Saturday, June 23, 2012

Martin Armstrong - How do empires die ?

Sorry, but you can die in a desert from extreme heat or freeze to death in Antarctica from extreme cold. To survive, we need a temperate client to live within. DEFLATION or INFLATION can kill an economy. Empires do not die by HYPERINFLATION – that is reserved for the fringe. When an empire dies, it historically has ALWAYS been by DEFLATION. How. Real wealth is driven from the ABOVEGROUND economy into the UNDERGROUND economy where it is hoarded and tucked away. This is why we find hoards of Roman coins. This reduces the VELOCITY of money and commerce is reduced. This is ALWAYS AND WITHOUT EXCEPTION how empires die. This is why there was scrip issued in the United States during the Great Depression. The VELOCITY of money came to a halt. The British Empire did not die of HYPERINFLATION. The pound collapsed in value. It did not inflate into oblivion. The British Empire simply rolled over and died. The decline of the sterling silver penny of England was no different a path than the decline and fall of Rome. The United States will follow the same path and that means there is a risk that it will break apart into regional sections ONLY AFTER the dollar is hit very hard following Europe and then Japan. This is fairly simple. All the hyperinflationists can point to is Germany and Zimbabwe. They can offer not a single historical example of how HYPERINFLATION ever destroyed any empire. I have no vested interest in HYPERINFLATION or DEFLATION. I simply do the research and let the evidence speak for itself. This is just not a personal opinion issue in the least. Both will lead to the same end result – the death of an empire. Why must there be an argument over such nonsense. It is DEAD! How Empires Die. The question how do empires die is absolutely critical to surviving the Sovereign Debt Crisis. You can buy gold and listen to this nonsense about HYPERINFLATION and $50,000 an ounce while everything else is worth shit. You will be right insofar as in the end the empire will die. However, you may not make it to the finish line with this myopic view of the world. The very word “suburbium" is what the Romans called it. People left the cities fleeing taxes. The population of Rome itself just collapsed. No city ever matched that size again until the Victorian era in London. This is how empires die. The cost of government always rises oppressing the private sector since the public sector is like a drunk – it just consumes and has the hand out claiming he needs money to eat instead of drink. The people either leave or revolt in their struggle to cope with the persistent unpredictable demands of government that historically NEVER lives within its means. The Goldbugs are not even in the right church forget the right pew. It has never been this battle against what is money or trying to create a “gold standard" that has never survived the folly of man because everything fluctuates in value – it has always been the perpetual battle against the spendthrift ways of those in power who squanders the resources of the people and assumes authority to extort from them whatever they desire at the moment. It matters not what period we look at, the end result NEVER changes. Most of the leading German cities freed themselves in the second half of the 13thcentury from all forms of subordination to territorial princes, yet they were not as autonomous as the independence republics enjoyed by the Italians. This movement towards autonomy was facilitated by various princes' urgent financial needs. The great episcopal cities of Cologne, Augsburg and Mainz became free cities. In the struggle for autonomy, possession of financial resources was a decisive factor in victory. Impoverishment, nonetheless, facilitated the return of the lords because of the failure to manage the fiscal spending of the city.