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Are Americans Ready For Europe’s Collapse?

By Rick Ackerman Posted on November 8, 2011, 12:01 am EST Last Updated November 8, 2011, 3:18 am EST

[In the guest editorial below, our good friend Tom McCafferty, a veteran commodity trader and author of numerous books about trading and the markets, recalls the challenges of boot camp in sizing up America’s economic predicament.  The nation will need every ounce of strength, courage and Yankee know-how it can muster to avoid slipping into a deep economic coma, says Tom. Are we up to it?  With Europe on the brink of collapse, we may find out sooner rather than later. RA]

“Get off your dead ass and onto you dying feet!”

Those of you who spent your wayward youth as part of the Corps can remember your First Sergeant bellowing these words, as you ended a rest break half way through a 50-mile hike at Camp Lejeune on a hot August day.  Guess what?  Europe is about to become you new First Sergeant.

Europe is headed for a major depression … like the good old days of 1929!  The Great Depression lasted over a decade in the U. S., even with all the market and job creating stimulus FDR could beg, borrow and steal from Congress.  It took World War II to get us working again.  Then, if we, our allies and even our enemies, hadn’t bombed just about every factory and storage facility in the world, leaving the U.S. with the only working factories and cargo fleet intact in the world, we still might not have gotten out of it.  The Great Depression could easily have gone on for decades and decades.

If Greece thinks they deserve a 100% haircut on their precious bonds and opts out of the EU, you can bet half the banks in Europe and a few in the U. S. will tank.  This will be quickly followed by Italy, Spain, Portugal, and Ireland — by then the EU will be the smoking wreck that Europe was in 1945.  This will quickly spread to Asia (where will China, Japan, Vietnam, India, etc. sell all their crap?).  The U. S. will be caught debating how much to borrow so it can hire every citizen as a government employee.

Retrieving ‘Core Values’

Sad to say, this may be the type of wake-up call it takes to get back to our core values.  Do we still have the spirit that:

•           Carried us through the Revolution of 1776

•           Allow us to expand into a nation from coast to shining coast

•           Absorb people of all nationalities, races and religions

•           Recover from a devastating Civil War

•           Win two World Wars

•           Explore space

•           Master computers, Internet, medicine and science

•           And a hell of a lot more!

The s**t is about to hit the fan — what will our reaction be?  Remember, Rome fell, as did the Holy Roman Empire.  Where is England’s great empire?  All of Europe went through this after the two great wars.  Even China lost the 18th and 19th centuries.  It is nothing new, and many, many countries never had their day in the sun!

We’ll Have to Pull Together

When we were blindsided at Pearl Harbor or when we looked up and saw Sputnik in the sky, what did we do?  We united.  We pulled together.  We crushed our enemy and put a man on the moon.  The lack of leadership at the top and the lack of bipartisanship just below must stop.  The Greatest Generation pulled our irons out of the fire last time.  Now we need the same type of effort from Tea Partiers to the Occupy Wall Streeters to the Wall Street itself to teachers and civil works to Unions to entrepreneurs to all businesses and business people, even the unemployed.  It will take a Herculean effort for the U. S. to survive the next decade.  If we do it with vigor and determination, the century will be ours.  If we don’t — buy gold, freeze-dried food and find a warm cave.

***

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  • davidnrobyn November 12, 2011, 7:05 pm

    In the immortal words of Tonto, “What do you mean ‘we’, paleface?” It’s this “we” that’s gotten “us” to where “we” are today. Down with the collective!

  • Richard November 10, 2011, 6:25 am

    Get the hell outta Dodge before they fire up the incinerators in good ol Nazi States of America!

  • Amir Murtaza November 9, 2011, 7:56 am

    Well my dear boo zoo this time u do not have that time to recover. It is all over. The chain you are stucked in was never their before in the history. It is bye bye for capitalism for ever and may be u’ll not able to see Britain on the map in coming by 2025. Remember me “world is left with 67 years.”

  • mava November 8, 2011, 10:58 pm

    Steve: “Not all are as you describe – disenfranchise.”

    Not sure what you mean by that.

  • mava November 8, 2011, 10:56 pm

    Robert,

    Regarding slaves, I think this might have been the case, because the slaves weren’t “caught” at first, but purchased from their own tribe leaders. You can read many accounts of that from, say Jack London. The tribal leaders were selling them in exchange for shiny utensils, and simple cheap jewelry, utility items. Presumably, then, since the slaves did not reject their tribes, then they were in agreement with the deal.

    I think it was later on, that outright capturing of slaves began. So, in the eyes of free trading Americans they probably were legitimate goods, since this is what the slaves themselves were affirming by holding the allegiance to their tribes.

    Logically, If I am a free man, then I should have the right to sell myself into slavery. As long as this was my own voluntary deal, or as long as others had struck it but I did not object, then I don’t see a problem here.

    What you think?

    • Robert November 9, 2011, 9:46 pm

      “Logically, If I am a free man, then I should have the right to sell myself into slavery. As long as this was my own voluntary deal, or as long as others had struck it but I did not object, then I don’t see a problem here.

      What you think?”

      I think it’s reasonable, provided the provision to “buy yourself back out of slavery” is also available.

      A properly worded contract would be easy to facilitate in this scenario.

      You touched on the ethics of slavery in your post “tribal leaders selling their own people” – this is unjust since it denies the right of the individual to have a say in their own destiny (short of taking their own life or the life of another)

      I see interesting parallels today with all the east Indian IT and medical staff labor pouring into the US to take the high paying jobs that the unemployed US job market is woefully unqualified to compete for.

      Many of these Indian IT contractors are here because:

      1) Their parents paid to educate them ONLY if they studied IT or medicine
      2) Their parents shipped them to the US.
      3) Their parents expect them to remit a minimum of their earnings back to the family in India

      Is this slavery? or is it merely cultural and traditional normalcy?

  • Chris T. November 8, 2011, 6:34 pm

    Tom:

    I fully share the sentiment (and implicit conclusion) of the article.

    However, the background points you make in support are not always correct, as they are way too full of mainstream belief and teaching.
    IMHO, that mars the argument, when it shouldn’t.

    Some specifics:

    a)
    “…a major depression … like the good old days of 1929! The Great Depression lasted over a decade in the U. S., even with … stimulus FDR could beg … from Congress. It took World War II to get us working again.”

    That is what Friedman/Schwarz taught us, and what Krugman, in his “not-enough” shilling, wants us to believe.
    But just because some left-wing or stupid committee members in Stockholm chose to confer a highly prized award on them does not make that any more correct.
    It is not.
    As von Mises and Rothbard showed in their work, that is not how the “Great Depression” played out, how it was started, etc.

    WWII did NOT end the economic malaise, that didn’t happen until right AFTER we stopped wasting resources on destruction. In fact, the mainstream thought the war’s end would bring yet another downturn, Keynesians that they were, but didn’t happen, and they were wrong.

    In fact, the real depression was not started until after FDR became pres, and that was because of his policies.
    The average American, when measured not by pictures or anecdotal evidence, was BETTER off from 1929 to about 1932-1933, because of real deflation.

    The metrics of consumption, based on historical data, show that people increased their consumption of superior goods, decreased their consumption of inferior goods, and increased their charitable giving.
    This is NOT what people do in a slump.
    The high unemployment we did see was the logical oucome of the wage-lagging behind the monetary trajectory:
    when wages decrease slower than deflation, you will have rising unemployment (the converse in inflationary times).
    It is the only way for employers to cope in such an environment.

    But the decrease of the price level seen after 1929 allowed people to live better, as seen in the historical data.
    We tend to forget that even at 22-25% unemployment, 75-78% of the people were STILL working, and because of the much sounder structure, and different lifestyle of the US back then, this LARGE majority was able to help their brothers and sisters.
    How were we sounder and different:
    the average person had savings, and quite a bit of them
    we were by far more agrarian, someone could go back to the farm
    there was very limited debt for the average person
    the average person was not really tied to Wall Street in any way
    But that time definitely was a depression for the 1% (to borrow from OWS), and it is they who want us to see things the way they see them.
    [for the average American, we have been in a depression since about 1970-1975, over which period all points above are just about in reverse. That is when we stopped being better off than our parents, and its been a slow, still-able-to-cope-somehow downhill slide ever since].

    But even if all of that is not persuasive, due to 70-80 years of smokescreen, Mises and Rothbard certainly are in their refutations of Friedman and Keynes.

    b)
    ” Then, if we, our allies and even our enemies, hadn’t bombed just about every factory and storage facility in the world, leaving the U.S. with the only working factories and cargo fleet intact in the world, we still might not have gotten out of it.”

    That really is just another example of Bastiat’s broken window fallacy.
    It is still believed, and unfortunately that belief, because so commonly held, is very capable of being used to justify a war and have the hoi polloi cheer when it is announced.

    c)”Absorb people of all nationalities, races and religions”

    We didn’t really do that back in immigrations heyday.
    We hardly absorbed the slaves we imported, and we certainly didn’t want to until about the 1960s.
    We didn’t absorb the Chinese RR-laborers.
    For most of our history, it was only an absorption from Europe, and that didn’t go smoothly for many.

    But the all races/all religions/all nationalities is a very recent phanomenon, even in our short history, from about 1965.

    And now, into what should this future absorption be?
    The majority that used to be (to whatever extent) the absorber is declining, its values have been deemed obsolete for generations now, and so on.

    Take just the example of So.Cal.:
    If you are an immigrant from Asia to there, if you truly wanted to adapt to your surroundings it would not be into the European-anglophone culture, but into a Latin/Central American spanish culture.
    That ability to absorb is being lost ever more, and on a one way trajectory.
    If ever were a melting pot, we now are almost not even a salad bowl, more like a Cobb salad…

    John Jay:
    ” It’s not like we are dependent on exports to prosper like Germany, Japan, and China are.”

    The replies to your post above are quite correct.
    But, there is another thing we fail to consider:
    Our imports, at least from China, were the escape valve for producers from the continous inflationary pressure applied to them.
    Going to China, or wherever, allowed this pressure
    not to show itself in higher prices, instead dumping it on China.
    The path you describe will bring that back like a tsunami, so we will hardly be better off for it.

    Finally a comment about Greece:
    They certainly can default on their obligations, in fact they should, and then they would be rid of their PAST overconsumption problem.
    But, who then will fund their PRESENT and short-term future overconsumption?
    No one.
    They will have to make due with what they have themselves, which is not much.
    With about 1/2 the country’s workforce working for the government, and a substantial protion of the rest living off the government in one hand-out form or another, the belt-tightening will be so severe as to resemble a corset of the Victorian Age.
    How many people can stomach that in Greece (pardon the pun)?

  • dan November 8, 2011, 7:28 am

    (1) our money is worthless

    (2) manufacturing gone

    (3) we import most items that we need

    (4) who will accept our currency to pay for imports

    (5) more consumers then producers

    (6) a corrupt government

    (7) a dumbed down populace

    (8) NWO agenda in full play…

    Good luck to all cave dwellers…

  • mava November 8, 2011, 6:18 am

    What is clear to me, from even my (very) cursory knowledge of history is that we do not scale up to Americans as they used to be. They had more brains, more guts, and more honesty – they killed the National bank twice in a row, – versus us begging the tyrant for the national helthcare.

    What are we talking about now? Who in OWA even understands the issue? Are they not just interested in getting fatter welfare check? They had enough guts to lie and get a fraudulent mortgage, yet they can’t stand to be evicted? They know enough to complain about corporations and layoffs, but not enough to understand that they created this all by demanding the minimum wage?

    For god sake, they are even silly enough to not know what “non profit” means, and how it works.

    We are entirely different grade of people. Not the free people grade, but rather slave soldiers grade. That is the level of our understanding, honesty and courage.

    • Steve November 8, 2011, 5:33 pm

      Not all are as you describe – disenfranchise.

    • Robert November 8, 2011, 8:38 pm

      “What is clear to me, from even my (very) cursory knowledge of history is that we do not scale up to Americans as they used to be. They had more brains, more guts, and more honesty – they killed the National bank twice in a row, – versus us begging the tyrant for the national helthcare.”

      Well…. No argument on the banks, or the brains parts- The Founders were apparently possessed of advanced intellectual thought processes and enlightened reasoning…

      More guts- perhaps in an aggregate sense- but humans in general were seemingly more pre-disposed to violence back then.

      Honest… Now that’s an interesting one:

      Honesty is a debatable trait as it pertained to white slave owners who declared in writing that it is a self evident truth that all men are created equal… There is a fundamental hypocrisy underlying this basis.

      Were they biased against women and slaves? I don’t know, but the historical record seems pretty telling when one comprehends just how hard fought the battle over the 19th amendment was (The 19th granted women and minority “franchisee citizens” voting rights in the US corporation)

      Could the Founders have avoided the cloud of ambiguity by using the word “people” instead of “man” in the Declaration of Independence…?

      Perhaps it is time for a new Declaration for humanity that would clear up these little semantic nuances…?

      Indeed, the term “mankind” is fundamentally racist at it’s core. How does one interpret a “kind” of man?

      Am I one “kind” of man due to the color of my skin? Am I another “kind” due to the lack of hair on my head, or the fact that I enjoy shooting guns?

      hehehe- I’m on a roll today. I should put away my pot-stirring stick.

  • Benjamin November 8, 2011, 4:02 am

    C’mon America?! Where’s your connection to your pioneering roots?! Let’s see…

    “Carried us through the Revolution of 1776”

    Our finest hour. Check!

    “Allow us to expand into a nation from coast to shining coast”

    Manifest Destiny, to this day, remains our greatest national and historic shame. There is NOTHING at all to be proud of, there.

    “Absorb people of all nationalities, races and religions”

    Yes, because it is not enough that we simply leave them alone. We have to take bolder actions in order to show how serious we are about the Declaration of Independence, don’t we? I mean, if we don’t leave people alone, then it cannot possibly stand, now can it?
    Riiight…

    “Recover from a devastating Civil War”

    Not from my perspective. I’m looking more deeply into that era than I ever have, and it seems to me that Civil War and Resonctruction Era politics are alive and well today. I’ll go as far as to say that the 3/5ths compromise could well be THE beginning of the end of the Founders’ vision. The issue hasn’t died. It has only morphed into a divisive monster that we just slap bandaids on.

    “Win two World Wars”

    I’ve always felt that if we hadn’t “saved” England from defaulting, that WWI wouldn’t have been so bad. And certainly not bad enough to give rise to WWII.

    “Explore space”

    …while hollowing out all else that matters. I’m not talking about resources and environment, but rather principles and the REAL wealth which results from them. If anything, that hollowing out has killed our ability to explore and utilize Space. What the post-war era space program did was allow government to shut down the pioneering spirit, via a monopoly on it.

    “Master computers, Internet, medicine and science”

    Mastery of science means strict adherence to the scientific method. We live in the post-scientific era, one that doesn’t adhere to that necessary standard…

    http://www.numberwatch.co.uk/zealots.htm

    “And a hell of a lot more!”

    No, no more. We need less. And marching orders from Europe is more of what we don’t need. “Maybe” if we don’t come to their rescue this time around, then Europeans will learn to get by without us. And if they don’t get their act together, well, the refusal would be all the more justified. People who can’t get their act together would only (further) drag down those foolish enough to take their hand in theirs. So either way, the U.S. wins from refusing to engage in more.

    • Robert November 8, 2011, 7:21 pm

      “Mastery of science means strict adherence to the scientific method. We live in the post-scientific era, one that doesn’t adhere to that necessary standard…”

      – One can draw many parallels between the scientific method and other regimented standards of conduct (like the Gold Standard for bankers and financiers, etc…)

      The Scientific Method was formulated originally to isolate the prejudicial bias of the Scientist to prevent or disuade it from clouding their own personal judgement toward their work- Consider that most people do not begin studying a subject with such scrutiny unless they are REALLY REALLY interested in it to begin with (read: passionate).

      I mean really, plate techtonics would never have been discovered, characterized, and accepted as natural law without someone (Alfred Wegener) being REALLY interested in why different rocks are made up of different compositions of minerals… In Wegener’s time, people were content to simply accept that earthquakes occured due to an “angry God” thesis, and that the moon has always been where it is in the sky.

      Today, we can infer (with near mathmatical perfection) the thesis that a Mars sized planet collided with Earth 3.5 Billion years ago, that the Moon was formed by the debris cast off from the impact, and that the Earth’s interior is still so hot and fluid from that event that the rocky crust we walk around on is merely the allegory of the foam floating around on the surface of a glass of beer.

      None of these logical and historical correlations would have come into existence without Wegener and his truly bizarre fascination with rocks.

      The scientific method is intended to protect the integrity of the work from “the human passion factor” of the Scientist, BUT- there is a glaring logical loophole in the method as it pertains to repeatability of experimental results. As an example, consider the “Wow” radio signal from space that was picked up by SETI in 1977. The fact that the signal never repeated on subsequent scans of that area of space has prevented science from declaring it as a valid signal of intelligent origin, and yet the TRUTH might simply be that whomever sent the message factually only transmitted it once. The logic of the plausible “one time transmission” is valid. Since we don’t know where the signal came from, we can’t prove whether or not someone might have deliberately sent it only once.

      Indeed- no one was around 3.5 Billion years ago to witness whether the moon and the moving continents were actually set in motion by an enormous cosmic impact, but, as with all things, our 5 senses (balanced by common sense) tell us that plausibility is more easily accepted than “angry Gods” if we are only willing to maintain an open mind…

      The Scientific Method (like the Gold Standard) is not infallible, and will never let us understand the mind of God. The individual will always have to “fill in the blanks” as to how facts lead to truth…

      Also, Science is every bit as corruptable (via lobbying) as politics is. I could fill the disks of Rick’s servers with accounts of Scientists who “volunteered” to abandon controversial work in exchange for a cushy Department Chair position at some University; or maybe to earn a larger grant from some corporate titan if they shifted the ” statistical bias” of their work in a direction that favored the company versus one of its competitors.

      I know far too many scientists who have placed their faith in the scientific method, only to watch their careers become derailed by others who chose to yield to (or willfully embrace) the patent dishonesty of unethical ambition (grabbing for the dangling carrot instead of defending the integrity of your work)…

      Corruption pervades all arenas of endeavour.

      Wow- this was a long post. What was I saying about passion?

    • Benjamin November 9, 2011, 12:46 am

      While I hadn’t expected it THIS time… Someone ALWAYS raises the point of something like plate techtonics to point to the scientific method and say “ah, but…!”.

      Someone never fails to do that, Robert. Never! 🙂

      Whatever else Wegener’s work had to say about continental drift, the observation of sea-floor spreading was the quintessential observation. Until then, the critics of continental drift could reasonably object and therfore could not be accused of violating scientific integrity. It’s a two-way street until that vital observation or set of observations emerges.

      So, rather than being a hinderance, the skepticism allowed by scientific integrity is a driving force for progress. But imagine what may have been if people hadn’t been so “mean and narrow-minded” as scientific integrity allowed them to be. How often, if ever, is one so on-the-nose that they don’t require more observations, to fill in the holes and inconsistencies that are destined to emerge in the works of even the most passionate and honest person in the universe?

      The scientific method is innocent of your charge of being a potential progress-killer. It strengthens our ability to progress, by making people try harder to unearth that quintessential observation(s). And that takes passion and dedication, so you’re not wrong to say that those matter. As for corruptability, that is purely the fault of an individual, not the standard which they are betraying. If one holds a position becuase they are paid to, or stand to gain much from resultant policy, then it can’t be the fault of the scientific method. Nor is, as some would contend, money or other benefit (the root of all evil is the conscientious decision to be dishonest, not standards which bid people to not be dishonest).

      One must also consider the nature of the “beast”. Science can be a wonderful thing, but at times it is not a thing for the timid. When an impasse is reached, emotions will boil in the calmest and most level-headed of people. People get testy, then nasty. And it stays that way until something comes along that bids them all to just shut up (for a while, anyway). Human nature. It is one thing to doubt or promote, even heatedly so, when the evidence-to-date allows for both. But it is quite another to systematically disallow people to agree to disagree, hit below the belt, threaten, condemn, and to continuously promote a position that has been shown to be in error and/or not in need of a policy being “humbly suggested”.

      That’s the point Mr. Brignell sought to make in March of the Zealots. Science today, in large part, has become a crisis of lies overshadowing truth, not of reason and passion driving one another (which is no crisis at all). In a broader context, I sought to point out that “taking orders from Europe” will not solve that crisis. If anything, tightening the ol’ belt so that we can “save” another continent again would cement us to what is killing scientific progress.

    • Robert November 9, 2011, 9:31 pm

      My point Benjamin is that the scientific method is not the savior that will deliver the unfallible rationalization between lies and truth.

      The liar decries the needful nature of skepticism, because as I stated elsewhere- lies require much more captital to maintain than truth does. If one can subvert skepticism, then one can reduce the “maintenance costs” of their own brand of propaganda.

      I never said the scientific method was not a valuable code of conduct- I merely said it is not a guarantor of infallible righteousness.

  • John Jay November 8, 2011, 12:02 am

    Mike,
    GE, Boeing, Master Lock, NCR, Coleman, and Ford are all moving at least some production back to the USA.
    Here is one link: http://tinyurl.com/7632l2n
    Here is the link that Eric listed above: http://www.bcg.com/documents/file84471.pdf
    Just Google the topic. It is not a flood, but it is a start. It will take time to undo 30 years of off shoring. It will take time for the mindset to change in the corporate boardrooms. But those guys are likely to go with the new trend once it catches on and especially if it makes economic sense to manufacture here for the North and South American market. I doubt it will mean we will be manufacturing here for export to Asia. I have even purchased some plastic drinking cups at WalMart that were made in the USA. Someone has a furniture manufacturing factory out here in Chino, CA. Their TV ads stress “made in Chino, not in China!”

  • Fred November 7, 2011, 9:19 pm

    Why don’t Italy and Greece issue gold backed bonds with long durations and push the crisis date down the road?

  • fallingman November 7, 2011, 7:04 pm

    “If Greece thinks they deserve a 100% haircut on their precious bonds…”

    When is a “haircut” a clean shave? Hmmm. I suggest we adopt a new term for a 100% haircut.

    How about a “decapitation.”

    Interesting comments guys.

    • John Jay November 7, 2011, 8:43 pm

      fallingman,
      The banks all over the planet are doing everything they can to stop the mark to market process.
      Here in the US they have millions of mortgage holders that have not made a payment in a year or more. They ignore that fact for a number of reasons. First, they need to hide the ponzi MBS scheme consequences at least until the statute of limitations runs out on those crimes. Second, if house prices collapse to be in sync with US wages, they will make vastly less in interest income, as I’ve said before, 40 years ago a house was 20k. They make a lot more in interest and fees on a present day 200k mortgage than on a 20k mortgage. Forty years of slow motion hyperinflation has helped to concentrate the wealth here. The rising costs that kill the little guy like gasoline, untilities and energy are not even a blip on the radar screen of a Buffet. Housing, rent, college tuition, health insurance inflation are just opportunities to make money to the uber wealthy, not a crushing burden. And they certainly don’t plan to suffer any losses on worthless Greek bonds if they can somehow stick it to the public. Europe is tottering on a mountain of debt that can’t be paid back, just like the USA. I hope they fall off that mountain before we do.

  • Robert November 7, 2011, 7:01 pm

    “When we were blindsided at Pearl Harbor or when we looked up and saw Sputnik in the sky, what did we do?We united. We pulled together. We crushed our enemy and put a man on the moon.”

    Going to the moon was an act of war? Sadly, you are probably right.

    “The lack of leadership at the top and the lack of bipartisanship just below must stop. ”

    BAH- the only thing that has to stop is people paying attention to what’s going on at the top and just below it. Disenfranchise.

    “The Greatest Generation pulled our irons out of the fire last time.”

    – By following orders to go overseas and kill other people, and destroy other economies.

    “Now we need the same type of effort from Tea Partiers to the Occupy Wall Streeters to the Wall Street itself to teachers and civil works to Unions to entrepreneurs to all businesses and business people, even the unemployed. ”

    What kind of effort? Going out there and grabbing a rifle and preparing to follow every ass-backward mantra of complete retardation that comes out of Washington?

    Wrong- what we need are for people to look themselves in the mirror and be honest with themselves.

    The introspective question, “Is what I’m doing really generating the results I intended for myself and others?” is so basically easy, and yet today so many seem afraid of self scrutiny and personal honesty because their senses and their intuitions do not “line up” correctly with the way that everyone has always told them things are “supposed to be”.

    Well, the real world is the one YOU experience. It has nothing to do with any of the diatribe, propaganda, or pure BS being fed to you by others.

    The Occupyers are doing the right thing (in my opinion)- yet I still question if they really know WHY they are doing it (merely a consequence of youth, I think).

    I trust that this knowledge and understanding of reality will gradually seep into the culture. The Internet is a much more powerful instrument of truth than it is of propaganda. Remember- once the lie is told, 90% of the liar’s effort has to go into obscuring the truth to maintain the lie.

    Once the truth is told, the truther can move on to whatever else they feel like doing next. There is no consequential effort to maintaining honesty.

    My wizened Grandfather told me something when I was 10 years old that stuck with me forever:

    “The truth represents the power of self. Lies represent the powers of others. If you cling to their lies, then you empower them unjustly.”

    For you Bible-types out there, this is the lesson of Jesus’ walk with Satan in the desert.

    For you more literary types, it is the lesson of Hamlet- The world we live in is developing a common social personality and consciousness; and it is unfortunately seriously schizophrenic (if not outright psychotic).

    “It will take a Herculean effort for the U. S. to survive the next decade.”

    Nah- all it will take is a good dose of reality and honesty. The rest will work itself out.

    The great thing about liars is that they all stick together, and when things get rough, they end up attacking each other first.

    Things are certainly going to be interesting as the Politicians (liars) and the bankers (liars) and the militant murderers all turn on each other… The best course of action will be to be a spectator on the benches rather than a player on the field. No sense getting sucked into the vortex as collateral damage, is there?

    60 Minutes had a great piece on Jack Abramoff last night- go look it up on Youtube if you missed it.

    The cannibalistic feast of the hyenas is getting ready to kick into high gear methinks…

  • mava November 7, 2011, 5:44 pm

    So, if there is a default, what exactly stops Bernanke from creating as much money, or as many digital zeros as he needs, and simply pay back all the losses to all the banks?

    If, only if, Bernanke wasn’t acorrupted ass*ole, why would a single bank have to fail, no matter what happens to Greek bonds?

    If AIG had to be bailed out, why not others?

    Obviously, I am pointing here to my forecast, that before inflation shows any teeth, don’t expect disasters, expect inflation. And likely even after.

    Secondly. Pull together? You mean like I didn’t gamble, didn’t borrow, didn’t malinvest in any crazy ideas, did not do any stupidity, and now I supposed to “pull together” with all those who did? “Pulling together” implies not getting market value from my trades, as in family affairs.
    Am I supposed to now subsidize all those communists as if they were my family? No mister. No pulling together.

    We do not have any single enemy. My enemy is everyone who demands socialist and communist destruction of America. I won’t let myself be an instrument to destruction of my country. I’ll gladly watch as all these OWS commies die of hunger, as they should. That, would help America beyond belief.

    And Steve, ditto on FDR and “surprise” attack from Japan.

  • Mark November 7, 2011, 5:37 pm

    The argument about the imminent collapse of Europe is a side show. The combined future financial responsibility of the U.S. alone is an astounding $400 trillion plus and exponentially greater than the rest of the world combined . No one can possibly believe that this U. S. debt alone will ever be paid off. What we are witnessing finally, one failed experience after another, is the undeniable and deserved death of world wide socialism. Where in the world does true free market capitalism exist? It doesn’t! It’s been lost for at least the last fifty years or more. Fundamental and technical analysis concerning any investment is a utopian panacea. It doesn’t exist. Each and every market is rigged beyond any semblance of honesty by government or cartel manipulation. The regulators are more crooked than the crooks controlling the market. The political class everywhere could care less about true equity in any part of society. The game is solely about control. The root of the problem is immorality. Fiat currency which the whole world is now a part of is immoral. Honest money is the only answer to this economic problem and until hard currency can not be manipulated, this world wide depression will only continue to spiral downward. This scenario is inevitable. So for all you momentum monkeys who think you can beat the market, I wish you good luck. You are only extending and compounding the pain that most surely will ultimately come at your own expense. Worldwide War is coming in a big way. History teaches us that the control game ends about every eighty years, (i.e, the Revolutionary War, the Civil War, World Wars I and II). This is why the Jews held a fifty-year Jubilee to forgive all debts. Self reliance, moral clarity and true belief in God and His blessings are the only ways out which, I fear, will be a hard pill to swallow for the 99% including me.

  • Carol November 7, 2011, 5:03 pm

    Mario >>”the whole damn country is on sale…!”

    Mario I don’t know what planet you live on but me, I don’t think anything in this country is “on sale”.

    When I was my son’s age (18 and in college) I could afford a good used car, gas, insurance, college tuition, food, cloths, etc on a PART TIME MINIMUM WAGE job. Now my son can barely afford to pay for his car insurance on a part time minimum wage job! (oh btw he has never had any accidents or moving violations but still pay exorbitant rates because he is a male).

    When I was young working a minimum wage job I made $2.65/hour BUT gas was .35 cents so I could fill up my car on one hours worth of work. Now at $7.25 you would be lucky to buy 2 gallons of gas for one hour of work (ignoring SS/Medicare/Fed/State taxes that is). Lets not even look at what college costs. I put myself through 4 years of University for less than one semester costs at a public/state university close to where I live.

    Mario you are so out of touch with reality you have no idea what you are talking about.

    • Radek November 7, 2011, 8:52 pm

      I usually let people duke it out between themselves, but this time I have to step in.

      Carol,

      I think Mario is commenting on the RELATIVE cost of consumer goods between USA and China/other countries. On average, US workers’ salaries go much farther than they do in most other countries. ON AVERAGE. He isn’t referring to specific examples, nor is he referring to a time-based one-country comparison.

      Maybe you should teach your son your off-grid techniques on how not to pay for car insurance, license plates, etc.. and still get away with it. Problem solved.

    • Carol November 7, 2011, 9:13 pm

      Radek,

      I disagree with what you beleive Mario meant. He clearly stated “daily prices in the U.S. are cheap cheap cheap.” which can only be read as living expenses here are cheap in relation to incomes here. If you are talking about upper middle class incomes then that may be true but if you are talking about incomes for lower – middle class incomes I disagree. I especially disagree if you are talking about the youth who are left with little opportunity today to even have an income (24% unemployment in the 18-24 yr old demographic).

      As far as my son goes you bet I have taught him about those things that I spoke of and others. However, one must be able to handle themselves in confrontations with those who believe that have authority over others and most 18 year olds are not equipped to do that (well at least my 18 yr old is not ready to take that responsibility on just yet). Additionally as I stated before you must be financially capable of making another whole should you cause any damage to another and my son is not at that point yet and I am not willing to underwrite his “risks” at this point in time.

    • mario cavolo November 8, 2011, 6:03 am

      Carol, yes I said that, geez lighten up girl… I specifically qualified my statement as to larger expenses were NOT the focus of my comments, which are a nightmare in the U.S. I specifically was talking about “daily stuff”…which right now in the U.S. is often as cheap as it is in Asia where wages are much lower… for example, constant 2 for 1 pricing or 5 for $5 on household goods, toiletries, vitamin/health supplements clothing, etc…And by the way gas is STILL relatively cheap in the U.S. compared to what we pay here in China and in Europe…Cheers, Mario

  • Jim N November 7, 2011, 5:00 pm

    I hope you are right, but it is difficult to impossbile to live in the past and to think that we can invoke the nationalism card to effectitvely war against our “enemy”. there are so many differences now structually in the US that it is virtually impossible to recreate a nationalistic solution.

    My thoughts..

    1. We are now a global economy. Nationalistic solutions will only go so far. Economic failure in the global system will definitely find its way to us poor folks in the US middle class.
    2. Who is the enemy? Obama….Tea Party….China….Occupy….BOA? So much energy is being expended to blame and yet the elite continue to get us all to fight each other instead of really fighting the battle that needs to be fought. Who can really see it clearly? Certainly not the mainstream citizen. Many of them don’t even recognize that there is a huge problem. In 1941, it was very clear who the enemy was, which allowed easy access and agreement of all to rally and fight against. Is there a scenario that this could happen now? I don’t think the elite media would allow it. ALternatively would they will give us all (speaking of a global all) a visible enemy to help us align ourselves against? Say Iran?
    3. I hate being negative, but no matter what is in the media, or the american rah rah, the global economy has a huge weight around its neck that structurally cannot be removed without killing off the elite…debt. That is the cancer. Then there are the social and structural reasons we got here in the first place as mentioned earlier by smarter minds than mine that also must be addressed.

    To recreate past solutions is very difficult indeed. I don’t see them solving the issues of today.

  • John Jay November 7, 2011, 3:29 pm

    Mario,
    What I am saying is, I believe we have probably hit bottom in the export of factories and jobs here in the USA. This is despite of the policy of our Federal government to encourage that export. While we are not on our way back to having 50% of the worlds GDP as we were post WWII, wages have been beaten down to the point that it makes economic sense to bring some work back here. Plenty of people happy to work 50 weeks a year and do a good job, especially in the Southern states.
    The key is for us to retain political stability which has the questions of Fed money printing/electronic money creation, plus the huge National debt to be resolved.
    I hope they are in worse shape than we are over in Europe. I read an article about systemic real estate swindles in Cyprus that make our r.e. market look AAA by comparison.

    • mario cavolo November 7, 2011, 4:02 pm

      the other thing we are all commenting on more and more from our perch on this side of the Pacific is that “daily” prices in the U.S. are cheap cheap cheap. Unfortunately, other big expenses are a problem especially autos and healthcare. But daily stuff, midline restaurant prices with big portions and great prices, retail clothing, home items, vitamins, electronics, car rentals, grocery store beef pork chicken prices….the whole damn country is on sale…!

      Cheers, Mario

    • Chris T. November 8, 2011, 7:31 pm

      Mario,

      have you been to Germany?
      The amount of stuff one gets here in the US when foodshopping is along the lines of:
      That little bit in my cost me how much?

      Over there, for an equivalent amounf, you get the bag full (with the exception of meat, esp. beef).
      But overall, no contest.
      Not to say that the US isn’t as you compare it to where you live, and certainly places like Switzerland or the UK are expensive, but not in central Europe….

  • mario cavolo November 7, 2011, 12:16 pm

    Hi Tom…

    “…We united. We pulled together….”

    I’m so afraid that can’t be done this time….pull WHAT together? The state of the society its sitting there broken after the greatest elite money grab rape job in history. I have said it before that it is most reasonable to start looking at the structure of societal and economic “America” in a more accurate way: It is now two places.

    1. We could call the ruined lower and middle class The People’s Social Dependent Republic of the United States. And then there’s:

    2. The Elite United States of America, which includes: the top 1% who owns the 40% of the wealth. The next 30% who are upper middle income folks whose lives are sufficiently tied to the top 1% and whose lives are also better than ever then the next 20% who are comfortable, secure working hard middle class without too much debt, also fortunate enough to be on the good side of the transformation of the economic structure of the society. That’s why the stats keep coming in pretty good. There is a large group of people in the U.S. whose position and wallet is better than ever. They are offsetting the loss of spending taking place by those left behind, the final 40%, 100 million, who are truly ruined and screwed for a multitude of reasons discussed at length many times…

    As a result of this state of affairs, govt is going to EXPAND even more, an even scarier thought, eh? The country is going to become more and more socialist, as it has and will continue to… (note Newsweek cover Feb ’09 We Are All Socialists Now) Companies are also going to become more socialist as in the way many countries are run in Asia starting with China, where companies provide a basic salary, then budget apartments, benefits, cafeteria meals, and transportation to their employees.

    Frankly, in many ways it is much better: I did an RCCL cruise ship contract 3 years ago. You get mid-level pay, you get accomodations, meals, medical, you save 80% of your paycheck. What’s THAT to complain about.

    I’ve said it before and I’ll say it again when people argue with me about “freedom” in China or in America. Americans are under a brainwashed, false sense of what “freedom” is. Slaves to a bunch of rich folks who figured out how to be rich folks and have poor folks do all the stuff they don’t want to do and then feel grateful for the job opportunity!….paraphrasing Bertrand Russell, In Praise of Idleness

    Cheers all, Mario

    • eric November 7, 2011, 3:24 pm

      ill agree to that definition of freedom. i can tell you of places where you are truly free. no one to work for and you are free to do whatever you please all day. you find your food or grow your food,or trade something for your food, you eat, if not, you dont eat, simple as that. its dirt poor in “rich peoples eyes” but its truly a free man/woman’s kind of world. out here in the west, we call em “third world peoples”

      funny thing is, they want to get “rich” in goods while the other side of the world wants to get “freedoms” from the very system that allows them to be rich and avoid “dirt poor conditions”

      hahaha- their lies the root to today’s problems- globalization, exports of “superior cultures”, consumerism and all that other fine stuff.

      gotta love it, go niners!

  • Super Sam November 7, 2011, 9:39 am

    Isn’t this just a secular bear market – everybody (in the herd instinct) follows the gloom & doom scenario?

    As for “Europe’s Collapse”, let’s just say they’d be first past the post in doing (hopefully) the short sharp Austrian Economic style dump & restart.

    USA & the UK have succeeded in kicking the can further down the road than the reluctant EU peeps. I see Europe doing an Iceland type face the consequences, whereas USA & UK are more into Japanese style sweep it under the carpet mode.

  • Rob Torres November 7, 2011, 7:49 am

    I have a hard time being optimistic about the future, especially when I see a rising interest in imposing tariffs and fiat currency manipulation etc, which inevitably leads to war.

    As far as OWS and Tea Partiers coming together, I seriously doubt that coalition ever forms. It would be analogous to Bolsheviks and the John Birch Society having a polka dance.

    On a positive note: America still has the most brilliant minds in science and industry. We seem to be neglecting our most valuable resource, our human capital. Too much of our effort seems to go into social abstractions, rather than real human enhancing production.

    All this talk of social justice is just more people wanting power over others. We have to rethink our love of centralized control, and give freedom of action back to innovators and entrepreneurs.

    My few cents.

    • Robert November 7, 2011, 8:56 pm

      “On a positive note: America still has the most brilliant minds in science and industry. We seem to be neglecting our most valuable resource, our human capital. Too much of our effort seems to go into social abstractions, rather than real human enhancing production.”

      All this talk of social justice is just more people wanting power over others. We have to rethink our love of centralized control, and give freedom of action back to innovators and entrepreneurs. ”

      -I agree on both counts, notwithstanding:

      1) The unemplyment situation might not resolve itself until Americans become willing (or desperate) enough to take whatever work is there, instead of expecting their former income and benefits levels to be fully restored… labor is still expensive in North America- not only in nominal terms, but also in real terms. There is the old addage that “you get what you paid for” but quality is no longer a viable justification for the growing wage discrepencies between east and west.

      2) Would-be Entrepreneurs are ham strung and hog-tied. The barriers to entry in business make it a mine field of regulation, legislation, innoculation, indoctrination, deforestation, and all around discombobulation…

      Entrepreneurism could use a little good old fashioned emancipation.

  • sportsdoc November 7, 2011, 7:33 am

    John Jay
    I agree wholeheartedly with you and think you hit the nail on the head . I fear a clash with China, but I think world economy really goes belly up, China may very well collapse into civil war between traditional enemies, Mandarin, Szechwen and Cantonese and we stay number one.

  • Don November 7, 2011, 6:33 am

    Steve,
    You are on target; and no when I was an 18 y/o Marine I had no idea of being a defender of the banking act or of the greatest enemy ‘federal reserve’.
    Count me in.

  • Steve November 7, 2011, 5:25 am

    Maybe I missed something about the Japanese and Pearl Harbor. Why was that attack a surprise? F.D.R. cut off all oil to Japan, and nearly all other natural resources. Bush, or Obama would react pre-emptively if the Fed even considered that there was going to be an oil slow down, or a blockade of any other thing coming this way.

    Being surprised is not where it should be today. Prepared, yes ! Besides my differences in regard to why anyone would be surprised, great job at laying out the reality that what is coming is coming no matter who the federal corporation thinks it is, or what some government official says it isn’t. The current game seems to be more about the hope of a soft landing, and Rome not falling from internal decay. Seems as if the more someone messses with the mess, the worse it is all going to come out in the end. And it looks like this mess is being messed with by the fed and democracy.

    It pays to know who the real enemy is though. Is the enemy the one who precipitates violence by abuse as F.D.R. did to the Japanese? F.D.R. may not have known Pearl would be the target, but; sure as sure F.D.R. knew the blockade of Japan would be met with force eventually. When we talk of good, is it good to use the Emergency Banking Act of 1933 as an excuse to conduct war in Korea, Nam, Bosnia, Somalia, Iraq, Afghanistan, and against every one of you forcing you to use fiat fraud money all based in lies by Bush #43? Or, is it right for #44 to deny the basic Right of Man declared July 4th 1776, as “We declare that all men, are endowed by their Creator with absolute Unalienable Rights, that among these are Life, Liberty, and the Pursuit of Happiness. . . by the Law of Nature and Natures God. . .” as he and the Mossad assassinate without regard to Rule or Law – just because they can. Israel has nuclear weapons, why lie about it? And yet it is the fact that the federal corporation is a liar that creates more discord across the nations of the world. Bush was inauthentic in abuse of power. Obama is inauthentic in abuse of power shoving mobocracy as a legitmate form of government. Obama cannot force another Nation to be a Free Republic, let alone an anti-constitutional democracy; he has no such legitimate power beyond the scope of tyranny.

    ( I specifically quality the federal corporation over which Obama is C.E.O. from the Constitutional Republic governed by highly limited powers, the united States of America) Madison opined (my summary) ‘Democracy is a tryanny run by despots leading to violent destruction’ (its not a direct quote, only a summary). If we look to Madison and many others on the subject of government by democracy the same conclusion of collapse by internal violence is a comon final destination. So, who is wrong but he who forces other nations to submit to democracy, which is mobocracy, or rule by passion without regard to consequences, communistic toward property, ruling by passion and not Law?

    Empires rise and empires fall. Some Things start out good and are infringed upon until they turn to evil before anyone knows what happened. In 1929, and again in 1941 individuals knew how to take care of themselves. That is not so today. The movements of today are not givers, but takers with little to no knowledge of how, unless something is given to them, the Now/Z/X/OWC know nothing but take, whether that is breathing by the Clean Air Acts, or going to the grocery store without the slightest idea of what it takes to get there with food.

    I hope you are right Tom that everyone will pull together. Someone in the government has spend a lot of money training civilian police and military boys about civil disorder, and how many corporate persons to eliminate based upon what a local region can support historically by subsistence. How many people can the Kenai support historically ? How many bridges need to be blown to isolate a viable population on the Kenai? Anchorage must be islolated as the population is too great and ‘they’ must be allowed to self govern to a reasonable population level which is about 1%. Fairbanks might survive. Kodiak is Okay. Southeast is Okay and will provide inhabitation breeders. What level of force must be used? Where is resistence likely to come from?

    I sincerely hope the oil keeps flowing, the ships keep shipping, the trucks keep rolling, the planes keep flying, natural gas keeps being turned into fertilizer, and China keeps shipping deflation in cheap goods to american ports all financed with debt discharges in phony fiat money.

    Drill Sergeant, Yes Sir Drill Sergeant- how high ? Yes Sir Drill Sergeant – how long? Yes Sir Gunny – I will not think. Yes Sir Gunmy I will not think. I will only Do Gunny – I will not think Drill Sergeant. Marines do what they are told. They do it because they are proud, because Marines honor one another when they are 18 years old. No 18 year old stops to consider he is enforcing the Emergency Banking Act of 1933 – present day against foreign states, and the Common Man Sovereign in Common on the Soil by Right ( jus Soli)

    Still a great essay to provoke a conversation. 1941 was different in social mood and values. I’m a Boomer and I’ve done my part for the Republic. My dad, who was 8th Army Air Corps WWII failed me and the masses. That generation went to sleep after fighting the great battles allowing democracy and tyranny to continue to creep in via the War Powers of 1917, the Trading with the Enemy Act of 1933, and the Emergency Banking Act of 1933. The Trading with the Enemy Act and the Emergency Banking Act are sill in force today. The last generation went to sleep just like Jefferson warned (again my words) ‘If one fails to know, understand, and exercise one’s Rights one subjects themselves to tyranny AND SO DESERVES). Our fathers came back from the war that F.D.R. started with Japan, and fell into a deep sleep based upon a debt scheme that has buried us to the neck. WWII – authority – Congressional Declaration of War – Korea, Trading with the Enemy Act/Emergency Banking Act – Nam, Somalia, Bosnia, Iraq, Afghanistan, Libya – now Africa – all under the “emergency” giving the Commander in Chief unlimited powers as a king over a feudal monarchy.

    I hope you are right Tom, and that I am wrong.

    • Chris T. November 8, 2011, 7:22 pm

      Steve,

      good point about our foreign policy towards Japan in the 1930s.
      We, like the British before us, tend to think that everything we do is just and the best there can be, and that we would never do anything bad, etc.
      The facts prove otherwise, which is one reason I respect Ron Paul, he has always been willing to call a spade a spade, even if that is unpopular.

      Your comment fits in with mine below, though I do still think that the quintessence of Tom’s post is right, which as I understand it, is that it’s not clear if we can (still) cope with a crisis of great magnitude as we used to.

  • A. Rand Fan November 7, 2011, 3:28 am

    Charles Hugh Smith speaks the truth to what really needs to happen.
    “The Collapse of Our Corrupt, Predatory, Pathological Financial System Is Necessary and Positive”
    http://www.oftwominds.com/blognov11/collapse-of-corrupt11-11.html

    • eric November 7, 2011, 3:12 pm

      please, enough with the china miracle. its a big bad bubble. 300usd a month is relative to cost here, try other asian countries who live off 2usd a day. sure,sure they got monopolies on rare earth and cheap labor.its not that they are used to living poor, its just that is how they choose to live.only now the”westernization” concept of rich is coming into the culture. true wealth to most is still having rice,chickens,veggies,fruits and gold.methinks you are only seeing the city lights. eastern to western ideas,concepts and traditions are as white to black,fat to skinny. im still calling out all the empty buildings and construction, it wont be absorbed. i see buildings built 3 years ago,still empty. by the way i live in china, been here awhile and am in of the overpriced if not the most overpriced cities in china. local kids and grown adults are complaining of inflation in housing to food.keep em working, keep em working, keep em working.

    • mario cavolo November 7, 2011, 3:44 pm

      Indeed while tons of cash beyond what any one realizes and a host of other advantages that give them a substantial edge across today’s global landscape, yet as you said undoubtedly the shine is wearing off quite significantly. One of the items also of rising concern is that the business environment and living environment for foreigners is getting stricter and more expensive; ie i’m sure you are aware of the new social insurance law (like U.S. social security and medicare) now legistlated into law, yet as often, so far without any means to implement it, it will take a few months to roll this new nightmare policy out, which is just another way of saying “more expensive to live here, work here, be here, do business here, whether you’re a foreigner or Chinese. And that’s called inflation in my book.” Indeed, my mother in law is freaking out about farmer’s market prices compared to a few years ago…these are serious issues… I won’t agree with you on the empty apartment issue though, meaningless misunderstood media rhetoric….Cheers, Mario

    • eric November 7, 2011, 4:35 pm

      no not meaningless media rhetoric but real empty apartments that i see evrydat and have saw with my own eyes in beijing,hebei province,harbin,henan province,shanghai,guangzhou,shenzhen,and other smaller cities in smaller provinces. i didnt spend all my time in one world class city in world class housing(ive seen my share) which china has, but let’s tell the real story to people who are not here. empty apartments and mini ghost towns. construction being built with no one moving in. my apartment is not even full capacity and they built a new one across the street,no renters or buyers and are building another one next to us again. im talking lots of copper,steel,aluminum,concrete,brass, plastic,glass, etc.just sitting around looking pretty.

      if my “street level” stories aren’t compelling necdotes anyone, here is am academic article that helps out John Jay’s theory on why manufacturing may return: http://www.bcg.com/documents/file84471.pdf

      real estate prices are out of reach and worse than america, but at least they got work to keep em busy. keep em working, keep em working.

      did you know accountants here get paid $300 a month?came from the workhorses mouth, i didnt just make up a salary figure.

    • mario cavolo November 7, 2011, 5:41 pm

      hi eric, i do understand your point of view, and i am no t saying all is well, yet, er, um, the urbanization of china, the migration of 50,000,000 more people into cities from the countryside will need someplace to live….its happening…the individual overbuilding is not a societal issue, its more isolated, not a broad indicator, just my opinion…

      Meanwhile, yes i know the office workers and managers are paid around $300/month and that is the equivalent of minimum wage in America, so what? Do 1.3 billion chinese have to file a tax return each year? No. how much does it cost for a doctor visit? $US 1.50, xray $US 12, root canal $US80, antibiotics? $US 5, transport? dont need a car, car ins or car maint/repairs…shall i continue? shuttle bus to work, 3 daily square meals delivered$2 each, dormitory style apt paid…cigs $1, bottled water $US.20, beer $US .50, ….that $300 goes as far as $1000 in the states…

    • Carol November 7, 2011, 5:49 pm

      A. Rand

      I just read that piece by Charles that you posted a link to – it is an excellent post! This collapse that Charles speaks of is EXACTLY what I and many others here and elsewhere have been HOPING for for years. When idiots who don’t understand the present system call us “gloom and doomers” they are playing into the hands of the MSM/Wallstreeters who want to keep their precious money machines in tact. We do not wish for or hope for “gloom and doom” NO we wish for and hope for a massive cleansing so we can reboot and start over and hopefully get back to a real capitalistic system.

      Thanks for the link

    • eric November 7, 2011, 6:14 pm

      yes, thats what i was saying earlier in my post, its all relative. and thats where it wont work. the urbanization will destroy china from the inside. the cities cant cope with all these people, a city is like a living, changing, organism,that like the planet,like humans,can only take so much. the urbanization will create such fierce competition for resources that the wages will only go lower with such higher supply of city labor. plus, the extra demand pulls on everyone else’s chain worldwide.

      and now for the so what- 1.6 billion making minimum wage, thats where it affects the rest of the working world. when you got someone who will literally do the work for .12 usd,this is how capital get spoiled. this is how globalization kills, this is why someone cant come to china and “work themselves up” it’s a big so what and it affects everyone in china and everyone outside china. think it over, my friend.

      lets just see what happens, an organism cant keep eating without having to get rid of its waste.

    • fallingman November 7, 2011, 7:40 pm

      A Rand Fan,

      THANK YOU! The Charles Hugh Smith article is, without question, the single best piece I’ve read to sum up the situation we’re in today.

      Completely spot on…a deeply penetrating analysis.

      It’s a must read I’ll be forwarding. I just mentioned to someone that it’s a kind of Cliff Notes version of the Nassim Taleb thesis if you don’t have the time or patience to read Fooled By Randomness and The Black Swan.

      Really brilliantly done.

      &&&&&&

      As far as I’m concerned, everything Charles Hugh Smith writes is a must-read. His commentary is always spot-on. RA

    • Mike November 7, 2011, 10:56 pm

      Mario,
      How can you disagree on the empty apartment issue? I can’t believe you actually said that. I’m living in Guangzhou, and I see this every single day. There are thousands of empty apartments, and more are being built.

    • mario cavolo November 8, 2011, 5:56 am

      Massive cleansing reboot collapse…? I have to jump in and suggest this sounds much better as an idealist fantasy than an actual reality of it if you really think it through across all the practical and realistic parameters…

    • A. Rand Fan November 8, 2011, 6:40 am

      Mario, I would say to you, you have not thought it through thoroughly enough.

  • John Jay November 7, 2011, 2:02 am

    If Europe collapses before we do, it could create a flight to US Treasuries. And, since we run a trade deficit with most of the developed world, if they all go down, we might be better off. It’s not like we are dependent on exports to prosper like Germany, Japan, and China are.
    If we can preserve our political stability while all of Europe erupts in violence it might work to our advantage. Recently there has been a slow trickle of factories returning to the USA from China. It seems the wage advantage has been greatly reduced, and when you add in transportation costs, counterfeiting of products, quality issues, etc. some corporations have moved plants back here. If the rest of the world goes smash, that trend might continue.
    If the CDS mess blows up, the simple solution is to have the government declare them illegal and unenforceable. Which is what they should have done way back in the LTCM blow up. Plus, maybe our bloated military may finally pull it’s own weight if we need to become the safe haven for the rest of the world. The MENA countries and AfPakIraq are getting more unstable by the day.
    In addition, our domestic oil production is going up thanks to the Bakken field and fracking. In conclusion, I think that the US has already hit bottom as far as losing jobs goes, Germany, Japan, and China are much more vulnerable than we are. I am much more frightened of WWIII erupting if we invade Iran and China and Russia get involved on the side of Iran.

    • mario cavolo November 7, 2011, 11:59 am

      nice John Jay but remember that China’s people can withstand hardship, and a much lower level of economic quality of life than people in the West. For 800 million people living on minimal salaries and basic shelter, its nothing new, and the ability to live comfortably on $300 / month exists here.

      Whereas in America it is truly impossible to be poor. In America you have the psychological battle of 100 million people having “had” a reasonably nice middle class existence and now living at the survive budget rent a room in a house and can’t find a job level…that’s demoralizing across the psyche of the population who are stuck in it…Cheers, Mario

    • Mike November 7, 2011, 10:42 pm

      John,
      Please provide a list of any major companies that have moved factories back to the U.S.
      “It seems the wage advantage has been greatly reduced.” Really? How many Americans are working in US factories for $300.00 per month? None.

      Yet, here in China, that’s a common salary for a factory worker, unless she/he is getting a lot of overtime, then a person might be making $400+ per month.

      As far as quality issues go, that’s way overblown in the media. There are just as many quality issues in the US. Where are all of the ipads, iphones, etc. being manufactured? Right here in China.

      I don’t doubt that China is due for a wake up call in terms of the economy, housing bubble, etc. But as Mario says below, the average Chinese person/family can live and are living on a lot less, right now, than anything the average western individual/family can imagine.
      As for multi-nationals moving their factories back to the US, forget that. They’ll move to other Asian countries, such as Vietnam, long before they’ll had back to US shores, at least in any significant numbers.

    • mario cavolo November 8, 2011, 5:51 am

      indeed Mike, the winds are already blowing toward Vietnam…

    • Richard November 10, 2011, 6:26 am

      Not dependent on exports? What are talking about? An economy with no productive capacity and trade partners? Wake up, sonny.

  • Paulie November 7, 2011, 12:38 am

    It’s the end of the age…but, don’t fear…another is just about to begin. It’s just time.

    • M SMITH November 12, 2011, 6:48 pm

      I agree to a point. Politicans are setting on their hands as the whole system burns to the ground in the EU Zone & in the USA. This man has been behind the curtain & has wrote about what he found & it is not pretty, you should read all of his work & you will understand what is really about to take place, like or not ,it will happen. http://armstrongeconomics.files.wordpress.com/2011/11/armstrongeconomics-speak-see-hear-nothing-110911.pdf.
      Armstrong does not hold back, he has tried his best to help the Nation he loves, but those in power never will not do the right thing. If you have never read about Martin Armstrong, please read his entire bio on his web site, it will open many doors every one should be aware of, but don’t & because of the closed door back room deals that congress & the Federal Reserve Primary Dealers have made together and those deals do not enclude the protection of the Common Mans wealth or equal justise in a court system that is corrupt to the core! If you don’t have your house in order, time is passing faster each day & it could all blow up at any time!


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