Friday, September 28, 2012

Learning From The Bolsheviks

As we move into October, a look back at this month in 1917 may be in order.  The Russian revolution has for some time been one of our favorite events to study.  Most people falsely assume that their current circumstances are unique and their future condition can not possibly be predicted.  We posit that humans have behaved as designed for their entire existence as a species.

When studying revolutionary Russia, what stands out to us is that there was an impoverished mass.  This mass was mobilized for the benefit of a few.  Once power had changed hands, the mass was actually in a far worse condition than before.  Independent thinkers began trying to persuade their fellow citizens that perhaps life under the Czar's rule was not as bad as they had thought.  These thinkers were sterilized either in gulags or graves.

Take an objective look around the world and see if you can identify the source of the pressure that is bubbling up in the developed world.  Liabilities have far surpassed assets creating technical insolvency.  In the US alone, unfunded liabilities have topped $80,000,000,000,000.  We should remind readers that $80tril is 5.5x annual US GDP.  Also, the current federal debt is 115% of GDP and is being financed by the creation of new debt which the central bank purchases.    

We are not just picking on the US, the entire developed world shares this condition.  France is responding to these pressures with an outright confiscation of productive income creation.

Consider this set of conditions and compare them to what we know about human behavior in a historical context .  A mass has been created.  This mass expects to be cared for and nurtured by the state.  This mass is growing at a rapid rate.  The mass has no productive capacity outside of its ability to employ elected leaders.  These elected leaders must remain in office which requires them to continually pacify the mass.  Here is an example of the mass demanding services in the US.

Who pays for this?

We urge you to stop dreaming of a republican president and start facing reality.  France is showing you what the future holds for the shrinking productive class in the US.  When your productive capacity is 95% dedicated to caring for the mass at least you will not be able to say you were not warned.

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