If the people are well fed and happy then government can pretty much do whatever it wants to do to a few members of the herd. These unfortunates are effectively sacrifices to the LEOs in order to retain the status quo of prosperity and full bellies. But when the prosperity goes away, that little deal collapses and the government begins again to fear its own people.
The latest proof of these facts is playing out in Hong Kong right now where government is reflecting on the fates of other collapsed governments who thought that they could put down protests using force. Government is now opting for a less dictatorial approach to dealing with protests. Less tear gas and rubber bullets and more focus on tolerance and talking. Maybe the herd will just get tired and go home, they hope. And maybe that is what will happen. But maybe the structurally bad economy is going to drive the people to demand real change and sooner rather than later. Keep one thing in mind: an expanding money supply supports expanding government and expanding tyranny.
A contracting money supply has the opposite effect and with the way oil prices are beginning to contract I would not bet on global monetary expansion at this time. The dollar is, on average, getting stronger. It is due for a significant pullback but then it will shoot higher and global markets will begin their long downward spiral as deflation overcomes all efforts to stop it. Deflation is a healing folks, not a sickness. It is the natural course of things. It will not be fun but no kind of drug withdrawal is fun. But it is necessary and the less we fight it and just let the market clear out the excesses, the shorter it will last. The best thing for the people is if government just lets the free market clear market excesses.
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