Following in Ancient Rome’s Footsteps: Moral Decay, Rising Wealth Inequality

There are many reasons why Imperial Rome declined, but two primary causes that get relatively little attention are moral decay and soaring wealth inequality. The two are of course intimately connected: once the morals of the ruling Elites degrade, what’s mine is mine and what’s yours is mine, too.

I’ve previously covered two other key characteristics of an empire in terminal decline: complacency and intellectual sclerosis, what I have termed a failure of imagination.

Michael Grant described these causes of decline in his excellent account The Fall of the Roman Empire, a short book I have been recommending since 2009:

There was no room at all, in these ways of thinking, for the novel, apocalyptic situation which had now arisen, a situation which needed solutions as radical as itself. (The Status Quo) attitude is a complacent acceptance of things as they are, without a single new idea.

This acceptance was accompanied by greatly excessive optimism about the present and future. Even when the end was only sixty years away, and the Empire was already crumbling fast, Rutilius continued to address the spirit of Rome with the same supreme assurance.

This blind adherence to the ideas of the past ranks high among the principal causes of the downfall of Rome. If you were sufficiently lulled by these traditional fictions, there was no call to take any practical first-aid measures at all.

A lengthier book by Adrian Goldsworthy How Rome Fell: Death of a Superpower addresses the same issues from a slightly different perspective.

Glenn Stehle, commenting on 9/16/15 on a thread in the excellent (operated by the estimable Ron Patterson) made a number of excellent points that I am taking the liberty of excerpting: (with thanks to correspondent Paul S.)

The set of values developed by the early Romans called mos maiorum, Peter Turchin explains in War and Peace and War: The Rise and Fall of Empires, was gradually replaced by one of personal greed and pursuit of self-interest.

“Probably the most important value was virtus (virtue), which derived from the word vir (man) and embodied all the qualities of a true man as a member of society,” explains Turchin.

“Virtus included the ability to distinguish between good and evil and to act in ways that promoted good, and especially the common good. Unlike Greeks, Romans did not stress individual prowess, as exhibited by Homeric heroes or Olympic champions. The ideal of hero was one whose courage, wisdom, and self-sacrifice saved his country in time of peril,” Turchin adds.

And as Turchin goes on to explain:

“Unlike the selfish elites of the later periods, the aristocracy of the early Republic did not spare its blood or treasure in the service of the common interest. When 50,000 Romans, a staggering one fifth of Rome’s total manpower, perished in the battle of Cannae, as mentioned previously, the senate lost almost one third of its membership. This suggests that the senatorial aristocracy was more likely to be killed in wars than the average citizen….

The wealthy classes were also the first to volunteer extra taxes when they were needed… A graduated scale was used in which the senators paid the most, followed by the knights, and then other citizens. In addition, officers and centurions (but not common soldiers!) served without pay, saving the state 20 percent of the legion’s payroll….

The richest 1 percent of the Romans during the early Republic was only 10 to 20 times as wealthy as an average Roman citizen.”

Now compare that to the situation in Late Antiquity when

“an average Roman noble of senatorial class had property valued in the neighborhood of 20,000 Roman pounds of gold. There was no “middle class” comparable to the small landholders of the third century B.C.; the huge majority of the population was made up of landless peasants working land that belonged to nobles. These peasants had hardly any property at all, but if we estimate it (very generously) at one tenth of a pound of gold, the wealth differential would be 200,000! Inequality grew both as a result of the rich getting richer (late imperial senators were 100 times wealthier than their Republican predecessors) and those of the middling wealth becoming poor.”

Do you see any similarities with the present-day realities depicted in these charts?

And how many congresspeople served in combat in Iraq or Afghanistan?

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Gold in Q3: USD -4.5%, EUR -2.4%, GBP +1.5%, CHF +2.4%, CAD +4.6%

- Stocks face worst quarter since 2011 over fears for global economy
– Global economy concern as China slows down sharply
– Concern re Federal Reserve stewardship
– Increasing nervousness re U.S. earnings outlook
– Stock markets of the world’s ten largest economies are currently in red
– Gold rose 1.5% in GBP, 2.4% in Swiss franc and 4.6% in Canadian dollar
– Gold down 4.5% in USD while global stocks fall 5% to 13%
– Stocks remain overvalued and still opportunity to rebalance into gold

After the China Tremors of July-August, September rolled in with a roar of a veritable Bear.

All in, on a quarterly basis, S&P was down 8.2 percent, DJIA fell more than 8.7 percent and EuroStoxx 50 shed 12.9 percent. Only longer dated (5 years-plus) U.S. bonds and Japanese Yen have managed to wrestle out quarterly returns in excess of 1 percent.

GoldCore: 3 Month Relative Performance
Meanwhile, the CBOE Volatility Index (VIX), a popular measure of the implied volatility of S&P 500 index options, jumped 38.4 percent compared to the start of July.

Risk aversion once again became a major strategy play in 3Q.

The core drivers for the changed risk sentiment are global themes.

China – at the front of the financial news flow – continued to post weakening macroeconomic data. August marked an outright collapse in Composite PMI, down to 48.8 from 50.8 in July, marking the fastest contraction of output since February 2009. September manufacturing PMI came in at a miserably low 47.2, with Composite PMI falling to 48.0 signaling a rapid rate of economic growth deterioration for the second month in a row.

Chinese economy’s woes, however, are far from being contained. Ongoing deleveraging in the markets – cutting margin loans volumes, unwinding carry trades (including across broader Asian markets), and closing off risk-parity positions – all saw Shanghai Composite Index falling from the peak of 5,166 in mid-June to 3,038 at the end of September. As of September 29, total margin debt in Chinese stock makers stood at CNY921 billion, down more than 50 percent on peak attained in June (chart), but still well ahead of 3Q 2014 levels.

Read more on the blog


Gold struggles near 2-week low after strong U.S. data – Reuters
S&P posts worst quarter since 2011 – Reuters
U.S. Stocks Have Worst Quarterly Rout in Four Years – Bloomberg
Glencore Rallies Most Ever After Company Reassures Investors – Bloomberg TV
Mitsui Posts Record Decline After Swiss Probe, Glencore Rout – Bloomberg


IMF warns of new financial crisis if interest rates rise – The Guardian
America’s Manufacturers Got Crushed in September – Bloomberg TV
BofA Issues Dramatic Junk Bond Meltdown Warning: This “Train Wreck Is Accelerating” – Zero Hedge
Is The Fed Preparing For A “Controlled Demolition” Of The Market – Zero Hedge
Mitch Feierstein: Firms too big to fail before, like JPMorgan, are bigger now – Independent

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GoldCore: Gold Storage 7 Key Storage Must Haves

Download 7 Key Allocated Storage Must Haves

Silver Shortage Reaches New Level: RCM Turns to Sunshine Mint for Help

The physical silver shortage just turned surreal…
Read more ›

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Luke Rudkowski (@Lukewearechange) Breaks Down Russia, China, US, Positions In Syria

Monegraph is disruptive and revolutionary

Monegraph protects digital art with blockchain armor: IHB News™

These are two words that are frequently used to describe the expected impact of blockchain technology on our lives in the near future. And now the latest entry is Monegraph, which aim to protects digital art with blockchain armor.

Regime Change is Coming – Saudi Prince Calls for Coup to Remove King

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You know things are bad in Saudi Arabia when one of its princes, and son of the state’s founder, is openly calling for a coup to displace the current King. This isn’t just some ambitious power play either, Saudi Arabia is an unmitigated disaster. I’ve repeatedly pointed this out, and also predicted regime change on several occasions.

If you’re caught up on your Game of Thrones, you know that this can end in only one of two ways. Either outcome will result in some sort of regime change.

Either the rebel prince succeeds in convincing enough people who matter to remove the King, or the King counters and drives the prince out. The former situation is far and away the best option for stability in the Middle East, and would likely allow the Saudi royal lineage to hold on to power for longer. If the second scenario unfolds, current leadership will crack down even harder on dissent and run the state further into the ground. This behavior will ultimately lead to an unpredictable and likely violent revolution, and if you think the Middle East is volatile now, you ain’t seen nothing yet…

Read the rest here.

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China Now Fifth in World Gold Holdings Table

In his article for Bloomberg business Ranjeetha Pakiam takes a look at China’s recent accumulations in gold and how the country now compares in the world league table on gold holdings. He observes that there is a deliberate policy of increased transparency in China “as the country improves data quality, increases its presence in commodities trading and promotes the international role of the yuan”.

  • China has overtaken Russia to become the country with the fifth-largest gold hoard
  • China’s accumulation of physical gold is being tipped to continue by market experts
  • Monthly reporting increases Chinese transparency after years of mystery

GoldCore: World Gold Holdings

Read more on the blog

Today’s Gold Prices: USD 1122.50, EUR 1000.08 and GBP 739.12 per ounce.
Yesterday’s Gold Prices: USD 1124.60, EUR 1001.16 and GBP 741.36 per ounce.

GoldCore: Gold in GBP - 1 month


Gold in GBP – 1 month

Gold closed at $1127.50 yesterday with a $4.40 loss on the day. Silver was up $0.05 at close to $14.64, a gain of 0.34%. Euro gold fell to about €1002, platinum remained at $914.


Gold ends lower for third straight session – MarketWatch
Platinum Extends Slide to Lowest Since 2008 Amid Demand Concerns – Bloomberg
Platinum poised for worst quarter in seven years on Volkswagen scandal – Reuters
Asia shares rally, but on track for worst quarterly loss in four years – Reuters
Traders Flee Emerging Markets at Fastest Pace Since 2008 – Bloomberg


Banks should be afraid, disruption of financial services has only just begun – The Telegraph
World set for emerging market mass default warns IMF – The Telegraph
Britain’s buy-to-let boom is a growing risk to the economy, could spark a house price crash – MailOnline
Obama Deifies American Hegemony — Paul Craig Roberts
It’s Time to Get Your Gold Out of the U.S. –

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GoldCore: Gold Storage 7 Key Storage Must Haves


Download 7 Key Allocated Storage Must Haves

China’s Leadership: Brilliant or Clueless?

I am often amused by the Western media’s readiness to attribute godlike powers of long-term planning and Sun-Tzu-like strategic brilliance to China’s leadership. A well-known anecdote illustrates the point.

Zhou Enlai, Premier of China in the Mao era, who when asked by Henry Kissinger about the French Revolution, is reputed to have replied, “It’s too early to say.”

This is generally taken to express the Chinese Long View, i.e. that the events of 1789 are still playing out.

But accounts of those present discount this interpretation. Zhou understood Kissinger’s query as being about the 1968 general strike in France. That social revolution was still actively in play in the early 1970s when Zhou and Kissinger were meeting, so the time frame was definitely present-day, not the 18th century.

China’s dramatic rise since the early 1980s, when Deng Xiaoping’s reforms occurred, has been nothing short of phenomenal. This remarkable success has to be attributed in some measure to the leadership’s policies and decisions of the past three decades.

This economic success is the foundation of those who see China’s leadership as brilliant.

But the policies and decisions that worked so well in the boost phase of growth–what we might call the era of low-hanging fruit–do not necessarily work in the next phase, where growth has matured and all the costs that were ignored in the boost phase must now be addressed and paid.

If we look at the problems in China’s economy, environment and foreign policy, it seems the leadership is making it up as they go along, with the one overriding goal being to maintain the domestic political control of the Communist Party.

On the economic front, China’s leadership has actively pursued policies that expanded the shadow banking system and conventional banking system into a $28 trillion debt bubble. This explosive expansion of credit has fueled a real estate bubble of monumental proportions, and a $10 trillion stock market bubble that is now bursting (as all bubbles eventually do, despite claims that “this time it’s different”).

Rather than being brilliant, this is a disaster, as bubbles don’t dissipate without profound systemic consequences.

rather than deal with the crumbling of the real estate bubble, China’s leaders have inflated a stock bubble that promises to bankrupt the tens of millions of households that placed bets in the casino with borrowed money (margin accounts).

On the foreign policy front, China has accomplished the near-impossible, i.e. driving all its neighbors into a united front, as Vietnam, the Philippines, Korea and Japan are all being forced by Chinese belligerence and over-reaching territorial claims to set aside their differences and strengthen ties with the U.S.

Were someone to craft a foreign policy designed to unite all of China’s potential enemies into a powerful alliance, this would be the top choice.

The Chinese leadership is acting for all the world as if it moves from strength to strength, when the reality is the opposite: the leadership moves from one catastrophically ill-planned misadventure to the next.

It is easy to predict the unraveling of the real estate and stock market bubbles and the subsequent collapse of China’s multi-trillion dollar shadow banking system. Having united all its potential enemies into one camp, China has undone decades of careful diplomacy and boxed itself into a diplomatic corner. Now that it has publicly issued extravagant territorial claims, China cannot back down without losing face; but if it continues to push its claims, it further alienates potential allies and pushes them to strengthen ties with the U.S. and other nations threatened by China’s bellicose claims.

In the Great Game, one should never risk one’s position before one has the means to defend that position. China is aggressively pursuing territorial claims that is cannot defend without isolating itself–a policy that would doom its export-and-resource dependent economy.

There are few if any historical precedents for China’s leaders to follow. the boost phase of plucking low-hanging fruit is the easy part, the fun part, the exciting part.

Dealing with the aftermath of burst credit/asset bubbles, environmental destruction, corruption, wealth inequality, global recession and China’s aggressive claim to territory in the South China Sea is the hard part, the not-fun part, the part rife with the potential for catastrophic errors in policy and judgment.

What worked in the post-global financial meltdown era of 2008-2014 (i.e. inflating a $15 trillion credit bubble) will not work the same magic in the next seven years, but there is little evidence that China’s leadership (or indeed, the leadership of the U.S. Japan and the European Union) have a Plan B that will replace strategies that are yielding diminishing returns and raising the risks of a systemic failure.

Brilliant or clueless? As Zhou observed, it’s too early to tell.

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Meet Carly Fiorina – Failed CEO, Staunch Defender of Torture, Advisor to the C.I.A. & War Hawk

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As a result of Ron Paul’s decision to run for President under the Republican ticket in 2008 and 2012, as well as the explosive popularity of his message, many people naively assumed the GOP was the obvious vessel under which libertarianism and/or constitutional ideas would ultimately take hold and flourish. The past year has completely discredited this pipe dream.

Yes, the Republican party has pivoted since Dr. Paul’s last run in 2012. It has pivoted decisively and resolutely toward authoritarianism and demagoguery. This can be seen in Rand Paul’s total failure to generate any sort of momentum (although his personal lack of judgement and poorly run campaign deserve plenty of criticism), but it is most clearly evidenced in the type of characters who have surged in the run-up to next year’s primaries.

Read the rest here.

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[KR816] Keiser Report: Days of Rage, Killer Cereal, Cryptocurrencies & Online economy

We discuss the days of rage and killer cereal as apps and ponzis are the only avenue to wealth. In the second half, Max interviews Matt Harms of StartChat about cryptocurrencies in the Netherlands, crowdfunding innovation and bypassing the banking system to create an online economy.


BBC: Cereal cafe attacked by ‘affordable housing’ protesters in east London
Charles Hugh Smith: Time to Trade in Your Jag, Benz, BMW for a Dented Econobox: Days of Rage Are Coming

Full Putin Speech U.N General assembly with English translation