Fourth Turning – The Shadow Of Crisis Has Not Passed – Part Two
The Burning Platform
by Jim Q
In Part One of this article I laid the groundwork of the Fourth Turning generational theory. I refuted President Obama’s claim that the shadow of crisis has passed. The shadow grows ever larger and will engulf the world in darkness in the coming years. The Crisis will be fueled by the worsening debt, civic decay and global disorder. I will address these issues in this article.
Debt, Civic Decay & Global Disorder
The core elements propelling this Crisis – debt, civic decay, and global disorder – were obvious over a decade before the financial meltdown catalyst sparked this ongoing two decade long Crisis. With the following issues unresolved, the shadow of this crisis has only grown larger and more ominous:
- The national debt has risen by $7 trillion (64%) to $18.1 trillion since 2009 and continues to accelerate by $2.3 billion per day, on track to surpass $20 trillion before Obama leaves office and $25 trillion by 2019.
- The national debt as a percentage of GDP is currently 103% (it would be 106% if the BEA hadn’t decided to positively “adjust” GDP up by $500 billion last year). It is on course to reach 120% by 2019. Rogoff and Reinhart have documented the fact countries that surpass 90% experience economic turmoil, decline, and ultimately currency collapse and debt default.
- Despite the housing collapse and hundreds of billions in mortgage, credit card, auto, and corporate debt being written off, dumped on the backs of taxpayers and hidden on the Federal Reserve balance sheet, total credit market debt has reached a new high of $58 trillion.
- Harvard professor Laurence Kotlikoff has been a lone voice telling the truth about the true level of unfunded promises hidden in the CBO numbers. The unfunded social welfare liabilities in excess of $200 trillion for Social Security, Medicare, Medicaid, and Obamacare are nothing but a massive future tax increase on younger and unborn generations. Kotlikoff explains what would be required to pay these obligations:
“To honor these obligations we could (a) raise all federal taxes, immediately and permanently, by 57%, (b) cut all federal spending, apart from interest on the debt, by 37%, immediately and permanently, or (c) do some combination of (a) and (b).”
The level of taxation and/or Federal Reserve created inflation necessary to honor these politician promises is too large to be considered feasible. Therefore, these promises, made to get corrupt political hacks elected to public office, will be defaulted upon.
- The level of local and state pension and healthcare unfunded liabilities to government workers exceeds $4 trillion. State and local politicians would have to double real estate, sales, and income taxes in order to fund the gold plated benefits for state and local workers. As government workers in Stockton, San Bernardino, Jefferson County and Detroit have experienced, these promises will be not be honored.
- Consumer credit outstanding, despite the false media storyline of austerity, currently stands at $3.3 trillion, an all-time high, as the Federal government took monopoly control of the student loan market in 2009 and proceeded to issue $600 billion of subprime loans to University of Phoenix wannabe graduates seeking degrees in Gender Studies. The Feds also used their five year control of Ally Financial (after their taxpayer bailout) to rejuvenate the subprime auto loan market by doling out $35,000 seven year car loans to unemployed SNAP recipients, because everyone deserves to drive a brand new Cadillac Escalade. The $250 billion increase in auto loan debt since 2009 has “created” the auto recovery. Loan delinquencies approaching 2009 levels will surely not cause a problem.
- Despite the false storyline of corporate America being flush with cash. Corporate debt levels are at all-time highs. The brilliant CEOs of S&P 500 companies decided that adding hundreds of billions in debt to their balance sheets to buy back their stock at or near all-time highs was an outstanding idea. It worked so well in 2007. I wonder if tying their million dollar bonuses to earnings per share had anything to do with it.
- Every legitimate valuation method used to assess stock market valuations for the last 100 years confirm the stock market being at least 100% overvalued. There could not be a worse time for margin debt to also reach all-time highs. The previous peaks in 2000 and 2007 preceded 50% collapses in stocks. The Yellen Put will surely save the excessive risk takers this time. Right?
- The feelings of anger, disillusionment, confusion, angst, bitterness, blame, and helplessness among a large swath of America is rising by the day. They were so pissed off in November, they voted the D team out of office and put the R team back in control. But more people have begun to realize there is one corporate fascist party in control doing the bidding of Wall Street, corporate CEOs, special interests, and shadowy billionaires who call the shots, select the candidates, write the laws, fund the wars of choice around the globe, and keep the citizens under constant surveillance and threat of military rule by police thugs in communities across the land.
- Despite the false storyline of economic recovery, soaring GDP, plunging unemployment rates, record corporate profits, and stock market highs, the lives of real people living in the real world continue to deteriorate at a rapid clip. The number of people on food stamps in 2009, at the height of the worst recession since the 1930s, was 33 million. Today, five years into the “economic recovery”, the number of people on food stamps is 47 million. This means 19% of all the households in the U.S. depend on the government for food. That figure was 6% in 2000. Does that sound like progress or decay?
- The Federal government insists the unemployment rate has fallen from 10% in 2009 to a miniscule 5.7% today. The ridiculousness of this claim is borne out by the fact the working age population has grown by 14 million since 2009, while the number of employed has only grown by 7 million. The number of people who have left the workforce since the economic recovery started is an astonishing 12 million. In the previous five years, only 4 million people left the workforce. There are now 102 million working age Americans not working versus the 147 million working. The labor participation rate stands at a 38 year low, back to levels before women entered the workforce in great numbers.
- If Obama is boasting about the best job growth in decades, why are real median household incomes below 1989 levels? The non-existent inflation, which has reduced the purchasing power of the USD by 96% since the Federal Reserve was mandated in 1913 to keep our currency stable, has somehow outgrown any wage increases received by the average America for the last 25 years. As good paying full-time jobs have been replace by low paying part-time service jobs, wages have stagnated.
- The entire engineered “recovery” has been a sham, designed to save Wall Street, not Main Street. The little old widowed grandmothers have been given a death sentence of .15% interest on their CDs and money market accounts, while the .1% Wall Street elite was handed trillions of interest free fiat to gamble in the market, buy up foreclosures for their rental scheme, and earn billions in risk free returns by parking their reserves with their sugar daddies at the Fed.
- The proof this debt induced, Federal Reserve concocted, Keynesian inspired, scheme was designed to benefit the few at the expense of the many can be seen by the level of global wealth accumulated by the richest, as the middle and lower classes sink further into despair. Over 48% of global wealth is in the hands of 1%, with the vast majority in the hands of the .1% ruling elite. The fact the wealthiest .1% have seen a vast increase in their wealth since the 2008 Crisis began, while the rest of the population has seen their net worth decline, is solely due to the policies implemented by central bankers and their puppet politicians around the globe. The larger this gap widens the more likely class warfare turns into a real war.
- The signs of civil unrest are everywhere. It began with the Tea Party liberty movement and the Occupy Wall Street movement back in 2010 – 2012. Both movements were hijacked and/or crushed by the police state and their media mouthpieces, carrying out the orders of a panicky corporate fascist hierarchy. The full use of mainstream media propaganda was utilized to discredit both resistance movements. The recent civil uprisings in Ferguson and NYC over the failure of civil authorities to prosecute rogue cops are the latest in a myriad of citizens versus police clashes, which grow by the day. The police as heroes’ propaganda emanating from the corporate mainstream media is deafening, but only the non-thinking statists are buying it. The level of advertising and movies glorifying the military as protecting us from ever looming threats, despite the fact no country on earth could possibly invade our country, has been thunderous as the deep state uses propaganda techniques to sway the easily manipulated.
- The United States has rapidly decayed into a surveillance police state, making Orwell’s 1984 seem like a guide for amateurs. The only true hero to rise during this Fourth Turning thus far, Edward Snowden, has revealed the depth of deception being practiced by a paranoid Big Brother style government operating unconstrained by the shackles of the Constitution as they attempt to retain their power and wealth at all costs. Freedom of speech, freedom from illegal search and seizure, and virtually every other Constitutional right has been disregarded by an all-powerful but fearful ruling party, as they monitor and record every electronic interaction of every citizen on earth. Orwell couldn’t have conceived of the $1.5 billion, 1.5 million square foot NSA Worldwide Surveillance Center in Utah. But, he did understand the mind of authoritarians:
“The Party seeks power entirely for its own sake. We are not interested in the good of others; we are interested solely in power, pure power.”
- The use of Executive Orders to bypass the U.S. Constitution regarding vital issues, which according to the U.S. Constitution must be approved by Congress, has pushed the country ever closer towards authoritarian rule. The checks and balances of the three branches have been found superfluous by the ruling party. They have set the stage for a president to declare a national emergency where one person can take complete control over the financial system, the internet, phone communications, road networks, and ability to use the military on domestic soil.
- The proliferation of red light cameras and surveillance cameras on street corners in most major cities were sold to the public as safety measures designed to make the roads and streets safer. These cameras are nothing more than a means to keep revenue flowing to government bureaucrats, monitor our every movement, and record our personal information. You can be tracked by your car, your phone or your credit card. Big Brother knows your location, thoughts, plans, weaknesses, and fears.
- The U.S. military has been conducting unannounced “training exercises” in major cities across America for the last few years, even though they have vast training facilities in designated non-populated areas. This is clearly being done as an intimidation tactic to let the public know it would be futile to resist such a high tech powerful force. The government is desensitizing the population to the military operating within our borders, even though the Constitution prohibits use of the military domestically.
- Did the Department of Homeland Security just think it was a fiscally responsible move to give “excess” military hardware to local police forces, run by a bunch of Barney Fifes? The idiocy of providing military equipment to low IQ, high desire to bully and control, small town cops is incomprehensible. Unless the government just wants to position the assets for when they assume control of the situation on the ground after social unrest spreads across the land.
- The number of SWAT raids has increased from a few hundred per year in the 1970s to over 80,000 per year today. This outrageous trend has occurred as the violent crime rate per 1,000 people has plunged from 50 in the 1970’s to less than 15 today. SWAT teams are a hammer in search of a citizen nail.
- The lock down of the entire Boston metropolitan area by government military forces as they conducted illegal house to house searches, in violation of the Fourth Amendment, searching for two teenage kitchen utensil terrorist bombers, who they were warned about by our evil Russian enemy months before their attack, was a trial run. The people of Boston obeyed, cowered, and submitted to the boot. Their colonial ancestors would have been disgusted by their trembling display of cowardice. Once the government declares an imminent or ongoing terrorist threat it is clear the majority will obey, submit, and cringe in fear. They will beg to be saved by their government keepers.
- The level of contempt for the common man and the arrogance displayed by these “Ivy League men of substance” as they ride roughshod over the U.S. economic system was never more visible than the recent spending bill passed with the support of both parties and signed by Obama. It proved there is truly only one party, controlled by the wealthy interests on Wall Street. The $1.1 trillion spending bill that funded Obamacare and Obama’s executive order granting amnesty to illegal aliens, also included language written by Citicorp allowing Wall Street banks to trade certain financial derivatives from subsidiaries that are insured by the Federal Deposit Insurance Corp, explicitly putting taxpayers on the hook for the nearly certain billions in losses which these reckless, lawless bankers will incur when they crash the financial system again. Congress and Obama proved they are bought and paid for by the Wall Street oligarchs – true bipartisanship.
- The cultural decay of American society is pervasive, promoted and applauded by the corporate media, hawking Chinese made baubles & trinkets, and proudly displayed by the delusional egocentric iGadget addicted masses. The tattooed, pierced, obese masses glory in their ignorance, apathy, materialism, selfishness and greed. A united nation of self-reliant, freedom loving, hard-working, personally responsible, civic minded citizens has degraded into a fragmented amalgamation of dependent, fearful, lazy, irresponsible, short sighted inhabitants in a kleptocracy of delusion. The vast majority are incapable or uninterested in the critical thinking required to keep evil men from hijacking our economic, financial, political and judicial systems. There will be no groundswell for change until the societal structure implodes.
- The only way civic decay could be reversed would be through an educated populace capable of critical thinking who questioned and contested the actions of government apparatchiks, politicians, bankers, corporate executives, and the self-declared Ivy League ruling class. Sadly, that is not to be. After forty years of government control of the education system spending per student (in constant dollars) has risen from less than $5,000 per student in 1970 to $12,000 per student, while test scores haven’t gone up by one point over this same time frame. Total enrollment is up 8%, while government employed union teachers and bureaucrats are up 95%. Their job has been to produce functionally illiterate, financially ignorant, indoctrinated consumers, who follow orders, feel rather than think, and believe what they are told by the government and their media mouthpieces. They’ve done a stupendous job of dumbing down the populace.
- Any children who show individuality or fail to conform to the government indoctrination are immediately diagnosed with A.D.H.D. and pumped full of drugs. This has the added benefit of increasing the profits of the healthcare industrial complex that pay doctors to prescribe their drugs. Nearly one in five high school age boys and 11% of all school-age children have been diagnosed attention deficit hyperactivity disorder. An estimated 6.4 million children ages 4 through 17 have received an A.D.H.D. diagnosis at some point in their lives, a 16% increase since 2007 and a 41% rise in the past decade. Keeping uncooperative children sedated is good training for adulthood, where one in ten adults is on anti-depressants and one in five women in their 40s and 50s are on anti-depressants. The prescribing of anti-depressants is up 400% since 1990. A dumbed down drugged population is not likely to revolt, notice the crumbling of their society, loss of freedoms, or declining real incomes. The oligarchs like it that way.
“The more corrupt the state, the more numerous the laws.” – Tacitus – The Annals of Imperial Rome
- The one constant since the onset of this Crisis in 2008 has been a never ending onslaught of violent upheavals, wars, revolutions, coups, financial collapses, currency wars, and shifting alliances. Anyone who doesn’t recognize the ratcheting up in the level of global turmoil and mayhem since 2008 are either paid by the vested interests to obscure the truth, are financially benefitting from the global disorder, or have been effectively neutralized and manipulated by the unseen government propaganda campaigns. Edward Bernays would be so proud of his modern day disciples of mind molding.
- The Middle East has been a flashpoint since the Arab Spring began in Tunisia with the self-immolation of Mohamed Bouazizi, a mild mannered street merchant pushed too far in 2010. By January 2015, rulers had been forced from power in Tunisia, Egypt (twice), Libya, and Yemen (twice); civil uprisings had erupted in Bahrain, Syria, Iraq, and Palestine/Israel; and major protests had broken out in Algeria, Jordan, Kuwait, Morocco, and Sudan. The common thread in all these uprisings is the United States of America. We propped up the dictators in Tunisia, Egypt, Libya, Yemen, and Syria until we decided they were expendable. When Egypt elected a government not in our best interests, we supported a military coup and currently prop up a new dictator. This is called spreading democracy in the Middle East. Allies and enemies are interchangeable, depending on the circumstances. The goal of the U.S. is to spread chaos, so no one country or coalition gains significant power.
- The U.S. provoked the uprising in Syria and armed and supported the forces fighting Assad, as part of a plan to build a gas pipeline from Saudi Arabia, across Syria to Europe. This is being done to reduce Russian influence over Europe with their near monopoly of natural gas supply. It has been a chess match between superpowers since Russia bloodlessly reclaimed Crimea. The chess pieces have been the lives of Syrians, Iraqis, and Ukrainians. The hundreds of thousands of dead, wounded and displaced are nothing but collateral damage to the rulers of empires. The very same rebels armed by the U.S. to fight Assad suddenly became the newest existential threat to our existence as the dreaded ISIS, who is now a threat to take over Iraq. They also happen to be enemies of our other axis of evil enemy Iran and the Kurds, whom our ally Turkey hates. Got it? Chaos and disorder are the U.S. solution and the main beneficiaries are our very own military industrial complex, whose profits were threatened when no military threats were on the horizon. If they don’t exist, just make them up.
- Meanwhile, in Afghanistan after thirteen years the Taliban are stronger than they were in 2001 and the opium trade is booming. The U.S. needs a strong illegal drug pipeline to keep its War on Drugs funded and enforced by hundreds of thousands of militarized police. Our corporate prison complex needs new meat from petty drug criminals to keep the profits flowing. As boots on the ground leave Afghanistan, they march back into Iraq to train the Iraqi military again. ISIS has been very impressed with the military hardware we left the Iraqi army, as they use it against the Iraqis. Israel continues to warn that Iran is only months away from a nuclear bomb, as they have for the last fourteen years. U.S. economic sanctions are an act of war and have pushed Iran closer to China and Russia.
- Russia’s support for Assad and Iran prompted the U.S. military empire to first use Cyprus as a way to siphon off some of their Russian oligarch wealth and then conduct the most blatant coup d’état in history by toppling the democratically elected Russian friendly Ukrainian government and inserting their hand-picked lackey. Russia rightfully fears the U.S. military/NATO on their doorstep in the Ukraine. They prefer a buffer state, not in the EU or NATO. The eastern Ukrainians prefer an alliance with Russia, while the U.S. controlled Kiev puppets will do as they are told. They have been told to destroy Donetsk, its citizens, and the resistance fighters supported by Russia. Just as the U.S. created the poison gas false flag attack in Syria, which was proven to be false, the shooting down of a Malaysian airliner over the eastern Ukraine by the Kiev government was blamed on Putin and the rebels. The blackout by American media regarding the suppression of radar, black box recordings, and controller transmissions is proof of their complicity in this government conspiracy. The economic sanctions against Russia are another act of war and have pushed Russia closer to China. The incompetence of the Kiev regime and their embrace of Nazis have allowed the rebels to gain traction and fight off repeated attacks. Neither superpower will back down, as their strategic interests in the Ukraine are essential to their power.
- China, which has been the driving world economic force for the last decade, is in a precarious position. They have been the slave labor manufacturer to the world as the worldwide debt fueled consumption orgy reached its 2008 climax. Their level of Keynesian mal-investment since 2008 makes Obama, Bernanke, and Yellen look like pikers. The level of corruption, deception, wealth inequality, pollution, censorship and phony economic data has been done on a majestic scale. It is now unraveling in a slow motion crash as the global recession has crushed their industrial output and is rapidly deflating their real estate bubble. The 52 million unoccupied housing units in China may not turn out to be great investments after all. The absurdity of Chinese economic reports makes the BLS look highly accurate and upstanding. Their reported GDP of 7.4% was their slowest in 24 years, but the real figure is closer to 4%. The proof of the dramatic slowing in Chinese growth is the collapse in oil prices, copper prices, iron ore prices, and the Baltic Dry Index. The index measures world trade and has crashed to its lowest level ever. The potential for social unrest when their mal-investment debt bubbles implode will be great.
- The 25 year Japanese recession has entered its final death throes of complete currency collapse. In 1990 the Japanese had a choice. Their debt fueled boom was going bust. They could have taken their lumps, experienced a brutal depression, wrote off the bad debt, liquidated the reckless banks, and learned an important lesson. Their economy would have recovered and their manufacturing based economy would have flourished. Instead they have attempted to extend and pretend for a quarter of a century. After trillions of waste on Keynesian stimulus projects, 0% interest rates, and increasing their debt to GDP ratio from 75% to 250%, the psychopaths in charge have pushed their money printing to hyper-speed levels. Next stop total catastrophe.
“There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.” – Ludwig von Mises
- The poster child for global disorder has been Greece. They were the catalyst for the EU debt crisis in 2009/2010. And they are currently the channel through which the molten ingredients of EU disintegration are flowing. The “solutions” implemented by the ECB and EU politicians to solve an insolvency crisis created by too much debt have been to introduce austerity on the average person, while issuing trillions in debt, and protecting bankers and billionaires at all costs. Europe does not have a liquidity problem. It has a solvency problem due to unpayable social promises, government corruption, mass unemployment in Southern Europe, and overleveraged sleazy bankers. Why anyone with an ounce of mathematical ability would think that driving your national debt to GDP ratio from 113% to 175% in the space of five years would solve a debt solvency dilemma, is beyond my comprehension. But if your true purpose was to keep your insolvent banks from going bankrupt, protecting the rich and powerful vested interests, and refusing to accept the consequences of your reckless lending, than the “solutions” make perfect sense.
The dominoes are beginning to fall. The initial spark in 2008 has triggered a series of unyielding responses by those in power, but further emergencies and unintended consequences juxtapose, connect and accelerate a chain reaction that will become uncontainable once a tipping point is reached. The fabric of society is tearing at points of extreme vulnerability, with depression, violence and war on the foreseeable horizon. Mr. President, the shadow of crisis has not passed. The looming shadow of crisis grows ever larger and darker by the day as this Crisis enters the most dangerous phase, where the existing social order will be swept away in a torrent of carnage and ferocious struggle. We are not a chosen people. We are not immune from dire outcomes. There are evil men wielding power and influence over our nation and their actions could lead to tragic consequences. The future course of our country hangs in the balance, as Strauss & Howe so forebodingly warned in 1997:
“History offers no guarantees. Obviously, things could go horribly wrong – the possibilities ranging from a nuclear exchange to incurable plagues, from terrorist anarchy to high-tech dictatorship. We should not assume that Providence will always exempt our nation from the irreversible tragedies that have overtaken so many others: not just temporary hardship, but debasement and total ruin. Losing in the next Fourth Turning could mean something incomparably worse. It could mean a lasting defeat from which our national innocence – perhaps even our nation – might never recover.” – The Fourth Turning – Strauss & Howe
In Part Three of this article I’ll examine how the seeds of this Crisis were planted during the resolution of the previous Crisis.
The Burning Platform