Broken Paradigms
Western systems are triggering global instability because that is what they do.
The turmoil in financial markets in recent weeks is confounding investors from Wall Street to Tokyo. What are we to make of the sudden explosion in the VIX (see below) oft referred to as the fear index? What about the US economy? Recent unemployment numbers spooked investors most of whom believe the US economy is strong and the global economy is stable. What about the selloff in tech stocks led by the correction in Nvidia or the unwind of the Yen Carry Trade? Are these mere blips offering opportunities to buy the dip (BTD) or are they confirmation that end of cycle fireworks are lighting up the sky? The answer is the latter.
Teleology is a branch of philosophy that seeks to explain phenomena in terms of purpose. Of course defining something’s purpose is abstract itself and presents an equally daunting challenge. However, in this regard, we are aided by Stafford Beer, the British cybernetics theorist who asserted that “the purpose of a system is what it does” (POSIWD). Beer’s insight clarifies the present situation greatly.
It seems the purpose of the western systems that dominate the world today is to create instability. This is observable in America’s military-industrial-complex where warfare is a business model rapidly embroiling the world in global war. Equally, the stock market, which consists of immense passive income streams channeled by robotic trading algorithms into momentum stocks pushed ever higher and narrower until sentimentality reverses and sends the entire market into a tail spin.
Western governments have weaponized democracy against the citizenry.
Western democracy seems to threaten instability as well. As was observed last week, the United Kingdom is very definitely in the early stages of massive racial conflict after decades of mass immigration (see video above). North America and Western Europe face the same chaos and for the same reasons. Making no distinctions between voters and citizens western governments have weaponized democracy against the citizenry and so the latter is finally beginning to push back.
The global economy as a whole continues to enrich the few, the privileged, the Cantillonaire’s and bankers while the majority get poorer and what’s left of the middle class drowns in taxes and debt. Indeed, healthcare, food, energy, rent, credit card payments, continue to surge and the masses are being squeezed from all sides.
The masses are being squeezed from all sides.
So where are we? If stocks crater the financial system will follow. Banks are already sinking in the quick sand of “unrealized losses.” Central banks are spinning in all directions: some hiking, some lowering rates, some trying to fight inflation, others deflation, all are contending with fiscal recklessness and economic slowdown. Meanwhile, the US Treasury holds its breath every time there is a long-duration auction as do governments across the world.
The purpose of these systems is what they do, and what they are doing is destabilizing the world. The volatility index is a richter scale showing tremors before the earth quake. Stock market turbulence has just begun and the global economy is teetering into recession or worse. Ultimately, the ensuing fiscal collapse will break western governments and fiat currencies, and bring the end of cycle to a dramatic close.
The good news is that once paradigms finally break we can go about building new ones whose purpose will be stability rather than chaos.
Stay liquid, stay alert.