Here’s The Setup For The Con Of The Decade

Shell GameTyler Durden posts on Zero Hedge (originally on Of Two Minds):

The Con of the Decade, which I described last July, is being set up nicely.

I described The Con of the Decade last July (2010). The Con makes me a heretic in the cult religion of Hyperinflation. I consider myself an agnostic about the destruction of the U.S. dollar and hyperinflation (basically the same thing), but my idea that hyperinflation is fundamantally a political process makes me a heretic. I skimmed a few of the dozens of comments posted on Rick’s Picks and Zero Hedge after they posted one of my expositions on this dynamic, and didn’t see even one comment in favor of this perspective.

The Con is being set up right now, and the outlines are clearly visible. The Con works like this:

1. The Financial Elites/Oligarchy raked in billions in private profit from the orgy of leverage, credit expansion, fraud, embezzlement and misrepresentation of risk that resulted in the Housing Bubble.

2. The losses were transferred to the public (Federal government, i.e. The central State) or its proxy, the Federal Reserve (i.e. the central bank), via bailouts, backstops, guarantees, the Fed’s purchase of taxic assets, and an open window for the financiers to borrow billions at zero interest (ZIRP) for further speculations.

3. The Treasury now borrows $1.6 trillion every year, fully 11% of the nation’s GDP, as the Central State has replaced private demand and credit expansion with its own borrowing and spending.

4. Non-U.S. central banks have largely ceased to support this unprecedented scale of borrowing, so the Federal Reserve now buys most of the Treasury’s issuance of debt via QE2 (quantitative easing, the direct purchase of $600 billion in Treasury bonds).

5. Unlike Japan, the U.S. cannot self-fund its own government borrowing: while U.S. investors, banks and insurance companies do own a significant chunk of Treasuries, the U.S. savings rate (capital accumulation) is still abysmally low, around 4%, which is half the historical average savings rate.

Read More: Zero Hedge

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  • JoiquimCouteau

    Sounds like germany in the ’30s

  • Anonymous

    Sounds like germany in the ’30s

  • Anonymous

    Sounds like germany in the ’30s

  • Liam_McGonagle

    Seems just a little bit word-y here to be really robust.

    I mean, the fundamental analysis is correct–financial elites own the monetary system and got the federal government to underwrite their losses. What we’re seeing here is a major re-distribution of wealth from the productive members of the economy to bankster parasites through a high inflation / low taxation policy. That’s it. Should be ’nuff said right there.

    But the issue that this article doesn’t seem to address head-on is, in my opinion, the only one worth talking about now: Tax equity. In fact, in a weird, contorted, round about way, it seems actually to suggest that ANY rise in tax is inherently unjust. I don’t think it says so explicity (this article’s wording is kind of unnecessarily belaboured), but the only context in which tax rises are mentioned implies that they will inevitably be regressive.

    Maybe the author’s just trying to say that he FEARS or BELIEVES that the taxation changes will be regressive. I just wish he’d get on with it and say so. Say it up front: “We have an unsustainable reliance on inflationary monetary policy, so major taxation revisions are inevitable. Make it equitable.”

    • DRLECHCTER

      But he is trying to outline the progression of the scam, not how to make the system fairer.

      And what would tax equity look like in a system like this where the bulk of the populations wealth and earnings has just been looted by wall street for the benifit of the top .1% of he population. Equity would be jail time and repossession of the .1% wealth.

      • Liam_McGonagle

        I get your point. But there’s no end of people talking about how unfair the system is. What’s needed is someone who has a solution.

        • Hadrian999

          the problem is that the system is run and guarded by those that benefit from it and they own the people who could take action against them, if someone found a solution it would never be implemented without a full scale revolution and even then as usually happens a revolution just establishes a different set of elites.

          • Liam_McGonagle

            Well, that’s exactly the kernel of my morality argument. It’s not that we don’t have the technical know-how to make solutions work–it’s just that society is far too tolerant of the scabby ol’ whores who allow these types of abuses go unchecked.

            Moral revolution is the only solution. Does that have to be accompanied by a political or social revolution? I don’t know, but I don’t see why. The real problem isn’t really the formal procedures of governance as much as the cultural biases with which they’re applied.

            I’m convinced a type of moral revolution possible. But it’ll take a lot of focused work over maybe generations. I concede that there is still a need for this type of technical article (though I think this one could have been written better). But what we really need is a way to speed up the moral education process.

            That seems a pretty ambitious goal. We’re dealing with a highly fragmented media and economic environment, and it’s more typically employed to erect barriers and gated communitities rather than tear them down. So while I have noted a few signs of hope recently, we’ve got a long, long way to go.

            How to get there? . . .

          • Hadrian999

            I don’t think we can, I believe we will become more fractured and less able for a grand change like you propose, in my opinion the united states will only exist as it does now for a few more generations.

          • http://twitter.com/JohnnyNucks Patrick AuCoin

            I am all for a moral revolution. It has to be a ground swell movement. In the past some were religious in nature, and usually initiated by charismatic personalities. Today social media is the logical conduit and meeting point. Widespread revulsion is the spark for a moral revolution. The ingredients are all present, greed and deception by a power group which uses every advantage to strengthen it’s position to the detriment of all. The greatest obstacle is the massive media control of the message and an uninformed populous. By fear mongering the easily swayed and fragmenting any dissenting voices the current power groups hold a smothering grip on the political process. Get the word out and expose these parasites for what they are.

    • Hadrian999

      Tax equity is not possible the world exists now the elite will find ways to keep their fortunes well outside the grasp of the taxman the only who will ever pay their due are those who cant afford the sneakiest accountants and lawyers.

  • Liam_McGonagle

    Seems just a little bit word-y here to be really robust.

    I mean, the fundamental analysis is correct–financial elites own the monetary system and got the federal government to underwrite their losses. What we’re seeing here is a major re-distribution of wealth from the productive members of the economy to bankster parasites through a high inflation / low taxation policy. That’s it. Should be ’nuff said right there.

    But the issue that this article doesn’t seem to address head-on is, in my opinion, the only one worth talking about now: Tax equity. In fact, in a weird, contorted, round about way, it seems actually to suggest that ANY rise in tax is inherently unjust. I don’t think it says so explicity (this article’s wording is kind of unnecessarily belaboured), but the only context in which tax rises are mentioned implies that they will inevitably be regressive.

    Maybe the author’s just trying to say that he FEARS or BELIEVES that the taxation changes will be regressive. I just wish he’d get on with it and say so. Say it up front: “We have an unsustainable reliance on inflationary monetary policy, so major taxation revisions are inevitable. Make it equitable.”

  • Liam_McGonagle

    Seems just a little bit word-y here to be really robust.

    I mean, the fundamental analysis is correct–financial elites own the monetary system and got the federal government to underwrite their losses. What we’re seeing here is a major re-distribution of wealth from the productive members of the economy to bankster parasites through a high inflation / low taxation policy. That’s it. Should be ’nuff said right there.

    But the issue that this article doesn’t seem to address head-on is, in my opinion, the only one worth talking about now: Tax equity. In fact, in a weird, contorted, round about way, it seems actually to suggest that ANY rise in tax is inherently unjust. I don’t think it says so explicity (this article’s wording is kind of unnecessarily belaboured), but the only context in which tax rises are mentioned implies that they will inevitably be regressive.

    Maybe the author’s just trying to say that he FEARS or BELIEVES that the taxation changes will be regressive. I just wish he’d get on with it and say so. Say it up front: “We have an unsustainable reliance on inflationary monetary policy, so major taxation revisions are inevitable. Make it equitable.”

  • younkint

    Great post, but it’s not directly from Zero Hedge. This is the writing of Charles Hugh Smith; often posted at ZH and they do credit him. The original is found here at the OfTwoMinds blog: http://www.oftwominds.com/blogapril11/setup-con-of-decade4-11.html

    • http://www.disinfo.com Disinformation

      Thanks for clarifying.

  • Anonymous

    Great post, but it’s not directly from Zero Hedge. This is the writing of Charles Hugh Smith; often posted at ZH and they do credit him. The original is found here at the OfTwoMinds blog: http://www.oftwominds.com/blogapril11/setup-con-of-decade4-11.html

  • DRLECHCTER

    But he is trying to outline the progression of the scam, not how to make the system fairer.

    And what would tax equity look like in a system like this where the bulk of the populations wealth and earnings has just been looted by wall street for the benifit of the top .1% of he population. Equity would be jail time and repossession of the .1% wealth.

  • http://disinfo.com Disinformation

    Thanks for clarifying.

  • Filmgal

    I doubt the author has even read an introductory textbook on economics (he has no understanding of Keynesian economics and is only repeating far right wing/conspiracy theory talking points), plus the name “Tyler Durden” is taken from a fictious charcter in the 1999 feature “Fight Club”

  • Filmgal

    I doubt the author has even read an introductory textbook on economics (he has no understanding of Keynesian economics and is only repeating far right wing/conspiracy theory talking points), plus the name “Tyler Durden” is taken from a fictious charcter in the 1999 feature “Fight Club”

    • Prose Stylist

      Um, I read Zero Hedge almost every day and despite some conspiratorial musings from the posts, many of the actual contributors have far more advanced understandings than introductory Keynesian economics, hence why so many of them disagree with it.

      Keynesian and Monetarist economics are both major contributing factors why the system is so broken.

  • Prose Stylist

    Um, I read Zero Hedge almost every day and despite some conspiratorial musings from the posts, many of the actual contributors have far more advanced understandings than introductory Keynesian economics, hence why so many of them disagree with it.

    Keynesian and Monetarist economics are both major contributing factors why the system is so broken.

  • toxic?

    taxic = toxic?

  • toxic?

    taxic = toxic?

  • pedro

    Our canadian government is no better. Stephen Harper and his NEO-Conservatives gallivanting as safe keeper of the public money….waiting to turn our Country into an American style Military state. Please give some interest into a nation with natural resources that are going to be raped and pillaged and NOT TAXED.

    it seems everyone is delusional.

    More proof increased strains of electromagnetic radiation is effecting the moral and ethical judgment of the electorate.

    People give your head a shake…the Conservatives are using a 240 year old blue print drawn up by a Libertarian (as a folly) to run your lives.

    http://en.wikisource.org/wiki/Rules_By_Which_A_Great_Empire_May_Be_Reduced_To_A_Small_One

    Vote Cons and you will get used to, or how should I say swallow stimulus packages in 2012, 2013, 2015,..

    The Federal Government illegally thrust the HST onto the provinces and smiled as they gave you a “bonus” for implementing it without the voters knowledge.

    That in my mind would spell theft to a degree.

    According to his own wiki page, reading his political beginnings page…it seems Mr. Harper has never been prepared to commit to ANYTHING or ANYONE.

    Let alone work with 34 Million canadians. ?

    His track records speak volumes, and anyone with an ounce of logic in their tiny reptillian brains would stray from a Conservative vote, which is a false party to begin with.

    I am not a Green Party supporter, although, everything Elizabeth May was trying to do Stephen Harper went through, although…Harper’s team has had to alter their public perception of themselves simply to come across as an alternative.

    Harper is the equivalent of a four year old wanting to honk the horn.

    Good Luck people.

    This is not a popularity vote. This is for your well being. The entire global population knows what Military spending will get you….a broke republic, common citizen living on chump change, “social and assistance programs” for the once Middle Class… and a political divide that threatens the basis of democracy.

    Democracy is palliative, unfortunately politics is being treated like a highschool pep rally.

    PLEASE GO VOTE….THIS IS THE ONLY STONE YOU GET TO THROW.

  • pedro

    Our canadian government is no better. Stephen Harper and his NEO-Conservatives gallivanting as safe keeper of the public money….waiting to turn our Country into an American style Military state. Please give some interest into a nation with natural resources that are going to be raped and pillaged and NOT TAXED.

    it seems everyone is delusional.

    More proof increased strains of electromagnetic radiation is effecting the moral and ethical judgment of the electorate.

    People give your head a shake…the Conservatives are using a 240 year old blue print drawn up by a Libertarian (as a folly) to run your lives.

    http://en.wikisource.org/wiki/Rules_By_Which_A_Great_Empire_May_Be_Reduced_To_A_Small_One

    Vote Cons and you will get used to, or how should I say swallow stimulus packages in 2012, 2013, 2015,..

    The Federal Government illegally thrust the HST onto the provinces and smiled as they gave you a “bonus” for implementing it without the voters knowledge.

    That in my mind would spell theft to a degree.

    According to his own wiki page, reading his political beginnings page…it seems Mr. Harper has never been prepared to commit to ANYTHING or ANYONE.

    Let alone work with 34 Million canadians. ?

    His track records speak volumes, and anyone with an ounce of logic in their tiny reptillian brains would stray from a Conservative vote, which is a false party to begin with.

    I am not a Green Party supporter, although, everything Elizabeth May was trying to do Stephen Harper went through, although…Harper’s team has had to alter their public perception of themselves simply to come across as an alternative.

    Harper is the equivalent of a four year old wanting to honk the horn.

    Good Luck people.

    This is not a popularity vote. This is for your well being. The entire global population knows what Military spending will get you….a broke republic, common citizen living on chump change, “social and assistance programs” for the once Middle Class… and a political divide that threatens the basis of democracy.

    Democracy is palliative, unfortunately politics is being treated like a highschool pep rally.

    PLEASE GO VOTE….THIS IS THE ONLY STONE YOU GET TO THROW.

  • Liam_McGonagle

    I get your point. But there’s no end of people talking about how unfair the system is. What’s needed is someone who has a solution.

  • Hadrian999

    the problem is that the system is run and guarded by those that benefit from it and they own the people who could take action against them, if someone found a solution it would never be implemented without a full scale revolution and even then as usually happens a revolution just establishes a different set of elites.

  • Liam_McGonagle

    Well, that’s exactly the kernel of my morality argument. It’s not that we don’t have the technical know-how to make solutions work–it’s just that society is far too tolerant of the scabby ol’ whores who allow these types of abuses go unchecked.

    Moral revolution is the only solution. Does that have to be accompanied by a political or social revolution? I don’t know, but I don’t see why. The real problem isn’t really the formal procedures of governance as much as the cultural biases with which they’re applied.

    I’m convinced a type of moral revolution possible. But it’ll take a lot of focused work over maybe generations. I concede that there is still a need for this type of technical article (though I think this one could have been written better). But what we really need is a way to speed up the moral education process.

    That seems a pretty ambitious goal. We’re dealing with a highly fragmented media and economic environment, and it’s more typically employed to erect barriers and gated communitities rather than tear them down. So while I have noted a few signs of hope recently, we’ve got a long, long way to go.

    How to get there? . . .

  • Hadrian999

    I don’t think we can, I believe we will become more fractured and less able for a grand change like you propose, in my opinion the united states will only exist as it does now for a few more generations.

  • Anonymous

    The solution is obvious;

    Get RID of the financial elites before they take and take and take and the system collapses under the swine’s weight because everyone is too starving to hold them up. This is how almost every society in the past, especially Ancient Rome has collapsed. France, too. A few elites get in power, delude themselves they are gods, and just keep taking. The society falls apart in barbarian invasions, bloody revolution, or just people saying “The h— with this great society of LIES!”

    And, with the 20/20 hindsight, it’s tragically comical how easily and cheaply collapse could have been prevented, and how all parties suffered far more trying to survive after the fact.

  • greengestalt

    The solution is obvious;

    Get RID of the financial elites before they take and take and take and the system collapses under the swine’s weight because everyone is too starving to hold them up. This is how almost every society in the past, especially Ancient Rome has collapsed. France, too. A few elites get in power, delude themselves they are gods, and just keep taking. The society falls apart in barbarian invasions, bloody revolution, or just people saying “The h— with this great society of LIES!”

    And, with the 20/20 hindsight, it’s tragically comical how easily and cheaply collapse could have been prevented, and how all parties suffered far more trying to survive after the fact.

  • Hadrian999

    Tax equity is not possible the world exists now the elite will find ways to keep their fortunes well outside the grasp of the taxman the only who will ever pay their due are those who cant afford the sneakiest accountants and lawyers.

  • DRLECHCTER

    one more thing from those far right wing kooks at zerohedge: Spitzer: If The Attorney General Does Not Sue Goldman Sachs, He Should Resign http://www.zerohedge.com/article/spitzer-if-attorney-general-does-not-sue-goldman-sachs-he-should-resign

  • http://twitter.com/MiddleAmericaMS MiddleAmericaMS

    Well done! You took the words right out of my mouth.

  • https://twitter.com/#!/MiddleAmericaMS MiddleAmericaMS

    Well done! You took the words right out of my mouth.

  • http://twitter.com/JohnnyNucks Patrick Aucoin

    I am all for a moral revolution. It has to be a ground swell movement. In the past some were religious in nature, and usually initiated by charismatic personalities. Today social media is the logical conduit and meeting point. Widespread revulsion is the spark for a moral revolution. The ingredients are all present, greed and deception by a power group which uses every advantage to strengthen it’s position to the detriment of all. The greatest obstacle is the massive media control of the message and an uninformed populous. By fear mongering the easily swayed and fragmenting any dissenting voices the current power groups hold a smothering grip on the political process. Get the word out and expose these parasites for what they are.

  • Andrea Heiden

    6. Now let’s all pull our heads out of the nation-state fiction of last millennium.

    A. Printed and digital USDollars are the ultimate fuel of the scam, so while everyone is focused on the nation-state ordeal the
    desiccated USD will cause in China, Russia, EU, etc, that very same mechanism has underpinned the ACTUAL assets those speculations upon fiction promoted.

    B. Remember these guys now essentially own the world, at the very moment the world no longer owns itself, such as the micro-scale version of the 1929 crash, which pre-funded the fascist states of Europe, and attempted then to install the fascist state, in hybrid form we have in America starting with the Bush dictatorship, JR.

    7. The end game. Now allow the crash to plunge the world into a chaos of war, which naturally will be a WW3 hot war, and many of the key obstacles in the next are naturally devoured by that chaos. Then the fiction makers, can bring in there global currency, by up the rest with huge leveraged reserves of EVERY
    conceivable currency, metal, and liquid asset global, for full possession of the last straggler’s wealth in China, India, Russia, and anyone else resisting this fiction of the old Pharisaic banking order, which had the service pact with the supernatural king of this world in
    John8:44 (Seems crazy, but it’s true, this was a deal with the Devil).

    Bingo, 

    1. You own the world at pennies on the dollar (or whatever currency you want to plop in), the entire nation-state facade and that “shell” level “government” and wealth ecology, to keep any semblance of the fantasy of the last 40 years alive, which America as an example is a full-blown slave of material and pleasure based illusion-to-excess-overkill, and the whole slave-drive to world
    uni-polar finance is done. 

    2. That uni-polarity then has the financial, intelligence system, and weapons system at a level unbeknownst to the majority of the planet at any time previous in global evolution.

    3. In the turbulence of that final evolution the world is also systematically
    depopulated easily 5 billion people or more, in a very short time period, all
    allowing the formation of a system developed by formula upon an ill-conceived
    beginning, in it’s pristine form to the generation sculptured after the final
    global-social filtration of what is left, to a nice sub 100 million global
    start-up population, all before 2020. (We won’t get that far, obviously this
    will cross the divine line 2Thess1:6, and it will be a deliverance, in like
    manner, but for a different purpose)

  • Andrea Heiden

    6. Now let’s all pull our heads out of the nation-state fiction of last millennium.

    A. Printed and digital USDollars are the ultimate fuel of the scam, so while everyone is focused on the nation-state ordeal the
    desiccated USD will cause in China, Russia, EU, etc, that very same mechanism has underpinned the ACTUAL assets those speculations upon fiction promoted.

    B. Remember these guys now essentially own the world, at the very moment the world no longer owns itself, such as the micro-scale version of the 1929 crash, which pre-funded the fascist states of Europe, and attempted then to install the fascist state, in hybrid form we have in America starting with the Bush dictatorship, JR.

    7. The end game. Now allow the crash to plunge the world into a chaos of war, which naturally will be a WW3 hot war, and many of the key obstacles in the next are naturally devoured by that chaos. Then the fiction makers, can bring in there global currency, by up the rest with huge leveraged reserves of EVERY
    conceivable currency, metal, and liquid asset global, for full possession of the last straggler’s wealth in China, India, Russia, and anyone else resisting this fiction of the old Pharisaic banking order, which had the service pact with the supernatural king of this world in
    John8:44 (Seems crazy, but it’s true, this was a deal with the Devil).

    Bingo, 

    1. You own the world at pennies on the dollar (or whatever currency you want to plop in), the entire nation-state facade and that “shell” level “government” and wealth ecology, to keep any semblance of the fantasy of the last 40 years alive, which America as an example is a full-blown slave of material and pleasure based illusion-to-excess-overkill, and the whole slave-drive to world
    uni-polar finance is done. 

    2. That uni-polarity then has the financial, intelligence system, and weapons system at a level unbeknownst to the majority of the planet at any time previous in global evolution.

    3. In the turbulence of that final evolution the world is also systematically
    depopulated easily 5 billion people or more, in a very short time period, all
    allowing the formation of a system developed by formula upon an ill-conceived
    beginning, in it’s pristine form to the generation sculptured after the final
    global-social filtration of what is left, to a nice sub 100 million global
    start-up population, all before 2020. (We won’t get that far, obviously this
    will cross the divine line 2Thess1:6, and it will be a deliverance, in like
    manner, but for a different purpose)