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The Rubes Are On to the Rig

David Stockman details The End Game Of Bubble Finance – Political Revolt:

By the eve of the great financial crisis, the GOP was actually controlled by the racketeers of the Beltway and the Wall Street gamblers, not the red state voters who had elected it.

In fact, Goldman’s Sach’s plenipotentiary to Washington, Hank Paulson, was in complete command of the elected side of government. At the same time, the Bush White House had populated the central banking branch of the state with proponents of monetary activism, who were more than ready to authorize “heroic” measures to reflate the bubble.

Needless to say, the leader of the pack, Ben Bernanke, had been groomed for the role of chief bailster by none other than Milton Freidman. The latter, in turn, had led Nixon astray at Camp David 37 year earlier when he persuaded Tricky Dick to default on the dollar’s link to gold, thereby opening the door to fiat money, massive credit expansion and the modern era of Bubble Finance.

There is a straight line of linkage from that great historical inflection point to Friday’s Brexit uprising. Namely, Nixon’s abandonment of the Bretton Woods gold exchange standard, as deficient as it had been, was also a profoundly political act.

It resulted in the abdication of economic and financial policy to an unelected elite and their eventual capture by Wall Street and the forces of speculation and financialization unleashed by unanchored central bank money and credit.

Nixon’s destruction of Bretton Woods was the enabling event. It turned central bankers and financial officialdom loose to operate a dictatorship of bailouts, bubbles and financialization of economic life. And to spread this baleful regime to Europe, Japan and the rest of the world, too.

One of the big things being missed in all the Brexit blather is that, as with Trump in the U.S., voters are not so much voting FOR Brexit as they are voting AGAINST the status quo.

People don’t really understand what’s gone wrong (and are increasingly distrustful of policy makers who claim they do understand) – but they know that something has definitely gone wrong and see no reason to continue down the same path.

The Ascendancy of Populism

Handelsblatt’s Gabor Steingart had some thoughts about how they’re handling the British exit from the European Union in Brussels where, apparently, they still don’t seem to get the whole “lower- and middle-class angst under the thumb of the ruling elite” thing.

To wit:

We shouldn’t bash the outraged electorate who brought this upon us – they are like passengers in an aircraft locked in a tailspin, panicking as the pilot slumps in the cockpit. No, they shouldn’t be allowed to take over the controls, but the pilot needs to wake up.

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Trump in Japan

What is, as best that I’m able to discern, one of the many unintended consequences of years of unconventional monetary policy in Japan.

… or maybe not.

(Not So) Golden Years

Breaking down the chart below (found in this Economic Policy Institute report) by age would be helpful as there is surely a big difference between a 30-something and a 55-year old when it comes to retirement savings, however, it still shows the rather bleak outlook for many Americans while in their golden years, save for the top 10 percent who will likely be disappointed to find out how far a couple hundred thousand dollars will go.

The data for the top one percent would likely be pretty shocking to the rest of us, a situation that is not likely to change absent a rebound in the political fortunes of Bernie Sanders.

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I Feel the Earth Move

Another diversion from what can be be found in the news today, including a surprising amount of interesting new stuff (e.g., sub solar points and Lahaina Noon).

Of course, the Monty Python gang had some thoughts on this as well..

Whenever life gets you down, Mrs.Brown
And things seem hard or tough
And people are stupid, obnoxious or daft
And you feel that you’ve had quite enough

Just remember that you’re standing on a planet that’s evolving
And revolving at nine hundred miles an hour
That’s orbiting at nineteen miles a second, so it’s reckoned
A sun that is the source of all our power

So remember, when you’re feeling very small and insecure
How amazingly unlikely is your birth
And pray that there’s intelligent life somewhere up in space
‘Cause there’s bugger all down here on Earth

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