united-states-since-1990/
Disagree – and a deflating currency is not a bad thing, just a different thing. Imagine if savings increased?
Yes – I think Javier is fully in the Wealth Pump camp.
The Debt Pile chart illustrates the intentional demolition of ‘the economy’, beginning with Scamdemic and continuing with resultant Planetary Lockdown. Forcing the closure of small and medium sized business across nations is guaranteed to ruin finances and economy.
They were able to do it because the West is female-controlled, thus hysteria is a perpetual opportunity, renewed daily, safety safety safety, think face shields. Once the Fear Polity is in place, the show can be run by remote-control. The Herd is utterly predictable.
Nothing in the world really changed to initiate the collapse, except the decision of the Regime to take down the nations and institute their beast system of Building Back Better.
“The herd is utterly predictable.” Money quote, Ray. The herd will do whatever the Leviathan tells it to do. As long as they have their variety of Soma, they will not care. Life is a vale of tears. Plan accordingly. – DTW.
You know those “countries” that are made up of multiple nations or tribes where they mostly hate each other, and high offices are doled out by ethnic affiliation? “The War guy has to be a Whovian, the Agriculture guy is always a Whatznik, and so on?
Is the US one of those fake countries? Because Treasury is overwhelmingly held by a tiny, tiny minority group (or persons who have married spouses from that group). Weird, huh.
https://m.youtube.com/watch?v=B57OWIysaoE
That ‘vale of tears’ riff has been on my mind all week. Then there you go. Takes two to witness.
The tears are only temporary, so also the vale itself. It all seems so permanent here, but it’s not. Permanent is for later.
They want to destroy real wealth – what better way than through inflation and debt?
I don’t know from Jenga — never played that game. I do constantly play a very old game called Barter. I especially enjoy trading my worthless currency for dry goods and freedom pills — my favorite playing pieces. Experience tells me that currency is tasteless, and gold works poorly as a self-defense tool.
…or, as has been said elsewhere – “Brass and lead are precious metals too.” 😉
Yup – I need to do some more conversions.
I’m a lot more concerned about the government’s trillions in Doom spending for social “justice” than I am about some 22 year old college chick maxing out her visa at DSW because she can’t get a job with her useless Menstrual Studies degree. The college chick can always set up an OnlyFans, but no one is going to pay to see Emperor Poopypants minus his drawers.
They used to throw people into debtor’s prison for being fiscally irresponsible. But when congress and our chief executive write IOUs they can’t ever hope to honor, it’s just bidnez as usual. And the ones who will ultimately pay for this recklessness are the generations yet unborn.
This country had a really good run, especially in the latter part of the 20th century. But the hour is late, the booze is nearly all gone, the hot chicks have moved on to the next party and a nuclear hangover is waiting impatiently for its star turn.
That’s the case. It always seems to be a good idea to get even drunker when you’re already blitzed. But there’s always a toll to be paid.
What we better worry about is the EBT people not getting paid not to steal
They don’t live near me, and assuming they were industrious enough to travel that far from the cities, rural America is well armed and knows how to dig holes.
Why worry? It would just be a more noticeable form of their daily existence. It might even become so bad the news would cover it and the normies might care enough to finally do something about the underlying problems. Or, the blue cities will fairly rapidly devolve into anarchy and cannibalism.
Either way, accelerationism is a good policy.
That day is coming.
Indeed.
It will take a near, if not an actual miracle to escape the financial catastrophe that is bearing down on us.
In either case, a wise person would plan on our current legal tender becoming essentially worthless (only nearly – as I grant that it does burn, if fuel is needed), and to work to become as independent as possible of any form of government and/or large businesses. Don’t plan on anyone coming to ‘help’ – unless they’re part of your tribe/clan. How many would survive if they only ate food they grew and/or raised themselves? We may well get to find out, and sooner than many (any?) of us would like. If you *cannot* be food self-sufficient, be very sure that you are useful to someone that can – and are willing to trade your usefulness for sustenance. If not things to barter with, then knowledge to ‘sell’ as services. Both is better. 😉
Most money came from imagination, and to imagination it will go.
Doom spending is exactly what was seen in Wiemar Germany in the early 1930’s. Nobody hung onto cash when its value was evaporating overnight. Spend it as fast as you can for hard goods. Or better yet, spend someone elses money (borrowing/debt) that can be paid back with devaluing currency … until the interest rates on debt catch up to inflation.
When thinking of hyperinflation, I always remember this story from Weimar Germany:
A modestly wealthy family had finally saved enough to by a house on a lake in Bavaria. But, seeing the uncertain times, they decided to save the money for something more important. Two years later, they used the money to buy a pair of shoes.
In a period of high inflation, saving money makes no sense. Hard good are hard currency.
Or under Brasil before Maduro. My cousin’s family would get their paychecks and use their lunch break to spend it on something – anything available. You don’t need a set of tires? Someone who has something you do need and wants them.
Yup – buy anything you can before it’s too late.
The one good thing about a period of high inflation is, once you’ve survived it, your previous fixed-rate debts become minuscule.
When money becomes worthless, things still carry value. Don’t buy gold bars, buy gold rings. Keep one (and a sob story) handy. Invest in brass, copper, lead, and trace chemicals. Canned goods, properly stored, will last longer than the average life expectancy. Honey lasts forever. Coffee is a valuable trade good, if kept sealed.
Sadly (and happily) my debt is minimal. The rest, all very, very good advice.
Heh, imagine playing jenga where you can actually see all the pieces. The really challenging game style is using invisible pieces, like derivatives. I wonder how much of those are in circulation compared to real money and debt…
https://www.visualcapitalist.com/wp-content/uploads/2020/05/all-the-worlds-money-2020-01-1.png
It’s a HUGE number.
John, I note at the time of this writing that the Dow has reached heretofore unachieved levels. This, at a time when (if one looks in the right places) businesses are laying people off seemingly as quickly as they can. For all of the “Nothing to see here” which seems to resound in certain circles, the truth on the ground is quite different.
That’s what a breaking apart feels like, and is another example of The Wealth Pump.
Wall Street makes a killing tearing down Main Street and selling the scrap.
Best thing to have when the tower falls over is lots of self sufficient hard hearted friends…
Tribe Up or Die Brothers…
Yup. Finding them a minute too late . . . is too late. Find them now.