The tendency to quantitatively expropriate fellow Glaswegian Adam Smith as an economist when he was, by formal assignation, a moral philosopher is a miscarriage of history. Why? Because we all find site for dwellings in our labors. We are what we do. Smith was no exception. Smith was no quant.
With today’s politics little more than glorified economics in disguise, everything rounds to numbers. Has it always been that way? Not entirely. In this age of financier-inspired hubris, honor has to fight harder for air and ink.
For over a decade, myself and a couple of colleagues had been on the lookout for evidence of a coherent, countervailing force within the government, some subterranean clique of white hats. The dissident energy was certainly there. Consider the whistle-blowers populating Washington’s Blog. Infowars also seemed to nurture and embolden disgruntled enlisted personnel and junior officers. For all his caveman bluster and occasional gratuitous misfires, Alex Jones has been prescient on many things.
The Petraeus dust-up was one such episode where the CIA-Pentagon turf battle burst to the surface. Another was the Obama administration’s systematic purging of ‘too-patriotic’ Generals.
Yet another festering schism, highlighted recently by longtime Westerner-abroad-in-Russia John Helmer reminds us of the historic rivalry between the CIA and NSA (the former an arch-nemesis and the latter a protector of the current President; Trump is the personified battleground for so much that ails us). Here’s Helmer citing Wikileaks:
“Since 2001,” Wikileaks announced, “the CIA has gained political and budgetary preeminence over the U.S. National Security Agency (NSA). The CIA found itself building not just its now infamous drone fleet, but a very different type of covert, globe-spanning force — its own substantial fleet of hackers. The agency’s hacking division freed it from having to disclose its often controversial operations to the NSA (its primary bureaucratic rival) in order to draw on the NSA’s hacking capacities.”
(Helmer, at this very moment, is doing indispensable journalism chasing down the Warner-Deripaska-Waldman-Assange nexus of intrigue. ‘Russian collusion’, in its current publicized form is little more than the Democrat’s pumped-up projection of their own seedy influence-peddling. His work poses an intriguing possibility: Did Assange bargain away CIA whistle-blower Joshua Schulte in a bid to get Uncle Sam off his back? Clandestine minds want to know.)
For us earnest watchers, moments of climactic exposure were few and far between. Nonetheless we took heart from the occasional internecine squabble. The Deep State monolith was at least exhibiting stress fractures.
Then the Trump insurgency happened and stress fractures became the default topology.
Almost overnight, the term Deep State firmly established itself in the public imagination. Much credit goes to Peter Dale Scott’s work for giving the term a renewed, early currency. Also see Walter Bagehot as well as Michael Glennon’s Double Government.
My own early expectations for Trump have been borne out for the most part, and in many ways handily surpassed.
Almost certainly aligned with QAnon, and a key Trump ally, is the NSA (or perhaps General Flynn’s DEA; suffice to say, somewhere within the military intelligence frame), the former until recently under the direction of Admiral Mike Rogers. The NSA’s signals intelligence and global reach is without parallel.
For those who haven’t yet, I urge them to watch my video, Admiral Mike Rogers: Hero of the Republic, below, where the absolute criticality of the NSA in averting the coup (and subverting the unholy trinity of Comey-Brennan-Clapper) against President Trump is documented. When QAnon says, we have everything, as he so often does, he is speaking almost certainly from a military intelligence perspective.
Yet, how odd that we find ourselves applauding the Orwellian coordinates of the advancing surveillance state. The frying pan may have saved us, for the moment, from the fire. The military is Trump’s friend. That makes them We The People’s friend too.
I liked Trump from the start for his disruptive potential. (I see I’ve been joined –both in sentiment and word choice– only yesterday by Twin Peaks creator, David Lynch, who bravely suggested, “He [Trump] could go down as one of the greatest presidents in history because he has disrupted the thing so much. No one is able to counter this guy in an intelligent way.”)
My rationale was that, one, Trump was financially non-beholden and two, he was exogenous to the seamy, political pecking order. Flaunting his independence vis a vis the usual bought-and-paid-for pols, Trump announced to the Republican Jewish Coalition in December 2015 “You’re not going to support me because I don’t want your money. If I wanted your money, I think I’d have a damned good chance.”
Afterwards, he was roundly criticized for tapping into enduring antisemitic canards. Correcting this early oversight, Trump ‘beholdened’ himself in the final days of the campaign with a $25 million contribution from staunchly pro-Israel businessman Sheldon Adelson. Whether or not this late-grafted agenda finds itself at odds with his nationalist boosters’ aims, Trump has tacked to a strong Zionist agenda ever since. A Christian, I happen to believe Trump is enacting a biblical mission in addition to his terrestrial duties. Time will tell.
- Coin of the Realms?
But back to money (Do we ever really leave it?) or more specifically, currency. How the world both alters and perceives its interactions with the US Dollar going forward is today’s million dollar question. Who better than wealth-fixated Trump to reroute that yellow-brick road?
For one thing, money is the omerta of our politically hermetic system. It takes a billion dollars to run for the Presidency, a mere pittance to those who seek to control the occupant. Yet a significant barrier to entry for all but the latter’s Anointed Ones and once-in-a-generation eccentric billionaires. Trump is the Perot of his generation.
The Trump insurgency, no impulsive dalliance, was long in the making. Think the Rockefeller/Mercer school of old American money, perhaps nursing residual and stubbornly sentimental affinities for America, while chafing against the Rothschild’s longstanding (and far more transnationally committed) grooming of China (Opium Wars, anyone?) complete with the latter’s intention to discard the US whole-cloth like a hollowed-out, post-empire husk. Absent Trump, America looked destined to become a bereft, post-capitalist (and culturally Marxist) Argentina of the north.
Russian thinker Andrei Fursov (Андрей Фурсов) describes below the competing Rockefeller-Rothschild clusters, with the late Zbigniew Brzezinski an actor for the former (and most certainly no believer in PNAC/Neocon unipolarity, as Paul Craig Roberts stressed in a remembrance of his old Cold Warrior colleague).
As Fursov stresses these two groups are not openly antagonistic and share many interlocking interests. However on the ‘America question’ in a USD post-reserve currency world, both groups differ markedly in emphasis and approach.
For better chart resolution, go here.
If I had to crystallize Trump’s central mission it is to unwind the Triffin Dilemma. What is the Triffin Dilemma (or Paradox), some may ask? Robert Triffin was an economist who recognized in 1962 the inherent schizophrenia of the USD serving two masters, as national currency and international reserve currency, the latter role being established at the 1944 Bretton Woods Conference.
The core paradox has to do with the competing outlooks that spring from star-crossed and inhrently conflicted (national vs global) agendas (from the Wiki disc): “a balance of payments current account deficit had to be sustained in order to provide liquidity for the conversion of gold into U.S. dollars. With more U.S. dollars in the system than were backed with gold under the Bretton Woods agreement, the U.S. dollar was overvalued. This meant that the United States had less gold as foreign governments started converting U.S. dollars to gold and taking it offshore.”
The Nixon Shock of 1971 served to prolong the paradoxical role of the dollar by severing its convertibility to gold. (In a sense, compounding paradox with alienation as fiat sought to impersonate first-order value.) Running a current account trade deficit continued to be at the least a strangely agnostic development for America as the world’s insatiable demand for dollars buffered the American economy from dollar overproduction (via inflation exportation). With the USD ’emancipated’ from gold, the sky became the limit.
In the parlance of macroeconomics, USD reserve currency status allows America to enjoy an unassailable comparative advantage in currency production. Because dollars comes into existence via ex nihilo keystrokes, the production and labor costs are nil. And yet, the entire world seeks them for their unique (though increasingly challenged) ability to purchase another non-substitutable requirement, oil. What a beautiful system.
Over the ensuing decades this eerie detachment from intrinsic value served to rationalize ever more provisional value derivations with the result that, today, the Western financial edifice teeters on the precipice of irreconcilable leverage. In its most extreme forms, leverage is Molochian in spirit. The children and their labors have been sacrificed on the altar of their parents’ insatiable appetites. Goya’s Saturn devours his children, in the modern instance before they arrive. Present value spends its future cash-flows.
This jealous moment regales itself with a delusional sense of singularity.
Who would have guessed that, a full two decades after the breezy hubris of Brzezinski’s The Grand Chessboard laid the game bare, the inestimable resource wealth of Eurasia would continue to elude the bankers’ balance sheets?
Securing this commodity basket was almost certainly baked into the leverage equation as a neat follow-on to petro-dollar partnering. Indeed today’s near-manic anti-Putin rhetoric derives precisely from this fundamental anxiety. Somewhere deep in the bowels of the NY Fed, a tipping point is closely being monitored. Has it been passed? That the Russian Collusion fairy tale still dominates the headlines is a barometer of the distress.
The Triffin Dilemma would resolve if the USD relinquished its global monetary role. Indications are that may be in the cards.
We appear to be in phase one of a two-phase project. The subsidiary steps within Trump’s overarching directive include reindustrializing America, normalizing us back from reserve currency empire to a nation-among-nations, ideally (to better assuage the American self-image) a most-favored nation in the spirit of MAGA. Phase two accedes to the USD shedding reserve currency status.
Again, while I believe in MAGA –a rallying cry meant to galvanize and enthuse the American patriot and nationalist elements critical to Trump’s support during this rebalancing process– I am skeptical that its efficacy extends beyond the mid-course correction phase. Globalism remains on the cards and will be well-nigh impossible to avert. Monism is biblically embedded.
The Trump-conducted denouement of American Empire makes sense in the context of a globalist equilibrating process wherein the former prepares to take its place as an administrative canton within a larger Bank of International Settlements (BIS) mosaic. Orwell’s Oceania may not be too far off the mark.
One of my favorite blogs at the moment, The Conservative Treehouse has done a great job of amplifying the win-win populist side of Trump’s trade offensive as well as revealing the nefarious hand of the US Chamber of Commerce hard at work keeping multinational corporations’ productive capacities off-shore consistent with the desires of our traitorous bought-and-paid-for (by China) political shills, Red and Blue. Echoing Carroll Quigley, the CTH refers to our seditious overlords as the Uniparty. As with so many other issues, Trump on trade is a David facing a battalion of Goliaths.
The CTH takes an economically deterministic approach and is fond of reminding us that, even in the thick of heated political debate, trillions of dollars are at stake. In fact the very large sums serve to heat the debate. It would be fascinating to see the CTH delve more comprehensively the ambiguities of the trade issue, the Triffin Paradox being a key impediment to a uni-dimensional, trade-populism stance.
There is a great story about Goldman Sachs alumnus (and former Trump Chief Economic Advisor) Gary Cohn grumbling about how he couldn’t bring his boss to understand balance of payments and current accounts deficits. Like Bannon before him, Cohn imagined himself the smarter guy of the two. We’ve seen it before and we’ll see it again. Almost certainly, Cohn’s frustration hinged on the Triffin Paradox and the counter-intuitive benefits (at least to Wall Street) of chronic trade deficits.
Let’s not kid ourselves though. The long term goal remains global governance for which Trump serves as an effective transitioning agent. As I expanded upon in ‘Revisiting ‘The Janusian Class’ in Light of the Trump Phenomenon’:
“America… [is] the final empire to be constructed from strictly national auspices. The next and final one will be transnational. Thus, Trump, who may or may not be fully cognizant of his agency (I don’t think he is, entirely), is dismantling the final empire, ironically enough, under an America-First banner so that an interregnum/plateau can be established for the final dash to full-blown trans-nationalism.”
The Rothschild vision of the future would have been ugly indeed for America. However some skepticism is warranted in MAGA beyond a patriot rallying cry and yes it will deliver an intermediate term boom. The long-term globalist plan however is to mount a final assault on one world government when America is restored to one among many. The IMF’S SDR or a currency basket equivalent is the future.
When pushing for the supranational currency the bancor (coterminous with Bretton Woods), Keynes intuited the distortive effects of what would come to be known as the Triffin Dilemma. No one could have possibly guessed –certainly not Triffin himself– just how out-of-whack things could become, not to mention how long the imbalances could persist.
Kissinger’s petrodollar recycling (1973-present) provided a massive second wind to the dollar, again, especially after Nixon’s orphaning of the USD from the gold standard. In effect a universally essential and non-fungible resource (oil) supplanted static, finite gold reserves as the underwriter of the USD. Barring Peak Oil, the petrodollar stood a better chance at immortality than did a dollar lashed to the finitudes of existent gold.
Verily, to grasp the immense implications of petrodollar recycling is to be conducted on a tour of the Devil’s Lair. Human existence is held in check by momentous keystrokes. Our lives hinge on ledgers of nil. Man’s labor (and all that he sells of it abroad, trade) is, by contrast, sacred and inalienable. Shoot the bankers. Hire the bakers. Banking masquerades as gainful occupation, when really it is a spiritual praxis of the darkest coordinates.
Using the parlance of trade, America possesses an unassailable comparative advantage in the currency trade. That’s what reserve currency status is. Even better, dollar manufacture enjoys no production costs nor physical exertion (labor) required to render the final product.
As for the straw that ultimately breaks the Triffin Dilemma’s back, Charles Wallace had it right recently, below:
“It was one thing for the U.S. to tolerate manageable deficits with strategic partners like Germany and Japan after the war. The plain fact is that China has become such a huge export behemoth, the U.S. simply can no longer afford to be the international reserve currency providing the Chinese with a constant outflow of dollars, not to mention the thousands of lost jobs that implies.”–from Trump’s Tough Talk Means a New Role for the Dollar, by Charles Wallace, Forbes
Ultimately Triffin is no match for China if we want to retain some semblance of production in America.
I first addressed the Triffin Paradox in a 2009 essay behind the paywall of the iTulip site, which appears now to be defunct. At the time, the only other google reference I could find was an essay by Dr. Zhou Xiaochuan, Governor of the People’s Bank of China, 23 March 2009. Since that time, the concept has rightly earned a much wider constituency.
China’s manufacturing base is simply too massive to allow the Triffin Dilemma to persist without the complete ghettoization of America’s own productive capacity. This is what Trump understood on an instinctual level far better than Wall Streeter Cohn ever could.
In Donald Trump And The Dollar: The Triffin Dilemma And America’s Exorbitant Privilege, David Deuchar takes what I would call an amoral, ‘financier approach’ (ala Cohn) when he stresses the ‘benefits’ of prolonging the Triffin Paradox:
“The U.S. can behave as a country as no other can; we export inflation without mercy, run fiscal deficits proportionately far higher than other countries without risk of insolvency, pursue monetary easing measures ad infinitum, and ultimately influence geopolitics on a scale greater than any civilization in the history of mankind. Is it worth giving all that up just so that we can manufacture Oreos in Chicago or steel in Pittsburgh?”
Pray tell, what’s wrong with the gainful pursuit of domestic Oreo and steel production? Simultaneously holding the world hostage to our imprudent financial excesses ‘without mercy’ while denying our own people the dignity to pursue honest trades is not a prescription for the future, and ultimately discombobulates our own moral compass as a nation.
But there is an even more practical reason for untangling the Triffin conundrum.
While reserve currency status furnishes an enviable ‘unearned prosperity’ to Americans financed by foreigners as a result of their insatiable dollar demand, a point is reached where, as Peter Navarro says, echoing Forbes’ Charles Wallace (see the former’s discussion of the recent steel and aluminum tariffs at 1:08 in the video, below), balance-of-payments considerations become superseded by national security considerations.
America cannot serve only as a USD trade settlement window. Triffin’s sweatless bounty becomes too much of a good thing. No different from other nations, we have butchers, bakers and boiler makers too. Commensurate with this fresh turn towards a reinvigorated export economy, the inequity of tariff structures suddenly matters again.
How strategically viable is a nation that relinquishes its ability to manufacture world-class products in key industries and serves only as a teller window for dollar transactions? What Wall Street endlessly extols becomes a social and (work) ethical catastrophe for a productively idled nation whose very fabric extols hard work.
Trump is presently plucking low-hanging trade victories from the maws of offending nations for which he will be heralded as a genius, an assignation he deserves in many ways.
But not so fast. There are never free lunches nor zero-sums in macroeconomics and certainly not in trade equations. Righting the current account imbalance doesn’t come without forfeiting what Giscard d’Estaing famously called America’s exorbitant privilege, what one might call ‘virtuous’ trade deficits.
That’s why we are almost certainly in the early stages of a follow-on world reserve currency, a monetary regime that is sure to augur a renewed assault on emergent nationalism. We should remember too that the perceived unfairness of tariffs on American goods mitigates in some measure the exorbitance of our privileged currency. The equilibrating process is already underway.
Globalism, by any other name or means of introduction, remains globalism. Though it pains me to rain on the Trump parade, One World Government still looms ahead in the long-term, bruised perhaps but far from beaten.