“The pools of blood that have collected, you’ve got to soak that up. Now, Jimmie, we need to raid your linen closet.” – Pulp Fiction
How do you drown a programmer? Put up a sign that says, “no swimming”.
If I were to come up with a metaphor for today’s situation, well, it might be this . . .
While I was half asleep this morning I visualized in that gauzy dreamy sort of way, dark pools, sitting quietly behind a large earthen structure. At first, the surfaces of the pools were smooth and reflective like glass as they slowly filled.
It was calm, and serene. For now. But the level was coming up.
What was the defining moment of my generation in our youth? Probably the fall of the Berlin Wall. I can still remember the news stories piling up day by day as the Soviet Union and Warsaw Pact nations slowly turned away from communism and then someone said the Berlin Wall didn’t match the Iron Curtains, so, it had to go. What a time to be alive! Heck, women were still winning women’s swim meets!
If I were born a bit earlier, it would probably would have been the Iranian Hostage Crisis, or Carter’s Stagflation, both of which led to Reagan’s election and eventual conversion to MechaReagan®, who fought Godzilla® and Mothra™. But that’s another story.
Anyway, think about those defining moments, the defining events of Gen Z are still out there, and I wonder what that would be. In the case of the fall of the Berlin Wall, it was a story that, at the time, was filled with hope. Here was the collapse of a political system bent on the forceful subjugation of humanity. What’s not to celebrate?
What was the favorite song of East Germans before the Berlin Wall came down? “Under Prussia”
In the end, though, what was lost in that moment was restraint. Just like Gingrich restrained the worst (political!) impulses of Bill Clinton (“What, I can’t spend what I want to spend because of the way the bond market might react?”), the Soviet Union constrained the worst impulses of the people in power in Washington. That restraint really ended with Clinton who had to fight to save his political career after lying under oath about dallying with the help.
But after Clinton, after 9-11?
Bill Clinton will be remembered for the economy. Oh, and that one other thing . . . .
All restraint fell. Oh, sure, we needed to go and find Osama Bin Laden, but did we need to invade Iraq? In hindsight, almost certainly not. Did we need to stay in Afghanistan for 20 years? Again, almost certainly not. And these adventures cost trillions of dollars, all of which we didn’t have. But that’s okay. Cash isn’t for earning. It’s for spending. Like AOC said when asked where the money would come from for one of her socialist programs: “You just pay for it!”
She was, and is, serious about this, since her understanding of cause and effect is limited to her goldfish-like memory.
But those dark pools of my dreams, they were filling. And while they filled, they began to destabilize everyone tied to the United States. In Egypt, for instance, I think they eat nothing but rice, sawdust, and the occasional house pet, which is fairly inexpensive. So, a small change in the price of rice or a decrease in the availability of sawdust causes people, real people, to go hungry.
Does Biden look like he needs more fiber in his diet to you?
As Snickers® told us, “You’re not you when you’re hungry” and hungry people are the ones that overthrow Middle Eastern despots. But that’s okay. You just pay for it.
What does the Left think about all the illegal aliens that are teeming over the border in relentless streams? You just pay for them. And you have to. Even when we’re not stacking them like cordwood in Chicago or displacing vets to house them in New York or trying to teach them to ski in Colorado, there is one horrible fact about illegal aliens:
They cost more than they create. We can’t get a volume discount if we import them by the millions. No, they just cost billions more. The net annual value of an illegal to the economy is, at minimum, -$10,000 per year. NEGATIVE $10,000, and that’s after the work they provide.
I used to worry about the collapse of the United States because of the destruction of our nation’s values and economy by illegals, but that was too scary. Now I just worry about celebrities. (meme as found)
Where does the cash come from? If you’re AOC, “You just pay for them.”
And all that “you just pay for it” is what’s filling those dark pools of my dreams.
If all that cash would just sit, quietly, in those dark pools, there really isn’t a problem. If we pay Raytheon™ for a $4 million dollar Patriot® missile to destroy $20,000 Iranian drones, as long as Raytheon© just leaves that money in their bank account, filling up the pool.
But, oops, you have to pay people to make the missile. If it’s only the Chinese who keep the money in a bank account somewhere and never use it, that’s fine, too, because that’s just another dark pool of money.
When the Fed™ started out bailing out every bank, that’s really what happened. The banks kept the cash in deposit, and salted it away in their dark pools.
I think it’s the dark pools of cash that will ultimately be the defining moment for Gen Z. Well, not the dark pools themselves, but, rather, the mess they make when the levee breaks. We’re seeing the problem starting now, and Gen Z is aware – many of them have lived their teen years seeing nothing but inflation as the pools break loose.
I’m getting tired of Gen Z, always walking around like they can afford to rent the place.
The pools are up high, and have a great deal of potential energy. The destruction the flow will create as the cash spreads down through the economy has been bad, but it will be legendary. When the American Continental was issued it was backed by the same thing the dollar is today: nothing. The phrase “not worth a Continental” was no doubt on the minds of the framers of the Constitution as they wrote that no State shall make anything but gold and silver coin a tender in payment in debts.”
But that’s quaint thought, right?
(meme as found)
Weimar Germany followed the AOC “just pay for it” formula, and German bankers eventually (after some, um, events) became the most cautious in Europe about inflation.
So, after my dream of last night, I think we have a big dam problem.
It worked so well last time, right?
Well said, as usual.
I have to say that we were much happier before we knew all of this. Ignorant, and naive as a people, but happier.
Yes, but seeing it, it gives you the time to act. As the Mariner said, a sad, but wiser man . . .
I’m a boomer, born in 1953 who worked in a blue collar capacity all his life. At the time of the Berlin wall collapse an older blue collar worker from the “greatest generation” was heard to say, “Ok the Wall came down, who gives a blank?!” This Korean war era fellow wasn’t in the least bit interested in any possible ramifications of that event, certainly not in any way worried about any release of the restraint on our own government.
That same attitude was on display if you pointed out the pitfalls inherent in the F*deral R*serv* banking system. I was told, “It’s not that I don’t understand you, it’s ‘who gives a blank?”
We have not been raised and guided by the best, not in any sense of the word and now those chickens are past coming home to roost, they’re busy laying eggs and the elders are confused about “How did this happen?” As long as people have a stocked fridge and a backyard grill and pool the thoughts and worries of the majority go no further and that allows them to be led.
Say your prayers sug, indeed.
Agreed. A student that I know at Harvard is in the class of one of these “overlords” that had a cabinet level position. They’re clueless.
The Silver Institute Annual Report comes out today. If they’re honest, h*ll will break loose. Once Ag breaks $30, $50 is the next barrier, a la Bunker Hunt. If that falls, the entire EV/Solar pipe dream evaporates.
And Elon is bankrupt…
Heard they whiffed it.
Yep we will find out 2 things very shortly:
1) what does it take to start the coup.
2) Both of the “celebrities” are homosexual
Oh, I think it’s farther off. A year, probably.
(a year at minimum)
Reminder 1: The bank reserve ratio, the amount of their total deposits they must retain on hand (as opposed to lending out or investing in stocks and bonds) is zero. 0.0%
Reminder 2: When a bank lends you money, that money is deposited into your account, adding to total deposits. The bank’s total deposits go down every time someone pays off a loan.
Reminder 3: The amount of money a bank may lend out is some multiple of their total deposits, such that their total deposits equal or exceed the bank reserve rate. Illuminating example: If a bank has $100 in total deposits, and the reserve rate is 10%, then the bank may lend $1,000.
Put these three facts together: Banks may lend infinite money, without any practical limit, and need not keep any deposits on hand beyond their usual day-to-day cash needs. The money banks loan comes from nothing, and returns to nothing. The only real money in the banking system is your deposits and the interest you pay on loans. (And the money they get from investing in the stock and bond markets, of course.) When a loan is defaulted, the bank loses nothing.
Did you mean to say “The banks ASSETS go down, every time someone pays off a loan”? Deposits are bank liabilities, since they’re owed to the depositor (saver). Loans are bank assets, since they provide a stream of interest income. Until they don’t, of course. A “non-performing asset” is produced when a bank makes a loan to someone who is not paying the interest (or principal), but it’s still an asset on the books.
Bankers are a liability to the rest of society.
Lathechuck
I often tell people that I was incredibly disappointed when I first started working as a bank manager to discover that my bank had lots and lots of “money” on paper but very little “money” in terms of currency on hand, and we got in trouble if we allowed our cash supply to get too high.
Infinite cash. No basis. And we don’t expect trouble?
This sort of reminds me of a recent post of mine. As a kid there were of course super rich people but the difference between the upper-middle class and the lower-middle class/working class wasn’t that great. We still live together in the same neighborhood.
Now? It feels a lot like “if you ain’t got it already, you ain’t gonna get it”. I can understand the resentment and bitterness of the Zoomers, the wealth of America has been looted and is being hoarded by the older generations like Smaug but with 401ks instead of piles of gold.
If it’s any consolation, those 401k’s will be raided eventually. Whether by inflation or outright theft, boomers are not going to have much in the way of savings very soon. I know I find a lot of consolation in it, but I’m a vindictive bastard.
Yup. They’ll blow it all, which I think is the plan.
I do think that’s the case – Turchin talked about these two exact factors: elite overproduction (check) and popular misery (check).
Demographics is destiny.
https://www.statista.com/statistics/797321/us-population-by-generation/
https://www.migrationpolicy.org/programs/data-hub/charts/immigrant-population-over-time
https://www.pewresearch.org/wp-content/uploads/2018/11/FT_18.11.01_UnauthImmigrantBirths_births-declined-since-recession2.png
https://www.statista.com/statistics/195908/number-of-births-in-the-united-states-since-1990/
https://cdn.statcdn.com/Infographic/images/normal/20326.jpeg
Poor Gen Z, I feel sorry for all 70 million of them. They’ve been dealt 7-2 offsuit as their hole cards in a rigged game of Texas No Limit Poker, er, Immigration.
Yup, and my boys are Zoomers. They’re not happy.
Good observation, while ignoring the elephant sitting in the middle.
Who is getting rich?
I will give you a hint. They don’t celebrate Christmas. They were responsible for the Weimar Germany thing, and similar situations all throughout Europe and Asia before that. This is a very very old game, and they always walk away with everyone else’s resources.