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Gold, The Fed’s “Stockholm Syndrome”, & Keeping An Open Mind | Zero Hedge

Gold, The Fed’s “Stockholm Syndrome”, & Keeping An Open Mind | Zero Hedge.

Once the family/gang has carved out their turf, they then turn to controlling and exploiting the resoruces (either natural or human) inside of it. How different is today’s President-Congress-Governor-Mayor-Worker relationship to the mafia’s boss-soldiers-associates model?


Is it simply ironic that the term “bankster” has become so ingrained? As Santiago Capital’s Brent Johnson explains in this brief presentation… if you can keep your mind open, today’s business leaders and politicians are no different as they run protection, extortion, control the flow of ‘drugs’, and manage ‘crime’.



Is it possible, he asks, that we are all collectivley empathizing and sympathizing (and in many cases defending) the very system and the very people that are holding us captive?


oftwominds-Charles Hugh Smith: How to Make a Million: Extortion Creates its own Antidote

oftwominds-Charles Hugh Smith: How to Make a Million: Extortion Creates its own Antidote.

The problem is its own solution. Whether we try to stop the Status Quo, or let it stop, it WILL stop.

Longtime correspondent Eric A. has a new essay describing a key dynamic of the years ahead: Extortion and skimming create their own antidotes. As the costs of skimming, extortion and corruption reach new heights, the savings to be gained by bypassing the Status Quo systems also increase.

Here are a few of Eric’s previous essays:

A Brief History of Cycles and Time, Part 1 (May 13, 2013)

A Brief History of Cycles and Time, Part 2 (May 14, 2013)

Generation X: An Inconvenient Era (May 23, 2013)

The essence of my key analytic concepts, neofeudalism and neocolonialism, is that debt and other state-cartel schemes enclose and imprison the bottom 90% while leaving the illusions of liberty, democracy and “prosperity” intact so the debt-serf inhabitants of the home-country neocolonial plantations love their servitude.

Eric’s point is that the incentives to escape the home-country plantation are rising in parallel with the skimming of the state-cartel Elites.

Here’s is Eric’s provocatively insightful essay:

Concerning the Middleman-Skimming Economy, I’m here to tell you, it’s not all bad! The oppressive system you describe of graft, fraud, theft, and extortion creates its own antidote.
Banking, for instance. Problem: they have created an enormous skimming operation, and one that puts users at personal and financial risk, as well as annoying the heck out of customers for no reason. But that means the problem, stated simply is, “they make too much money.”

But that means that ANY ONE who goes around them in ANY WAY, has enormous payoff. Also creating a solution, like micro-loans, digital clearing, etc, has enormous incentive.

Simply put, so long as the out-sized pay exists, the out-sized incentive to avoid them, ignore them, go around them, re-think them, will always exist. Every minute, to every participant. So they’re really creating the solution as fast as they can.

Same with these other issues. Health Care? The kickoff of ACA (Affordable Care Act, a.k.a. ObamaCare) was the starting gun for cash-only medical care which until now only lived in the slimmest shadows. Since basically the co-pay alone is more than paying in cash–and the entire premium is 110% of direct welfare to the health lobby (a business model usually called “extortion”)– there’s no possible incentive not to ignore the system entirely and pay cash. The penalty would have to be 2x, 3x, 5x higher to come anywhere near tipping the balance. And thanks to a decade of previous screwing, the young people don’t actually HAVE the money, so even if the penalty were raised, it would have no practical effect.

Although college, with their 3x more admins, paid 2x more is a clear example, it’s the same with military, government, all these. All we have to do to save 50%, 90% or more is ignore them and let them collapse.

What do you think Detroit is doing for their present residents? As far as I can tell, basically nothing–and that’s true for cities nationwide. All we have to do is tell them to cease existing, go bankrupt, for-the-love-of-God stop helping, and we’ll all save 50% of our money and scarcely have a lower level of service. I mean, you can hardly exceed abominable.

The NYC school system is a great example: something like 66% of students drop out, while many of the remainder are uneducated and illiterate. What possible harm would it be to close the school system and stop paying for it altogether? With rates that bad, basically only the students who would study at home and pass anyway are passing now. Teachers, administration, programs, are therefore measurably providing ZERO benefit over the baseline. So it’s easy to see that we can’t possibly do worse, BUT WE CAN SAVE 100% OF OUR MONEY.

That’s incentive. Especially when most of us haven’t got a nickel to spare. By demanding ALL THE THINGS, they have only destroyed themselves.

Unfortunately, they’ve taken most of us with them.

Just for anecdote, a friend of mine works for a group home. They had a resident with a 105-degree fever who had been to the E.R., but had returned as his heart was racing–a thing easily noticed by pre-nurses and healthcare-oriented staff.

This patient had chest pains as well, and although hard to quantify it was worrisome stuff. So they took him back to the E.R. and waited 2 hours to be seen because there were… wait for it… two patients that evening.

The doctor prescribed Motrin. … I didn’t skip over a part there, the doctor heard the healthcare employee say the patient had chest pains with an irregular heartbeat, refused to hear it, refused to examine, said they’d seen the patient yesterday and they had a cold. Yes, they’d been in already. Because they didn’t diagnose it the first time. The hospital then forgot to fill the prescription Motrin and issued an empty envelope, releasing the patient on a Sunday, presumably to DIE OF HEART ARRHYTHMIA, and/or fever, and/or whatever it was they might have had, which they didn’t know, because they never looked.

If we were in a log cabin, in 1820 Kentucky, and I spent 2 hours walking my sick Pa down to the neighboring cabin and said, “Well Billy-Joe, Pa’s been sick and now his heart sounds funny,” what do you think you would do? You’d probably say, “let me listen and see if you’re right.” We’ve descended below the level of instinctual primate behavior here, and are into some sub-basement reserved for PhD’s.

Doctors and mis-prescriptions are now a leading cause of death–26x more deadly than firearms, 800,000 vs. 30,000/yr.

Death by Medicine (Estimated Annual Mortality and Economic Cost of Medical Intervention)

Gun violence in the United States

Granted that as people see doctors when already ill, the numbers are not neatly comparable. However, medicine is considered “safe” or “exemplary”, we are encouraged to use it, while guns are often considered the standard for “unsafe” and “dangerous.” While many would die without medicine, this suggests the baseline is that 800,000/year would be saved by banning medicine altogether. In short: We’re doing it wrong. Considering we pay twice (on a per person basis) what other developed nations pay for care, net-net could we really do much worse by having no doctors or medicine whatsoever?

Not really an unusual case either. They tried to kill someone a few weeks earlier and a different patient that weekend. They have tried to kill family members several times. I’m sure most readers have a similar scare stories. But death by neglect is still fatal, the fault of just not giving a damn.

Surely I exaggerate?

800,000 people were statistically killed via paid-for quack science that incorrectly (and illegally) promoted statins in Europe.

Medicine Or Mass Murder? Guideline Based on Discredited Research May Have Caused 800,000 Deaths In Europe Over The Last 5 Years (Forbes)
The earlier paper demonstrated the potentially large and lethal consequences of the current European Society of Cardiology guideline recommending the liberal use of beta-blockers to protect the heart during surgery for people undergoing non cardiac surgery. There is, it has now become clear, a general lack of concern and response to evidence of scientific fraud and misconduct.

This was quickly followed by a few thousand probable deaths of blood clots due to a newer configuration of the Pill.

Have 800 women been killed by the Pill? The alarming dangers of taking so-called third generation contraceptives (Daily Mail, U.K.)

(Note that 800 deaths are only the U.K.) –Just two random articles in the last few days, probably hundreds of others with millions of deaths if I looked. The over 60,000 deaths from provably corrupt research authorizing Vioxx comes to mind.

I somehow feel that if I killed 800,000 people through fraud, abuse, or neglect, that the police would be –I don’t know– MAD at me or something. Or killed even one group home patient by refusing to lift a finger. There were once quite a number of laws concerning it: neglect, reckless endangerment, manslaughter–murder even.

But that’s so 20th Century. Consequences, I mean. Laws and enforcing them. Like so many, we’re now considering flying out of the country for healthcare, but unlike so many we don’t have money for 5-star hospital spas in Goa or Singapore. So we were thinking maybe the Belgian Congo for better medical care than rural NY. I hear they may have stethoscopes there.

THAT’S what I mean when I say you could close the whole system and have it be a measurable benefit to mankind.

The problem is its own solution. Whether we try to stop, or let it stop, it WILL stop.Because anything that can’t go on, won’t. When you’re at 100% costs and 0% benefits, congratulations, you’ve reached the Singularity.

Thank you, Eric, for an insightful look at the benefits of bypassing or ignoring the Status Quo systems, and the benefits that will accrue from their inevitable collapse. The idea that the next arrangement will be better, cheaper, more equitable and sustainable is not yet dominant, but that doesn’t mean it isn’t true.

charles hugh smith-Theft Is Deflationary–Especially the Crony-Capitalist/State Kind

charles hugh smith-Theft Is Deflationary–Especially the Crony-Capitalist/State Kind.

Monopoly power in all its forms–in our system, crony capitalism and its partner, the neofeudal state–enables theft on a systemic scale.

If a monopoly forces its customers to pay more for low-quality goods and services because they have no choice, how is that not theft?

If the Mafia raises the price of “protection” on small businesses (another case of monopoly and no other choice), how is that extortion not theft?

When a local government raises junk fees to fund its cronies’ excessive (i.e. non-market-rate) salaries and pensions, how is that monopoly power to extort more money from those with no other choice any different from Mafia extortion/theft?

If a pharmaceutical company extends a patent on a costly medication by changing the dosage slightly, how is that not theft via regulatory capture? If a government contractor charges the Pentagon $1,000 for a hammer (all those overhead charges, tsk-tsk–lobbying corrupt politicos costs a lot, you know), how is that not theft of taxpayers’ money?

When the Federal Reserve drops the yield on savings to near-zero to funnel all that stolen wealth to its cronies on Wall Street, how is that not theft?

Monopoly power in all its forms–in our system, crony capitalism and its partner, the neofeudal state–enables theft on a systemic scale. When crony capitalism and the state are essentially one system, the propaganda organs of the state and mainstream corporate media combine to persuade the stripmined populace that their theft is not theft, it’s “capitalism and democracy at work.” This is known as The Big Lie. What we have is systemic theft, predation and exploitation.

Calling things what they really are would upset the apple cart of systemic exploitation.Let’s Call Things What They Really Are in 2014 (January 15, 2014)

Correspondent Jeff W. explains that all this systemic theft is inherently deflationary:

All forms of stealing are deflationary. Stealing cuts into the average citizen’s disposable income, it reduces how much he can buy. Because there are now fewer dollars chasing more goods, deflation is the inevitable result. Stealing is actually worse than a zero-sum game. Society loses more than the thief takes. In addition to losses from theft, a victim often has to spend more on security measures. Theft also has a chilling effect on capital investment and commerce in general.Consider how many different kinds of theft the American citizen is exposed to: street crime, sickcare industry ripoffs, legal system ripoffs including huge fines for traffic violations, high taxes, interest earnings on his savings that amount to ZIRP, a corporatist state determined to suppress his wages by any means necessary, unending victimization at the hands of predators enabled and protected by the state. If he owns a small business, he has to deal with a corrupt regulatory state, higher taxes, and an enlarged menagerie of predators. Today there are thieves everywhere.

So one big deflation trend is theft. As theft increases, deflation increases. As society collapses and thieves start roaming freely all over the landscape, a deflationary collapse can be expected—absent a determined and persistent campaign of money printing.

Exhibit A for the case that stealing is deflationary is the Dark Ages.Stealing was rampant in the Dark Ages. How did people react to that? By “going medieval.” They wore clothing that made them look poor so as to avoid attracting the attention of thieves. Their dwellings looked poor for the same reason. If they had cash, they would bury it in the ground; no one could be trusted. Unless one was an insider who could get protection from the state, no one’s property was safe.

Capital investments were much too risky, and out of the question. What were the price characteristics of the Dark Ages? Wages were low. Real estate valuations low. Prices of manufactured items (such as they were) were low. Only food was expensive. People can cut back on clothing and shelter, but there is a limit to how much they can cut back on food. In the Dark Ages, people really hunkered down and just focused on basic survival.

Exhibit B is Detroit. Detroit for many years has been a high crime area, i.e. it had lots of thieves running around. What are the price characteristics of Detroit? Wages low. Real estate valuations low. There is very little manufacturing being done inside the city limits today because of high property taxes and crime. There is also very little capital investment for the same reasons.

There is a vicious circle at work here. 1) Thieves control the government; 2) Which results in increased stealing; 3) Deflation results from that; 4) Which gives the thieves a reason to print money and give it to themselves; 5) Which enriches the thieves some more; 6) Which gives them more resources they can use to consolidate their control of the government; 7) Back to step 1.

Many people seem confused about how there could be deflation in the paper (or digital) money era. If they would recognize how much stealing is going on, and if they understood the powerful deflationary effect of stealing, then perhaps they would not be so surprised to observe price decreases, particularly in wages and the prices of manufactured products.

Thank you, Jeff, for explaining the causal connection between systemic theft and deflation. To all those terrified of deflation (for example, central bankers and their cronies holding trillions of dollars in phantom assets and illusory collateral), the solution is obvious: get rid of systemic theft. But since those terrified of deflation are at the top of the monopoly-power thievery pyramid, that is asking the impossible: for the thieves to relinquish their power to steal.

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