Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
UK Population Growth - Latest ONS Immigration Statistics and Consequences - 24th Mar 19
The Fed Follows Trump's Tweets, And Does The Right Thing - 24th Mar 19
Yield Curves, 2yr Yield, SPX Stocks and a Crack Up Boom? - 24th Mar 19
Risk/Reward in Silver Favors Buying Now, Not Waiting for Big Moves - 23rd Mar 19
Similarities Between Stock Market Today and Previous Bull Market Tops - 23rd Mar 19
Stock Market DOW Seasonal Trend Analysis - 23rd Mar 19
US Dollar Breakdown on Fed Was Much Worse Than It Looks - 23rd Mar 19
Gold Mid-Tier GDXJ Stocks Fundamentals - 23rd Mar 19
Which Currency Pairs Stand to Benefit from Prevailing Risk Aversion? - 23rd Mar 19
If You Get These 3 Things Right, You’ll Never Have to Worry About Money - 22nd Mar 19
March 2019 Cryptocurrency Technical Analysis - 22nd Mar 19
Turkey Tourist Fakes Market Bargains Haggling Top Tips - 22nd Mar 19
Next Recession: Finding A 48% Yield Amid The Ruins - 22nd Mar 19
Your Future Stock Returns Might Unpleasantly Surprise You - 22nd Mar 19
Fed Acknowledges “Recession Risks”. Run for the Hills! - 22nd Mar 19
Will Bridging Loans Grow in Demand and Usage in 2019? - 22nd Mar 19
Does Fed Know Something Gold Investors Do Not Know? - 21st Mar 19
Gold …Some Confirmations to Watch For - 21st Mar 19
UKIP No Longer About BrExit, Becomes BNP 2.0, Muslim Hate Party - 21st Mar 19
A Message to the Gold Bulls: Relying on the CoT Gives You A False Sense of Security - 20th Mar 19
The Secret to Funding a Green New Deal - 20th Mar 19
Vietnam, Part I: Colonialism and National Liberation - 20th Mar 19
Will the Fed Cut its Interest Rate Forecast, Pushing Gold Higher? - 20th Mar 19
Dow Jones Stock Market Topping Pattern - 20th Mar 19
Gold Stocks Outperform Gold but Not Stocks - 20th Mar 19
Here’s What You’re Not Hearing About the US - China Trade War - 20th Mar 19
US Overdosing on Debt - 19th Mar 19
Looking at the Economic Winter Season Ahead - 19th Mar 19
Will the Stock Market Crash Like 1937? - 19th Mar 19
Stock Market VIX Volaility Analysis - 19th Mar 19
FREE Access to Stock and Finanacial Markets Trading Analysis Worth $1229! - 19th Mar 19
US Stock Markets Price Anomaly Setup Continues - 19th Mar 19
Gold Price Confirmation of the Warning - 18th Mar 19
Split Stock Market Warning - 18th Mar 19
Stock Market Trend Analysis 2019 - Video - 18th Mar 19
Best Precious Metals Investment and Trades for 2019 - 18th Mar 19
Hurdles for Gold Stocks - 18th Mar 19
Pento: Coming QE & Low Rates Will Be ‘Rocket Fuel for Gold’ - 18th Mar 19
"This is for Tommy Robinson" Shouts Knife Wielding White Supremacist Terrorist in London - 18th Mar 19
This Is How You Create the Biggest Credit Bubble in History - 17th Mar 19
Crude Oil Bulls - For Whom the Bell Tolls - 17th Mar 19
Gold Mining Stocks Fundamentals - 17th Mar 19
Why Buy a Land Rover - Range Rover vs Huge Tree Branch Falling on its Roof - 17th Mar 19
UKIP Urged to Change Name to BNP 2.0 So BrExit Party Can Fight a 2nd EU Referendum - 17th Mar 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast March to September 2019

The Decline of Empire, Idiot Solons and Pentagon Zombies

Politics / US Politics Oct 26, 2011 - 06:43 AM GMT

By: Bill_Bonner

Politics

Best Financial Markets Analysis ArticleWhat’s Bill doing in Cyprus…?

Markets a big move to the upside. And why? No apparent reason. Gaddafi bit the dust, almost literally. And the Europeans seemed to be stumbling to yet another solution…in which they borrow more money to help fund the troubles created by borrowing money in the past.


Nothing new, in other words…

Your editor brought his wife here to Cyprus on a weekend get-a-way. Besides, he wanted to see where Solon died. Whether or not Solon, the great Greek lawgiver, died in Cyprus or not is a matter of some dispute. And what he was doing here is unknown. But Herodotus says his body was “consumed in Cyprian fire.” So this is the place he must have gone back to ash.

Solon was in charge of Athens in the second part of the 7th century BC. Then, as now, the people had gotten themselves into a jamb. They owed too much money. The burden of debt was so great that the economy was apparently being crushed by it.

But Solon was no dope.

“The Athenians were in the habit of disguising the unpleasant aspects of things, giving them endearing and charitable names,” wrote Plutarch. “They refer to whores as mistresses, taxes as contributions, garrison cities as guards and the common jail as a residence.”

So, according to Aristotle, Solon figured the thing to do was to organize a “shaking off of burdens.” Solon “made a cancelation of debts, both private and public…they shook off the weight lying on them.”

The problem with today’s solons is that they do not shake off the weight lying on the public. They add to it. The problem in Europe is government debt. But every government in the EU continues to go further and further into debt.

And next week – on Halloween – the US is supposed to pass the point where it has national debt greater than 100% of its GDP. And at the present pace, each year’s deficit adds about another $1.5 trillion.

If we are really following in the footsteps of Japan – as we think we are – we’ll see the feds double their debt over the next 7-10 years.

But wait. Japan has an advantage. It has no military expenses of any consequence. The US has them up the kazoo. The cost of its wars and foreign meddling is more than $1 trillion a year. It cost a million a year just to maintain one soldier in Afghanistan. These expenses could be cut without much pain or suffering in the US itself.

But empires don’t back up. Certainly, the Greek empire didn’t. After Solon sorted out their debt problems, they were soon back in the empire business and back in debt. That’s why much of the history of Cyprus is the story of one Greek misadventure after another. Sometimes the Athenians were fighting the Persians and the Phoenicians. Sometimes they were fighting other Greeks. Sometimes they were fighting the Cyprians. Sometimes they were fighting alongside the Cyprians. Like the Americans, they had troops all over the place…making enemies wherever they went.

A stele was discovered that recorded the names of the Athenians of the Erechtheid tribe who fell in the years 459-458 BC.


“Of the Erechtheid tribe, these are they who died in war, in Cyprus, in Egypt, in Halieis, in Aegina, at Megara…” Inscribed are the names of 177 soldiers.

Athens didn’t back up. It kept going until it had gone too far. In 431 BC Pericles gave the kind of speech that Mitt Romney just gave at the Citadel. (No presidential candidate can talk openly about managing the process of decline….that would be political suicide.)

Pericles praised his forefathers for their efforts:

“They dwelt in the country without break in the succession from generation to generation, and handed it down free to the present time… And if our remote ancestors deserve praise, much more do our own fathers, who added to their inheritance the empire which we now possess, and spared no pains to be able to leave their acquisitions to the present generation…. You may reflect that it was by courage, sense of duty and a keen feeling of honor in action that men were enabled to win all this…” .

Then, he vowed to stay the course:

“You cannot decline the burdens of empire and still expect to share its honors.”

He should have backed up. Under his guidance, Athens continued to make war on just about everyone…until the Spartans invaded it, laid wasted to the city and enslaved its people. Pericles died of plague.

Don’t expect the US to back up either.

Threatened with budget cuts, Defense Secretary Leon Panetta reacted not with thoughtful reflection, but with Greek-like lunacy. As to the budget cuts, he called them a “doomsday mechanism.” They would be “catastrophic.” We would be “shooting ourselves in the head,” he went on.

These would be the effects, said he, of spending only as much as the whole rest of the world put together.

Of the people who propose to put on the brakes, they are like the Nazis at Bastogne, asking Patton to surrender. “Nuts,” says he replied.

Spending cuts are intolerable…so is any talk of “decline” or backing up. The armed zombies who run the defense industry won’t permit it.

But imperial decline doesn’t have to be such a bad thing. Gideon Rachman, in The Financial Times, explains:

What the UK discovered after 1945 is that a decline in national power is perfectly compatible with an improvement in living standards for ordinary people, and with the maintenance of national security. Decline need not mean the end of peace and prosperity. But it does mean making choices and forging alliances. In an era of massive budget deficits, and rising Chinese power, the US will have to think harder about its priorities. Last week, Hillary Clinton insisted that America will remain a major power in Asia – with all the military expenditure that this implies. Very well. But what does that mean for spending at home? Few politicians are prepared to have that discussion. Instead, particularly among Republicans, they fall back on feel-good slogans about American “greatness”.

Those who refuse to entertain any discussion of decline actually risk accelerating the process. A realistic acknowledgement that America’s position in the world is under threat should be a spur to determined action on everything from educational reform to the budget deficit. The endless politicking in Washington reflects a certain complacency – a belief that America’s position as number one is so impregnable that it can afford self-indulgent episodes such as the summer’s near-debt default.

The failure to have a proper discussion of relative decline also risks leaving American public opinion unprepared for a new era. As a result, the public reaction to setbacks at home and abroad is less likely to be calm and determined and more likely to be angry and irrational – feeding what the historian Richard Hofstadter famously called “the paranoid style in American politics”.

These days the British have learnt almost to revel in failure. They buy volumes with titles like the “Book of Heroic Failures” in large numbers. It is quite common for the supporters of a losing English soccer team to chant, “We’re shit and we know we are.” This is not a habit I can see catching on in the US. When it comes to managing decline, self-abasement is optional.

And here’s another piece from The Financial Times, describing America’s “Eclipse” :

…In this challenging new study, Arvind Subramaniam of the Peterson Institute for International Economics writes of the next transfer, that from the US to China. This one is surely closer. While Americans were prating of the “uni-polar moment”, its economic foundations were crumbling away. Properly measured, he argues, China is already its economic equal. Very soon it will be far more powerful, economically, and ultimately, also militarily.

The book’s most striking prediction is that the renminbi will match, or replace, the dollar as a reserve currency by the early 2020s, far sooner than most now suppose. This is largely because China will emerge as far and away the world’s largest trading power: currency follows trade.

Bill Bonner
The Daily Reckoning

Bill Bonner [send him mail] is the author, with Addison Wiggin, of Financial Reckoning Day: Surviving the Soft Depression of The 21st Century and Empire of Debt: The Rise Of An Epic Financial Crisis and the co-author with Lila Rajiva of Mobs, Messiahs and Markets (Wiley, 2007).

http://www.lewrockwell.com

    © 2011 Copyright The Daily Reckoning, Bill Bonner - All Rights Reserved
    Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules