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The Death of American Capitalism?

ARROYO GRANDE, Calif. (MarketWatch) — Jack Bogle published “The Battle for the Soul of Capitalism” four years ago. The battle’s over. The sequel should be titled: “Capitalism Died a Lost Soul.” Worse, we’ve lost “America’s Soul.” And worldwide the consequences will be catastrophic.

That’s why a man like Hong Kong’s contrarian economist Marc Faber warns in his Doom, Boom & Gloom Report: “The future will be a total disaster, with a collapse of our capitalistic system as we know it today.”

No, not just another meltdown, another bear market recession like the one recently triggered by Wall Street’s “too-greedy-to-fail” banks. Faber is warning that the entire system of capitalism will collapse. Get it? The engine driving the great “American Economic Empire” for 233 years will collapse, a total disaster, a destiny we created.

You know something’s very wrong: A year ago “too-greedy-to-fail” banks were insolvent, in a near-death experience. Now, magically they’re back to business as usual, arrogant, pocketing outrageous bonuses while Main Street sacrifices, and unemployment and foreclosures continue rising as tight credit, inflation and skyrocketing Federal debt are killing taxpayers.

Yes, Wall Street has lost its moral compass. They created the mess, now, like vultures, they’re capitalizing on the carcass. They have lost all sense of fiduciary duty, ethical responsibility and public obligation.

Capitalism has been the engine driving America and the global economies for over two centuries. Faber predicts its collapse will trigger global “wars, massive government-debt defaults, and the impoverishment of large segments of Western society.” Faber knows that capitalism is not working, capitalism has peaked, and the collapse of capitalism is “inevitable.”

When? He hesitates: “But what I don’t know is whether this final collapse, which is inevitable, will occur tomorrow, or in five or 10 years, and whether it will occur with the Dow at 100,000 and gold at $50,000 per ounce or even confiscated, or with the Dow at 3,000 and gold at $1,000.” But the end is inevitable, a historical imperative.

While the timing may be uncertain, the trigger is certain. Societies collapse because they fail to plan ahead, cannot act fast enough when a catastrophic crisis hits. Think “Black Swan” and read evolutionary biologist Jared Diamond’s “Collapse: How Societies Choose to Fail or Succeed.”

A crisis hits. We act surprised. Shouldn’t. But it’s too late: “Civilizations share a sharp curve of decline. Indeed, a society’s demise may begin only a decade or two after it reaches its peak population, wealth and power.”

“How are you so sure about this final collapse?” The answer: “Of all the questions I have about the future, this is the easiest one to answer. Once a society becomes successful it becomes arrogant, righteous, overconfident, corrupt, and decadent … overspends … costly wars … wealth inequity and social tensions increase; and society enters a secular decline.” Success makes us our own worst enemy.

Quoting 18th century Scottish historian Alexander Fraser Tytler: “The average life span of the world’s greatest civilizations has been 200 years” progressing from “bondage to spiritual faith … to great courage … to liberty … to abundance … to selfishness … to complacency … to apathy … to dependence and … back into bondage!”

15 more clues capitalism lost its soul … is a disaster waiting to happen

Much more evidence litters the battlefield:

1. Wall Street wealth now calls the shots in Congress, the White House
2. America’s top 1% own more than 90% of America’s wealth
3. The average worker’s income has declined in three decades while CEO compensation exploded over ten times
4. The Fed is now the ‘fourth branch of government’ operating autonomously, secretly printing money at will
5. Since Goldman and Morgan became bank holding companies, all banks are back gambling with taxpayer bailout money plus retail customer deposits
6. Bill Gross warns of a “new normal” with slow growth, low earnings and stock prices
7. While the White House’s chief economist retorts with hype of a recovery unimpeded by the “new normal”
8. Wall Street’s high-frequency junkies make billions trading zombie stocks like AIG, FNMA, FMAC that have no fundamental value beyond a Treasury guarantee
9. 401(k)s have lost 26.7% of their value in the past decade
10. Oil and energy costs will skyrocket
11. Foreign nations and sovereign funds have started dumping dollars, signaling the end of the dollar as the world’s reserve currency
12. In two years federal debt exploded from $11.2 to $23.7 trillion
13. New financial reforms will do little to prevent the next meltdown
14. The “forever war” between Western and Islamic fundamentalists will widen
15. As will environmental threats and unfunded entitlements

“America Capitalism” is a “Lost Soul” … we’ve lost our moral compass … the coming collapse is the end of an “inevitable” historical cycle stalking all great empires to their graves. Downsize your lifestyle expectations, trust no one, not even media.

Hackers Have Already Embedded Code in U.S. Electrical Grid

WASHINGTON (CNN) — Computer hackers have embedded software in the United States’ electricity grid and other infrastructure that could potentially disrupt service or damage equipment, two former federal officials told CNN.

The code in the power grid was discovered in 2006 or 2007, according to one of the officials, who called it “the 21st century version of Cold War spying.”

The U.S. power grid isn’t the only system at risk. The former officials said malicious code has been found in the computer systems of oil and gas distributors, telecommunications companies and financial services industries.

Napolitano said the vulnerability of the nation’s power grid to cyberattacks “has been something that the Department of Homeland Security and the energy sector have known about for years,” and that the department has programs in place to fight such attacks.

Security experts say such computer hacking could be the work of a foreign government — possibly Russia or China — seeking to compromise U.S. security in the event of a future military conflict.

Russia Lashes Out of Missile Shield Deal in Poland

WASHINGTON — The United States and Poland reached a long-stalled deal on Thursday to place an American missile defense base on Polish territory, in the strongest reaction so far to Russia’s military operation in Georgia.

Russia reacted angrily, saying that the move would worsen relations with the United States that have already been strained severely in the week since Russian troops entered separatist enclaves in Georgia, a close American ally. At a news conference on Friday, a senior Russian defense official, Col. Gen. Anatoly Nogovitsyn, suggested that Poland was making itself a target by agreeing to host the anti-missile system. Such an action “cannot go unpunished,” he said.

Those fears were codified to some degree in what Polish and American officials characterized as unusual aspects of the final deal: that at least temporarily American soldiers would staff air defense sites in Poland oriented toward Russia, and that the United States would be obliged to defend Poland in case of an attack with greater speed than required under NATO, of which Poland is a member.

Polish officials said the agreement would strengthen the mutual commitment of the United States to defend Poland, and vice versa. “Poland and the Poles do not want to be in alliances in which assistance comes at some point later — it is no good when assistance comes to dead people,” the Polish prime minister, Donald Tusk, said on Polish television. “Poland wants to be in alliances where assistance comes in the very first hours of — knock on wood — any possible conflict.”