Posted Jan 5, 2013 by Martin Armstrong
As taxes rise and services decline, underground economies are booming. Barter is returning and governments are clamping down following the model of the commonly known Stasi, which was the Ministry for State Security (German: Ministerium für Staatssicherheit).The official state security service of East Germany GDR was one of the most effective and repressive secret police agencies in the world. The Stasi motto was “Schild und Schwert der Partei” (Shield and Sword of the Party), and was viewed by the independent minded people as just a ruthless criminal organisation. When the GDR collapsed in 1989, what has come out from their secret files has been astonishing. People who were thought to be a friend were informers of the Stasi. People were turned against each other by the threat of prosecution for something. When I was there in the early 1980’s, you had to be silent whenever someone was near within listening distance. Everyone was an informer. When people began renovations after the collapse of the GDR of their newly owned possessions (apartments/condos). they found microphones hidden everywhere. Files were created on just about everyone in such detail it was amazing.
Guess what. Those days are back. In Europe, Germany has been openly paying bribes for names of Germans with accounts in Switzerland. Italy has people stationed outside of expensive luxury shops writing down names of anyone who buys. I did not see a single Ferrari on the streets on this trip as a vast amount have been exported awake from the taxman. Governments are so desperate for cash, they are ensuring that Europe in 2013 will have a struggle to produce any positive economic growth.
Britain is now publishing names and photos of people they claim are avoiding taxes. France is openly calling anyone who leaves and refuses to turnover 75% of all their income “assholes” and “traitors” in the press. Governments cannot understand that they are causing an economic implosion. This is PRECISELY the same stupid shit that caused (1) people to abandon the cities in the Roman Empire (suburbium) as we see in France right now, and (2) the collapse in trade and economic activity. The higher the taxes, the less Rome collected, and this forced greater debasement and that fueled hoarding of the old coinage just as all the silver coins disappeared after 1964. Gresham’s Law – Bad Money drives Good Money out of Circulation. VELOCITY implodes!
If you keep extracting revenue from the private sector, there will be no economic growth and unemployment will continue to rise. That will only cause civil unrest. It is time to look at what the hell we are doing. This is economic suicide! Forget HYPERINFLATION. This is DEFLATIONARY by shrinking the economy to the breaking point.