Signs of the Economic Apocalypse, 4-14-08

From SOTT.net:

Gold closed at 927.00 dollars an ounce Friday, up 1.5% from $913.20 for the week. The dollar closed at 0.6325 euros Friday, down 0.5% from 0.6356 at the close of the previous Friday. That put the euro at 1.5810 dollars compared to 1.5734 the week before. Gold in euros would be 586.34 euros an ounce, up 1.0% from 580.40 at the close of the previous week. Oil closed at 110.14 dollars a barrel Friday, up 3.8% from $106.14 for the week. Oil in euros would be 69.66 euros a barrel, up 3.3% from 67.46 at the close of the Friday before. The gold/oil ratio closed at 8.42 Friday, down 2.1% from 8.60 for the week. In U.S. stocks, the Dow Jones Industrial Average closed at 12,325.42 Friday, down 2.3% from 12,609.42 at the close of the previous Friday. The NASDAQ closed at 2,290.24 Friday, down 3.5% from 2,370.98 at the close of the week before. In U.S. interest rates, the yield on the ten-year U.S. Treasury note closed at 3.47%, up one basis point from 3.46 for the week.

World economic leaders, meeting in the G7 ministerial level gathering last week, expressed concern about the possibility that a rapid fall in the value of major currencies like the dollar and pound sterling could lead to economic collapse:

G7 fears sudden slide in main currencies

Krishna Guha and Chris Giles

April 13 2008

The Group of Seven industrialised nations has signalled shared concern over the danger of a disorderly slide in the dollar and sterling, following bouts of extreme weakness in the two currencies in recent months.

The warning came in a new sentence of the G7 communiqué, which said “there have been at times sharp movements in major currencies, and we are concerned about their possible implications for economic and financial stability”.

The G7 pledged as before to “monitor exchange markets closely and co-operate as appropriate”.

This is the biggest shift in the G7 language on currencies since the Boca Raton summit in February 2004. It signals the emergence of a new consensus on the risks posed by extreme currency weakness following months of disagreement between economies with appreciating and depreciating currencies.

Up to this point the US had rebuffed pressure from the eurozone to express concern about currency movements. The US government and the Federal Reserve see currency weakness as an essential prop to growth.

But the US government has started to worry more that dollar weakness could run out of control, exacerbating problems in financial markets. The Fed is concerned about the interaction of a weak dollar, global commodity prices and inflation expectations at home.

The US remains unconcerned about the level of the dollar. But it is bothered about the pace of decline.

The UK, meanwhile, also sees benefits from a weaker currency in supporting growth and creating more balance in the economy. But policymakers are concerned that the level of the pound does not slide too far, and are anxious about the risk of a sudden fall.

Officials from one G7 country said the UK was very worried about the potential inflationary consequences of a further big decline in the pound.

Officials in the eurozone and Japan have become increasingly concerned about the effect of currency appreciation on growth.

Eurozone policymakers – with the partial exception of German officials – believe the costs of euro appreciation to growth now outweigh the benefits of downward pressure on inflation.

The eurozone believes the level of exchange rates is a problem, not just the volatility, and hopes the US will eventually come round to this view. But for now European officials have decided to cement the consensus on volatility rather than press publicly for an acknowledgement that exchange rates themselves are out of kilter.

“The words are like a poem, they speak for themselves,” said Jean-Claude Trichet, ECB president.

The G7 stopped well short of threatening to intervene in currency markets. There was no discussion of intervention at the G7 meeting and the prospect of such action still looks remote.

Hank Paulson, US Treasury secretary, remains sceptical of the view that policymakers should try to second-guess market-determined exchange rates. There is no consensus as to the correct exchange rate levels, and Fed and ECB monetary policies are not consistent with an effort to push up the dollar against the euro.

However, some analysts interpreted the new language as an attempt to moderate the pace of currency movements by raising the possibility authorities might intervene in the event of extreme market volatility, even if not to defend any particular exchange rate.

If the strategy succeeds, it could make a sudden collapse in the dollar or pound less likely. But it is also possible traders could see these comments as a minimal response to market movements, and keep pressing the dollar and pound lower. If that happens, the G7 could find its newfound harmony on currencies soon tested.

The rapid rise in food and fuel costs is causing concern in developed countries and riots in poor countries. Food riots have been reported in Haiti, Yemen, Ivory Coast, Senegal, Bolivia, Indonesia, Mexico, Morocco, Guinea, Mauritania, and Cameroon, among other countries in recent weeks. These are some of the world’s poorest countries, so they function as canaries in the coal mine, since a high percentage of people’s income in those countries goes to food. Somewhat less poor countries like Egypt, India, and the Philippines have seen “unrest” over higher food prices. But even in the developed world “discomfort” is being felt and, soon enough, will unrest, then pain will be felt.

The leaders of the world economy reacted in different ways. Again there was a split between the U.S. Treasury Secretary Henry Paulson and the Europeans over what to do. Dominique Strauss-Kahn, the head of the International Monetary Fund leaned towards intervention:

Strauss-Kahn Warns Food-Price Inflation May Trigger Starvation

Christopher Swann

April 12 (Bloomberg) -- Further gains in food prices would be “terrible” for the world’s poor and throw hundreds of thousands of them into starvation, International Monetary Fund Managing Director Dominique Strauss-Kahn said.

Governments throughout Asia, Africa and the Middle East are seeking to combat food inflation and avoid social unrest by curbing exports or lifting import duties on basic food staples such as rice. Global food prices surged 57 percent last month from a year earlier, according to the United Nations, and the World Bank warns civil disturbances may be triggered in 33 countries.

If food inflation keeps accelerating at its current rate “the consequences will be terrible,” Strauss-Kahn told reporters at the IMF’s semi-annual meeting in Washington today. “Hundreds of thousands of people will be starving, leading to a disruption in the economic environment.”

Haitian Prime Minister Jacques Edouard Alexis was voted out of office by the country’s senate today after violent protests over rising food prices, news agencies reported today.

President Rene Preval, who called the no-confidence vote “unjust,” announced a 15 percent cut in the price of rice, which had doubled this week to $70 for a 50-kilogram (110-pound) bag, Agence France-Presse reported. No replacement for Alexis was announced.

Price Outlook

Consumer-price inflation in poor or so-called developing countries will accelerate this year to 7.4 percent, compared with a January forecast of 6.4 percent, the IMF said this week. Food prices will probably remain comparatively high until at least 2015, the World Bank said in a separate report.

“Economic progress made over the last years could be destroyed,” Strauss-Kahn said.

Rice, the staple food for half the world, has surged 96 percent in the past year, reaching a record $21.60 per 100 pounds on April 8. That’s forced China, Egypt, Vietnam and India, which export more than a third of the world’s rice, to curb shipments of the grain. Argentina and Russia have also sought to discourage food exports in a bid to boost domestic supplies.

The head of the United Nations Food and Agriculture Organization advocated price subsidies in poor countries:

Food riots to worsen without global action: U.N.

Robin Pomeroy

Fri Apr 11

ROME (Reuters) - Food riots in developing countries will spread unless world leaders take major steps to reduce prices for the poor, the head of the United Nations Food and Agriculture Organisation (FAO) said on Friday.

Despite a forecast 2.6 percent hike in global cereal output this year, record prices are unlikely to fall, forcing poorer countries' food import bills up 56 percent and hungry people on to the streets, FAO Director General Jacques Diouf said.

"The reality is that people are dying already in the riots," Diouf told a news conference.

"They are dying because of their reaction to the situation and if we don't take the necessary action there is certainly the possibility that they might die of starvation. Naturally people won't be sitting dying of starvation, they will react."

The FAO said food riots had broken out in several African countries, Indonesia, the Philippines and Haiti. Thirty-seven countries face food crises, it said in its latest World Food Situation report.

Some of the worst tensions have been in Haiti where protests at high cost of living descended into riots last week and four people were killed in clashes with security forces. There is concern about rising prices in the Philippines, but it was not clear what incidents FAO was referring to there.

"I am surprised that I have not been summoned to the U.N. Security Council as many of the problems being discussed there would not have the same consequences on peace, security and human rights (without the food crisis)," Diouf said.

Increased food demand from rapidly developing countries such as China and India, the use of crops for biofuels, global stocks at 25-year lows and market speculation are all blamed for pushing prices of staples like wheat, maize and rice to record highs.

While people in richer countries have noticed higher supermarket prices, the effect is far more pronounced in developing countries where 50-60 percent of income goes to food compared with just 10-20 percent in the developed world.

Food Crisis Summit

Diouf called on heads of state and government to attend a food crisis summit at FAO headquarters in Rome on June 3-5.

He said the priority was a "massive seed transfer" -- to ensure farmers in poor countries could buy seeds, fertilizer and feed at prices they could afford.

Other necessary measures include creating financial mechanisms to ensure poorer food importing countries could continue to buy the food they need and give a larger proportion of aid budgets to agriculture, Diouf said.

The comments echoed those of British Prime Minister Gordon Brown, who called this week for a coordinated response to the food crisis which would include reaching a deal on the Doha trade talks and the possible use of market-based risk management instruments to avert food price volatility.

Diouf said it was normal to expect developing countries to put controls on food exports, even if that exacerbated global food prices. The price of rice jumped 40 percent in three days recently when India and Vietnam banned exports, an FAO official said.

"Export bans are a normal reaction for any government that has a prime responsibility to its people," he said.

Expanded crop plantings this year should mean a 2.6 percent increase in cereal output, with wheat up 6.8 percent on last year, FAO has forecast. But with only a small proportion of that reaching the open market, the effect on prices will be negligible as other prices pressure remain, it said.

What did the top economic member of the Bush administration say? What else – food price controls on food in poor countries would be a bad idea. U.S. Treasury Secretary Paulson saw economic danger in helping millions of people avoid starvation and ruin. The economic machine might suffer “distortion,” or there would be “fiscal burdens” (rich people might have to pay some taxes and redistribute some of their income!):

Paulson says food price controls won't work

Sun Apr 13

WASHINGTON (Reuters) - Treasury Secretary Henry Paulson warned on Sunday that governments should resist temptation to try to control soaring food costs through price controls, which he said would likely make the situation worse.

In remarks prepared for delivery to the World Bank's development committee, Paulson said such measures were "generally not effective and efficient" at protecting people likely to suffer the most.

"They tend to create fiscal burdens and economic distortions while often providing aid to higher-income consumers or commercial interests other than the intended beneficiaries," Paulson said.

World Bank President Robert Zoellick warned earlier this month that soaring food and energy prices were a serious concern that threatened to foster social unrest in an estimated 33 countries.
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Zoellick called on rich countries including the United States, Japan and European Union to immediately fill a $500 million funding gap at the United Nations World Food Programme to offer food aid to the world's poorest.

Paulson said countries suffering "severe negative shifts in the terms of trade due to higher commodity prices including higher food prices" should focus on policies to control energy use and consider measures to boost agricultural production.

"Governments, however, need to resist the temptation of price controls and consumption subsidies that are methods of protecting vulnerable groups," he said.

The World Bank has similarly advised that, despite the fact that several countries are trying price controls to curb food costs, it is unlikely to be effective in the longer term.

"Income transfers or food assistance for poor people will work more efficiently and sustainably than more general steps at the national level," World Bank economist Don Mitchell said recently.

So the World Bank is now advocating social democracy? Income transfers, food assistance? Apparently Paulson and the Bush adminstration, with their “Shock Therapy” style neoliberalism, are also at odds with institutions controlled by the U.S. establishment.

Speaking of income transfers, if the problem with the world’s credit system began when Americans could no longer pay their bills after years of falling income and rising prices, what better way to solve it than by letting the pay of workers rise?

Want to Save the Economy? Spread the Wealth and Give Workers a Raise

Mike Whitney

Apri1 12 / 13, 2008

Insolvency's dark shadow hangs over Wall Street. One major player, Bear Stearns, has already gone under, and from the looks of it, another investment giant may be on the way down. It's getting ugly out there. The so-called TED spread, which measures the reluctance of banks to lend to each other, has begun to widen ominously suggesting that the money markets think another dead body will be floating to the surface any day now.

The ongoing deleveraging of financial institutions and the persistent downgrading of assets has the Fed in a tizzy. Bernanke has backed himself into a corner by stretching the Fed's mandate to include everyone on Wall Street with a mailing address and a begging bowl. Now he's taken on the even larger task of fixing the plumbing that keeps credit flowing between the various investment banks. Good luck. There's plenty of more pain ahead. The IMF expects the final tally will be $945 billion, that means $3 trillion in lost loans for the banks. Bernanke better pace himself; this mess could last for years.

The US subprime fiasco has spiraled into what the IMF is calling "the largest financial shock since the Great Depression." America's capital markets are on the fritz. The corporate bond market is frozen, the banks are buckling from their losses, and the housing market is in a shambles. No one is buying and no one is lending. Private equity deals are off 75 per cent from last year and no one will touch a mortgage-backed security (MBS) with a ten foot pole. The mighty wheel of modern finance is grinding to a standstill and no one's quite sure how to rev it up again.

The US consumers are feeling the pinch, too. Credit cards are maxed out, student loans overdue, car payments in arrears, and mortgages entering foreclosure. Also, wages haven't kept pace with production and and the home-equity ATM has been shut down. Now that the credit tap has been turned off; the American worker is hurting, but no one is offering a bailout or a even helping hand; just a few table-scraps from Bush's "surplus package". 500 bucks will just about fill the tank of a normal-sized SUV. A new survey from the Pew research Center "Inside the Middle Class-Bad Times Hit the Good Life", shows that working families are in debt up to their ears and that fewer Americans "believe they are moving forward" than anytime in the last half century. The study also shows that most people believe "it's harder to maintain a middle class life style" and that "since 1999, they have not made economic gains." Average families are struggling just to make ends meet.

That's why so many people bought homes when they should have opened savings accounts. They were duped into speculating on housing so they could get a chunk of money. It looked like a good way to overcome stagnant wages and crappy hours. The cheer-leading TV pundits offered assurances that "housing prices never go down". It was all baloney. Now 15 million homeowners are upside-down on their mortgages and the very same experts are scolding workers for fudging the facts on their income disclosure forms. It's all backwards.

No wonder consumer confidence has dropped to record lows. Working people don't need lectures on saving money; they need a raise. The big-wigs at Bear Stearns are still dining on crab-cakes at the Four Seasons while the working folk are just trying to make their way through Greenspan's nuclear winter living on beef jerky and Big Gulps. Where's the justice?

Volumes have been written about the current crisis; subprime-this, subprime that. Everything that can be said about collateralized debt obligations (CDOs) credit default swaps(CDS) and mortgage-backed securities (MBS) has already been said. Yes, they are exotic "financial innovations" and, no, they are not regulated.
But what difference does that make? There's always been snake oil and there have always been snake oil salesmen. Greenspan simply raised the bar a notch, but he's not the first huckster and he won't be the last. What really matters is underlying ideology; that's the root from which this economy-busting hydra sprung. 30 years of trickle down, supply-side gibberish; 30 years of idol worship for the waxy-haired reactionary, Ronald Reagun; 30 years of unrelenting anti-labor, free market, deregulated orthodoxy which inflated the biggest equity-Zeppelin in history.

Now the bubble is hissing out of the blimp and the escaping gas is wreaking havoc across the planet. There are food riots in Haiti, Egypt, and Kuwait. Wherever the local currency is pegged to the falling dollar, inflation is soaring and trouble is brewing. Also, European banks are listing from the mortgage-backed garbage they bought from brokerages in the US and need central bank bailouts to stay afloat. It's just more fallout from the subprime swindle. Finance ministers in every capital in every country are getting ready for a 1930's-type typhoon that could send equities crashing and food and energy prices rocketing into the stratosphere. And it can all be traced back to the wacko doctrines of neoliberalism. These are the theories that guide America's "screw-thy-neighbor" monetary policies and spread financial turmoil to every city and hamlet around the world.

The present stewards of the system are incapable of fixing the problem because they represent the interests of the people who benefit most from the disruptions. Paulson's latest "blueprint" for the financial markets is a good example; a more pro-business, self-serving scheme has never been put to paper. Gary North sums it up in his article "Really Stupid Loans":

"With the Federal Reserve System's latest proposal, presented to the public by Secretary of the Treasury Henry "Goldman Sachs" Paulson, the Fed is asking the United States government to make it the Great Protector of Capital....The new proposals will centralize power over finance in the hands of an agency that is officially run by the government but in fact is run by agents of the largest fractional reserve banks. ...Regulation by tenured staff economists will not make the system less fragile. It will make it more top-heavy and less flexible.."

Some version of this plan will probably pass in the next Congress. No matter whether it does or does not, the direction is the same: toward an economy controlled by the federal government in conjunction with titular private ownership of the means of production, that is, toward fascism." (Gary North, "Really Stupid loans" lewrockwell.com)

The whole point is to put the markets in the Fed's control so that when the next financial crisis arises (from the next swindle) the Fed can bailout the bankers and hedge fund managers without consulting Congress.

Paulson's plan is a power-play; nothing more. The investment Mafia wants to take over the whole financial system lock, stock and barrel. They want to liquidate the SEC and any other government watchdog and put the investment banks, hedge funds and brokerages on the honor system. It's the end of transparency and accountability which, of course, are already in short supply.

Currently, Paulson and Bernanke are expanding the balance sheets of the Government Sponsored Enterprises (GSEs) so that Fannie Mae and Freddie Mac will underwrite 85 per cent of all mortgages while FHA will cover 10 per cent more. The mortgage industry is being nationalized to save banking fellowship while the taxpayer is on the hook for another $4.4 trillion of dodgy loans. Paulson doesn't care if the taxpayer gets stuck with the bill. What bothers him is the prospect that, somewhere along the line, workers will demand higher wages to keep pace with inflation. Then all hell will break loose. Paulson and Co. would rather see the economy perish in a deflationary holocaust than add another farthing to a working person's salary. He and his ilk take class warfare seriously; that's why they are winning. But their strategy also creates problems. When wages don't keep pace with production, demand decreases and the economy falters. That's what's happening now and Paulson knows it. Workers are over-extended and can't buy the things they make. They barely have enough to feed the kids and fill the tank for work. Consumer spending (which is 72 per cent of GDP) is nose-diving at the very same time the Fed's equity bubble is exploding.

Neoliberalism has a twenty-year record of producing the very same economic calamities. Why is this crisis different? Why should the US be spared the same predatory treatment as the many other victims of the global corporate oligarchy? After the Fed's equity bubble bursts, the corporate vultures will swoop down and buy up vital resources and industries for pennies on the dollar.

Economist Michael Hudson anticipated many of the present-day developments in the financial markets in an amazingly prescient interview in CounterPunch in 2003 called "The Coming Financial Reality":

Michael Hudson: "Free enterprise under today's financial conditions threatens to bring about an unprecedented centralization of planning, not in the hands of government but by the financial conglomerates and money managers. Whatever government planning power is destroyed becomes available for them to appropriate, with plenty of vigorish left for the politicians whose campaigns they back and who will "descend from heaven" into high-paying private-sector jobs, Japanese style, after having performed their service for the new regime.

Question: The financial regime is nothing but parasites?

Michael Hudson: "The problem with parasites is not merely that they siphon off the food and nourishment of their host, crippling its reproductive power, but that they take over the host's brain as well. The parasite tricks the host into thinking that it is feeding itself.

"Something like this is happening today as the financial sector is devouring the industrial sector. Finance capital pretends that its growth is that of industrial capital formation. That is why the financial bubble is called 'wealth creation,' as if it were what progressive economic reformers envisioned a century ago. They condemned rent and monopoly profit, but never dreamed that the financiers would end up devouring landlord and industrialist alike. Emperors of Finance have trumped Barons of Property and Captains of Industry." (Michael Hudson, "The Coming Financial Reality", counterpunch, interviewed by Standard Schaefer.)

Bingo. Hudson not only explains how finance capitalism is inserting itself into the governmental power structure but, also predicts that "industrial capital formation" -- which is the production of things that people can really use to improve their lives -- will be replaced with complex debt-instruments and derivatives that add no tangible value to people's lives and merely serve to expand the wealth of an entrenched and increasingly powerful investor class.

Finance capitalism has "devoured landlord and industrialist alike" and created a galaxy of seductive liabilities which masquerade as assets. Derivatives contracts, for example, represent over $500 trillion of unregulated counterparty transactions; a "shadow banking system" completely disconnected from the underlying "real" economy, but large enough to send the world into a agonizing depression for years to come.

The goal should be to dismantle this corrupt Ponzi-system, which merely wraps debt in a ribbon, and rebuild the economy on a solid foundation of productive labor, worker solidarity and and above all the redistribution of income and hence purchasing power away from the system which now flow to the top two or three per cent.

Political power has to be taken from the financial mandarins or the disparity of wealth will continue to grow and democracy will wither. We've already seen our main institutions -- the courts, the congress, the media, and the presidency -- polluted by the steady flow of corporate contributions which only serve the narrow interests of elites.

Henry Liu expands on this idea in his excellent article "A Panic-stricken Federal Reserve":

"In the 1920s, the wide disparity of wealth between the rich and the average wage earner increased the vulnerability of the economy. For an economy to function with stability on a macro scale, total demand needs to equal total supply. Disparity of income eventually will result in demand deficiency, causing over-supply. The extension of credit to consumers can extend the supply/demand imbalance but if credit is extended beyond the ability of income to sustain, a debt bubble will result that will inevitably burst with economic pain that can only be relieved by inflation.....More investment normally increases productivity. However, if the rewards of the increased productivity are not distributed fairly to workers, production will soon outpace demand. The search for high returns in a low demand market will lead to consumer debt bubbles with wide-spread speculation .... Today, outstanding consumer credit besides home mortgages adds up to about $14 trillion, about the same as the annual GDP. "

Voila. A strong economy requires a strong workforce and an equitable distribution of wealth. When money is concentrated in too few hands, the political system atrophies and becomes unresponsive to the needs of its people. That's when the nation's laws and institutions are reshaped to reflect the ambitions of rich and powerful.

The financial system is doing exactly what it was designed to do, it is crumbling from the decades-long trickle-down experiment. Social programs have been gutted, civil infrastructure is in tatters, legal protections have been savaged, and workers rights have been trounced. Is it any wonder why we're embroiled in an unwinnable war and the financial system is on its last legs?

The only way to break the stranglehold of Wall Street's financial Politburo is to level the playing field through greater wealth distribution. That's the best way to rekindle democracy and make America the land of opportunity again. And it all starts with giving America's workers a raise.

Sounds nice, but how would this come about? Stef Zucconi tells us bluntly what we’re up against:

For those of us with a less, um, stochastic view of how the world works and who believe that s*** doesn’t always ‘just happen’, mainstream media accounts of what’s going on in the world are often frustrating and, occasionally, amusing – but only in a very dark way.

The coverage of the state of the British and World economy being the most immediate example that comes to mind.

The British media has recently finally woken up to some key economic trends which have been noticeable for some time now but there has been far too much other, much more important stuff to report on. Those key economic trends include...

· The price of oil is going up lots
· The price of rice is going up lots
· The price of wheat is going up lots
· The price of gold is going up lots
· The value of the dollar is going down lots
· The value of the pound is going down lots
· The availability of retail credit is going down lots

And not only has the British media been rather slow in reporting these movements it is also meticulous about reporting these movements as unconnected events and giving some frankly bollocks explanations as to the causes.

Last night, on Channel 4 News for example, we were treated to appearances from representative jackals from both the World Bank and the IMF; in two scrupulously separated news items, lying through their f****** teeth about why the British/ European/ World economy is going to go t*** up and why people can’t afford food in a growing number of regions of the world.

What neither owned up to is that the underlying reason why all these things are happening is that a massive re-balancing of the world’s already unequal distribution of wealth is now well under way.

Re-balancing is, of course, a euphemism for naked theft.

UK interest rates have just been cut by another 0.25% and even before the cut the media whores were warning people that this cut, as with the previous cuts, would probably not be passed onto ordinary borrowers and that banks would continue to cut back on the volume of mortgages they are lending to people.

Which is all very strange when you think about. Central banks have been creating and pumping money into the global economic system but the stuff is, so we are told, still thin on the ground

Where’s it all going?

I’d suggest a good place to start looking is in the markets that speculate in the price of things none of us can do without. Right now, borrowing made-up money at 5% to punt on and drive up the price of food or oil another 20, 30, 40 or 50% is pretty much a one way bet.

...only your average person hasn’t got the resources or the means to buy their food six months forward. So, they’ll just have to take it up the rear end when the prices rise won’t they?

We are repeatedly told, from cradle to grave, that the cost of the things we need is driven by supply and demand. For example, the price of houses in the UK and the US was driven by population pressure, the increase in the number of households and a failure to build enough new housing.

Bollocks

That’s only half the story – and not the interesting half.

The other key driver for the £ or $ price of a commodity is the supply and demand of the money used to pay for it. And if you can force up the price of something by flooding a market with money, whilst restricting increases in what people earn, you end ******** those people big time

and you can flatten the price of anything just as easily.

The need for housing in the US or UK didn’t suddenly drop overnight.

In the same way that the need for rice or wheat didn’t suddenly leap up overnight either.

There are some very, very evil f****** manipulating both the supply of the essentials of Life and the money used to pay for that supply. Those of us on the demand side are currently at their mercy. A quality that oligarchs are not exactly renowned for.

The only hope of dismantling the “corrupt Ponzi-system” Whitney refers to lies with a more accurate understanding of human nature. One that takes into account the nature of normal humans as well as the nature of the “other human race,” the psychopaths. As Laura Knight-Jadczyk put it,

If the existence of psychopaths and their ability to play us is denied, then their role in government, in business, in the media, in the military, in the police and law, in education, in any place where power is to be had, cannot be understood… Fortunately, researchers such as Łobaczewski, Robert Hare and Paul Babiak are bringing to light the nefarious influence these pathological types play in society. We are beginning to have an understanding of the dynamic between psychopath and non-psychopath, between predator and prey, in individual lives and in society at large.

That is the environment in which we live. If you wish to understand how we are influenced by evil, it is the fact of the existence of the pole of the conscienceless that you must understand. It is the existence of this pole that explains the horrors of human history, not some incurable or permanent predatorial nature at the heart of every human being.

This conscienceless reality continues to exist because the majority of people are ignorant of the facts. They have no knowledge of psychopathy and the role it plays in shaping society. They do not understand that their ideas, their opinions, their thoughts, their dreams, their goals in life are all broadcast out from a group of people who either have no conscience and are incapable of it, or who are willing to do whatever they are asked in order to preserve their own comfort.

To break the rule of the pathocrats, we need knowledge: the knowledge about them and how they work, both on an individual level and on the level of society as a whole. Knowledge, scientific knowledge on psychopathy and ponerology, will permit us to create a pole of conscience that can serve as a counterweight to the pole of the conscienceless. The goal of this knowledge is to eliminate the influence from the other pole by facilitating people to pull themselves out of its field of influence. The 17% or so percent who support the pathocracy would be won away if they were to feel that their security and comfort was bettered served by supporting the other pole.

The goal is not to eliminate physically the psychopaths but to render their manipulations fruitless as more and more people see through them. Knowledge of them and how they manipulate and deceive serves as an inoculation. We can learn to become immune. As this occurs, the weight of the left pole will decrease. If the pathological have no influence, if they can no longer have access to positions of power, gradually, consciencelessness will become nothing but an idea. It will lose its physical manifestations.