Bubble-blowing and the hollowing out of the American middle class.

Remember the good ol’ 1980s? Michael Jackson, Ronald Regan, Back-to-the-Future, Pac Man, leg warmers, and Huey Lewis?

The nostalgia gets me every time, thinking back to an era when Americans mostly got along. Even with the Cold War against the Soviet Union as a backdrop to everything, it feels quaint compared to today.

Most of us children of the 80’s were always ready to band together and go Red Dawn if we had to. For all you 90’s kids, the 1984 movie featured a group of American high schoolers fighting an invasion by the Soviet Union. The ‘Wolverines’ were (of course) led by Patrick Swayze and Charlie Sheen.

Suddenly though, in 1991, the almighty Soviet Union, the world’s other “superpower” collapsed on itself. It took 70 years, but collapse it did, because command-and-control economies don’t work.

Now here we are in America, following suit. How does collapse sound to you, then? If it seems like it can’t get worse than 2020, it can. Much worse.

We’re careening towards a collapse of our own – one of the currency – if the command-and-control economic approach isn’t abandoned.

The basics

A thriving economy is built on individual liberty, entrepreneurs, laborers, and unprotected, fiercely competing capitalists reading signals from unfettered price discovery.

The role of government is to stay out of the way, stepping in only to enforce contracts, protect against encroachment, and apply laws fairly across actors.

Individuals acting freely together form markets. As they pursue their own dreams, they get ahead only by serving others. From this dynamic opportunity springs.

While this is known as capitalism, don’t think of it that way. The word is badly misunderstood because the system today is so corrupt. Capitalism requires creative destruction, i.e. failure. Bailouts don’t exist in capitalism, nor do essential and nonessential businesses. Today’s system is cronyism.

The keyword isn’t capitalism anyway. It’s liberty. Freedom. Where people and markets are free, things are good. Where they are not, things are bad.

These ingredients have worked everywhere they’ve been tried, even on mere rocks devoid of natural resources (i.e. Hong Kong). It’s a simple, repeatable recipe, like whipping up a morning pancake dotted with a pat of melting butter. Anyone who says otherwise is a damn fool or a liar.

Need examples? This quick read from our friends at Sovereign Man captures plenty.

The liars mostly gather around Capitol buildings, and the damn fools lap up their pitches, trotting off to the voting booth each November to get fleeced. Both parties are as guilty as the night is dark.

Each President since as far back as I can remember (i.e. Family Ties) has been more command-and-control than the last. The beatings will continue as long as we keep begging for more.

Bill Bonner puts it best, this run of emperors without clothes, The people running the show look like the most hapless and moronic on the planet – just what you’d need to bring an Empire to its knees. They seem driven, as if by instinct, to do the worst possible thing at the worst possible time.

The Unseen Force

Where is command-and-control at its worst in America today? It’s causing the business cycle.

Even more dangerous, the amplitude of the boom-then-bust just keeps getting bigger. The once-in-a-lifetime tech bubble of 2000 was followed by an even bigger housing bubble just eight years later.

This thing we face now, the GREAT DISCONNECT is a high speed, runaway train headed for a sharp turn. It’s the mother-of-all-bubbles, where we sit today, with markets soaring alongside lockdowns, business failures and crushing unemployment. What could possibly go wrong?

To quote Holly McClain from Die Hard II, why does this keep happening to us?

The boom-and-bust-business-cycles are the direct result of price setting by bureaucrats.

Right here in America. Like the Soviet f—ing Union proclaiming the price for a roll of toilet paper in Moscow, we entrust a politburo of 12 stuffed shirts, roll them in a cart of cocktail shrimp, and let them set the most important price in the entire US economy, one that impacts literally everything.

They set the price of money.

By forcing interest rates down (and flat-out printing of new money), they artificially reduce the cost of capital, allowing those with credit and collateral to buy up everything.

This drives asset prices to the moon and sends faulty signals to entrepreneurs, misallocating resources in terribly unproductive and distorted ways (like the Pets.com of 2000, Vegas hairdressers flipping six condos in 2008, the GameStop fiasco, or today’s share price of Tesla). It’s pure, speculative madness.

As the politburo gets ready to raise rates, those closest to them prepare accordingly, getting out of temporary positions before the downturn, only to buy everything back up at the bottom.

Wash, rinse, repeat.

Even worse, now they’ve learned how to shut down your business completely with COVID lockdowns, funneling money only to the bigwigs hand-picked and ready to play ball in the coming ‘Great Reset’.

It’s tragic, and disgusting.

Don’t worry though, you’ll get your stimmy. Who needs a business, job, or self-reliance when you’ve got stimmies and Netflix?

This is the hollowing out of the American middle class, and our representatives in Congress together with both political parties have their greasy hands all over it.

You either anticipate what’s coming, or you’re in the cheap seats, already poor or fast becoming so. Can you hear the call from the luxury boxes?

Pacified peasants and plebes, surrender your purpose, your pride, your liberty and self-reliance. In its place we offer UBI (Universal Basic Income), carefully curated Facebook feeds, and plenty to watch on TV.

Do as we say, and it’s all you can eat!

That is, until the currency collapses. Command-and-control economies don’t work, remember. Then, if you’re not prepared, you can starve like a dog, or kill one in the street to roast in a trash can.

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Want more like this? The Great Reset for Dummies.