In the infinite mystery of Is, there is no way for a presumed separate point of view (that would be what you and I call ‘I’) to know ultimate Truth. Since the ultimate Truth of any thing (or everything) minimally requires its apprehension from all points of view in space and time, no one point of view, limited to its here and now, can know it. Every point of view is inherently ignorant.

Science is not immune to this limitation on knowing Truth. Science is a method of creating narratives (stories) that describe phenomena. There is good science and bad science.

Good science starts from presuming its inherent ignorance and goes on to methodically create useful narratives. A useful narrative is one which accurately and repeatably predicts the future based on a set of starting conditions.

Bad science creates narratives that describe past phenomena without any predictive value. Bad science is not inherently less (or more) Truthful than good science. Bad science is merely useless.

Conventional economics is a set of narratives about past phenomena which has -- except in the most simple and artificial cases -- no ability to accurately and repeatably predict future phenomena. If conventional economics is any kind of ‘science’, then it is bad science; conventional economics is useless.

Incidentally, because of human proneness to cargo-cultism, many people think that a narrative with the ability to accurately and repeatably predict the future based on a set of starting conditions is the definition of Truth. This conceptual error can be cured by either doing good science or taking some acid. Or both.


The government of Greece borrowed a lot more money than their economy can repay. They borrowed that money mostly from banks in other European countries. Now Europe is proposing to create more European debt to “bail out” Greece by “giving” them money to give back to the European banks, which would only be stupidly circular, except that above and beyond the amount that Greece owes, they still also have to fund their government.

“The structure of the deal puts the IMF/EU/ECB clearly in control of the finances of Greece so they have replaced some sort of Czar with the bureaucrats of the Troika and the country no longer will control its own finances as they traded away their sovereignty for cash. In fact, an escrow account will be set up for Greece which will be controlled by the Troika and Greece is being forced to change their Constitution pledging to pay their creditors before providing any money for the country. A quick study of the math reveals that Greece will get about 19 cents on the Dollar and the rest of the money is the sovereign nations of Europe paying back their banks with the money they have supposedly lent to Greece. Greece is now nothing more than a conduit for the nations of Europe to pay back their own financial institutions.” [Source]

So the deal basically says that Europe is going to borrow money to lend Greece money and 80% of that money is going to Europe’s banks and 20% is going to fund Greece.

But that level of funding for Greece means crushing austerity for the Greek people and at the same time, the rest of Europe is bailing out its own banks via piling more debt on top of Europe’s and Greece’s already too much debt, and they are paying a 20% premium on that bailout money to Greece.

And all of this makes sense for exactly whom?

In a nutshell, Europe is creating new debt and paying an extra 20% and the Greek people are going to live in a hell-realm so that a handful of fat bureaucrats can keep their jobs.

Whether or not the European taxpayers should bail out the European banks at all is a question I’ll leave to another time, but even if one believed this was a good idea, it would clearly be better for them to give the money directly to the banks and skip the 20% premium to Greece.

On the other side of the picture, the Greek people would be FAR better to default on their debt, leave the Euro, devalue the reinstated Drachma, and start rebuilding their economy from the base of an incredible advantage they would have in the tourism industry and whatever exports they brought to the market with a local currency that was very cheap against the Euro.

So it’s far better for the European people for Greece to default and leave the Euro, and it’s far better for the Greek people for Greece to default and leave the Euro. If Europe directly bailed out the European banks that are holding Greek debt, it would be a wash to the banks. So the only tiny group of players in this drama who are benefitting from the farce of “bailing” Greece out are the bloated eurocrats — the people whose jobs and twisted little fiefdoms depend on shoring up the terminally flawed Euro.

Right, business as usual then.


Please see this excellent article by Charles Hugh Smith

Hi Charles,

I recently had an insight about what appears to me as the fundamental driving force beneath the corruption that you wrote about in your article today. It’s not a new insight in any way — there have been many people who have said this in one way or another, and it is the essential basis for the whole concept of “sound money” but it hit me in a decisive way recently.

If you consider that the primary “fabric” of society, the sum total of our relationships with everyone, is a web of energetic exchange that we all participate in by working, employing, bartering, buying, selling, etc. … And if you accept that money is a representation of energy whose utility is in making the exchanges of energy that underpin society more convenient by both storing energy as well as providing a standardized unit of account and value for all work and property in energetic terms…

Then if you simply run a thought experiment about what would happen to the nature of exchange — again, the “fabric” of society, and most significantly, our RELATIONAL landscape — if you allowed the supply of money to be massively manipulated such that it no longer represented the sum total of real energy (whether stored in the form of “real capital” or potential in the form of “work”) available to be exchanged.

I believe that fractional reserve banking, in and of itself, inevitably leads to the forms of corruption that you write about and that we can observe in the US and the world in general. By systematically misrepresenting the energetic “content” of money, by turning the basis of our relational exchange into fraud, you create an uncertainty and sense of wealth scarcity while simultaneously creating a playing field that incentivizes people to game and exploit each other in order to horde a larger and larger share of an uncertain pie for their own security.

Where the very nature of relational exchange has itself been made fraudulent, how can a society built on that foundation be anything other than fraudulent?


The official U.S. Debt recently ticked up over 15 trillion dollars. At this writing, the official estimate of the total number of U.S. Citizens is 312,804,515. If you do the math, you will discover that officially then, the federal government of the United States of America has incurred about $48,000 of debt on behalf of every living American citizen.

For the 2010 tax year, there were a total of about 141,536,000 U.S. taxpayers. So if you calculate the official debt per taxpayer, it comes out to about $106,000. That literally means that officially speaking, if you are a U.S. taxpayer, you have been indebted by your government in the amount of $106,000.

I don’t know about you, but I simply refuse to be involuntarily encumbered in that manner. But wait, it gets worse. Much, much worse.

Lawrence J. Kotlikoff, a former senior economist on Ronald Reagan’s Council of Economic Advisors, has the following to say about the official U.S. debt:

“If you add up all the promises that have been made for spending obligations, including defense expenditures, and you subtract all the taxes that we expect to collect, the difference is $211 trillion. That’s the fiscal gap,” he says. “That’s our true indebtedness.”

Let’s re-do the calculations based on Kotlikoff’s estimated true U.S. debt. Based on $211 trillion, the total debt per U.S. citizen comes to about $675,000 and the total debt per U.S. taxpayer comes to about $1.49 million.

Pardon, but I have to repeat that last number in a way that it somehow seems less abstract. Based on Kotlikoff’s estimate of total U.S. indebtedness, every taxpaying citizen of the United States is on the hook for about ONE AND A HALF MILLION US DOLLARS.


Here are some data sources for this post:
A National Debt Of $14 Trillion? Try $211 Trillion
U.S. & World Population Clocks
Total Tax returns filed for 2010