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Courtesy of Russ Winter

Originally posted here:

Every day our country moves closer to the brink of collapse because of systemic corruption. We have become a country that relies on and feeds off of government schemes and looting. It’s happening at every level. This is the crippled backbone of our economy, and it’s fracturing. Virtually all governance is now inside capture by those who can promote their special interests.

I call these looters “trough feeders” and the system they feed off of the “sistema,” an apropos Brazilian term. The U.S. sistema has been largely an out-of-control loot of anything not tied down. For example, one of the troughs is the all-powerful Oz, the Federal Reserve. The Fed facilitates looting, but I don’t think things can be held together (market or otherwise) solely by it.

Note that I utilize trough and sistema theories often in my work. My post “The Sistema: Feeding At Three Troughs” is core to understanding my thinking. David Stockman in his book, “The Great Deformation” used this theory as well calling them “tentacles”.

Currently, there are at least four major feeding troughs in the corrupt American sistema:

1. Financial manipulation through the Federal Reserve and stealing at an unprecedented level. Think Enron multiplied by a thousand. This is assisted by a whole industry that’s on the payroll. It delivers double-think and Ministry-of-Truth psych-ops through a steady diet of shills.

2. The Military-Industrial Complex, now expanded through the Homeland Security/surveillance state racket.

3. The education system scam.

4. The medical industry loot now being reinforced by the Obamacare scheme.

On the financial loot front, No. 1 is interesting in that a smoke screen has been put up of late whereby the too-big-to-fail financial firms are being asked to pay a little rebate for show to the-chief-feeder-of-the-troughs as part of the facade that there is rule of law in the country. Here is a roll call of crimes and fines involving JP Morgan, and this firm is not alone. This will go along for awhile to please the peasants.

[Image above by William Banzai 7]

There has also been nearly a $100 billion annualized decrease of late in racket No. 2, the military. Unfortunately, I don’t think the U.S. economy can stay afloat unless to runs up trillion-dollar deficits. So this trough’s reduction is becoming a problem. I would therefore be on special alert for some black flag event, like a “sink the Maine” operation or a conflict getting things “back to normal.”

The latest in No. 3, education, is the student loan scam that lures more debtors in on a sick version of the old ARM housing scam. Under the newly modified student loan legislation, students get to pay a teaser rate priced against U.S. Treasury bills and the bond bubble. Interest rate surprises beckon down the road, at which point other schemes will surely be attempted.

Young adults, or at least the remaining lower middle class who are actually working, are about to be thrown under the bus by No. 4, Obamacare. This group is being targeted with more expensive, mandatory insurance or else face increasing “fines” for not participating. Starting in 2014, the penalty for lack of coverage is $95. In 2015, it jumps to $325, and then in 2016 to $695. The issue here of course is that most will pay the fine, at least in 2014. As a consequence, the subsidy for their older cohorts will go unfilled. Analysts suggest that 2.7 million young healthy adults are needed to offset the costs of older generations. Thus, in 2014, budgetary costs for Obamacare will skyrocket far higher than projected.

Of course, one problem trough-feeding debtism faces is the need to clean up its detritus.  This has shown up (not surprisingly) in the municipal and state arena. Presidente Hopium used some sleight of hand when Detroit at long last filed for Chapter 9 bankruptcy, indicating there would not be a direct bailout. And why should there be when you have Obamacare? The New York Times described how this new racket will pair underfunded health benefits for the looming lines of city and federal workers and push these into subsidized Obamacare medical insurance. You see, the sistema has a trough filled and ready after all!

Officials say the plan would be part of a broader effort to save Detroit tens of millions of dollars in health costs each year, a major element in a restructuring package that must be approved by a bankruptcy judge. It is being watched closely by municipal leaders around the nation, many of whom complain of mounting, unsustainable prices for the health care promised to retired city workers.”

Another of the looming detritus is to figure out how to deal with Housing Bubble version 2.0. Mortgage applications are down 55% in 11 weeks. I guess we will have to stay tuned for that; but one thing you know for sure, it will involve another trough and government scheme.


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