Disingenuous Consensus Ensures an Eventual Fait Accompli
Open societies permit the discussion of ideas of all kinds. This allows periodic changes to be enacted as needed to ensure a relatively cohesive society. For example, if enough people begin to think that gay people deserve equal matrimonial rights the law can be changed to accommodate this. Changes can be made in real time. Your generation has the ability to create historic change. This promotes a feeling of fairness in society. Injustices may go on for a while but most people agree we are working our way towards a more just society.
Sometimes the above system breaks down. When a society begins to do things disingenuously en masse for the sake of keeping up appearances something has changed. In the final innings of Soviet Russia, even the very last months, everyone vociferously supported the government when opinion polls were conducted. The discontent could be sensed by all but it failed to register in the official numbers. You would see high approval ratings from people lying to pollsters. Being a totalitarian state, and one of the most paranoid ever, people feared the consequences of speaking their minds. The regime had worn people down to the point where they would only repeat ideological platitudes in any official setting. They did what they believed was expected of them.
Cultural stagnation is certain when no one feels they can speak their mind. When a society gets to this point upheaval will likely follow. When people feel they have no ability to enact meaningful change in their lifetime you begin to see a breakdown of human character, trust in institutions, and planning for the long-term. When the Soviet Union did fall everyone was suddenly an outspoken anti-communist. They felt this way the whole time, but were too afraid to say so.
This type of behavior has now found its way the land of the free as well. Pollsters had a very difficult time assessing the 2016 general presidential election because many people would lie in polls to escape the perceived judgement of the person polling them. They would say “Oh I’m voting for Gary Johnson” or “I’m not voting.” If the respondents were clever they would attempt to sabotage the polls directly and say “I’m voting for Hillary Clinton.” How rabid Trump supporters uttered this lie without their facial muscles freezing up is amazing by itself. Once the election occurred and the results were tabulated these people no longer felt shame about their choice. They were no longer in a wretched minority. They were in a near majority of 46%. A few retained their shame but most came out and boasted boldly that they had voted for Donald J. Trump.
When people are afraid to speak openly on any topic out of fear of reprisal, society has a looming problem. This environment makes it impossible for policymakers to gather accurate information and properly assess the situation. When you don’t allow people discuss things freely and openly you make peaceful change impossible. Those who make peaceful change impossible make violent revolution inevitable.
The Soviets weren’t able to implement glasnost measures quickly enough to remain in power. The Democrats weren’t able to adjust their platform to court the previously rock-solid Midwest voters they were about to lose. The polls indicated to both of these groups that if they just kept doing what they were doing, implementing slow and steady change, everything would be fine. They believed the people were patient and willing to allow change to occur at its traditional glacial pace. All was well. But the people weren’t fine. They were unhappy, upset, and pissed off. The people wanted change, and they wanted it now.
What is the next issue that the consensus is totally wrong about and is therefore being mispriced by the market? It has to be something that people are lying about in the hundreds of millions. Lying even to themselves. The US is the sole surviving super power, the only country to have the privilege to control the world reserve currency. What if that were to cease being the case?
Millions of people are voting with their wallets that the world will not stay the way it is. They feel behooved to hedge their traditional bets by allocating small portions of their portfolio to gold and bitcoin. They see the profligacy of the US government and the federal reserve. The US’s immense financial privileges, due to WW2 and Bretton woods, have fomented an attitude that says: the world needs us for protection, they must use our currency for trade in exchange, so we can print as much as we like, and they have no alternative. We can blow out the deficit, monetize our debt, force feed everyone negative real returns, and the world will take it lying down. We are the school yard bully who keeps the goods flowing on the playground while exacting our cut. We deserve to maintain our immense privileges even as our growth slows relative to the world and our percentage of global GDP falls. It makes less and less sense to conduct trade in the currency of a country which makes up a smaller percentage of world trade year after year.
There is a great many people coming to the quiet realization, in the recesses of their minds, that this situation cannot go on forever and will not go on for much longer. It starts only as a whisper, the thought that the winds of change might really be blowing. Most find this too unlikely to even consider. After all the world financial system has operated this way since their grandparents were born. If you ask them if they think the Fed is going to maintain control of interest rates or if the dollar is a good store of value. They will vehemently answer yes. But this is because they are afraid to acknowledge something so far out of Overton’s window. They are afraid to say that perhaps gold can reclaim its throne or that bitcoin has a chance. They fear the ostracism and ridicule from their contemporaries too greatly.
They are aware that the US’s current fiscal situation is untenable. M2 growth is at 25% this year. Civil unrest is rising. Anyone with a paycheck or pension is feeling the squeeze and expressing their discontent. Change will be gradual and then sudden. It will be a step function. It will be like the collapse of the Soviet Union, or the election of Donald trump. A silent majority who thought the system was unjust and untenable all along, but who weren’t permitted to speak their mind, will unveil the fait accompli that was inevitable the whole time. In hindsight all will be clear.
