The Day the Dollar Died (Part IV)
IV. Arrogance of the Gods
Filed under: The Day The Dollar Died Series
by John Galt
November 25, 2009
“And Zeus gave ample plunder to their hand,
That they embark and get them to their land
With ships full-laden, even on them great fear
Falls of the Watchers in heaven who stand.”
-The Odyssey by Homer, Book Fourteenth, page 159, translated by J.W. Mackail 1905
Alas a quick note before I present the fourth entry. The proverbial “powers that be” are our collection of Gods in the minds of those married to a digital scroll of symbols and numbers flashing across their screens every day and to those unwilling to grasp the gravity of sacrificing freedom for financial security, liberty for laziness, and willing to adore false idols for the perception that these ‘men’ not deities will protect and enhance their freedoms. In this episode I shall attempt to bring thousands of years of human fascination with power into the grasp of how our willingness to sacrifice choice for security results in a situation not too much out of the reach with the actions of the elites within our financial, academic and political classes.
May you have a blessed Thanksgiving and understand that our time has been marked, our actions noted, the duty soon to be paid.
The presentation below is fiction……
February 23, 2010 6:30 P.M. ET
Georgia on my Mind
Tom stirred awake when the alarm on his wristwatch stirred him into a startled look around the room. “Sigh, thank God, I’m home” he said out loud then calling out to his wife “Honey, let’s talk sweetheart and I’m sorry I’ve upset you so much.” Sandy walked out of the bedroom smoking a cigarette, something she had not done since they both quit ten years ago and yelled at Tom in a drunken stupor “Okay you geek, what the hell do you want to talk about now? The end of the world? Obama having alien ears and a forked tail protruding from his butt? The local newsboy spying on us when he delivers the paper? I swear you’re a (burp) loser Tom, why the bleep am I married to you?”
Tom was stunned by this outburst then noticed she was taking another swig from a cheap bottle of wine they used to keep on the shelf for ‘those’ guests that they did not want to serve the good stuff to. “SANDY!” he exclaimed, “What in the heck is wrong with you? Why don’t you sit down and watch the national news with me tonight, let’s get close and see what is going on so we can decide what to do.” Sandy looked at him, her eyes totally glazed over mumbling “What to do? What to do? What to do? Hell boy, you ain’t got a clue as to what to take for lunch day to day and you are worried about some slicked up steaming pile on the TeeVee says about a situation that is so fake it isn’t even funny? You want me to follow you, Mr. Wimpy Boy? The Man with a plan from the internet because you read three articles on the 2012 movie? Just stay out of my way while I find another bottle, I’m going to drink until I pass out and you can eat your damned Spaghetti Freaking O’s by yourself mister.”
Tom sighed loudly and looked at her with those big puppy dog eyes and started to plead, “Baby, if I’m wrong about this, I’ll leave you alone. But if this situation is as bad as I saw at WalMart this morning, we should get ready for some bad times. Please, sit down beside me for just a half hour, we’ll watch whichever news show appeals to you.” Sandy put the empty bottle on the floor of the hallway, stumbled over to Tom’s lap and grabbed the remote control, switching around until she found Katie Couric on CBS news which was just starting. Sandy blurted out “This wench has it going on you know. She threw Tom Cruise off her sofa!” Tom sighed again, hugged her waist and watched with great interest as the news began.
CBS news sounded hauntingly like the FEMA updates, plain, bland and with repeats of information until about fifteen minutes into the show when Tom and his intoxicated wife noticed there were no commercials for Viagra, bladder issues or tingly leg syndrome. Sandy said “Okay know it all, what is this scroll at the bottom and top of the screen?” Tom looked and the top scroll was in Spanish much to his surprise and the bottom one in English stating that the broadcast was “cleared” by the Department of Homeland Security and the Bureau of Economic Oversight. “Honey, I have no idea, this is weird” he replied to her. Katie then read a story about the hardships of the inner city during this economic recession and how the government under Obama’s leadership was ending discrimination against the poor and other economic minorities. “SSDD I guess eh baby?” Sandy said in her stupor. Tom just nodded and started to worry as this was weird that all commercial television, no matter the channel he switched to, did not have any commercials. Perhaps things will be better in the morning, if he could just get Sandy to pass out he thought to himself.
Fergus Falls Down
February 23, 2010 5 P.M. CT
Mike’s shirt was soaked after several hours of chopping wood, fixing gaps in his barbed wire fence, checking locks and securing his semi. As he popped the cover off his face to drink some hot tea from his Thermos, a sound he was shocked to hear appeared in the bitter winter silence, that of his cell phone ringing as if never had owned one before. Hesitating slightly he opened the phone to check the number and sure enough it was his dispatcher finally calling him back. “Mike, are you home, I hope?” the voice on the other end sputtered out. “Larry, I’m good. The load is secured. And if you’re asking me if I am delivering tomorrow, you’ll have to guarantee that I can turn around and come home” Mike replied. Larry hesitated and spoke slowly, as if not to upset his driver, “Mike, I was planning on reloading you at Hormel with an emergency shipment for Dallas in the evening. I really need this one.” Mike was stunned. He took a deep breath and told his dispatcher of three years in a very slow speaking Midwest intonation “Larry, I’ve known you for several years now. I can not use my credit cards, my fuel card and I don’t have the cash for the trip. You’re asking me to leave my wife for a week or more by herself in a small town now surrounded by deputies guarding against God knows what AND you and the company have no damned idea on how or when you’ll pay me. If you were in my shoes, just what the heck do you think the response would be? I’ve got about a third of a load of frozen pork and no guarantees I’ll get paid, protected or anything so if you think I am going to Duluth tomorrow without being paid, you are nuttier than that FEMA broad on the radio every hour!”
Larry was somewhat shocked at this tone of voice and even more so when Mike hung up. But the reason the phone was disconnected would not be known to Mike or Larry for weeks to come. A driver in a tanker truck was run off the road by a group of thugs and took out the cell phone tower about three miles north of Mike’s house. Little did anyone know that Fergus Falls Minnesota and many other small towns would soon fall prey to the scum of the earth as the weakest links would be picked off first.
For the first time in Mike’s life since Vietnam, he took the night shift for guard duty. He prayed hard for his son in Afghanistan and wished he was home. Mike knew their lives were changing but the consequences of years of living off of the fat of the land had distorted this small town’s perception of the big world that Mike knew all so well from his trips around the country. “Fergus will fall as America is falling” he thought to himself.
As darkness enveloped his town and the bitter cold set in, he longed for the days of old when neighbor could trust neighbor. That was the first victim of this week’s events and as the shortages began, the victims would multiply.
February 23, 2010 7:10 P.M. ET
Even my wife was impressed with dinner tonight. We had agreed after a long talk to relax, take in the information and just relax. I had cooked two of the steaks in our freezer that I had started marinating in Italian dressing the night before and the smell on the grill just had to make the neighbors envious as there were so many snowbirds down here already escaping the bitter cold of up north and not used to the smell of char grilled ribeyes in February unless they were regulars down here. We cracked open a bottle of wine we had been saving since our wedding day for a special occasion and we figured that with steaks, baked potatoes on the grill, vegetable kabobs and some fantastic garlic toast from our local bakery that the end of our nation as we knew it fit as a special occasion. After all that and the last drop of wine was consumed, we needed to walk it off and despite a brisk sixty-one degree evening, we decided to head over to the Ringling Bridge.
February 23, 2010 8:00 P.M. ET
The new Ringling Bridge opened years ago lacked the character of the old draw bridge but for our little community, it was a fantastic and brisk walk up and down with the ‘largest hill’ in our area plus the traffic actually stopped backing up into downtown Sarasota once it opened. As my wife and I parked the care over by Marina Jack’s we walked down noticing the flashing lights of police cars at the base of the bridge and wondered if there was a bad accident or what could have happened now.
As my beautiful wife and I approached the southern sidewalk to the bridge a local officer approached my wife and I with his flashlight pointed in our faces and what appeared to be his other hand on his pistol. “What can I do for you two?” the officer asked. I replied we were just going for our nightly walk on the bridge like we have for years now and wanted some fresh air. “Do you have some identification on you, both of you please?” he asked somewhat insistently. I handed my license over to him and explained my wife doesn’t carry her purse on her when she walks as he basically ignored my words and walked over to the squad car, now with another officer watching us closely.
“Sir, I notice on your records you have a firearm in your ownership and a CCW, are you carrying now?” he asked with the pistol now drawn but pointing down to his side. “No sir,” I replied, “I do not carry when I walk around here, I’ve never had to.” The officer seemed satisfied with my reply and then pointed us back towards the parking lot and stated firmly as he holstered his weapon “All of the barrier islands in Florida are now closed I am afraid. We are under strict orders to restrict access out here because of fears of retaliation.”
“Retaliation?” I thought to myself and apparently so did my wife as she looked at me somewhat worried. “No problem officer, we’ll just head back home” I said to the officer as I slowly turned my back and walked with my wife back to the car. Once we were pulling out of the parking lot and heading home we noticed the marina had private security guards setting up for the night, another new feature and that prompted her to ask “Retaliation against who or what?” I told her I did not know and we headed home as I just had to get on the message boards and find out what the heck was going on.
February 23, 2010 9:40 P.M. ET
The wife, normally whining about my time talking to my friends on the phone and online said she was doing the same to try to figure out what was happening. Her first inquiries yielded a response from her friend online from Australia of “sucks to be you” or worse words to that effect. The interesting responses I saw on the message boards I frequented ranged from the bizarre to the sheeple and really failed to shed any light except that some other members noticed an upgrade in the law enforcement protection around the affluent neighborhoods in their towns.
As the banter and speculation went back and forth via email and messages alike, I tuned into CNBC and Bloomberg to see what the various opinions of our financial markets just might be for the future. CNBC-Asia actually looked relatively normal except for the scrolls at the bottom with the “ALL FINANCIAL MARKETS CLOSED UNTIL FEBRUARY 25, 2010″ over and over again with some program announcements. Bernie Lo had Jim Rogers on tonight at 10 p.m. Eastern and I could not miss this interview as I figured it was the “see I told you so moment” of all time as Singapore looked like the new financial center of the world as New York just imploded. CNBC in the United States was a different story entirely. It appeared that Cramer was sweating more than Coach Andy Reid of the Philadelphia Eagles trying to choose toppings at a sub shop and Kudlow looked as if his dog had just been hit by a dump truck. They were both trying to justify a cause for hope by parsing a speech from President Obama and speculating on just what Ben Bernanke would be saying tomorrow. In the mean time Rick Santelli upset both of them by stating that the U.S. Dollar was the equivalent of burnt toast at the now bankrupt Waffle House in the Southeastern states. Rick was in rare form tonight as he then launched into an attack of the ‘God Complex’ the central banks seemed to exhibit thinking they could manage capitalism and investors instead of letting the market do it’s job. When Cramer tried to defend the G20 meeting, Santelli cut him off and said the following which stuck in my mind from that day on:
“These arrogant fools have been acting like Gods for years now and guess what James? They have destroyed the American model for capitalism. You’ve made your money. I’ve made mine. But for the average slob on the street, they are now slaves to the dictates of these megalomaniacs who think that they are above every aspect of human society and our Constitution. You and your kind make me sick. It really doesn’t matter what you say now Jim, the markets are dead and you helped kill them.”
“Honey, are we out of port?” I yelled as she walked to the kitchen.
February 23, 2010 10:59 A.M. Hong Kong Time
Interview with a Vampire
Bernie Lo: “Jim it is good to have you back and I’m sure that with only the Chinese internal markets open, you have quite a bit you would like to discuss tonight.”
Jim Rogers: “Good morning Bernie. To say this was not going to be easy to see as a possibility of happening would be a lie.”
Bernie: “I must ask, do you think we will see the North American and European markets open again before March or April?”
Jim: “Absolutely no later than March. If they fail to open their equity markets by the middle of March you might as well just hold a massive liquidation sale. The United States has to absorb the pain they have postponed and insure that functioning capital markets are returned to operation soon or the rest of the world will just circumvent their currencies, debt and banking systems. It would be tantamount to the sinking the Titanic and selling more tickets to board it unless they open the markets up and allow capitalism to repair itself.”
Bernie: “So what happens to other equity markets as they re-open to international investment? Will they not have to impose limits or….?” (Interrupted)
Jim: “Centralized economies and banks will impose capital flow restrictions. I imagine the Asian governments will restrict the amount of withdrawals to insure their banking systems do not collapse but the silence has been deafening. I imagine everyone is going to follow the American lead but we have to wait for Bernanke and his merry band of idiots to speak tonight.”
Bernie: “I have to ask, what becomes of the dollar, a subject we have discussed many times and the price of gold?”
Jim: “That really depends on what you are pricing gold in. Gold in United States dollars will be unattainable at any price now inside of North America barring currency controls by Canada and Mexico and neither of those nations can afford the risk of alienating the Federal Reserve, especially Mexico. The price of gold in Euros should top out around one thousand to two thousand Euros only because of the exposure of ECB to dollar based debt and investments by the continent. The United Kingdom might as well join the European Union now because the Sterling is useless except for wadding. The Asian currencies, ags and precious metals are the place to be and if you really push me, the price of gold in U.S. dollars will open back up well over two thousand dollars per ounce if the markets are allowed to trade. The dollar itself though is no longer a functional measure of trade nor investment and can now be openly dismissed as a reserve currency.”
Bernie: “Then what exactly will function as the new reserve currency for world trade? I mean, uh, Jim, what you are saying is a total shock to the system and will change the nature of foreign investment activity for years to come.”
Jim: “We’ll know when Bernanke speaks. But if I am the ruler or President of a nation, the reserve currency of choice is the primary asset or commodity I have on hand. Many nations started to hoard precious metals, oil and base metals the past four years. I think they set the tone no matter the decisions of the G20 yesterday. As I told you a few years ago, farmland is investment number one if you live in the U.S. now and for the rest of the world the decoupling that many said would not happen will have to happen.”
Bernie: “With that, I must say good night Jim and thank you for another enlightening discussion.”
I did not notice it until my wife screamed at me. There was a glass tipped over with port wine soaking into our carpet. She must have been yelling at me for ten minutes.
“I’m sorry honey, I’m in a little bit of shock. Remember all those bad things I said that could happen? Well, they have. Let me find out what the plans are for the local governments online and statewide. We may have to hit the road on very short notice.”
February 24, 2010 12:21 A.M. ET
I’ll never forget the email I received in answer to my question about the bridge incident. It was from an old retired friend from the local police force and he said it best:
Are you an idiot or something? What are you still doing in town? The reason they closed the barrier islands was to prevent attacks against the homes of the bankers and investment community who created this crap hole of a disaster! They are going to do all they can to protect those clowns even if it means half the damned town burns down. Do you honestly think they will let riff-raff like you get out there on the Key with the likes of Springer and King? Not to mention all the scammers who screwed us over out of our retirements and future?
Damn. It made perfect sense now. The police were following orders and I was willing to bet that other areas like that were well guarded. Which meant my home, my cars and my “stuff” was pretty much on my own. With that in mind, I muted the television, tucked my .45 into its holster and went outside to our driveway to move my pick up right up to the bumper of my wife’s car in the carport and to scout the yard. As I searched with a flashlight, I drew my pistol at the first noise, only to see a raccoon scurry into our neighbors back yard. With the deep exhale, I started to head inside when in the distance several loud cracks rang out. It sounded like firecrackers but there was no way anyone beside those who held gold or Swiss francs would be celebrating.
I ran back inside, locked all the doors, put chairs from the dining rooms under the doorknobs and in front of the glass doors then checked all the windows. With that I went back to the computer to see what the Chinese markets were doing. I slid the holster off my side, put it up on my desk in my office and logged into my Bloomberg terminal, hoping for a news and market update. The scroll at the bottom of the screen told me that I would not get much sleep tonight:
BERNANKE AND FED TO ANNOUNCE BANK RE-OPENING PROCESS…….OBAMA TO SPEAK TO NATION AT 8 P.M. EASTERN……GENERAL ELECTRIC TO FILE FOR CHAPTER 11 BANKRUPTCY AT 8 A.M. EASTERN WITH FED PERMISSION FOR REORGANIZATION…..FEDERAL HOME LOAN BANKS TO BE NATIONALIZED…..CHINESE YUAN REVALUED AT 2:1 RATIO TO US DOLLAR FOR 30 DAYS….
Coffee or port were the only questions I had left now. The die has been cast…..