Here Thar Be Monsters!

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Will They Never Learn

I just had an epiphany.  I finally see what's going on at the macro level of economics and geopolitics.  I have a bead on why the Western oligarchs are so panicked.  And the answer is really stupid and childish.  It also explains why China is pissed at the US, why Japan was rubbed out, and why things are about to change really fast, really soon.

To put it in a nutshell...

Back in 1998, the Eastern hemisphere was struck with something we in the West called the Asian Contagion.  If you remember, the Asian economies were hit with a major recession, led by Japan (China was still developing back then).

It was bad.  The folks I've met who lived through it witnessed the bottom fall out and things get really nasty in these parts.  Riots in the streets, houses being looted at will, banks closing and/or being mob-robbed.  The red-hot Yen and Nikkei tumbled down a black hole from which they still haven't recovered.

All across Asia, the socio-economic fabric was coming unraveled at an alarming rate.  Naturally, Japan and the lesser economies looked to the West for help, but the dominant Anglo-American empire sat on it's wallet and instead, used the situation to solidify it's position over the region.

Let's pause for a moment here.  If you look at the calendar, you'll notice that 1998 was 60 years or so after the end of WWII.  Now we turn to a decent economics textbook (if we can find one) and look up Kondratiev and Dewey.  These two men, one Russian and the other American, both came to the conclusion at roughly the same time and independently that there was a long-wave cycle in all economies of roughly 60 years in which the business cycle turned south and there was nothing to be done about it but ride it out.

Dewey noted that governments could take certain actions to lessen the pain, but the crash and burn was sunrise or waves on the beach.  Kondratiev said the same thing, though he didn't focus as much on state actors.  Regardless, he was put in front of a firing squad since he couldn't find a way for the almighty State to stop it.

Now, back to Asia.  In the 60 years since WWII, Japan had become a major economic powerhouse.  It dominated Asia and dictated the ins and outs of how things were going to be around here.  They didn't make a lot of friends (not that they ever have).

So when things started to fly apart, China tucked in, Korea started maneuvering, and the other Asian economies went through violent convulsions.  Here in Indonesia, Soeharto was dethroned after 30 years of iron-fisted rein.  Similar events took place all over the region.

Tokyo called on the Anglo-American empire to come to the rescue, but the Western oligarchs were too busy positioning themselves to come out on top of the fray.

Slowly, things started to come back, like electric service after a major outage.  When all was said and done, Asian nations had unwound most of their debt and a massive shift in wealth had occured, as is often the case after deep recessions, or to be intellectually honest, depressions.  If you think of it in terms of a vineyard, winter had come and the vinters had trimmed back the vines in anticipation of spring.

Except Japan...

Japan had listened to the Western oligarchs and taken steps to try and stop the wholesale destruction of its economy.  They didn't want to lose their privileged spot atop the Eastern hemisphere.  They reduced interest rates to less than zero and kept the yen on life-support with the gold-carry trade.  Japan survived, but at a cost.

By dong this, Japan accrued more debt, rather than trim off the dead vines.  It was the proverbial heart-attack victim who continued to eat pork, smoke cigars and sit on the couch.

Meanwhile, China and the lesser economies had cleared out their debt and were building from a freshly leveled foundation.  When the inevitable long-wave spring came along, they sprouted forth with renewed vigor, creating red-hot economies from the ashes of the foregoing two years.  By 2000, China, Korea, Thailand, Vietnam, Malaysia, and Indonesia were in position to launch forward.

And they did.  In the past decade or so, China has come to dominate global manufacturing and became an outsourcer to smaller regional economies.  The whole region experienced double-digit growth and exploding middle classes.

Except Japan.  It limped along, following the Anglo-American playbook with, at best, anemic results.  It watched as its once-vaunted engine sputtered along, refusing to get a tune-up because they didn't want to lose their status at the top of the pile.

Finally, Japan's electorate decided they needed to take action, since the leadership wasn't going to.  They threw out the political party which had run things since WWII.  They cleaned up the financial system and overhauled the banks.  But the biggest move was to tell the Anglo-American empire to go stuff its playbook.

Japan started taking action to uncouple itself from the Western train ride.  They stopped hanging on every word out of the Western oligarchies and even (gasp) told the US to close down its military bases, especially Okinawa.

Conveniently, Fukushima happened and put an end to that little uprising.  It got the Japanese focused on other matters and put it in the position of having to take hat in hand and go back to Uncle.

Meanwhile, China powered ahead, bringing the rest of Asia with it.

In the West, the same thing nearly happened at the same time.  In 1998, the milk started to sour a bit and Wall and Fleet Streets went into high gear.  They also found that nothing was going to stop the long-wave shift, but they weren't satisfied with following the laws of Nature.  They had enjoyed the greatest economic tidal wave in all of recorded history, and it had put the Western oligarchs at the top of the global heap.  They so coveted this position that they were determined to keep it at any cost.

Thus, the oligarchs took a page from the Pearl Harbor playbook and created a distraction.  It was big enough and shocking enough that it would be sufficient reason to create a war long enough to power through the long-wave negative cycle.  Everyone knows war is good for business.  It blows off assets and is cause to crank up the factories and dig a little deeper in taxpayer pockets.  But they hadn't figured on a couple of things.

Ramping up production when all of your factories are overseas does nothing to keep the home fires burning, and part of the natural long-wave cycle is the repudiation of debt and the transfer of wealth.  They are as inevitable as death following birth.

Because of the huge amount of wealth that had accrued to the West during the preceding 60 years, they have been able to float the boat for a short while, but they are quickly coming up against one of those glorious Natural boundaries that remind us that we don't know everything yet.

The vinter has tried to deny winter and keep the vines growing through the freeze.  As a consequence, the new growth is being choked out by the old, and instead of getting a bumper crop of grapes, there's nothing.

To use another metaphor, grandpa is on life support.  We can go visit him in the hospital, and all those bells and whistles and tubes and electrodes are keeping his heart beating and his lungs filling, but conversations are decidedly one-sided.

Shift happens.

Russia had its upheaval in 1991.  China/Asia followed in 1998.  They have had explosive growth.  The West has refused to relinquish its grip on the world's throat, and so America languishes and Europe looks a lot like Asia 15 years ago.

Only one Western economy has trimmed the vines and is now powering ahead with renewed vigor...Iceland.

In fact, we've seen this same thing happen again and again throughout history, which I suppose is the definition of a cycle, yes?  Because a handful of families refuse to let go of grandpa, we have to watch and suffer as the poor guy falls apart before our eyes.  Those who accept and live within the inevitable cycles flourish, while those whose hubris and greed lead them to defy Nature slowly wither and rot.

It's like Chauncey in Jerzy Kosinski's brilliant and profound novel, "Being There".  It doesn't take intelligence to see the repetition of the seasons and to infer that all life must follow those cycles.  Those who recognize it and live within the boundaries of the rules will rise to the top, and those who defy it and seek to supplant Nature will be destroyed.

The banksters know this and have done everything they can to kick and scream till the cycle goes away.  But everything is not enough to stop the waves from hitting the shore.

Years ago, a good ole boy in Texas running for governor named Clayton Williams made a rather profound, if inflammatory statement, "Rape is like the weather.  If it's inevitable, just sit back and enjoy it."

Ya know...he had a point.