Dimitry Orlov: The Real Perpetuum Mobile

Dreams of a perpetual motion monetary machine are being dashed, to be replaced by pain and disappointment. The US went under heavy monetary sedation in 2020 and hasn't regained consciousness yet. It attempted to create an illusion of a perpetuum mobile: a state of affairs where it is possible to chaotically flood the markets with unlimited liquidity without suffering any consequences, all the while enjoying a fleeting sense of immortality. The markets are bubbling away, the budget deficit is unbounded, there is no inflation and all is sweetness and light!

At that time, the US federal government, beguiled by a feeling of invulnerability and suffering from a permanent lapse of reason, generated endless rescue plans. Helicopter money fluttered about endlessly: around $1 trillion in March to May of 2021; $1.2 trillion of infrastructure plans from November 7, 2021. There were dozens of such plans spawned into being by Biden et al.

When their faith in immortality reached its apogee, fear faded away, brains shut down, and $6 trillion was given away to all who could possibly soak it up for any sort of shoddy excuse. People were literally being forced to shut up and take the fake money.

Back then, in 2020 and in first half of 2021, when inflation was still low, it seemed that this state of affairs would last forever. It was being said at the time that inflation is temporary and being caused by various transitory and nonrecurring factors. These factors would go away, it was being said, and the situation would normalize. Now there is a new topic for such shameless banter: that there is no risk of recession—none at all! They are trying to manipulate public opinion using idiotic official predictions of 2.5% GDP growth for 2022.

In both cases they were dead wrong. Inflation is at a 40-year high while the economy has entered a terminal crisis. Standard procedures of reacting to it would be useless in finding an exit from it.

Specifically, any attempt to conjure up consumer demand out of thin air is doomed to failure. All previous attempts at doing so have failed. Real per capita household consumer spending in the US in May 2022 is just 1.5% higher than in February 2022. Incomes are 0.6% higher, but if you subtract government handouts it is 0.6% lower.

Inflation is destroying everything, and the wave of destruction won't crest until every single fake dollar disgorged by the Fed is burned up in an inflationary hell. But that will just be the start. For decades now the US got rich on its ability to blackmail the whole planet, making it possible for it to import all sorts of things in exchange for promissory notes that eventually become worthless.

That ill-gotten wealth will now be expropriated in a process known as asset-stripping: anything that isn't nailed down will be crated up and shipped off just to keep the product lifelines functioning a little longer. And then there will be the reparations for all the US war crimes of the past half-century. Oh, and wasn't it the US that engineered Covid-19 and unleashed it on the planet? How much do you think the compensation for that heinous act will come to? A whole lot, I would think! But let's not forget the little stuff, like the costs of environmental clean-up for all the US military bases around the world that are about to be abandoned.

Paying for this with fake printed money isn't going to work and there is just not that much demand for internal organs for transplantation. Americans have been doing brisk business in stem cells from aborted fetuses, but that's limited by the number of sick rich people who can afford stem cell therapy, plus the recent Supreme Court decision on abortions will probably derail that business

To my mind, there is no way for the US to ever repay all of its debts. But it should be possible for the US to perpetually make payments against it by becoming a sort of agrarian and mining powerhouse, growing crops and digging up minerals by hand and delivering them to the loading docks in mule trains.

Of course, this would involve bringing back slavery, but that shouldn't be a problem: at present there are more African-Americans toiling away in US prisons than there were Negros toiling away on plantations prior to the Civil War. To make it politically palatable, it would be best not to call it slavery but to disguise it and dress it up with cute eco-symbols and catchy slogans such as "you will own nothing and you will be happy."

And that, my friends, would be a true perpetuum mobile: the US forever working to pay down its debts—until the next ice age rolls around.