Central Planning, Politics, Economics and The Santelligram
by Dr. Jeffrey Lewis, Silver-Coin-Investor Rick Santelli may be one of the last speakers of truth left in the mainstream financial space. Santelli is a former commodities trade – now a popular CNBC commentator, broadcasting from Chicago. He is treated like a sad clown brought out for entertainment effect, where you brace for the extreme. In his case, this often manifests as an angry rant. In a recent broadcast, Santelli presented what is now affectionately known as “The “Santelligram”. It’s Venn diagram illustrating the multigenerational evolution and relationship between money, finance, and politics – reaching back from now to the end to the 19th century. You can access the original piece here: Rick Santelli Unleashed: It’s Not The Economy, Stupid – “The Central Planners Are In Control” In other words, it’s a chart illustrating a developing imbalance over time, where ultimately central planning takes over everything. I’ve added a couple things. I would argue that ‘government’ was engulfed by central planning long ago. Little by little – money centers gained access to and influence over the highest levels of political and judicial powers. Also, central planning ultimately captures Justice. Or rather an injustice rationalized and accepted by the profit motive. See the accompanying video for further explanation. (CLICK here) This is why the regulators stand by while the system is pillaged. It’s why high frequency trading has been allowed to replace the traditional market maker. These are the advantages given to publicly traded multinational investment banks – or the primary nodal points in a fiat-based financial system that stands at edge of collapse. As a result of this full-capture, no markets are ‘allowed’ to trade according to fundamentals. In fact, fundamentals are actively scorned, almost to the point of ‘conspiracy theory’. In this way, true market price is never allowed to manifest. The silver market is the poster child for this. Silver is tiny market long dominated by power-house fabricators, traded by insider speculators, and mostly ignored by the masses over time. Politically, all of this capture, leads to much greater hazards. The slow, steady wealth grab continues while the masses are safely distracted. Is it so surprising that — not so much as ‘the person’, but the ‘persona’ of a Donald Trump would arrive on the scene at this point in the generational cycle? It is a sad omen. A festering on the surface that has given way to a fuming ulcer. For the general mistrust and apathy created by this progression from true capitalism to where we are now, combined with the disenfranchised, leaves a massive vacuum to be filled by whomever shouts the loudest. Ultimately, central planning has never worked. In retrospect, this scale of intervention always appears like a futile exercise. Like trying to save a fish from drowning by taking it out of the water.
- Central banks now own over $22 trillion of financial assets, a figure that exceeds the annual GDP of US & Japan
- Central banks have cut interest rates 577 times since Lehman, a rate cut once every three 3 trading days
- Central bank financial repression created $6 trillion of negatively-yielding global government bonds earlier this year
- 45% of all government bonds in the world currently yield <1% (that’s $17.4 trillion of bond issues outstanding)
- US corporate high grade bond issuance as a % of GDP has doubled to almost 30% since the introduction of ZIRP
- US small cap 5-year rolling returns hit 30-year highs (28%) in recent quarters
- The US equity bull market is now in the 3rd longest ever
- 83% of global equity markets are currently supported by zero rate policies
What worked in the past was a balanced decentralization, based primarily on the will of people, and not the power of leadership. Alas, ultimate power is synonymous with unlimited force. And pretend what we will about the ‘civility of the oblivious’ during these times of bread and circuses. Domestic spying, the militarization of local police, the erosion of justice from the top down. Sadly, if those in power are any indication, humanity has as long way to go before expanding the laws of morality beyond the law of the land.