Wealth is on a skyward sprint—to meaninglessness. How good was Sartre with a buck? We’ll soon find out as the entirety of the planet’s wealth is headed for the very deep pocket of the top 0.000000000142857143%. (Odds of winning? 1 in 7 billion.) In short, we’re converging on the Omega Man Wealth Syndrome where one tight bastard will own everything.
Will Smith did dystopian-chic proud in ‘I Am Legend’. However old-timers will fondly recall Charlton Heston’s off-handed abandonment of snazzy late-year models whenever the gas gauge hit ‘E’. There’s nothing like a post-apocalyptic landscape to crater the Peak Oil thesis and precipitate a glut of excellent used cars.
When 99.999% of the world’s population barely has a pot to pee in, pots will stage a subversive coup, becoming the de facto reserve currency of the world. The IMF, by then working exclusively for the Omega Man, will struggle to enforce universal austerity with zero paid staff and seven billion indigent wards of the state.
A silver lining? Class warfare will lose its juice in this brave new flatland. The zero-bound world of utterly cornered wealth will ensure that nothing acquaints with everything. Envy will slink away, finding little to simmer over. Only creaturely needs will hang on stubbornly, re-righting their bearings in a world of silenced cash registers. People will emerge from behind the barricades of consumerism and 401k plans. Economies will collapse back into the arms of neighborhoods and friends.
The binary construct of monocracy (the Omega Man – everything, we – nothing) will collapse the Great Usury Pyramid (GUP) to a pile of earthen dust. (The other alternative is that the Last Man Owning will be so consummately antithetical to Christian principles that, by definition, he will be the Antichrist. In that case, prepare for big fireworks.) Strivers will suffer identity crises as absolute wealth extinguishes the very benchmarks that once made wealth meaningful. Like a tail-eating serpent, the law of large numbers will devour the efficacy of numbers and net worths. People will be beside themselves for a while not knowing just how to keep up with the Jones anymore. Finally some brave pioneer, perhaps John Doe of sample check fame, will break the neighborhood impasse by knocking Mr. Jones’ door and introducing himself. Localism will retake the world. People will reacquaint and find, for the most part, they like one another.
Imagine the Great American Casino where China sits at the blackjack table flush with $2 trillion in plastic chips. Should she sprint for the cashier, Germany, seated across the floor, will discern panic in China’s step and beat her to the window. Other jittery gamblers will follow, forming a well-heeled lemming stampede. China’s $2 trillion will be reduced to $1 trillion within seconds, prompting 19th century economist William Forster Lloyd to pine from his pine box that, were he still around, he’d have a name for the phenomenon: the Tragedy of Trump Plaza.
Inquiring existential minds want to know, why the rush? To convert plastic into what exactly? Like the Hindus’ stacked tortoises, it’s currency all the way down. There is no final curbside to catch a gulp of fresh air because the casino is a matryoshka doll housed in yet another casino. The only chance for a penultimate payday is gold—followed in all cases by death and estate taxes.
Fortunately the New World Casino has a plan if Jim Rickards is to be believed, and recently it’s paid to believe Rickards. In a recent blog post, he imagines a year 2024 where gold has been sealed in an underground vault by the powers-the-be. Meaninglessness triumphs when decent men and women allow real stuff to be buried alive.
At least plastic chips can be beaten into toy swords. Alas modern-day money is not nearly so fungible. Modern Monetary Theorist (MMT) Warren Mosler underscores China’s surreal predicament of trading the sweat of her people’s brows—real goods and services—for blips on a Federal Reserve computer screen. One hopes China still insists on paper statements in the event of a devastating EMP attack. They’re worth the extra couple of bucks a month. Of course we already know the answer: There are no refunds for labor.
Mosler argues that money underwent, with the 1934 Gold Reserve Act, a paradigm shift the profundity of which few grasp even today. Money doesn’t need to be ‘backed’ by anything (again, the cognitive fallacy of solidity demands a physical backstop; as also happens in these sorts of conversations, ‘fiat’ is a pejorative implying maddening insubstantiality).
Mosler’s definition of modern money is both officious and banal. He calls it simply the sole instrument that government, the exclusive legal issuer, demands for payment of taxes. This sort of bloodless definition leaves the average primate sorely wanting. After all, a real man doesn’t bust his hump all day so some quasi-governmental banking stooge can push on credit strings. No, he wants a truly filthy lucre with heft, something that feels like, well, money in the bank. His sweat and sense of equity demand something of compensatory weight. Money is how we get things. Money should be a thing.
Money is also like chocolate. After a while people tire of debating about it, and just want to eat it. Wherever there’s a plenitude of appetite, thinking gets bogged down by empty calories. The world is presently overinvested in money and wealth-building. Frankly, how does one escape this denomination-hell that stalks all value like a third-rate shadow?
In the end, we are convicted by cognitive anachronisms; fetishizing, stacking, flaunting and hording money as though barbarous relicdom still pays the bills. Hyperinflationists lament the endless ‘printing’ of money. However, physical currency makes up only a tiny portion of the money supply. If quantum physics has taught us anything, it’s that there is no cash on the barrelhead because a) there is no cash and b) there is no barrelhead. It’s a pity most of us can’t get past medieval notions of accumulated storehouses and that ultimate albatross, intrinsic value. Tellingly, gold is intrinsically useless. Now there’s a paradox wrapped in a conundrum.
The fact is, money with no discernible value (beyond the coercive power of the state) offers the most radical form of freedom—so radical in fact the powerful are loath to broach the subject for fear brute force collapses in an antiquated heap. The challenge for the 21st century is how to keep people marching to a mirage. They’re way too late shutting down the Internet though recent monumental efforts to do just that are duly noted. We’ll need a real attention-grabber while the cable guy pulls the box. Here’s a visual: Janet Yellen with no clothes on. Not graphic enough? How about a naked Janet Yellen dropping tulip bulbs from a helicopter. QE 5 will be followed by Quantitative Gardening. We could have a Cultural Revolution except you need culture and intellectuals and stuff like that. All we have is TV.
There’s every reason to believe even the powerful don’t grasp the sweeping implications of vanquished intrinsic value. Capital is losing its lever. Labor is cross-training its trans-human replacement. Should serious and sustained reflection ever break out among seven billion humans, what’s the elite going to pin them down with? Tulip beds? Good looks? Have you ever really seen Henry Kissinger in natural lighting?
Mosler insists the FOMC member are essentially clueless (his word), and that only Fed staffers grasp the subtleties of a money lurched into pure abstraction. The implications are profound. Absent self-imposed constraints (like a gold standard), debt has all the scare-value of a weightless, odorless gas. Money is an accordion. Government extends credit as needed and contracts it through taxation. The crisis is one of imagination; the symptom, profound monetary confusion. But here’s the real tragedy of the commons: We shouldn’t need to regress to the barbarous, except our cognitive barbarisms are going to drag us right back there. Listen to the doomsayers’ rhetoric: We’re falling off a cliff. We’re being crushed by an unsustainable burden. Look too at the crushing prices of their newsletters. Ask a metallist why we need gold and he’ll say gold has been money for 6,000 years as if that’s an answer. Prostitution is the world’s oldest profession. Is that an argument for walking away from more honest careers in banking and politics?
Back to our Omega Man. An old-school creature of engineered money scarcity, he’ll mutter about all the hard work it took to acquire everything on earth and that he’s in no mood to recommence the hurly-burly of economic activity. What’s in it for him? Only later, will he see the error of crushing his last remaining competitor. That was one Mohican he should have kept around. Blackjack requires a dealer or at least a wealthy old widow at the end of the table. That’s right. Wealth, like misery, seeks company. Increasingly isolated and paranoid, The Omega Man will do a Howard Hughes on the eve of the 2016 Great Financial Collapse.
He will be wealthy beyond anyone’s imagination even as his wealth will have long since become a facet of the imagination. Compelled by a sense of his receding social relevancy and too damned cheap to hire a Praetorian Guard, he will retreat to a cave in the desert. However two years without room service will prove too much. Risking everything, he’ll emerge from self-imposed exile to demand of the world a fair and proper accounting. However the world will have changed profoundly during his two-year absence.
Following a brief period of fear and teeth-gnashing, the Great Collapse surprised everyone by fading into an uneventful denouement. Like a neutron bomb, wealth vanished with nary a whimper. For one thing, the Omega Man was not around to press his claims. Consistent with the laws of physics yet flying in the face of contorted banking ethics, the use-value of buildings and factories ensured that they remained standing. Legal title, it seems, was a rich man’s charade. It was as though people had expected upside-down mortgages to cause brick and mortar to cave in upon their heads. That’s how powerful and insidious financial mesmerism had become within the collective psyche of the masses.
Outraged, the Omega Man will present title to the world’s housing stock and manufacturing base before the International Court. Forced to revisit the miseries of a meretricious age just passed, an angry mob will storm the building. The Omega Man will be dragged from the court, hanged, drawn and quartered. His megalomania will be collected in small glass jars and distributed to curious, once-starving children like invisible pet rocks.
A brief period of economic egalitarianism will ensue before some enterprising primate gets his greed-game back and pyramid construction commences anew. Or will that car be left in the garage forever?