Global Finance Path Dependency

The negative interest rate phenomenon is part of the path dependency and trap discussion I had yesterday in regards to REAL Green.  It is at the very top of what drives global economics of life.  It is not like the carbon trap we are in but of course they are both related.  The net energy decline of the carbon trap along with climate destabilization, environmental decline, adverse demographics changes, and social decay are fundamental forces now of late stage Capitalism decline.  It represents an end game of globalism but it is unclear what kind of end and when it will collapse the status quo.  It represents stagnation which is an economic decline force.  Lower economic activity combined with higher prices IOW the worst of deflation and inflation.  It also represents more income inequality and concentration of wealth which means destruction of the middle economic layer of productivity and consumption. 

Negative rates and stagnation will push socialistic tendencies of money creation for government stimulus if hyperinflation does not get us.  This will not be normal socialism because the pie is shrinking.  It will be further corrupt wealth redistribution.  Real Socialism only works when times are improving and all parties can be lifted.  This will lift a few who are connected and the privileged who are close to the money creation.  Both late stage capitalism and socialism in the decline phase lead to authoritarianism characterized by dictatorial power, forcible suppression of opposition, and strong regimentation of society and of the economy. It is likely we will see the worst of both in this end game phase.  Is that not what we are seeing now?  Both will find coercive and corrupt tools to force their change.  

We are path dependent now with global finance which will end globalism.   We will go this way because there is no choice.  The conditions that got us to and through the 08 crisis now define where we can go.  We will never go back to the previous time of economic fundamentals with increasing freedom.  To trash the situation more, we have authoritarianism combining with high tech.  We have corruption of the rule of law, cold civil wars in leadership, military buildups, MSM corruption, and economic nationalism in trade.  None of that is good.  Technological advancements is stalling with diminishing returns.  There is one area of good and that is the recognition that the whole narrative of better is flawed and wrong but even this partial good is wrong because the solutions that science and academia are pushing are delusional.  They want to think we are not path dependent and the carbon trap can be broken out of.  This is of course the lie of FAKE Green liberalism of a clean future of affluence and social justice.  We then have the delusionals who think space is the next frontier. 

We are in an end game and the critical element for you the individual is where you are at and what you do.  There will be destructive forces that will upend life for many in the near term and all of us longer term.  Now is the time to prepare and clean out the deadwood of the unnecessary.  You will need to be lean and mean for what is coming or go delusional sheeple.  That choice should be a no brainer but the reality is people are generally paralyzed with path dependence and traps at their local level.  It is hard to know even where to begin to prepare and also how to.  The first step should be behavioral with acceptance of failure of the social narrative but also the failure of the solution narrative of FAKE Greens liberals and the capitalist.  REAL Green starts from failure and gets to work.  Leverage what is left of the status quo to position yourself while you dance along the cliff of collapse in the status quo.  The behavior of acceptance of failure will guide you from the seductive lies.  Acceptance with a rebirth will require you go through the other 4 steps  of the Kübler-Ross model  Start now and beat the rush. ��THGt

“We Finally Understand How Destructive Negative Interest Rates Actually Are”     zero hedge

“We are slowly starting to understand how destructive negative interest rates actually are. Central banks control short-term interest rates in an economy by setting the rate banks receive on their deposits, that is, on the reserves they hold at the central bank. A new development is the control central banks now exert over long-term rates through their asset purchase, or “QE” programs…Negative interest rates foster the phenomenon of zombie corporations in two ways. First, credit is extremely cheap and in some cases you are even paid to take it (if banks acquiesce to the negative interest rates set by the central bank). Second, because negative interest rates weaken banks by destroying operating margins, they will try to avoid capital losses by extending credit to ailing or even insolvent borrowers.  Moreover, negative interest rates kill the incentives to invest in productivity-enhancing technologies by supporting industry leaders, which usually pay lower premiums for loans. As very low or negative rates naturally favour dominant firms, competition is strangled, leading to a fall in overall investment. As a result, productivity growth starts to stall leading to stagnation in the overall economy. This crucial but perverse mechanism has yet to be broadly understood.  The backward economic logic of negative interest rates also corrupts the role of time-preference… it is likely to be much more damaging in the economic interactions of everyday life. This is because negative interest rates fly in the face of both economic logic and our innate human sense of rightness. If we must pay to deposit money and to lend, but receive money if we borrow, our economic thinking corrupts. If such perversion continues long enough, it is likely to have far-reaching social and economic ramifications, which we can only guess at the moment.” yes��TR` t

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