Day 104, Trump, War over? doubtful.

 MORE WAR, THEN PEACE, TESTING AMERICANS GULLIBILITY

HOW LONG CAN CREDIBILITY LAST?

Yesterday, the world was whipsawed by competing narratives coming out of the White House. More intense war, oil markets rise, then peace, oil markets fall, the same pattern that has been going on for now months. I suspect that any proclamations coming out of the White House are now considered just so much verbiage without any substance. It can be assumed that much of he world is feeling the same. This pattern is the quickest way for a President to become irrelevant.

This whole ceasefire was called for by Trump, tentatively agreeing to Iran's position, then when it came to real negotiations, it all evaporated. In reality, Iran has not changed it position and neither has the U.S.  Lets face it, Trump is hoping for Iran to capitulate and give him a clear victory. Iran, a nation that is in an existential fight for its survival, not just its government, but its nation, which has been under sanctions and assault for its entire modern existence is demonstrating that it has the social cohesion and military ability to demonstrate a lasting deterrence. This whole fiasco is weakening the U.S. and giving Iran credibility in the world community. I suspect that saying that is tantamount to treason, everyone is supposed to be on board exclaiming the virtues and power of the U.S. while in effect it is diminishing by the day.

Together  with the Ukraine/Russian war, another conflict that was expected to be over in weeks and is now in its 4th year, all in the hope of maintaining world control and control of the politics and resources of Russia and Iran, have in effect decimated the economies of Europe and soon the U.S. The debts are piling up, the internal social fabric disintegrating and the credibility of their governments evaporating. Exactly opposite of the goals that these wars were expected to enact.

It seems the leadership class is without the ability to change course, either from hubris or just unable to neutralize those with other agendas, either way, it is likely going to end with a diminished nation in all respects.

Day 103, War back on, Strait closed.

 U.S. ATTACKS IRAN, IRAN STRIKES U.S. BASES

IRAN DECLARES STRAIT CLOSED FOR EVERYONE

Dueling narratives from both sides, the U.S. claims it's strikes are defensive and Iran retaliates, more of the same, but just escalating. Trump claims the U.S. has been sneaking ships through the strait. Imagine sneaking 1000 foot long ships through a 20 mile wide waterway. We can assume the ships going through were with Iranian permission. Iran now states, no ships will be going through until escalation stops.

We can assume that this is going to be the situation for some time and the disruption of the flow of oil out of the gulf will continue. More are speculating that the U.S. actually wants the oil traffic disrupted, hoping, while it may damage Iran, it will cause economic worries for China. While it may hobble consumers in the U.S. it will damage China more and the U.S. will be less impacted than others. It may also increase dependence on U.S. energy and increase U.S. leverage. A sad way of trying to insure the U.S. remains relevant.

All this also takes the focus off of Israel's attacks on Lebanon and it seems there were no more attack by Iran on Israel.

It is amazing that oil prices have been restrained so far, when actual shortages begin that may be much harder to control.

Indications that the stock markets are possibly finally entering a new reality phase, we will see if this will cause another reevaluation of this conflict.

Chaos, instability and uncertainty seem to be outlook for the foreseeable future. 

Day 103, War some more.

 BACK TO WAR IN PERSIAN GULF?

U.S. STIKES IRAN, IRAN HITS U.S. GULF BASES

Yesterday a U.S. helicopter collided with a Iranian drone over the strait of Hormuz. Iran claims it was unintentional, while the U.S. responded with stakes into Iran.  Iran then responded with strikes on U.S. bases in the gulf. It is not clear if this is going to continue or just another strike and respond incident.

Little talk of any negotiations in progress. 

Reports claim that the U.S. staged  airborne troops in Israel for a planned attempt to capture Iran's Kharg island, it now may be another cancelled covert mission.

Most likely this tit for tat will continue for some months, until the U.S. and Israel feel they are ready for another go at Iran or until some other crisis erupts to distract.

It is doubtful that any peaceful resolution is on the immediate horizon. 

Day 102, Economic or political exhaustion, not military victory.

 WHO WILL BE FORCED TO END THIS BY NECESSITY?

THE CLOCK IS NOW TICKING QUICKLY

It is clear, there is no serious negotiation that will be acceptable to the U.S., Iran and Israel. At present, everything is sort of in limbo, but it is becoming clear that a military victory is unlikely. It is more likely that exhaustion or financial necessity will be what brings this conflict to a close.

The U.S. is the most powerful player in this affair, at least militarily. It is clear that 40 days of bombing have not eliminated Iran's ability to do damage, that is why there was a call by Trump for ceasefire in the first place. So far, the damage to the world economy due to the interference in energy supplies has been managed by expending reserves, and there is a limit to how long that can be sustained. The reality is that the flow of energy out of the Persian gulf must happen and soon.   

The calls from the hard core Neocons and Israel to finish off Iran assumes that Iran is a sitting duck and an easy kill, serious analysts understand that this is not true. Iran has made it clear that a further resumption of attacks will result in Iran taking out the Persian gulf energy production facilities for possibly years, Iran does have that capability. This will result in a global financial crisis that no one will escape. At present, Iran has not pre-emptively attacked anyone,  but they are retaliating to any attacks by the U.S. and Israel, both on Iran and Lebanon.

It seems Trump has hoped that an embargo would bring Iran to accept his demands, this is unlikely, as Iran as alternative corridors through the Caspian sea and Pakistan. It is near impossible to enforce a total blockade on Iran. The clock is ticking for Trump both economically and politically. 

Iran is geographically a fortress that will not be defeated without massive ground forces and there are not enough forces available and logistics of such an enterprise are not being entertained by anyone. Iran has been under sanctions and assault for 47 years, that is why they constructed such a massive underground defense system. The hope of an internal revolt has been much exaggerated. While there is internal disagreements, the assassinations and massive bombing has united the country as it would any nation. I suspect, that while suffering, they can outlast the U.S. and Israel. The delusion in the west that Iranians view Israel and the U.S. as benevolent saviors is just stupid.

Israel is now in the weakest position, the idea postulated by the present leadership that Israel is an emerging super power is dangerously delusional. It is completely dependent on the U.S. for its ultimate security. The U.S. is experiencing  its own problems of over extension after years of war, both it the middle east and Ukraine. Another reason for the call for a ceasefire was the shortage of precision munitions.

Israel's army is being exhausted after 3 years of continuous fighting and the idea of expansion and occupation is near impossible for a small population. There is a limit to how long Israel can continue militarily, economically and more importantly politically. The opposition at home is not for peace but for more war, how is that situation going to be reconciled?

The real solution is a comprehensive negotiation to settle all disputes, at present no can even talk directly to each other, a real solution would take years to accomplish and at present there is no will for anything like that. It will only end with the brutal reality of exhaustion and an inability to continue.

U.S. and Israel continue conflict.

 THERE IS NO PEACE PLAN

TRUMP AND BIBI ARE ON THE SAME PAGE

We continue to hear that Trump is admonishing Netanyahu for attacking Lebanon and that Trump desires an end to this conflict, it is all for domestic consumption and is all part of the plan. Neither want peace until there there is no opposition to their long range plans. Netanyahu has the vison of a region subservient to Israeli control and Trump wants to control the resources in the Persian gulf.

The goal is to cut off oil to China and Asia in an attempt to end the global move to an alternative economic system. Iran is geographically pivotal to this alternative system and the hope is make Asia more dependent on U.S. energy as a means of control. The same applies to the Russian/Ukraine conflict, hampering of Russia's ability to supply oil to this alternative economic group is part of the goal. The same goes for the supposed divide between the U.S. and NATO counties, just more psyops.

This plan has been underway for some time, the only question is, does the U.S. have the manufacturing base to keep up this conflict for the years it may take to be accomplished? Can the U.S. economy be sustained with massive debts and the effects of this enterprise on the global economy? Can the West prevail internally with increasing inflation and a deepening political divide? It seems it is an all or nothing gamble. 

The alternative would be to pursue goals of a sound currency and a strong economic and manufacturing base at home. A sound footing that could compete and also seek cooperative relations with the goal of mutual prosperity. The U.S. is not or has not been in a position of threat from none of these supposed adversaries. The real risk is an internal breakdown of the financial system that is unsustainable with current policies. 

Maintaining control of the global economic and political system will not insure the wellbeing of the nations citizens or those of Europe, it seems it is all about maintaining the privileged system of the Epstein class. The risk is that by pursuing this agenda they will destroy the future for us all.

Consensus growing, Iran is now Nuclear.

 PERFECT TIME FOR COMPREHENSIVE MIDEAST AGREEMENT

THE RATIONAL SHOULD ALL BE READY TO END WAR

There are increasing reports that Iran has joined the nuclear club and that they may soon make that reality clear. These reports are coming from several different sources and claim that soon after the death of the Ayatollah Kaimani, the stance was changed by his successor and that they have now nuclear weapons that are capable of being delivered by Missles.

While no tests have been conducted, it is also been speculated that they will soon demonstrate and announce that they are now a nuclear power. While it is very possible that this is a reality, it is also possible that they are engaging in a coordinated false narrative for political purposes. I suspect that this will be revealed in the coming days.

While Trump keeps threatening more military action, many in Washington are pushing for this, it seems that he is unwilling to play Russian Roulette with the world economy. Most agree that a new round of military action will result in the elimination of  Persian gulf oil from the world market for an extended time. It is clear that Iran has that capability.

While there is talk of negotiations and talks have all been through intermediaries and no direct talks between the U.S. and Iran have happened since Islamabad, many months ago. One must believe that if meaningful risk free military action was possible it would have happened by now. The idea that a U.S. embargo will bring Iran down is becoming less of an option, with different routes available in the north.

I suspect that the Gulf countries are ready for peace, I believe Iran is also ready, but not by submitting to unrealistic demands. All the other countries in the region are ready. The world economy is ready. The U.S. should be ready and it may time for Trump to exhibit some real courage and declare he is now ready for real negotiations for comprehensive deal that will settle the Palestine future in a serious and humanitarian way. It would indeed be the deal of the century. 30 years of war should be enough for the rational to step up and make it happen.

THE COMING COLLAPSE OF DEMOCRATIC SOCIALISM

THE COMING COLLAPSE OF DEMOCRATIC SOCIALISM

THE QUESTION IS NOT IF, BUT WHEN? 

 

Watching the news we see economic crises worldwide. While we are not currently in a major downturn, we have been sort of treading water for the last 8 years. The  underlying problems with most economies, particularly western Europe and the United States, have not improved. In fact, the amount of debt and the future ability to deal with a downturn is a lot more unstable than before. The amount of debt held by Western countries, businesses and individuals, has actually increased since 2007. This election year we hear from some who believe if we just raise taxes on the wealthy all will be well. Others contend that all will be well if we can just instill confidence that a solution is near. Sorry, All will not be well. Taxes would have to be doubled in most cases, which will cause an economic collapse, or government spending would have to be cut in half, which will also cause a collapse.

Of course the problem is that there has been an accumulation of extraordinary debt by all governments, corporations, and individuals. There is not a precedent for this situation in human history. While the housing bubble was the symptom that was burst, when gas rose to $4.00 a gallon, in the US the massive debts held by everyone was the real problem. Debts of individuals can be traced to central banks that have not been willing to clear excess debts since the early 1980’s. Instead, they have encouraged and enabled individuals to borrow beyond their means to repay. We now see a classic debt collapse scenario where people are having a hard time servicing the debt they have and banks are raising standards to stop losses...with the economy stagnating until the debts are reduced to normal levels. This may take decades rather than years. 　

A far bigger problem is the debt of governments, particularly in Western Europe and the US. These debts are a direct result of massive spending and the whole idea of democratic socialism where votes were bought by promising unsustainable benefits...to individuals, spending on projects, surveys, studies, ad nauseum... to the well connected. When fulfilling these promises could not be sustained by raising taxes they just borrowed the money to be consumed. The spending on projects, etc. is more easily addressed by just saying "NO"...BUT the spending on benefits is much more difficult to address. The real culprit in all this is that socialism has been a dismal failure whenever it has been tried. I should qualify that by distinguishing between voluntary and involuntary socialism.

Voluntary socialism is self limiting. An example is fire insurance. If the incidence of loss becomes excessive, premiums go up and some people may refuse to buy insurance. If losses become excessive insurance companies may refuse to enter that market. There are natural limits for both parties.

The first instance of collectivist failure was recorded in the New Testament. The early Christians, thinking that the end was near, sold there possessions, dined together and shared with each other. It was not long until Paul, hearing complaints from the responsible members of the community, wrote to them saying, “He who does not work shall not eat.” Human nature and the voluntary basis of this experiment was a natural remedy.

Another example was the Puritans who landed in Plymouth in 1620. They formed the, "Mayflower Compact," an agreement to share all property and work in common. After 3 years of this experiment, they were barely able to survive. The Puritan's endeavor had been financed by investors in Europe who hoped they would reap a profit by the Puritans repaying their debts with furs and other goods. After 3 years of no return, investors refused to send any more support and the idea was scrapped. The Puritans then distributed land to each family and they were on their own - the result was the beginning of prosperity for all.  It was chronicled by William Bradford that while the number of people who were either too weak or incapable of work grew, and the young and motivated were increasingly unhappy with the communal arrangement, many who formally were unable to add much to the community instantly became more productive when they were able to keep the fruits of their labor.

Remember the 1960’s  communes, where a few self motivated people bought a ranch and lived off the land? It was not long until they were supporting a larger and larger number of new disciples, who agreed it was wonderful, except for the motivation part. Again it ended in a natural turn of events and human nature.

Now to involuntary socialism. Of course the greatest example has to be the Union of Soviet Socialist Republics. This experiment was immediate total government control that in the end was a dramatic failure. It may take Russia several generations to recover from the debacle. While touted by Socialists as the wonderful system of the future, (including Eleanor Roosevelt who visited the country many times in the 1930s when the worst atrocities were being committed), Solzhenitsyn and others saw and reported the true nature of the experiment. It's interesting to note that from the revolution in the USSR in 1917 to its collapse in 1989 was 72 years. If we take 1935 as the "embrace of socialism" in western Europe and the US, we end up at 2007. Does it take roughly this long for the failures of socialism to become unsustainable? While we have not had total control by the governments of western Europe or the US, we have been progressing in that direction for decades...hence the term progressivism. It has been a slow incremental movement that has taken control of most industries through regulation and has encouraged dependency by promising a safety net to those displaced by their policies. The part of the private sector that has not been effectively controlled by the government is the food and energy sector. They are in the process of taking over the energy sector and when they can control food they will have complete control of the economy and the people. Remember the winners of socialist economies are the ruling class who often live well off on what they skim off of the redistribution schemes. Even in the Soviet Union they lived well in their dachaus and had access to  travel and benefits that could only be dreamed of by the rest of the population.

While it all appears wonderful in theory, Unchangeable Human Nature has not been taken into account. Humans will help each other to some extent, but most will not jeopardize their or their families well-being for others. On a voluntary basis, many are willing to help those in need, in danger, etc. but as soon as it becomes involuntary, there will be resistance. This is just the nature of human survival instincts. While it may not measure up to the expectations of the ideologues of socialism, it is probably superior to all other organisms on earth. The Soviet experiment ended when there were no longer any incentives left. The Russians who have weathered one form of dictatorship for their whole existence were noted to remark to each other, "We pretend to work, and they pretend to pay us." In the end the only prospering part of the economy was the black market and flea markets.

So what has happened in every case of involuntary socialism?  Those who believe they are taxed too much will resist by finding ways to pay less; those who believe they are restricted in some way will find ways around the restrictions. Too much tax will usually create less revenue, etc. At first this is accepted or minimally enforced, but as the deficits grow, enforcement must increase and we see a cycle of increased enforcement, then less activity, then less revenue and if left to follow a linear path to forced labor and slavery.

In the U.S. there was once a work ethic and pride of self reliance - many would not accept charity, but after decades of increasing regulation and taxation it seems all restraint has fallen off and everyone will take and pursue more benefits, even if liquidating assets and claiming poverty is necessary. The dam has broken. The tipping point has been reached. It will not likely be restored by government action, or by acts of Congress, the same applies to Western Europe.

So what is the solution? At this point there is no easy solution. All solutions will require much pain and suffering. It may be limited by economic suffering and the necessary austerity to liquidate the debt and begin a new start with liberty and self reliance the foundation...OR...it may be that more enforcement will be needed until we return to feudal type society where basic necessities will be provided to the productive and compliant and those that do not conform will be eliminated from society by the powers that be. This is the question that will be answered when the coming collapse reaches its fulfillment.

originally published 2/11/2016

update 9/1/22   We are about to see the fulfillment of this narrative, possibly within months in Western Europe and then on to the U.S.

update 3/10/2023  We see the new budget is increased by 1 Trillion dollars. Debt of over 31 Trillion. Inflation destroying buying power. It is all unsustainable. 

update 11/16/2023, all the problems are now more severe, $34 trillion debt, $2 trillion deficit. Bond market in trouble. Any attempts to fiscal responsibility labeled extreme. 

update 5/24/2024, U.S. now incurring debt at the rate of $1 trillion every 100 days. Gold $2450 oz. While all seems well, it is all unsustainable, Economic crisis on the horizon.

Update 2/19/2025. U.S. debt nears $37 trillion. Gold $2940. Trump and DOGE attempt to reform spending and fraud in budget. Many would rather go down with the ship than change this unsustainable course.

Update 7/21/2025. U.S. debt now over $37 Trillion. deficit near $2 Trillion. Gold $3300 per oz. All unsustainable.

Update 2/25/2026. U.S. debt now near $39 Trillion, deficit near $2 trillion, 25% of budget. Gold over $5100 per oz.  A major economic event could trigger the crisis of the century.

Update 6/3/2026, U.S. debt near 40 Trillion, 25% deficit, high energy prices and increased defense budget and continued war could be the tipping point. Europe eyes reducing social spending as economies suffer under effects of war and increased defense spending. Gold has replaced bonds as the safe reserve haven. Social unrest can be expected. Classic Mises described stock market BlowUp is underway.