Manageable financial basis

So, I think they [government] have actually gone beyond the point of no return. There’s no way to avoid a genuine catastrophe, much worse than what happened in the 1930s. There are several ways this could end, but I suspect the government will choose the worst alternative. I suspect the destruction of the US dollar is in their minds. How are we going to get rid of all this debt? Well, destroying the US dollar is the only way. Their first priority is saving the US Government.

But they’re not considering that the people who will be hurt the worst are the prudent people, people who have saved dollars. They will destroy the prudent parts of society that actually try to produce more than they consume and save the difference. Prudent middle class workers are going to be wiped out, and the people who borrow and are deeply in debt are going to be rewarded by having their debt wiped out. That’s perverse. It is going to wipe out the middle class in the US and all over the world. Everywhere in the world, people have preferred to save in US dollars where they can, and those people are going to be wiped out. Perhaps even worse, it’s going to put the US government temporarily back on a manageable financial basis. That means they won’t have to fire all their employees or disband all these agencies and get rid of the military, which is what should be done. They’ll wind up destroying the productive parts of the economy to save the government; the parasite will kill the host. It’s a total disaster, with wide-ranging consequences, and it’s going to happen in this decade.

On QE3:

It’s happening now. It has to happen because how else are they going to finance a trillion and a half dollar federal deficit? And that deficit is going to go higher. It’s happening as we speak. Foreign central banks can see what’s going on. Nobody wants to buy treasuries; the Fed is the only buyer at the low interest rates that they have engineered. The Fed should be abolished.

On Democracy:

Democracy is just mob rule, dressed up in a coat and tie. It’s too bad people conflate democracy, which is mob rule, with liberty and freedom. Democracy in most of the world is everybody voting for the person that promises him or her the most stolen goods from other people. Democracy is a political system, and all political systems rest on institutionalized coercion. I don’t care whether it’s a king, a president, a congress, or a mob of chimpanzees that tell me I have to pay 50% of my income over to them so they can fund wars, welfare programs, the police state, oligarchic corporations, or whatever. That’s what democracy is today. Regretably, the average person has been programmed to think democracy is a high moral good, much as his ancestors were programmed to believe that monarchy was the way Yahweh, or whoever, wanted the world organized.

On the Internet:

I suspect the Internet is the one thing that is most likely to bring down the nation state. I think it’s extraordinarly important, and will have the same effect on the ruling classes as gunpowder and the printing press did. That’s why in the future you are going to see lots of effort on the parts of governments to shut it down or regulate it so it can’t be used effectively.

On gold:

Gold is the only financial asset that’s not simultaneously somebody else’s liability, and nobody is going to want to hold dollars or any other currency. Gold is going to be driven much higher by fear, greed and prudence – a deadly combination. Gold will turn into a mania, a bubble.