The Economy of Bandages, Splints and Duct Tape

I’ve written an unusual amount about the financial systems of the world over the past month. Honestly, I’ve felt that I’d be derelict not to.

Please understand that I’m not giving you prescriptions. I trust that you are capable of making your own plans. My concern is that by living inside the present financial system, people can easily believe nothing will ever really change.

You might also keep in mind that I dislike the present financial system for philosophical reasons. I would much rather build a decentralized economy than to remain in a rigged, corporatist economy.

My message to you today is really a simple one: We’re not in our fathers’ economy anymore.

All Is Bandage and Splint

The financial systems of the Western world are standing only because of emergency measures.

Since 2008, the central banks of the West have spent literally trillions of dollars and Euros to keep their economies functioning. And they haven’t been able to cut that back, even though they’ve tried. If we went back to the “normal” of 1970, 1980 or 1990, the system would collapse into a heap.

So… bandages and splints.

A huge portion of all government bonds in the West, on the order of $10 or $15 trillion worth, are yielding negatively. Put in $10,000. and get $9,800. back. It’s almost an insanity((Short term bond traders can still make money on such bonds if the market goes even more negative in the future. Then, they can sell their bonds at a mark-up since they are “less bad than the new ones.”)). This has never happened before, and no one is sure about its effects over time.

More bandages and splints.

Interest rates have been lower and longer than ever in recorded history. This has artificially inflated everything from house prices (who cares about anything but the monthly payment these days) to stock prices (the CEO takes a ridiculously cheap loan, buys back his company’s stock, the price goes up, and he gets a huge bonus).

Yeah, more bandages and splints.

Governments, at the same time, are running deficits like they never have before((You can find short passages where they did worse in the middle of wars, but nothing really analogous to this.)). They keep doing it because profligate spending keeps things from crashing, and because insanely low-interest rates keep them from facing the consequences.

So, still more bandage and splint. I’ll stop here, even though I’m quite sure I could go on for some time.

And Beneath That…

Please bear in mind that all those bandages and splints are the surface rigging. The structural rigging is a mess too.

Gold used to be what kept the system honest: If you played games with your currency, the gold trade would nail you. But even the possibility of that ended in 1971.

Stock prices, back in the day, were based on what were called fundamentals. Nowadays they depend on central banks, tweets and algorithms.

Also back in the olden days, people retired on dividend income. That is, on the actual profits earned by companies. Nowadays, they retire based upon the aforementioned stock prices, which are more or less untethered from things like profits and losses. The secure retirement of millions, then, rests upon the whims of others.

And perhaps worst of all, John and Jane Doe are hip-deep in the Debt game. Everyone’s playing it, after all. They have loans for everything, cultivate their credit scores like their lives depend upon it, and have more or less no hope of paying off their debts in their lifetimes. And whether or not people acknowledge it (your friends are playing too… don’t be rude), the collateral damage from this is serious.

And so, at this level it isn’t all bandage and splint, it’s also rusted beams, wood bracing and super-sized duct tape.

Last Words

Again, I’m not telling anyone to do anything. What I’m really doing is unburdening my conscience. I have a small public platform here, and I’ve felt obliged to make people aware of this situation.

Do as you wish, but do it with your eyes open.


If you want a deeper understanding of these issues, see:

FMP issue #7
Parallel Society #4
The Breaking Dawn

Paul Rosenberg

The Rape of the West


I wanted to find a less ugly title for this article, but I couldn’t find one that still conveyed the depth of the crimes that are under way. So, apologies where they are due.

In this post, I’m going to give you an overview of what is going on and an outline of how the schemes work. I am not going to “prove” everything I write with citations and math. That’s an important thing to do, but today I’ll pass. If you doubt anything I write here, do your own research: Find the facts, question them, compare them, and forge your own opinions.

What’s Happening

Right now, people who can fairly be called the “ruling elite” are bleeding the West dry, and many of them are fully aware of what they’re doing. Others are simply “doing what works” and hiding behind slogans like “it’s all legal” that help them bypass morality.

These people are doing this rather urgently at the moment, because the financial system is poised for a collapse. The system has been propped up with many trillions of dollars, but the debts within it will never be repaid. Once the reality of that can no longer be evaded, the hypnotic confidence people have in the system will break.

At this moment (June 2016), Europe and Japan are closer to the precipice than North America. That means that large capital flows are coming into the US and Canada. That drives up the prices of property, stocks, bonds, and other things. At some point, however, even “the last to crash” will indeed fail. And at that point, fear will spike to astonishing levels and a new game will have to be instituted. (See, please, The Breaking Dawn.)

The Debt Swindle

Imagine you had this deal:

  • You get a slice of every dollar created.

  • You get to set the key interest rates.

  • You are authorized to manipulate securities markets.

  • You get to lend out many, many multiples of the money you have.

  • You can do all of this with complete, government-enforced anonymity.

This is the position that central bankers occupy, and I am not embellishing. (Can you name the shareholders of the Federal Reserve Banks?)

Now ask yourself a question: What do you think these people are doing with this?

I’ll allow you to conduct your own thought experiments.

Also please understand that when debts are not repaid, reserves fall and many times that many dollars (which are based on reserves) vanish with them. Picture this as fractional reserve banking running in reverse. Fewer dollars will be chasing the same amount of goods.

Now, think of the 1930s and consider this crucial fact: Deflation transfers assets from borrowers to lenders.

If your income falls from $70,000 to $40,000, you’re not going to be hurt buying food – those prices will fall too – but your fixed mortgage will become unpayable. And when you fail to pay, the bank takes ownership of your house.

Now, please add this to the mix: The bank did not loan you the deposits of your friends and neighbors – the bank simply made up your mortgage loan by entering a number on a line. That mortgage you’re slaving to pay back was created from nothing, with a key stroke.

So, to sum this up (and yes, I am simplifying, which isn’t entirely fair), it costs the banks close to nothing to create loans, and when people can’t pay, the banks end up owning their houses (or factories or cars) outright.

Again, apply your own thoughts here.

The Next Level Down

The next level down from the central banks is occupied by the big corporations and institutions. These outfits operate through politics, rather than banking. To put it briefly, they purchase politicians, who write laws and regulations that secure monopoly positions for them. From those protected positions, they reap huge fortunes from the populace, who have no other options.

Think of Obamacare. Think of the university system. If you want medical treatment, you have to use the system; if you want a diploma (and you can’t be hired for most decent jobs without one), you have no options. You will pay these outfits whatever they ask, and you’ll jump through whatever hoops they tell you to jump through. All other choices are forbidden under force of law… laws that they purchased.

Look at the prices of medical care and higher education these days: They are bleeding you dry, precisely because you have nowhere else to go.

Pay attention this election cycle. How many billions of dollars will be raised for campaigns? These are simply payoffs; every major donor will expect favors for their donations. That’s the simple fact and all else is dreaming.

Bribery is legal these days, cloaked in regulation to cover its sin. The capital cities of the West are what P. J. O’Rourke rightly called “Parliaments of Whores.”

Again: Political donors are bribing politicians to gain monopoly positions. They are using those to bleed you dry. And so long as you keep obeying, they have absolutely no reason to change.

Mr. and Mrs. Average

At the present moment, Joe and Jane Average are keeping their heads down, making no waves (avoiding shame), and hoping to ride out the insanity. After all, they were taught that democracy is magic – a system that will always right itself, no matter what.

And so these basically decent people sit quietly, waiting for magic to appear, murmuring “democracy, democracy” as they are robbed day by day.

“Because… Terror!”

“Terror” is the greatest tool of compliance in modern times… and maybe ever. Westerners are glued to terror delivery systems (network television) day and night, soaking it all in and buying the same old political line: We must do more!

As I write this, the news has just hit that the monster who shot up a nightclub in Orlando was not only part of the American security complex, but had been interviewed by the FBI three times for suspected terrorist ties.

But that will hardly matter, because fear will fill the atmosphere and fear makes humans very, very stupid.

Terror keeps compliance at a peak. I am not being flamboyant when I say the system needs terrorist attacks to keep itself going. This is true all across the West.

Without fear-driven compliance, the system would crack. That’s simply the way things are. If Joe and Jane Average were confident and rational, they’d demand better for themselves and their children.

Your Choice

I’ve laid things out as best I can in brief. It’s now your job to check them and see if they’re true. And then it’s your job to start acting on your conclusions. I think I’ll write a bit about doing in the next few weeks, but that post will merely be my suggestions. You must decide to act – or to avoid acting – on your own. No one can act for you, and anyone who offers you an “easy path to action” is just another politician.

You alone must choose. You alone must face the consequences. There is no easy way.

* * * * *

If you’ve enjoyed Free-Man’s Perspective or A Lodging of Wayfaring Men, you’re going to love Paul Rosenberg’s new novel, The Breaking Dawn.

It begins with an attack that crashes the investment markets, brings down economic systems, and divides the world. One part is dominated by mass surveillance and massive data systems: clean cities and empty minds… where everything is assured and everything is ordered. The other part is abandoned, without services, with limited communications, and shoved 50 years behind the times… but where human minds are left to find their own bearings.

You may never look at life the same way again.

Get it now at Amazon ($18.95) or on Kindle: ($5.99)


* * * * *

Paul Rosenberg