Dear Central Bankers: Prepare to be Swept Away in the Next Wave of Populism
The Ruling Elites’ Chattering Classes still haven’t absorbed the key lesson of the 2016 U.S. presidential election: the percentage of the populace that’s becoming wealthier and more financially secure in the bloated, corrupt, self-serving Imperial status quo is declining and the percentage of the populace that’s increasingly insecure and financially precarious is increasing, and candidates that mouth the usual platitudes in support of the bloated, corrupt, self-serving Imperial status quo lose to those who speak of the failing status quo as a travesty of a mockery of a sham, i.e. a “populist” speaking truth to power.
Donald Trump steered clear of the status quo’s favored platitudes and embraced a bit of populist cant, and so to those who understand that the majority of Americans have been abandoned by America’s hubris-soaked, self-serving managerial / ruling elites, his victory was not entirely surprising.
Just as we’ve reached Peak hubris-soaked, self-serving managerial / ruling Elites, we’ve also reached Peak Central Bank Cargo Cult: from now on the majority that’s been abandoned by the managerial / ruling elites will become increasingly aware that the unprecedented asymmetries of wealth and power that have undermined American social and economic life can be traced directly back to the central bank, the Federal Reserve, which has become the all-powerful Cargo Cult of the global economy.
The same awareness of central bankers’ responsibility for soaring wealth-income inequality and the decline of social mobility is spreading in other nations as well.
Longtime readers are probably tired of the chart below, depicting the incredible expansion of wealth in the already super-wealthy and the stagnation in the prospects of the bottom 95%. But let’s shake off the boiled-frog syndrome and check the temperature of the political water we’re immersed in: It’s getting hotter–a lot hotter.
The ideological rhetoric of the next wave of populism matters less than its intensity. It’s not just possible but increasingly likely that the next populist wave will assume many of the populist positions of the Left, positions which the “progressive” status quo is desperately attempting to co-opt and water down.
The core reality that powers populism Left and Right is the economy no longer works as advertised for the bottom 80%, and by many measures, the bottom 95%. The “conservative” camp generally holds that the “problem” is markets have been throttled by heavy-handed government regulations while “progressives” see private-sector wealth / power as as the problem and “taxing the rich” and redistributing the wealth as the solution.
What neither status quo camp dares mention is the domination of central bankers and the “winners” of their dominance, financiers, global corporations and state-enforced monopolies / cartels. (The losers are of course the rest of us: tax donkeys, debt-serfs, wage slaves, the restive crowd demanding more bread and circuses, etc.)
The political moment when the “losers” connect their discontent and decline with central bankers is approaching. Perhaps the wires will arc in 2020, or maybe it will be 2025; but whatever the timing turns out to be, the all-powerful Cargo Cult of the central bankers will be swept away in a global political convulsion unlike any in memory.
If you harbor any doubts about the demise of the Central Bank Cargo Cult, reflect a bit longer on the meaning of this chart:
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