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Imagining the Unimaginable

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(Cam Fitzgerald posted the following essay in the Rick’s Picks forum, but I am presenting it as a guest commentary because it discusses the all-too-real implications of America’s economic crisis so bluntly. Many of you, even the pessimists, will be troubled by this grim jeremiad, and some will disparage its conclusions. But four years into what has come to be known, probably euphemistically, as the Great Recession, it is time we asked ourselves whether a collapse indeed looms that could prove equal to what we have imagined in our most troubled moments. RA)

On many levels, I have been in denial regarding the extent and severity of this downturn. Much of the hazard naturally revolves around the deflation of asset wealth – specifically, real estate. I only wish it was just money that was at risk. Collectively we seem poorly equipped to even contemplate the true consequences of the housing collapse. We are detached from its reality, mere spectators and pedestrians at the scene of an accident. “This” cannot really be happening — not to us, anyway.

And yet it is. And so we find ourselves in uncharted territory. We live in a disconnected time, without the benefit of eyewitness guidance from anyone who has experienced what we are now experiencing. There are several generations of people alive today with virtually no living connection to the traumas and realities of the past.

What is occurring before our very eyes is simply impossible. And yet the trend continues, day after agonizing day. Will we awaken in time to recognize that we are all at the scene of the accident — that we are actually casualties, not mere witnesses? It seems doubtful.

But we had better snap out of our reverie soon. This is not our grandfather’s recession. For in fact, it is wholly unlike any that have occurred in the past. This time around, we are not the center of the universe nor even the focus of all the attention. This time our domestic policies don’t necessarily have global implications for everyone else on “our terms,” and so our leverage to play this game has diminished.

Financial Weapons

We all know that our standard of living has dropped both here in Canada and in the U.S. For that matter, living standards are dropping for most of the Western World, as we are awash in debt. However, I do not think that the debt deleveraging currently underway can adequately address the severity or the danger of our circumstances. Some of the biggest bubbles have yet to pop. Derivatives alone that amount to no less than massive bets against our civilization will never be paid out as originally contemplated. It is frankly impossible, given all that we now know about this market, that many multiples of global GDP wealth will shift from one pocket to another without causing a catastrophic upheaval. Ridiculous?  On the subject of derivatives, no better description could be provided than Warren Buffet’s: “financial weapons of mass destruction.” Indeed.

I happen to agree with Rick, that we are headed into a depression. It is beyond me to define the exact course by which we will arrive at that point, though. Will it follow a brief inflation? Will we see the utter collapse of the dollar, and hyperinflation? Or will we just muddle along in a false economy where equity price increases raise false hopes of recovery while the rest of the economy grinds down day after day, to the point of capitulation?  To the point of no return, possibly?

Seeds of Renewal

Defeat, perhaps? Not likely. The seeds of renewed growth are always there in the soil of last season’s bad harvest. I am not worried too much from that perspective. It is the adjustment to it all that is hard to imagine, and we never know with certainty how long the pain will last, nor how politics might aggravate it. That is the real worry. Our world is on the verge of being shaken up, and even doubters like me are in denial about how serious some of the consequences might be. So what do we do? How can we be prepared?

Does anyone out there still remember Maslow’s Hierarchy of Needs ? At the top of the psychologist’s pyramid was self-actualization. I think we are there, for the most part. The idea of his chart, presented in a 1943 paper entitled A Theory of Human Motivation, was that we need to satisfy basic needs before we can move on to higher needs. Food, water, shelter and security were basics that came before love itself. Our motivations to climb the scale were generated by our success at having conquered needs that were lower on the pyramid. The chart assumes we are climbing higher, paying little attention to how we might respond if we were to start sliding back down the pyramid. That is most surely at the root of many of our fears — that we may soon lose the ability to meet basic needs that we have long taken for granted.  Is that not also the fear of those who would silence the gloom-and-doomers, lest they cause us inconceivable hardship merely by discussing the prospect of it? We are a superstitious lot.

China’s Unprecedented Spree

It probably does seem inconceivable to anyone in an advanced society that we might ever revert to a more primitive state. It is beyond insane, however, that we cannot discuss the possibility openly without being ridiculed. And yet, we are witnessing the hollowing out of education in North America as one example, and watching idly as Asia bids fair to take the lead in so many categories, threatening both our self-esteem and our very security.  As a highly focused and energized Chinese empire-in-the-making takes decisive action to ensure its own economic survival, we continue to dither over the vagaries of domestic tax law and how they might impact our (supposed) pension plans. We are distracted by bits and pieces of financial paper as Asia goes on one of the biggest commodity buying sprees in history. Not even the English or Spanish in their day entertained the idea of owning all of the world’s key resources, as China someday may.

The news media, meanwhile, glutted by corporate advertising and influence, have been watering down the news so that nobody knows where to find the truth anymore. Even the Internet is coming into question as doubts grow concerning its ability to resist the intrusion, depredations and designs of Big Government. God help us all, should totalitarianism arise on this continent. Computers never forget, now do they?

As we backslide down Maslow’s Pyramid, are we prepared for the social consequences of reverting to the mean? Many societies have collapsed in the past. Few saw it coming. I imagine that fewer still were prepared for that ugly day when nations went to war over supposedly scarce resources. But we don’t have to worry about that, right?  Not unless money matters, that is, and access to energy is deemed important. In fact, the track we’re on now, greased by a dollar that is falling toward worthlessness, implies that many will not be able to afford to drive their vehicles in the future, never mind heat their homes.

What Dollar’s Collapse Means

That is what a dollar collapse really means, by the way. In its most basic form, a failure of our currency means we will not be able to fulfill our most basic needs: security, shelter, warmth and access to a healthy variety of foods year-round. And if those basics cannot be acquired and ensured without worry, then we are indeed headed down Maslow’s Pyramid, not up. The supposed lunatic fringe that wants to head for the hills may not be so crazy after all. Actually, they could be ahead of the curve in realizing that our society is on an unsustainable path. Beyond it, only brute force will guarantee our survival ahead of those we see as competitors. And that is why we will not see the U.S. military give way as global uncertainties over our very sustenance continue to mount. On the contrary, the military is growing and new bases are under construction. Forget closures.

Meanwhile, the global financial system could unravel and destroy all currencies. We need to understand one thing very clearly, though: There is a big difference between a 1930s-style Depression and the specter of North Americans actually freezing to death in their homes for lack of fuel, or starving for lack of food. Before that almost unimaginable day arrives, there will be another war, and it will be the big one. The perception is growing that supplies of key resources may not be sufficient to satisfy the ravenous appetite of the developed and developing world. We see this. Asia sees it. Hedge funds have begun to speculate on it. There is certain to be much grief as we, and assuredly other nations, ratchet lower on Maslow’s Pyramid. The power that spring from guns will ultimately win. Darwinism may well be at-hand. This is one battle we cannot afford to lose.

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  • warren January 8, 2011, 11:07 pm

    Well,….It looks like something has started. I’m watching the news Saturday.

    • Steve January 9, 2011, 4:27 am

      Not surprised, deeply saddened. What could happen has happened and it did not need to happen.

    • Robert January 9, 2011, 9:26 am

      No, it did not need to happen, and I wish it haden’t. Today hit very close to home in more ways than one.

      That poor little girl.

      Will this wake them up? or will it simply inspire them to remove MORE liberties as they try to instill MORE security… thereby creating even more fringe extremists?

      I’m feeling very melancholy

    • Benjamin January 9, 2011, 10:27 am

      Children should never be punished for the crimes adults over-indulge to death in. The saddest thing in the universe is, given that the child’s parents apparently believe that liberty is being able to force their will over others, that kid only would’ve grown up dead anyway. Born and taken care of, but unwanted no matter what, be it because of wreckless assholes that should be pulverized into a thin red paste or our so-called free, democratic society. Nowhere for them.

      It won’t be said in all that is and will be said about it.

  • kkken530 January 8, 2011, 8:49 pm

    @steve re:Historical and recent economic reality:
    this report goes a little deeper,giving names and dates.
    http://www.scribd.com/doc/9442970/Collateral-Damage-US-Covert-Operations-and-the-Terrorist-Attacks-on-September-11-200128062008

    @Redou re:3)Americans will have to go back to work for
    less pay. Welfare, social security, medicare,
    doctors pay, hospital costs – will all have to be
    cut. This is not a Political Decision, it is only a
    reflection of Economic Reality. You cannot charge a population more than it can pay.
    To have a seller there must be a buyer.
    Both seller and buyer must remain solvent
    in order for business to continue.
    The solution to all of these problems is money. We need congress to do it’s duty and coin money,and I don’t mean gold or silver.Bimetallism is just as bad as a gold standard. Both Silver and Gold are commodities which vary in value as market conditions change. The problem with that is when market prices are lower than the value of the coin,gold or silver work no better than paper,or steel,zinc,or our clad metal coins,but when gold or silver are worth more as metal than its value,your currency vanishes as people melt them down and sell the metal. The U.S congress is supposed to issue coins and set their value. By issuing clad coins in values of one,five,ten,fifty and one hundred,and then creating paper claim certificates good for one of its value,so people don’t have to carry a large pocket full of coins,congress would be fulfilling its duties,and providing a sound currency,and saving the nation billions in interest. Then they can buy back most of those bonds reducing our debt. You don’t want to buy back all of them,as state and local governments need them to store tax receipts they don’t need til later,which is what most of the debt is now.Its basically a saving account at the fed. The reason china and japan buy our bonds is to keep the dollar up on world markets and make their products cheaper here.

    We need the government to spend that money to create jobs.Build a Rapid-transit style,Rail/mono-rail/High speed train down the Interstate,connecting most major cities by rail,having electric rentals available in the city.This would create thousands of jobs,and be a major asset to US. Build desalination plants on gulf coast,or in New Mexico/Arizona,depending on better site/ease of pumping salt/fresh water,and make the desert bloom.Rebuild inner-cities with laid off construction workers,rebuild water systems and sewage systems.As long as we have laid off workers and can buy materials the only thing stopping us is money..we’d have the biggest boom time in history.

    • Steve January 9, 2011, 4:24 am

      How in the world can a tally number of 20, having no value mean anything? Get a grip people. A Dollar is legislatively defined at 371 4/16ths grains of fine silver as a VALUE. As long has eveyone thinks a federal reserve note is something we will continue to go down the road of destruction. Please get the head out of the sand.

      FOR CRIPES SAKE – THE CONGRESS AUTHORIZED CURRENT MINT DOLLARS – just get off your butt and use them and quit bitching in delusion.

  • Bradley January 8, 2011, 6:56 pm

    Off topic? Oh. Sorry. Back to Maslow’s Hierarchy of Needs. Boehner is a perfect example of someone, like many of our “leaders”, who have all the things below Self-actualization, (they would certainly claim to have the respect of others), but don’t have a snowball’s chance in hell of climbing that last step…

  • Bradley January 8, 2011, 6:49 pm

    Boehner. Now THERE’S a man who understands the simple things. He has the healthy suntan of somone who spends plenty of time on the golf course, the air in his district smells sweetly of chicken manure and the water falls from his big dopey swollen eyes like money out of the pockets of lobbyists. What a guy.

    • Steve January 9, 2011, 4:32 am

      If you can’t cry. I don’t want you at my back EVER !

  • Jill January 8, 2011, 5:45 am

    Speaking of people thinking that the new GOP majority in the House would cut spending, here’s a related article. Seems that Rick’s is a primarily Republican web site, as folks here seem to point out the faults that exist in almost all Congress folks, as if they existed only in Democrats. So perhaps this article on the Republican Speaker of the house will give things a little balance.

    http://www.rollingstone.com/politics/news/matt-taibbi-the-crying-shame-of-john-boehner-20110105

  • Candlepen January 8, 2011, 4:48 am

    my thoughts on Canadian real estate prices….real estate turns into a bubble when incomes turn into a bubble…Canada has been riding the precious metals and oil sands wave for some years now -do you think a real estate collapse would be caused by a collapse in PM and oil prices? I can’t imagine a real estate collapse in Canada happening simultaneously with a contining boom in PM and oil. The US real estate collapse was because the incomes were fake, circular even, mortgage agents were making a lot of money and investing in real estate. Canada, from my distant eyes, seems to have a much more solid base to support home price inflation, the US didn’t.

  • Rich January 8, 2011, 4:26 am

    Aloha All, particularly neighbors near The Lake.
    Re imagining the unimaginable, had thought election of the GOP majority to the House where spending bills originate meant deflation would resume in earnest to overcome The Bernank’s reflation efforts. Had even hoped deficit red tape building 0Care with new taxes and 16,000 IRS agents, Fixed Fin Reg and Food Monopoly might somehow be neutered, despite the Harry Reid Senate. Then saw various interviews with Rand and Ron Paul suggesting not only might they accede to raising the debt ceiling, but the senior Paul thinks the endgame is massive default because we are past the point of no return with warfare welfare entitlements.
    Oh well.
    Bought some more silver on the dip.
    Thinking a very scary correction could begin next week.
    Time will always tell….
    Regards*Rich

  • Steve January 8, 2011, 12:35 am

    Historical and recent economic reality:

    Lewis and Clarke = notice to the Blackfeet that U.Sam was taking over Trade.
    British / American breakup of the Arab Lands = install American puppets for Oil. (divide and destroy culture)
    WWII = returning of 10% tithe taxation to the Holy See after 700 years of loss.
    Economic blockade of Japan = Pearl Harbor
    Blockade Russia’s natural resources = social/eco/ military intervention in satilite states by CIA, and inclusion of Afghanistan for oil transportation with U.S. bases in Iraq and Afghanistan forever.
    Economic control of Middle East = Iraq / Afghanistan
    wars and the establishment of bases in blockade of Russia’s natural resources.

    Confine and divide because the former U.S.S.R. owned Natural Resources.

    I agree more with Cam’s assessment of outcomes. The absolute history of war is based in political economic outcomes whether the spice trade, silk trade, Spanish gold trade, african sponsered slave trade via the brits and portugese, loss of roman church taxation at 10%, or other economic need actual or preceived. Military power, or threat of military power is always used to accomplish economic goals. The spoils of WAR have been great sources of income forever.

    The military, quasi-military civilian plans for the use of force have been in place for many years.

    Each of the events I listed above did not turn out well for one culture, or one way of living. U.S. abuses have nearly always turned out well for the mass of U.S. citizens. The people who caused the problems and have gained the most from the manipulations are not going to give up their ill gotten gain to soft hands and kind voices.

    What is now happening is that U.S. abuse is not paying off to the lower caste of Americans. Fewer and fewer Americans are gaining in real economic terms. The greedy at corporate and government levels are shearing the sheep way to close. It is just a few sheared too close right now. But, as confidence in debt voodo economics fails more and more common Americans will get their ox gored and see their standard of living end.

    It does not matter what one actually has in hand. What matters is the events that take what one has in the present. If the slide in standard of living continues to slide as it now is sliding in the U.S. there will be rebellion. The Chinese forced to ride their bicycles, then forced to walk have lost very little to the few HAVE EVERYTHINGS in China. It is actual loss or perception of loss that will drive rebellion against those who take.

    The U.S. already has military plans to deal with this rebellion. It is the same system that the federal government has used for economic gain, and/or threat of economic loss for 224 years. Cam’s assessment is more realistic in regard to history, and in regard to future potential.

    Those Natives who remained after the American War 1804 to 1886 against the Blackfeet lived a holocaust. Every warrior who knew freedom is dead as is his family, friends, horses, lodges, and dogs. The U.S. military/civilian legislature destroyed an entire ecosystem on the Great Plains to gain commercial power and starve the Native American to death to take their lands. The commercial interests INFRINGED and then they DESTROYED. It is well recorded out in the West that the U.S. Military used disease to kill for economic gain. After that Holocaust, the Laws of Nature that created Blackfeet died and there is no knowledge left. Beaten into submission is a very important concept to grasp. Maybe 3 unborn generations of Americans from now will accept/live with a lightbulb in a 10 x 10 cardboard shack. But, until those who have lived free and in liberty are crushed by the jack-booted abuse of economic power will there be no acceptance of the things preached by people from foreign lands living in subjugation.

    If one wishes to understand just look to Al Gore.

  • Redou January 7, 2011, 10:07 pm

    Interesting…. but:

    Contains some incredible assertions.

    “We live in a disconnected time, without the benefit of eyewitness guidance from anyone who has experienced what we are now experiencing.”

    The above statement is nonsense.

    The world has gone through multiple busts –
    they happen regularly and frequently. There are any number of people, IMF people, Ministers of States, bank people in the international community who have dealt with
    and are dealing with similar problems – and
    are competent to do so.

    A real estate bust is one of the most common problems.

    To solve the multiple problems,
    What has to happen first is:

    Someone will have to take losses.
    The losses will have to be honestly recorded.

    Unless the losses are assigned to those who
    actually deserve them – the unfair scorekeeping will continue – the problems will not get better.

    After everyone knows the true and honest score.
    Then the game can continue.

    Problem is, those that are politically connected
    – banks (campaign financers), homeowners (voters), welfare recipients (voters), do not want to take losses.

    So the politicians will juggle the books, juggle
    the money – pretend and extend – rather than
    let those politically favored take losses. Of
    course, that will only put off the Day of Reckoning that Has to Come before life can
    return to normal.

    Homeowners Paid Too Much for houses. They
    screwed up. Bankers loaned too much on houses, they screwed up. They should take their losses and shut up. This has to happen
    before the economy can get moving again.

    A bank fails, their assets are sold to a solvent bank, the name over the door changes – life goes on.

    No one wants to take risk, bet on the future,start a business, buy a house – until they
    believe in the future. How can they believe in
    the future when the gov’t and it’s cronies are
    rigging the game, socializing losses, taking over the private sector – showing the public
    that the future does not follow time proven
    economic laws – but the ever changing whims
    of politicians.

    Why do you think the Soviets
    starved from 1917 to 1990? And are still in bad
    shape today? Because the Marxists tried to run
    an economy based on Politics rather than Economics. That is why we are in bad shape
    today – Politics thinking it can run Economics.

    My main problem with Cam Fitzgerald’s essay,
    although he has many good points, is the doom
    and gloom aspect and the end where he talks
    about military solutions.

    Another incredible assertion.

    “our society is on an unsustainable path. Beyond it, only brute force will guarantee our survival ahead of those we see as competitors. And that is why we will not see the U.S. military give way as global uncertainties over our very sustenance continue to mount. On the contrary, the military is growing and new bases are under construction. Forget closures.”

    The above statement is totally insane. Nobody thinks Norway will not survive. Nobody thinks
    China will not survive. Nobody thinks Japan or Switzerland will not survive. But none of these nations depend on military might to survive.

    These nations depend on free trade and hard work to survive. In other words, Something for Something.

    What kind of American or Canadian idiot thinks
    that the US Military can assure the flow of raw materials into the US? Hell, they can’t even catch Bin Laden.

    If the stupid politicians try a military solution to America’s Economic problems – that could
    very well INSURE that we will not Survive.
    Who is going to pay for it? If breaking things
    and blowing things up makes a nation rich,
    then everyone go out and break all the windows tomorrow. The next day we will all
    be rich.

    “Meanwhile, the global financial system could unravel and destroy all currencies. We need to understand one thing very clearly, though: There is a big difference between a 1930s-style Depression and the specter of North Americans actually freezing to death in their homes for lack of fuel, or starving for lack of food. Before that almost unimaginable day arrives, there will be another war, and it will be the big one. The perception is growing that supplies of key resources may not be sufficient to satisfy the ravenous appetite of the developed and developing world. We see this. Asia sees it. Hedge funds have begun to speculate on it. There is certain to be much grief as we, and assuredly other nations, ratchet lower on Maslow’s Pyramid. The power that spring from guns will ultimately win. Darwinism may well be at-hand. This is one battle we cannot afford to lose”

    The above is where the writer really goes off
    the deep end. Somehow he thinks that there
    is a Military solution to an Economic problem.
    There may be a war – in addition to the two
    wars Obama is pursuing now – in addition to
    the one that Nato/ Obama / Israel are trying to start with Iran.

    But a brand new BIG WAR is not a solution, it is another BIG PROBLEM.

    I think this guy has been watching too many
    John Wayne movies.

    The solutions to America’s problems are tricky in detail but simple in conception.

    1) those who made bad economic decisions
    should take their losses.

    2)the losses must be fairly recorded.

    3)Americans will have to go back to work for
    less pay. Welfare, social security, medicare,
    doctors pay, hospital costs – will all have to be
    cut. This is not a Political Decision, it is only a
    reflection of Economic Reality. You cannot charge a population more than it can pay.
    To have a seller there must be a buyer.
    Both seller and buyer must remain solvent
    in order for business to continue.

    4)America cannot provide everything for everybody

    5)America will have to abandon the concept of
    Something for Nothing before it can become
    prosperous again.

    6)Politicians must get out of the markets.

    7)The stock market must be changed to reflect
    the fundamentals of companies – rather than
    being a casino run by the connected money.

    All this doom and gloom is not addressing the
    real issues. Armageddon is possible Only if the
    nation continues to avoid realistic solutions.

    • Cam Fitzgerald January 7, 2011, 10:39 pm

      Finally! Something I can sink my teeth into.

      Thanks Redou. I am busy right now but I will certainly get back to you late tonight or tomorrow morning. Your post is appreciated and your objections have been noted.

      Cam

      PS: I don’t watch John Wayne movies. Hell, I don’t even own a TV. Maybe I will give it a try though.

    • Rick Ackerman January 8, 2011, 1:13 am

      The simplicity of your 7-point plan has the virtue of being easy to understand, Redou. Unfortunately, a key aspect, mediating responsibility for the housing bust and fairly apportioning its costs, can only happen via some political process. Under the circumstances, it might be better for a tsunami of bankruptcies to bring about their own cycle of creative destruction and healing. This is what I think will eventually happen anyway, and it obviously will stick lenders with the lion’s share of the costs. But getting to that point, politically speaking, ain’t gonna be pretty.

    • gary leibowitz January 9, 2011, 7:39 am

      I concur with most of what you have objected to. This is cyclical in nature. I would add though that this depression should be deeper and last longer than the 30’s simply because of the exaggerated world excesses and indebtedness that we see today. The last 50 years of “managing” and suppressing deflationary forces should give us a clue as to what type of depression we will experience.

      My only caveat is how angry nature will become after we mistreated it for so many years. Not a good prospect combining the backlash of Mother Nature alongside a world economic depression. With the world getting so much smaller and weapons of destruction getting so much bigger I hope enough cool heads prevail to prevent a holocaust.

  • Bradley January 7, 2011, 6:33 pm

    re: Maslow, I don’t want to be glib, but I think many of the “requirements” that one must have in order to attain self actualization might be considered impediments to some. The most obvious might include sex, employment and the respect of others, (none of which the Buddha or Jesus had the entire time of their journeys to enlightenment). In my opinion, self actualization is a very solitary, very individualistic journey, which has no easy definition or requirement of standard of living. Americans will not, by definition, be miserable if their standard of living is not equavalent to the recent past. Many might be happier, and be more connected to the things that make us human.

    A cursory reading of Camus, (another quite self actualized person in my opinion), reveals his appreciation of sun and water and air, all available for us without tax or Chinese ownership, all of which provide us with pleasure. Perhaps more Americans will come to appreciate things as simple as these.

    • Benjamin January 8, 2011, 12:23 am

      I lied about having nothing more to say, but this will be last on this topic. I wanted to post this before, originally, but couldn’t quite find the right way of conveying it. So first, thanks Bradley for helping me find the right words the perfect way to convey them. Now, don’t take this the wrong way, but….

      Glib without meaning to be glib” = Bradley

      Not so glib life for many people happily living in less material well-being = “Extensive Tissue Necrosis of the Lower Limb in an 11-Year-Old Boy who had been bitten two weeks earlier by a Bothrops asper (viper) in Ecuador.”

      http://en.wikipedia.org/wiki/File:Tissue_necrosis_following_bite_from_Bothrops_asper_PLoS_Medicine.jpg

      Never mind that, though. Giving up “a little” can’t lead to anything but happiness in the purity of the simple life that we supposedly “don’t appreciate”. It’s just that we can’t see that, having lived in so much material sin for so long. It just feels evil. And certainly, no one here will be bitten by a bothrops viper (then again, no one in the developed world ever expects to be poisoned by Clostridium Botulinum, either, let alone expect that it won’t be diagnosed in order to be properly treated (as happened with me), leaving them frail and in a pain level that one never thought existed).

      Naure has so, so many ways of teaching us how downright cruel she can be, especially if we don’t respect reality, namely that falling from the top and landing hard means, by necessity, pain that only the happiest people in the spiritually perfect poverty of the jungles feel today.

      But enough of the enormity of being glib. Since the topic is about unimaginable things, I have a perhaps horrifying thought pertainting to myself that maybe some need hear….

      I have several dogs. Why? That’s a good question. What are dogs good for? Some say for work and hunting, others for comapanionship. One can get by without them, though, so I wonder why people keep them as pets. But they just are, and I love mine and they love me. I’ll always have dogs if I can have them, and never veiw them as wasteful luxury.

      From time to time, it serves to keep the mind real by asking unaskable questions, such as what one would do if they had to eat their dogs in order to survive. Of course, we wouldn’t, we say. We’d go hungry first, wait til the last possible minute before acting on such a repulsive thought. But when the final minute arrives?

      See, you have to grab your brain and force it’s eyes to look, otherwise it won’t. You stare for a moment, picturing your dog, your beloved pet, being torn into a bloody mess. You try not imagine how it tastes and feels, but if you’ve a vivid imagination you’re doomed to make guesses. You try to square this with the fact that at some previous time, they were “just” a beloved pet that you wouldn’t do this to. You scream to God, “this is just me imagining! This isn’t something I would do!”

      That’s not the horrifying thought, though. Once I forced myself (long before reading this article) to see that vision, I pushed back by insisting that some other way could be found if I was without food. The mind tries to go back to it’s squirming and insisting that something else can be done. Grab hold hard, and jam toothpicks to keep the eyes open…

      I store, but just imagine several months in without being able to restock it. And keep pushing your brain to confront that possbility.

      I got mad and thought about the why of the whole thing, and realized that I would rather kill another person, eat them and feed them to my dogs as well, than kill something so close to me as them. This is just me imagining, God. I wouldn’t do something like this (!!!).

      There. Was that so bad? A little honesty, at long last?

      No, it isn’t bad. We see terrible things about ourselves when we are willing to admit it, but that by no means be the ONLY thing about ourselves. Thankfully, I don’t want that to happen. Thankfully, I am a person who truly values civilization, and all that it requires in it’s vastly unspoken complexities. Being the person I am, someone who would do brute things, I will (and have and will) defend what I realize is most important for myself and everyone else.

      And for those so convinced that returning to the simple life as is easy as chopping off the top of that dastardly pyramid and being glad to have done so, there are more reasons than pure psychological ones why we’re bound to over-do it, quite beyond our control to stop once it begins, and quite possibly nothing we can do about it once it settles. The Inca never thought a (possible) 11 year old desendant of theirs would still be living in the wild, centuries after their collapse, such that he would have to carry around a dead leg for two weeks.

      Past a certain level of attainment and acheivement, it’s quite dangerous to regress. Past successes build into our ongoing needs a complexity that demands more destruction than we believe we can surgically perform. Even the Amish will come to realize what a whole nation of people crashing back into Amishhood will result in.

      And just as one should burn that disturbing image of an 11 year old boys leg into their conscious, also remember that should all this collapse, you’re quite possibly going to end up as dog meat, performing one of the last functions on that pyramid from my intestines. And DO NOT think for a second that it cannot happen here. The Donner Party was a local occurance but we all know from that what man is capable of when faced with it. And finally, realize that for every past glorious outcome we are certain happened, there was, standing behind it at ready, other possibilities that just barely weren’t but would have been.

  • Rich January 7, 2011, 5:49 pm

    A Toronto friend who listens has had a hard time staying in PMs and cash while Canadian RE went crazy. In Alberta at least there appear to be some cracks.
    O/T but relevant. Amazing bottom calls Rick on ES and SL:
    1264 vs 1264.50 actual and 28.345 vs 28.33 actual.
    Good stuff!
    Cheers…Rich

  • Rich January 7, 2011, 5:37 pm

    Re “Much of the hazard naturally revolves around the deflation of asset wealth – specifically, real estate.”

    Real estate continues down in the lower 40 as the Pauls, father and son, agree to raise the debt ceiling if government spending is cut.

    On that basis bought some silver again this AM…

  • F. Beard January 7, 2011, 3:54 pm

    @Benjamin,
    I would love to dissect your nice long reply but alas can’t do so here without being a bore (or boor). Email me at [email protected] and we can take it off-line, if you wish. Or not.

  • rmsimc January 7, 2011, 2:07 pm

    I think that it can be truly seen by the initiated that our empire is in decline, as has been the case with all that have come before us. But history also teaches that, although things continue to progress exponetially wrt time, this is also accompanied by improvements to the human condition. After Rome fell, we plunged into the dark ages for 800 years. Each subsequent collapse or trasition, however, was relatively smoother…Holland, Spain, France, England.

    I dont expect blood in the streets but am not turning a blind-eye to that potential outcome. After all, quantum theory teaches us that all events are simply probabilistic. (And yes, I do tend to cling to my God and my guns.)

  • Benjamin January 7, 2011, 12:53 pm

    Well, Cameron, even discounting the O/T posts (sorry about that), you still managed to draw quite a crowd.

    From the responses, I would have to say that the unimaginable turned out to be the imaginable after all. The naysayers are clearly “outgunned”, as their shorter and less numerous responses show. And you truly did manage to keep my mind thinking about these things long after I first read, long after my last comments, that I still see much to talk and debate about.

    But after 100+ posts, I think the points have been well enough established. All that’s left for me to say is that for those who won’t even imagine, it’s going to be…

    Anyway, and I’m sure I speak for a large number of readers, I look forward to anything else you might have to share in the future, whatever the topic may be.

    • Cam Fitzgerald January 7, 2011, 3:27 pm

      I do have a new topic Benjamin!

      I had written an update on Canadian real estate but wasn’t quite happy with it. We live in a mad world up here where home prices simply refuse to cooperate with gravity. They keep rising relentlessly but I see a classic bubble top forming.

      People would kill to get a decent house for under 250k in many cities right now. In Vancouver, a million barely cuts it and that might only get you a tear down in some neighborhoods. It really is madness up here. Keep in mind our dollars are now at parity to yours so we are talking the same money. Our own “wealth effect” may be at risk though.

      Hopefully next week I can finish my thoughts.

    • Benjamin January 7, 2011, 3:49 pm

      Quick, Cam, crack-shack or mansion? I recall visting a site some time ago where that was a sort of game. See the house in Vancouver, guess whether it was priced too high or too low. It was quite educational, in that I hardly got a single one right!

      Thanks for the mini-update, as I’ve been mostly U.S., Europe, and my-own-world-centric this winter. I didn’t even know the currencies were paired again. Exports doing rather well, I presume? It would make sense. At least, that’s the only way I can figure why housing price would be like helium.

      Anyway, hope we can see your essay soon enough. Take care!

  • Rick Ackerman January 7, 2011, 8:42 am

    Can we please return this discussion to ideas that come explicitly from Cam Fitzgerald’s essay? If those who post here continue to promote their pet topics relentlessly, I will start deleting the stuff with a heavy hand.

    Thank you for your cooperation.

  • Steve January 7, 2011, 8:08 am

    F.Beard. The 16th amendment created no new power of taxation. Income or 1040 is an excise tax on corporate beings. 100 years ago all taxes were on corporations, and via Duties, Imposts, and Excises (Article I, sec. 8, cls. 1). Taxation under authority is levied against the several States, corporations, importers, and exporters; not the People.

    The issue is what happened to turn you F.Beard from a Natural Born Man having all the prerogative of King George III, into a corporate enfranchisee subject to excises, because there is no authority for a federal tax on the Sovereign in Common. We have a genuine problem because federal citizen corporate enfranchisees do not care about the Law. All they care about is making sure everyone is just like them – subjugated.

    We were a creditor Nation until the tax burden changed to persons instead of corporations. Back in ole’ 1909 we were Men, and corporations were persons subject to excise taxes.

    Look to the act that created corporate enfranchisee legislative subject persons under an internal act of congress. We can once again do what worked, or we can continue to corporate destruction. Right now the Corporations own the legislature. The Republican “Old School” are not going to change that. The democrats are not going to change that goose.

    When enough disenfranchise the game will change. How it will change is for you to imagine in pages and pages of belief that corporations are not going to go quietly.

    F.Beard, a corporate enfranchisee may only trade for the master, and frn notes are a tally. His corporate gain must pay a FEE to the master/creator the congress. This is an excise tax for corporate license to do resident business away from the citizen domicle within the district of Columbia.

    Eagles and specie Dollars are Legal Tender at Face Value. Why don’t you trade with them ? Could it be because an enfranchisee cannot own property, but; may trade bullion for the master ? Nash’s Non Co-operative Game theory compels most to federal commerce under Article I, sec. 8, cls. 5 by making it hard to do business honestly. There are no banks at which to trade Gold and Silver. It is nearly impossible, yet; Lawful for the Sovereign to Trade in specie Coin that is absolutely Legal Tender for all Debts. It is just hard to do what is right, which is how the system of mobocracy works. Then things get ugly under Roman Civil Law and “use” = debt = trust under the general and paramount lien of the Banking Act of 1913. VOLUNTARY ‘use’ of federal reserve notes establishes a presumption of corporate benefit. I’m also getting too tired. Maybe later a discussion may be had on the court cases that established the presumption of corporate enfranchisee character, trust law by ‘use’ of some Thing under Roman Civil Law, and the means to disenfranchise. Great discussions today.

    • Benjamin January 7, 2011, 8:28 am

      “Taxation under authority is levied against the several States, corporations, importers, and exporters; not the People…We have a genuine problem because federal citizen corporate enfranchisees do not care about the Law. All they care about is making sure everyone is just like them – subjugated.”

      But why is it right to tax a venture? Ventures are undertaken by people, and people shouldn’t be forced to bear anything they don’t want to voluntarily bear.

      I’ll probably get egged for this, but I believe the Founders made a mistake (dodges egg) in allowing taxation of any kind. Yes, it worked, but as I often point out, anything works so long as people can find ways to avoid the burdens they didn’t personaly demand, which ultimately leads to mortals playing God, showering mana from heaven to keep it all together.

      We don’t need force on any person or on any persons property, corporation or individual. People naturally want to live in law and order (more than they do not), so we can trust people to kindly donate to their own self and collective interests. And even if someone doesn’t, that only means a lower currency weight, freeing individuals to be more productive on their own resources, which by definition cannot mean people on the whole would be criminals.

    • F. Beard January 7, 2011, 3:50 pm

      Thanks! Once again I somewhat regret that I did not go into law.

      I would post a longer reply but it appears I have been seriously off-topic.

  • F. Beard January 7, 2011, 7:36 am

    You may privately engage in Trade using any medium in agreement as long as one pays the tally for gain to the master who created nearly everyone as corporate U.S. resident/subject in about A.D. 1868. steve

    Which means we are de facto enslaved to using FRNs? BTW, I reckon we need to abolish the capital gains tax and the Income Tax too if we are to have a true free market in private money creation. I would appreciate any other ideas that would preclude a stealth inflation tax wrt private currencies should you have any. thanks.

  • F. Beard January 7, 2011, 7:04 am

    @Benjamin,

    I just ended a long, exhilarating but tiring debate on common stock as money at:

    http://blog.mises.org/15228/life-without-the-fed-the-suffolk-system/

    Read my example of how I would set up an “amusement park” corp. if interested. Plus a lot of other money topics were vigorously debated.

    Afterwards we can chat, if you’d like.

    I is tired.

    • Benjamin January 7, 2011, 8:09 am

      About the only thing I agree with you on is that money quantity isn’t the real issue. But then you and everyone else over there at Mises go off on the most nightmarish of tangents. I mean, sheeze, I thought that that analysis of the movie “The Shining” I read the other day was long (took a full 24 hours, 8/hrs per night, to finish and was not nightmarish at all. Quite good, too. Kubrick was a genius (but we knew that already)).

      Anyway, F Beard, the point you seem aboslutely determined to miss time and again is that only when governments are restrained in their spending and and power can people be free. That is the whole point of what you call “special favor” for gold and silver. I could go over and over the reasons why those two commodities, but the shortest and simplest answer is their stability (much less in silver, obviously, but even all of today’s sensible uses for it still sees plenty accumulation over time).

      And frankly, your major concern about mining it is the problem with Western thinking these days. It doesn’t dig nearly deep enough.

      First, we don’t even need more and more supply. I’ve said once, I’ll say it again… Just the gold supply has some 150 decillion atoms in it. That’s an incredibly huge number. It would take 1,000 governments spending 1 quadrillion each, every year for 150 quadrallion years for them to spend it all (but that’s not the objective, just to give an idea how large that number is).

      Second, it’s going to turn up incidentally from mining other stuff anyway. I know you hate gold and all (it’s just a metal. Chill out), but you’re going to have to learn to co-exist with it because there isn’t going to be any getting away from it. It’s going to have to be moved out of the way if we want to get to other things, see? That was only going to happen anyway, and that many people in poorer countries were negatively impacted by bad practice only means that things can and should’ve been done under different circumstances.

      Third, and I’ve always said this to you, on so many occassions, that pollution is always going to be a problem that we must manage. It can’t be done away with. Period. And the only way to deal with it is for people to be free to do so, which, as I’ve stated quite clearly on numerous occasions, is why sound measures and restraints in/on governments is absolutely essential to our continued existence on this planet (or anywhere else, for that matter).

      I’ve also stated quite clearly why this can’t mean everything the anarchist ideology wants to use to pay for government. BY IT’S VERY NATURE, the limits on what government can consider money is what secures liberty. I’m sorry you can’t come to terms with that “most horrendously hypocritical contradiction”, but you anarchists will have to go pound sand until the laws of reality change. You’re not free if you don’t limit government spending and power, so naturally everything and anything under the Sun cannot be even a remote possibility at some future date. And again, because I know you so well, no…

      Government issued fiat does not meet the criteria of limitations and restraint. Not for reasons of quantity, though. For reasons of personal liberty for everyone, which is literally something you can’t put a price on (so quantity goes out the window as an issue).

      That said, I don’t care what you use in your day to day life, or what you save or don’t save in. Just keep it away from government if you really want to be a free man.

  • SDavid January 7, 2011, 7:00 am

    Trade California and Alaska to China for all the debt amassed.

    Problems solved.

    • Steve January 7, 2011, 7:37 am

      Don’t do that. I spent 10 years in Alaska. The People in Alaska are kinder, more sharing, and more honest than any other place I have known. Living closer to the reality of the Land does that to People. When the risk of death by Nature is ever present it changes the way people act toward one another. Maybe that explains why you chose Kaliforn.

      The debt owed to China has no “value” – Don’t wurry, be happy a frn has no “value” just ask the federal reserve about their ‘notes’.

  • F. Beard January 7, 2011, 6:55 am

    Once again speaking anarchy via stocks that can be manipulated at will. What J.P., B of A, Goldman, and others are doing in the stock market today can be done again. steve

    So you say. But all I insist on is a true free market in privtae money creation. Then folks could voluntarily use gold, silver, common stocks, store coupons, the government’s fiat (legal tender for government debt only, taxes and fees), or whatever.

    • Steve January 7, 2011, 7:25 am

      F. Beard, In anarchy private contract governs like you say. Buyer beware, seller beware. Civilized Men establish a constant value to protect the weak and feeble, the old and infirm, from the sharks and shavers. That way you don’t have to go thump some thug who defrauded your parents. You can ask the state to prosecute. People get real out of hand when they think some smart arse stole from their Mom. Taking things into one’s own hands usually gets really out of hand.

      I’ve stated this before. Right now private contract cannot be impared by the government except in regard to misrepresentation/fraud (Peace and Dignity of the State “thing”). You may privately engage in Trade using any medium in agreement as long as one pays the tally for gain to the master who created nearly everyone as corporate U.S. resident/subject in about A.D. 1868. The issue will always remain in regard to misrepresentation of value by one party or the other.

      Everyone is free to contract in Bull Crap – Just Do It !

  • Jill January 7, 2011, 6:08 am

    F. Beard. I agree. However, I see a problem in ideologies, in that they usually have nothing to do with reality. If a politician tells you “I am going to do X if you elect me” then you have something to go on, to judge by later. But if they say “I am a libertarian” or “I am for free markets”, many people just love those phrases. And then the “free markets” politician votes to bail out big banks, just this once, just because it’s an emergency & this will keep our free market system going forever after supposedly. There’s always some excuse.

    The politicians pay marketing professionals to come up with the idealistic phrases and to come up with the names of ideologies that get them votes; but most have no intention of following through on any of that. They “dance with them that brought them”– i.e. serve the Special Interests who financed their campaigns.

    • Steve January 7, 2011, 7:11 am

      Jill, who is the idiot ? The guy who votes in an illegimate voter scheme and expects change, or the person who doesn’t care enought to know what system they register to and still expect things to change. No one seems to care what a Dollar is. No one seems to care that they practice democracy which proves idiocy in a modern feudal scheme where once stood a Free Republic, (well at least until the Whiskey Rebellion). Who cares FEE / FREE they really seem similar.

      There is a genuine problem under the U.C.C., and via abuse under the Commerce Clause (healthcare). Yet, the greatest problem is the sheeple who complain without knowledge. With education and knowledge peace could be maintained and attained. At the present; doing the same thing over and over again expecting a different result since 1867 is sheer delusion.

      Try reading Article I, sec. 8, cls. 17 and 18 of the federal constitution and SEE where the federal government has jurisdiction. THEN DO SOMETHING REAL AND HONEST. I’ll throw in Article IV, sec. 3, cls. 2 so you understand territorial powers, and citizenship created by congress as the Master.

      Demos, Republicrats , Libs, Socialists, and Commies in the congress are all owned by the corporations. You are right about corporatism, yet; there seems to be no care to trace the Issue to 1867 / 1868 to discover the corporate enfranchisement of people to create persons as enfranchisees under a voluntary military voter scam. Person(s) are natural and artificial and the presumption is that all are corporate under u.s. federal creation and domicle within this district doing resident business over a several State.

      Strip the Commerce Clause and 90% of federal legislation goes away. Overturn The state of Georgia v. Stanton 73 U.S. 50 and the federal government is confined to dock-Yards, Guano islands, Reservations, etc. & etc. etc, see; Article I, sec. 8, cls. 17 – too lazy to do the work HERE:

      To exercise exclusive Legislation in all Cases whatsoever over such District (not exceeding ten Miles square) as may, by Cession of a particular State, and the Acceptance of Congress, become the Seat of Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings.

      At Article I, sec. 8, cls. 10 congress can deal with Piracies and Felonies on the high Seas.

      Congress can prosecute counterfeiting securities and Coin of the several States.

      You are right Jill, the problem is Article I, sec, 8, cls. 5 Commerce Clause and the abuses thereto creating unauthorized police powers at the federal level. And that is what the congress wants FEDERAL POLICE POWER to control the flyover people.

    • Benjamin January 7, 2011, 7:15 am

      Individualism is the only right “ideology” (for all that it isn’t an ideology, but rather a reality). That is the problem with any ideology out there. It automatically condemns the individual, in one way, shape, or form, to one extent or another.

      But the individual is always right, provided they are freely deciding for themselves, with no over-riding mechanisms over them (aware of them or not). The only time the individual is wrong is when they hurt or deprive someone else of their natural rights, be it their physical person or any portion of their property.

      Pretty short ideology, huh? How this continues to baffle people is quite beyond me. Well, okay, it doesn’t, as I know the reason why. The old mentality makes people think the most outrageous things about themselves, about their very nature. With that delusion forming the basis of their decisions, they will adopt top-down policies (or just adapt to them) that have nothing at all to do with reality, except in their errosive and eventually disaterous effects. And while we will always have the power to do bad things as individuals, denying individuals via self-limiting ideologies and policies (mild or otherwise) isn’t going to change that.

  • Jill January 7, 2011, 4:28 am

    When particular choices are labeled “socialist” it seems to turn people off. When other choices are labeled “free markets” they seem to turn people on. But the labels are usually incorrect. And even if they were correct, how about trying to be pragmatic as a choice? The political ideologies s in our minds have nothing to do with the politics in our country– in which TBTF banks & other powerful corporations rule us, regardless of what ideology the government is labeled with, or labels itself with.

    • F. Beard January 7, 2011, 5:24 am

      The political ideologies s in our minds have nothing to do with the politics in our country– in which TBTF banks & other powerful corporations rule us, regardless of what ideology the government is labeled with, or labels itself with. Jill

      The problem is avoiding throwing out the baby with the bath water. Americans are idealists which is our strength. We typically don’t like pragmatic solutions and only accept them under duress and even then we try to figure out where our principles have failed.

      Now, since our current system is in crisis, I have no objection to any pragmatic solutions to prevent suffering. But we do need a principled system for the longer run to avoid even more misery.

    • F. Beard January 7, 2011, 5:26 am

      scratch “any” from “any pragmatic solutions”. Obviously, some pragmatic solutions are unacceptable.

    • redwilldanaher January 7, 2011, 7:15 pm

      “Americans are idealists which is our strength. We typically don’t like pragmatic solutions and only accept them under duress and even then we try to figure out where our principles have failed.

      Now, since our current system is in crisis, I have no objection to any pragmatic solutions to prevent suffering.”

      And this is exactly what TPTB have counted on for centuries. There’s no faster way to move away from our ideals than to let them engineer “crises” and then to steamroll us and our ideals to “solve” them. What will it take for people to realize that they/we can’t be trusted, especially when they/we aren’t within a natural proximity.

  • F. Beard January 7, 2011, 4:12 am

    @Larry D,

    Mockery? I assure you the socialists have their ideas for monetary reform and for taxation too. And I doubt they include PMs as even a private money form.

    So we learn to do money ethically and please everyone worth pleasing OR we go from a banker-fascist country to a socialist one.

  • F. Beard January 7, 2011, 2:57 am

    Once the banks have been nationalized and dollars have been replaced by GreenBacks for payment of taxes due, what remains will be trying to fix the price of a new Chevy Volt in terms of Hudson Bay blankets. Larry D

    Actually, common stock is an (the?) ideal money form. It requires no PMs and no debt either hence no interest nor fractional reserves.

    • Steve January 7, 2011, 6:35 am

      Once again speaking anarchy via stocks that can be manipulated at will. What J.P., B of A, Goldman, and others are doing in the stock market today can be done again.

    • Benjamin January 7, 2011, 6:55 am

      PMs don’t require any interest, but the more I tell you that the more you ignore what I’m saying.

      Now, I’ve looked at this common stock idea you keep talking about, and you never do answer me as to how it doesn’t cause debt.

      If I create a price tag that says “$10” and use that as money, there is no accountability whatsoever, other than someone (or a lot of someones) word. It’s no different than printing a $10 bill. And certainly no different than issuing a share of common stock with a 10 on it. When I buy something with it, supply of that thing reduces.

      Provided I did something productive to issue that 10, whatever it’s form, there shouldn’t be any problem. My production is there to be traded for someone elses. But here’s where you never answer me… What if I don’t produce anything?

      Debt, and seeing as how there’s only the word of someone behind that stock, there isn’t any way you can say that there is zero potential.

      Second, let’s say I have 1,000 shares of common stock with a company with 1,000,000 such shares issued, with a face value of 10. They dilute the shares to 2,000,000. I lose 5,000.

      If you punish savers, there’s debt. If you print or issue without production, there’s debt. That there’s no fractional banking doesn’t eliminate the possibility. Nor does government issuing fiat (as you also often contend would work) make us free people. Nor does piting their endless ability to issue vs the same power of regular people make for a productive society. It makes a paper war, and if people want to get busy doing other things, they will have to allow government monopoly over money creation so they can walk away from the computers and printing presses and get some work done, which is surrenduring to government’s endless ability to take from us what we work so hard to produce.

      And that is why common stock will always be something you can buy and exchange for money, not commonly act as money itself. And that is why fiat will forever be the tool of theives. Fractional banking, on the other hand, merely covers up the shortages caused by the thefts carried out by the growing, empty assurances. First government has to rob you, then you have to beg to borrow from the bank that creates a loan from nothing in the absolute sense, but rather the endless power of government to create more debt (whether outright printing or issuing bonds… it matters not how).

      They use our desperation against us, the desperation being caused by their ability to take without permission in the first place. Government steals, so people borrow what isn’t there, prompting government to steal more to “put it there”. This they call divinity and enlightenment, what you would call halfway decent, when in fact it isn’t anything but 100% filthy.

      But FR wouldn’t be anything, wouldn’t even exist, without the power to issue on nothing or, just as bad, the power to tax a free person as a “guarantee” that government will make good its paper. That said…

      See my long post. A commodity in the hands of people, even if it’s only atoms of said commodity, voluntarily extended to government as permission to spend, and allowed to define the national currency weight, removes all the problems mankind has had with himself and his creation called money. If you can fit FR banking and robbery into that… but you can’t. It’s honest, flexible, and quite forgiving accounting, the only kind that will work for billions and billions of free people so long as we exist.

  • Jill January 7, 2011, 2:41 am

    We have all these ideas and ideologies in our heads, but no one knows what will happen. Optimists could be wrong. But then again, gloom and doomers like Prechter have been dead wrong for about 18 of the last 23 years.

    • Steve January 7, 2011, 6:32 am

      Jill, if you really followed Prechter you would be up about 400% over the past 5 years, and much more over the past 23. Getting out too early, and buying too late is a motto of someone famous.

      Econ 101 teaches that manipulations to the upside create greater damages to the downside. How much has been shoved at the market to create this little rise? The real figure to the banks was 13T according to what was forced out of the Fed Dec. 1, 2010.

    • Rick Ackerman January 7, 2011, 8:29 am

      Pretty squishy, Jill. I gather that, apart from his sins against gold, you haven’t followed Bob Prechter’s forecasts very closely — especially where they have concerned deflation.

  • Martin C January 7, 2011, 2:01 am

    For the record, I am not espousing Marxism – just saying that the idea that Western Governments are Marxist because they tax and spend is as nonsense as saying they are Adam Smith style capitalist. Trying to redress the balance a bit as there is a consensus on this site which tends towards the redneck on occasion despite the obvious intelligence of posters.

    Larry D, I think we are actually in agreement about the impracticalities of large scale Marxism although I do not agree it is envy based, it was Lenin, Stalin and the powermongers who turned the theory into something horrific

    I certainly don’t think I described any type of utopia – the opposite in fact, it’s just post apocalypse you get by any way you can and on a small scale with willing participants anarcho socialist models have a better chance of working – as long as you don’t expect an iPad and a McMansion

    Good luck you all, remember it’s a big world out there and more than one way of looking at. Don’t let your prejudice close your mind to different ideas and don’t forget there are as many loonies in the counter culture as in the main stream media

    • Steve January 7, 2011, 6:26 am

      Try comparing the 10 planks of the manifesto to the U.S. government form.

  • F. Beard January 7, 2011, 1:51 am

    You’re essentially arguing that we “extend the pretending” right? redwilldanaher

    No. We should implement fundamental reform in money creation after the bailout. And I’m not talking about a government backed or favored gold-standard which is merely “Plan B” for the usury class and is fascist to boot.

    • Larry D January 7, 2011, 2:45 am

      Bales of tobacco and beaver pelts would make an excellent form of new money creation after the bailout.

      Once the banks have been nationalized and dollars have been replaced by GreenBacks for payment of taxes due, what remains will be trying to fix the price of a new Chevy Volt in terms of Hudson Bay blankets.

    • roger erickson January 7, 2011, 3:20 pm

      Exactly. And the only rational thing to tie a bookkeeping currency to is public initiative.

      Whatever our population sets it’s mind to do, we will get it done by artful manipulation of our labor & tangible resources, and we’ll need just enough currency to denominate all the required transactions. No more and no less.

  • F. Beard January 7, 2011, 12:46 am

    What depresses me is that we allow mere accounting entries to doom us to Depression and maybe War. It’s not like we have any actual material shortages. It’s just a matter of the WRONG (unjust) numbers on accounting spreadsheets!

    So fix them already! But how? Does not fractional reserve lending cheat both borrowers and savers? Then send them a bailout check of new debt and interest free US Notes.

    Make it big. The Biblical restitution for theft is from 2-7 fold.

    As for the banks, the bailout would fix them too in nominal terms. In relative terms the uber-rich will lose but OTOH, their head will rest more securely on their necks.

    • redwilldanaher January 7, 2011, 1:07 am

      You have something here F. You’re essentially arguing that we “extend the pretending” right? The possibilities are only limited by our imaginations divided by the square root of time that Monsanto’s had to “work” with them. Sure beats the boot on our face reality we’re in now.

    • roger erickson January 7, 2011, 3:16 pm

      OMG! Since we went off the gold std, in 1933, there IS no fraction we’re lending against, so we effectively abandoned fractional reserve lending at that time.

      Say it again: “The only thing really backing our currency is public initiative – which has always been the real case (since any enemy could come in and take your gold by force).”
      A gold std is only a farce by which plutocrats trick populations into using only as much currency as the gold hoarders own. Letting a few individuals own a public currency supply has never worked for long – witness the historical brevity of the recent gold-std era.
      http://www.eh.net/book_reviews/handbook-world-exchange-rates-1590-1914

      No subset of a population can “own” or limit public initiative by trying to own & manipulate the currency supply. The only outcome is national demise, since that nation will not remain competitive against other populations.

      The DoD doesn’t need gold, only well trained & practiced coordination. Ditto for the US population.

  • Steve January 6, 2011, 11:02 pm

    Republican House Members walk off the floor while Constitution is being read aloud. A.P. news flash !

    Need anyone say more about what is wrong.

    Contract with America here we come.

  • Victor Laszlo January 6, 2011, 9:27 pm

    But, other than that, Mrs. Lincoln, how was the play?

  • laurent January 6, 2011, 8:55 pm

    It is quite clear, there is but one choice. Be a member of the army and survive by force or move away from the masses, get beyond the horizon with your like-minded confreres who have been preparing for a couple of years. Once your little group can honestly say it is equipped to handle a peaceful existence off the grid, provide food, warmth, and shelter to all its members, a great sense of peace and security takes over. It then mutates to a real sense of love. The next mutation brings you to expand these capabilities towards anyone who comes asking for help. The paradox in here is that one will only be able to provide if one is far removed from the mainstream populations. These will be operating by force, but not for that terribly long. Sixty days and most will be dead.
    This may be doom, but it is a scenario that may mutate from possible to probable. Make preparations.

  • John Jay January 6, 2011, 8:49 pm

    I believe the magic number is 11%.
    If and when the average interest on all the Federal government debt gets to 11%, 100 percent of tax revenue will go to pay the interest, leaving nothing left for any other purpose.
    I think it peaked at 16% in the1980’s.
    Still a ways to go yet.
    But we are at much higher debt levels now, and adding debt a lot faster now compared to 30 years ago, so that 11% number will keep dropping as the debt rises.
    Death watch.
    Dead pool.

    • roger erickson January 7, 2011, 3:00 pm

      One simply cannot let this go. Citizens don’t let co-citizens operate ignorantly.

      The very concept of national debt applies ONLY to a gold std (where debt is somehow owed to gold-hoarding plutocrats) OR if you’re stupid enough to hold debts denominated in someone else’s currency (or commodity).

      Our supposed national debt is denominated in our own FIAT currency. Repeat that. F-I-A-T. The only worry is inflation, NOT default. And there has NEVER been hyper-inflation in a country with a sovereign fiat currency [unless they’ve lost a war & have punitive debts in someone else’s currency/commodity, OR have stupidly pegged their currency to someone else’s (same thing, effectively)].

      The whole point of currency is to keep currency supply within tolerance limits about that amount needed by a growing population & growing economy.
      http://www.uhuh.com/unreal/lincoln.htm

      This isn’t rocket science. That task is far easier with fiat currency, because the only thing that really backs any currency anywhere is public initiative. You lose organization and you lose the ability to tap the return-on-coordination.

      If you tap the return-on-coordination, it will always outstrip – by many orders of magnitude – any feeble worries we can predict, and has consistently done so for, say, ~ 4 billion years. So don’t get so cocky. We never, ever, ever know what’s going to happen, but we can be very good at rapid group reactions to whatever does happen.

      That will happen only if citizens stop arguing over irrelevant details and invest in coordination. We didn’t win WWII infighting over what we could/couldn’t do. We just did it, and surprised even ourselves. Ditto COULD happen today, IF you send smart people, not idiots, to congress.

  • JimK January 6, 2011, 8:48 pm

    I detect such a fatalism in many voices here, including Cam Fitzgerald. And while I am not the Good Witch of the North, proclaiming that ‘all we have to do is click our heels together and proclaim “there’s no place like home”, I do think it bears reminding people of a few facts regarding scarcity. We live in a culture that believes in austerity even though it is not full blown at this point – but the premises are distortions – the facts are:

    It’s not that hard to grow food,
    or make clothing,
    or furniture,
    or houses, and
    nearly all of us can learn these things.
    Health is attainable without great expense.
    It’s not normal to require medical intervention
    for most of our lives, bankrupting us in the end.
    Our well armed population is a deterrent to aggression.

    We have become accustomed to a painful struggle of a life, having forgotten our culture of self sufficiency, despite all the technological advances, and this I believe, is due not only to some kind of grand cycle, but also to having granted too much power to corporations – and that’s something we can take back.

    We continuously underestimate the human spirit in these discussions, and the innate power of transcendence that is within all of us. The most uncreative and nonconstructive voices, in my view, are those citing Biblical or other prophesy, rather than focusing on the reality, which is that this is just a bigger version of the packs of scoundrels who have looted before – but we are bigger too. It seems that the internet is the thing we have most in our favor, as it amounts to distributed power and voice – which is the arch-enemy of an elite intent on consolidating and locking up power through the channels of society.

    I visited with a Rabbi’s wife the other day who said that her New Year’s resolution was to let go of fear. That is the beginning of empowerment.

    The idea that there will be no money system is not realistic – money systems will arise, even if they are cumbersome, and quickly. The best we can do for ourselves right now is to talk to each other, to generate personal alliances which are outside of the dollar system. It seems like another good area to focus on is local government – get to know your Sheriff. Remember the Sheriffs in Pennsylvania who wouldn’t enforce repo’s?

  • Rich January 6, 2011, 7:43 pm

    Look out below…

  • John January 6, 2011, 7:28 pm

    … only brute force will guarantee our survival ahead of those we see as competitors. On the contrary, the military is growing and new bases are under construction.

    Might makes right?

    … there will be another war, and it will be the big one.

    Destruction, death, and more control of the populace.

    … supplies of key resources may not be sufficient …

    Rare earths are the hot topic and provided a mentality of USA vs CHINA. Necessary for smart phones, super sized TVs, and missile guidance systems. Not necessary for life and the pursuit of happiness.

    The power that spring from guns will ultimately win. … This is one battle we cannot afford to lose.

    The love of the truth of God will prevail.

    I’m OK with an America with less influence and a humble foreign policy. A reversion to the America of 200 years ago is a sustainable America.

    • Benjamin January 6, 2011, 10:19 pm

      This reminds me…

      I don’t think there will be great, big wars in the future. No, this is going to be a silent, slow death.

      Depolyment of the military on the part of the U.S. will still continue, but that’s just one way our competitors are killing us one cut at a time. A great big war is something we can easily win (just look at our technology, and sheer number of missles). This they know, and they’re taking full advantage of the fact that we cannot justify total war in retaliation for the relatively minor things they do.

      We’re going to be “greened” to death as well. Say what one will of solar, wind, culry-Q and LED bulbs, and 50 mpg cars, but the subtle complexities of reality, on all levels, will show us what “going green” is really meant to accomplish. Many don’t see this, and the many who do do not see nearly enough. No one today, that I’ve ever met, can repeat back to me why lower mpg is a necessity, for example. Even something so seemingly obvious as an “obesity epidemic” that needs tackling is a part of this shifting of wealth/killing of a culture. Fewer are the people that would question, let alone suggest that maybe some fat people aren’t a bad thing.

      Advanced educations that teach us to think only in terms of surface logic, the endless meme-streaming in the MSN… It has so many fooled into thinking nothing bad will happen, nothing bad can happen, and in fact, only good things will happen if we deal with so-called problems (especially, but they’re not problems at all to begin with) in the ways proposed by the very people facilitating this wealth-shift that is designed to not just sink the West, but lodge them in the mud deep in the swamp waters.

      There is a war. It has begun already, running a number of years, in fact. It is economic, scientific, intellectual, financial, political, military… Everything.
      We were made aware of this from the first day we started declaring “war” on things that aren’t normally thought to be enemies in that sense. And how we, on the whole, fight among each other. That is the best way to fight a war against an enemy whose vast wealth you’ve always wanted. I thought we learned this, but apparently, that it is happening, we have not.

      Maybe this is what Cameron was alluding to, or trying to, but being perhaps too much to comvey in a short article, it was just more easily expressed as saying big wars. Anyway, the reason I don’t think there will be is simple… This isn’t our grandfather’s depression. Nor is it the same world under the same circumstances. There’s far more people, far more inefficiency, far more mounting problems, and it’s all being handled by a financial system that can’t. Previously, none of that existed, at least to this extent.

      Bleed 150 million Americans? It will not stop there. 350 Europeans? And you can bet that another 30 million between Canada and Australia isn’t quite going to cut it. Total population of the West is around 1.05 billion, and we have to transfer the rest of our wealth to… 300 million more Chinese, around a billion (each) Africans, Muslims, and Indians… And more, believe it or not. Count so far: 3.3 billion.

      The West has not enough wealth to shift to those who are wanting and desperately needing it. As it were, those expecting to rise to the same level, or even close to the same level of greatness as the U.S. are going to find out that wealth redistribution isn’t all it’s cracked up to be. A big war would destroy a lot of the little that is being transfered over. Our competitors know this. They’re not stupid, and they need to keep as much under control in their back yards as they can. That is why no one really wants a big war. The small ones they tolerate because it works brilliantly as a cog in the machine. We bleed relatively little every year, they can work with what spills out and keep promising but never delivering the more that simply is not there.

      Forget about nationalism. We, everyone on earth, all had our time in the Sun. If you didn’t get a nice tan, and are pale, too bleeping bad. If you got sunburned, hey… so what?

      The too-important-to-faill authoritarian system is all that matters and we need show our thanks to the volcano gods before they get mad. Get it? If you don’t die, you’ll be killed so… Cough it up! (or rather, choke it down)

    • Steve January 6, 2011, 11:28 pm

      How long does it take if one stops the trucks a hauling? 1 day, 2 days, 3 days 4 !

      How long will the average individual’s stored goods last? (holding over 3 months is a federal crime last I knew)

      What will you do when your child is a crying?

      Should it come I believe the Great War will be a war of individuals in back yards on a global scale. The less developed the better off the people will be. Someone wrote in here that growing a garden can be learned in the event of a meltdown. Good luck friend because growing a garden at that level and taking care of it is major work. I will not have time to teach you. You will not be able to get the right kind of seed, nor will you be able to keep the pests off, or the fertilzer coming. You screw up once and you are done to eat leather for the winter into never.

      Just what is one capable of in that event ? None of this needs to happen. But, happen it will if the masses continue to believe false prophets.

  • Carol January 6, 2011, 6:48 pm

    I suppose I will be going against the grain here. Mindful that today’s mantra is that big government is the problem, I can’t completely agree. Today, the news one can read if so interested (assuming it reaches more than just the financial press) is that the multinationals are sitting on over a trillion dollars in cash…net of what they’re paying out to the executive suite and their crony boards. Those receiving unemployment benefits are paying more in taxes than hedge fund managers. While a blank check (like so many) was handed to Bush and fulfilled by Obama, Geithner, et. al. to bail out the banks and a sizable portion of those funds went directly into the pockets of those who designed and signed off on the mortgage mess, the hew and cry seems to be over the bailout of the domestic car industry and (horrors) the unions who build those cars. Oddly enough, the words “class warfare” are only used by the elite when the proles complain. But it is those proles whose jobs were sent overseas … by multinationals, Wall Street and the two party system which the multinationals and Wall Street have bought and paid for many times over. It was not the union workers who designed, specked out and okayed the designs of shoddy autos built by “the big three”. It was the elites who designed, specked them out and okayed the designs. And while the autoworkers did, indeed, have enviable contracts, I do not recall them holding guns to the heads of the execs and boards who okayed those contracts. Nor do I recall the poor going into the local mortgage broker’s shops with guns demanding at gunpoint to be given subprime mortgages.

    We need to recognize a few important facts missing in the current conversations. First, the fact that we all know that the government has stealthily and steadily obscured important data, e.g. M1 – M6. Just one of those small matters of “kicking the can down the road”. I would also suggest that the official economists in government, industry and Wall Street seriously neglect the most basic needs (going back to your Maslow pyramid) that have been and continue to undergo serious inflation – food and the cost of energy. These two items form the very foundation of the basic needs of the overwhelming majority of people in the U.S. Yet they’re not included in the official calculation of inflation. It is estimated that about 40% or more of the U.S. citizenry has zero assets. They live hand-to-mouth. These are the people who’ve gotten screwed over the last 30 years by voodoo economics – not only in the stagnation of their incomes but by virtue of the fact that this nation’s two parties, at the behest of the multinationals and Wall Street, transferred its manufacturing offshore – most notably to the Chinese. I’m as able to bash the Chinese as anyone but the truth is that the real culprits are the elites in government and big business (the hidden culprit no one appears to be willing to indict) who mind-numbingly decided that this country could easily displace those who work with their hands and we could all survive as a service-industry nation. No town can support more than X number of barbers, beauty salons and pizza parlors. It is that missing manufacturing sector that will destroy us – that and the hubris of the elites who look down their snoots as those who built the cars, the railroads, the bridges, the superhighways by the sweat of their brows and the muscles in their backs. Many of these people have been displaced (outsourced, downsized, rightsized…whatever lipstick you want to put on it) that are the first falling down the Maslow slope.

    You cannot expect to have a free market in finance for long without recognizing that you also need a free market for labor. The lesson for me is that we elites – well, those who’ve made the decisions in corporate boards, lobbying offices and campaign finance headquarters – are the ones to blame. We’re just fobbing off the blame on the grunts who used their muscles to build this country. And we’re throwing them under the bus first.

    The challenge is no longer how to get rid of the Geithners, Hank Paulsons, Larry Summerses, and their ilk and sending them back to do more useful, beneficial work such as growing tomatoes in their backyards from now on. The challenge is whether this country’s elites wake up from this nirvana they’ve created and manage to reintroduce respect for manufacturing, those who do it, those who must be paid for it in order to recreate a sustainable demand part of the ledger before China does, indeed, buy up the rest of the world’s supplies of everything. There is no shortage of proof that China and the rest of Asia protect their markets. Why are we the only fools not doing so? Let the Chinese and the other Asian countries begin to build their own domestic consumer markets. We need to rebuild our own. If you want to regain respect for the blue collar worker and his or her contribution to society and its economy, you need only look to the vast wealth that China, et. al, have amassed over the last 30 years or so. My question is, when do the elites in the US start contributing their share to the sacrifices that need to be made?

    • redwilldanaher January 7, 2011, 12:54 am

      My question is, why would you be satisfied with that? Maybe you should consider leaving the elites with a lot of overhead breathing down their necks and nothing but vacancies in their newly constructed roach motel as an alternative.

  • C.C. January 6, 2011, 5:47 pm

    Martin C says:

    “The US will be interesting with your obsession with guns”

    Actually, the ‘obsession’ with guns (by orders of magnitude) has come primarily from Marxist states over the past 100 years – the obsession to Remove them from the populace at large… Why this is, I have absolutely no idea…

    Aussie Mick:

    You’re a Man’s man. And despite the old lady’s protestations, she loves ya for it, as any woman with her head half screwed on straight would, trust me.

    • Martin C January 6, 2011, 6:36 pm

      Which Marxist States are these. There are no Marxist States.

      Marx’s writings were pure, the practises perverted by power crazy pragmatists in Russia then across the World

      You can argue that Marx was wrong but it is very hard to prove as there has never been a proper exploration of the practical application of this writings (which I guess in itself might give us a clue)

      Calling how US and European States use tax and spend to remove a mans wealth and use it to control the populace Marxism is like calling bailing water out of a sinking ship submarine research.

      Socialists call the current financial a failure of capitalism. The capitalists call it socialism. Both are wrong

      However, was Marx really wrong about capitalist crisis? Is that not what we are seeing ie standards of living of the few massively and unsustainably elevated at the expense of (or at least unarguably in comparsion to) the many. More and more desperate measures used to sustain the status quo including war.

      Capitalism does have a flaw in that it is based on self interest which makes it ripe for manipulation and relying on greed means it is never destined to be restricted to the Adam Smith notion of improving general levels of wealth based on efficient allocation of capital and mutually beneficial trade where specialisms and surpluses encourage transfer of goods efficiently to those who need them. Marxism in theory overcomes this flaw by attempting to consider the aggregate needs of the people and allocating resouces in a planned way to the greater good

      Only flaw is it doesn’t work as no one is clever enough to do this efficiently hence the need for the market and it discourage wealth creation and industry hence the need for monetray incentivisation?

      Maybe, but I don’t mind betting that once this capitalist (in name at least) edifice comes crashing down the remnants will be split in to 4 categories:

      – The old elite who have salvaged something
      – The victims, those with no power or group and just scratch by
      – The survivalist, the kind of people on this site who have got guns and a bit of nouse and are looking after themselves and their families
      – Small communal collectives working together upon marxist or Anarchic lines (please learn what anarchy means before criticising this)

      and I have little doubt the kindest group will be group 4

    • Larry D January 6, 2011, 8:16 pm

      An assignment by Martin to readers here:

      Pick up a worm-eaten copy of Das Kapital and trudge on through to find out what pure, unpragmatic 1848 solutions to 2011 problems would be.

      The problem with Marxism, like most envy-based religions, is that nobody is pure enough to implement the teachings properly. A theory of the future, and always will be. Even so, “from each according to his ability and to each according to his need” does have a certain entropic appeal.

      Your little utopia sounds something like the Amish culture here in the States. Forward!

    • redwilldanaher January 7, 2011, 12:47 am

      “Maybe, but I don’t mind betting that once this capitalist (in name at least) edifice comes crashing down the remnants will be split in to 4 categories:” Please Martin, reveal the location of this capitalist edifice that you’ve discovered. I’m all for relocating there as it will be an uptick. I’ll be happy to leave the fascist/socialist/communist hybrid that’s overtaken what was once the USA in search of this place. I know that you can’t be referring to the USA since no sentient being believes that it’s even nominally capitalist at this point.

    • Robert January 7, 2011, 6:49 am

      LarryD Said:

      “Even so, “from each according to his ability and to each according to his need” does have a certain entropic appeal.”

      Has appeal to who?

      Did the story of the grasshopper and the ant teach you nothing in grade school?

      “From each according to his ability, and to each according to his need” fails miserably because those with the least ability typically have the greatest need…
      They therefore become the leaches that drain the lifeblood out of the system.

      Get it?

      Better the INDIVIDUAL should work for personal reward, and have the liberty of choice as to how they wich to treat that reward (selfishly or selflessly)- this is the only economic system sustainable, and conducive to collective mental health, in the long term

  • Monty January 6, 2011, 5:37 pm

    This morning it’s obvious even to an amateur like me that someone is propping up stocks, propping up treasuries and probably pushing down gold too. I say this because the correlations don’t make any sense.

  • Michael January 6, 2011, 5:32 pm

    Many view the coming crash with trepidation. They shouldn’t. This reset will reflect the beginning of societies resolution of the internal conflicts destroying the social contract.

    While bankruptcy may leave us in a place which is materially far different from what we thought existed 5 years ago, a new beginning means we will be born again with the prospects of growth, rather than death, animating the spirit.

    Life will not end. It will be different. Change is a constant. We just happen to be living in a period of big change.

    • Robert January 6, 2011, 7:26 pm

      I love your philosophical outlook Michael…

      The only “end” that counts is death… Everything else is merely a test of our own attitudes toward life.

  • roger erickson January 6, 2011, 5:32 pm

    We COULD recover quickly, if we just started sending rational people to Congress again. There are plenty such people, we just have to start being far more selective in who we vote for.

    1939 Senate testimony by Sen. Marvel Mills Logan, Kentucky (shortly before his death)

    Quoting Abe Lincoln: “Money possesses no value to the State other than given to it by circulation. Capital has its proper place and is entitled to every protection. The wages of men should be recognized in the structure of government and in the social order as more important than the wages of money. …

    Government should create, issue, and circulate all the currency and credit needed to satisfy the spending power of the Government and the buying power of consumers. …

    The taxpayers will be saved immense sums in interest, discounts, and exchanges. The financing of all public enterprise, the maintenance of stable government and ordered process, and the conduct of the Treasury will become matters of practical administration. The people can and will be furnished with a currency as safe as their own Government.”

    http://www.uhuh.com/unreal/lincoln.htm
    http://en.wikipedia.org/wiki/M._M._Logan

    • redwilldanaher January 7, 2011, 12:38 am

      “We COULD recover quickly, if we just started sending rational people to Congress again. There are plenty such people, we just have to start being far more selective in who we vote for.”

      If this isn’t satire then it surely is delusion.

  • roger erickson January 6, 2011, 5:29 pm

    Why do we even bother pretending to “sell” T-bonds? Why not just halt the pretense of debt-related money supply?
    ONLY because bank lobbies pressured our Congress into passing a law requiring all currency creation to be matched, to the dollar, with Treasury bond sales. Why? Primarily to deliver a steady business in handling fees! Is there ANY utility in Treasury Bond sales? Perhaps some in managing short term inter-bank interest rates, but those reasons are grasping at straws, and could be better managed through other methods.

    NO NEED TO ISSUE TREASURY BONDS
    http://neweconomicperspectives.blogspot.com/2009/06/professor-l-randall-wray-responds-to.html

    • redwilldanaher January 7, 2011, 6:50 pm

      Yes, the utility is the illusion that’s created.

  • langej January 6, 2011, 5:11 pm

    “watching idly as Asia bids fair to take the lead in so many categories, threatening both our self-esteem and our very security.”

    Just what the Spanish and the British – the two large empires of their day – said about the rise of America. Didn’t turn out too badly for them, in terms of prosperity and security. They even managed to keep their self-esteem by pretending to be superior (culturally, morally, whatever) to the Yanks.

    Playing second fiddle is simply a talent we will have to learn, as others learned before us. It is our own fault: no one made us blow our power and prosperity on consumption and no one made us spend more than we earned.

    • Steve January 6, 2011, 10:07 pm

      I didn’t do IT.

  • John Stella January 6, 2011, 5:00 pm

    blah, blah, blah……this is the same story we’ve heard for what now 3 years running…..boy who cried wolf….eventually the clock is right twice a day but what if that day is 2o years from now
    ??

    &&&&&&

    There’s a lot of ruin in a civilization, so what’s three years? In any event, you can bet against the doom-and-gloomers simply by leveraging up to your eyeballs in real estate. RA

    • Steve January 6, 2011, 10:06 pm

      Thanks Rick, what I had to say was not going to be kind.

    • redwilldanaher January 7, 2011, 12:24 am

      John, you do look glum! What you need is a gramme of soma. Turn on CNBC if you’re out of soma.

  • Steve January 6, 2011, 4:02 pm

    There seems to be a miss in conclusion making herein. The issue that is ignored is control. Some seek to control ‘things’, and others seek to control ‘people’. We therefore end up with individuals who cannot control themselves seeking to control others. We also have the crowd that seeks to force everyone to be just like them (called american democracy). The less bounded by internal morality the more certain persons seek authority to control what they preceive of the human condition.

    You see, a liar thinks all people lie. A thief thinks all people steal. A letcher believes all are immoral. A banker thinks his clients are corrupt. All that remains is justification between a penny and a million. Justification is the norm for imposing one’s will on another by ever increasing means until the use of force becomes a normal accepted event. Policemen talk about Us and Them. Pelosi cannot control herself, so she seeks to control others. This can be a local, or a global need to control. Many seek to have a King of the World over them, and a few seek to be that King. And on goes the story of reality. Some of this is social conditioning, and some is genetic. And about all we see is local conditions on a personal level.

    I liked the percentage anaolgy on fraud at 10% 80% 10%. There is another percentage theory 3%, 1/3, 1/3, 1/3, 3% in regard to who will fight, support the fight, swing either direction, support being against, leaving 3% fighting against a given thing. This leaves us with 3%, 94%, 3% in regard to getting ones hands dirty by entering the field of play in order to understand, really understand. The percentages are pretty much historical explaining why people are always shocked by events, and it further explains why most just cannot fathom “that” ever happening. Micro thinking versus Macro thinking, yes? The question is in the realm of possibilities – and yes it is possible.

    The ever unanswered question is how far the individual will go to gain control. Danger exists in the person who seeks the many to enforce their will upon others without regard to order. Ultimately the Laws of Nature govern all things when enough stress is placed on any system. Today, in your neighborhood, someone will choose to abuse. The abused will choose to accept abuse, or rebel against that which is wrong. The time and events required for an abused spouse to terminate her husband is an unknown variable under the Laws of Nature. The amount of time an abusing spouse will use to exert control over another before termination of life is effected is an unknown variable. That is our reality today – the unknown variable in regard to abusive control not at a micro level, but; at a Macro level. Ignoring the macro event by just looking at the micro event is a fatal mistake.

    I believe Thomas Paine wrote the Rigths of Man. I recently read where Paine stated that the british citizen will fight wars to remain in serfdom. In fact Paine seems to state that the british citzen will die to be controlled by another. This is another historical condition that is documented through 5000 years of history. The worst of the human condition has existed locally nearly forever, and the men and women who work the streets in enforcment deal with it daily, and the military have seen the worst of regional conditions. The worst of control issues has existed locally for a very long time, but; 97% of the population has no idea in real terms, except what they see in their own home which is only a reflection of their own control on a micro level.

    It is a bigoted view that says that things will only happen on a local level forever. It appears to be a major breakdown in logic to ignor the issue of control of property, and of people that exists and has existed. I wish to control property, and will defend your right to control property within the laws of assault, breach, theft, trespass etc. & etc. etc. My problem is that the slag has floated to the top electively, and now wants to tell me how to control my property. We have moved forward, evolved into a governmental form that is no longer interested in the individual right to own property. Instead we have democratised into a governmental form where a new lord in presidential succession says that under the commerce clause he has a power to deny the Unalienable Right to Property by compelling performance by force. More and more and more control over Unalienable Rights is a macro reality.

    Have we missed the point as we argue about PM, and Bonds, and whatever else it is that blinds reality in regard to control? Stuffing one’s head in the sand really does make things much better in a micro sense. And it works a whole lot better if one’s eyes were closed long before stuffing one’s head in the sand.

    • Robert January 6, 2011, 5:31 pm

      “we have democratised into a governmental form where a new lord in presidential succession says that under the commerce clause he has a power to deny the Unalienable Right to Property by compelling performance by force. More and more and more control over Unalienable Rights is a macro reality.”

      – Uniform Commercial Code- The process of the human being acting as the agent that willfully creates a false person that is their own evil alter ego.

      The UCC declares, in black and white, that you are not an American, and that your Constitutional and Independent liberties are not welcome here.

      Simply put- you may NOT commence trade on this planet as a free individual under UCC- you may only commence trade as an agent of the system that owns your soul (that soul being established as a number stamped on the bottom left corner of a legally binding document called a birth certificate)

      Nobody ever gets it until I ask them the fundamental question “Why does ANY document have to demonstrate or prove that a person exists? Do we as humans not trust our own eyes? If I can converse with you over cocktails, then I’m pretty sure you are real- so why must we both have a registered name-number combination recorded somewhere in order to conduct “legal” commerce or trade?

      Steve is 100% right. We are all willing serfs/slaves/servants to an evil Master/King/Lord.

      I had my wife 99% convinced that our children would be better off in life without Social Security numbers, but in the 11th hour, with the presure of the agent of the state looming, she chickened out, and I relented to her mental well-being in a moment of elevated stress.

      I wish I had fought harder for the rights of my children to make their own decision as to whether they personally wished to live their lives behind the mask of a false person, because very few of us ever come to grips with the fact that the mask, once placed over your face, can never be removed…

  • Bob Haines January 6, 2011, 3:58 pm

    Put you head in the sand if you like but tht will not stop what is coming our way.
    1. We are heading down the same path as ancient Rome.
    2. Our money is being devaluled on a daily basis.
    3. We openly embrace the Gays in our society, God condems this behavior.
    4. We have killed aprox. 70 million babies through abortion, this is am abomination in God’s eyes.
    5. Our morals in the USA are at a all time low.
    6. No society in the world that commits such behavior has ever survived as a super power , we are sinking fast.
    7. As this all plays out it will not be pretty. Say what you like, when you put away the bibical principals you are asking for trouble.
    8. We are heading for a hyperflationary depression, whick will shake us to our roots. This will be the perfect time for a dictator to take over( Obama) would fit this description.

  • Imants January 6, 2011, 3:43 pm

    Scenario development allows for extreme futures to be envisaged, like the one Cam has presented. While this future has a probability I would not expect it to come to pass- why – because the human being is capable of infinitely evolving if it awakens to its deepest dimension – as spirit, the spirit that exist before time and that is the evoving 13.7 billion year big bang. Once awoken and evolving as spirit as the process of evolution we humans can change the world for the better. Until that happens the probability of the Cam scenario grows with each day. I do find your notes Rick generally very insightful and look forward to reading them although they often remind me of the Elliott Theorist. The context however we are in today in terms of scale of economic activity, population and global integration has never been experienced in historical terms- this has both a good and bad side- good in that usual cyclical downturns can be over come and bad in that the

  • cmoreoke January 6, 2011, 3:25 pm

    WHAT ABOUT THE BIRDS?

    • redwilldanaher January 7, 2011, 1:11 am

      I do like the Birds but I prefer Vertigo to it when considering the latter stages of Hitchcock’s filmography.

  • Aussie Mick January 6, 2011, 3:16 pm

    I am stocking up on silver,food, water,alternate power,hardware..everything I will need to be self sufficient…security…survival mentality…my wife shakes her head in disgust at my efforts…I find that 9 out of 10 people I know, think like my wife. Most people are more worried about what is on tv..who is shagging who..when is the next party…or night out…how is this for an attitude..” if society falls apart..I don’t want to survive”. This came from a family member. Read my lips…the only one you can depend on is you…if you find others who think the same..there is safety in numbers…at least more than being alone. The crap will hit the fan…when it happens..you better have a plan..and a plan B…

  • Martin C January 6, 2011, 2:50 pm

    You yanks make me laugh, seems like most of you understand derivatives about as well as you understand Marxism, ie heard the name but not much more, judging from previous posts

    Of course we are in danger of the thin veneer of civilisation disappearing, wouldn’t take much more than loss of confidence in currency, can’t buy goods, rioting, total breakdown of society – although it is unlikely to be as clean as this as the establishment and military may attempt to impose order – if this is what they want, it could be a break down is exactly what the MOU want

    Point is it has always been thus and the difference now is just that most of the populace are less able to fend for themselves. The US will be interesting with your obsession with guns, no doubt more of the barbarians at the gates will become ex barbarians but the level of violence will be immense. It has little to do with derivatives or Marxism

    Who knows, it may not happen for a couple of generations which may mean it doesn’t happen at all as who knows what developments in the next 50 years may make this type of thinking defunct

    • Steve January 6, 2011, 4:07 pm

      Sticks and stones will break bones. Who makes the rules?

    • Larry D January 6, 2011, 5:20 pm

      We make us laugh, too. More now than in the past.

    • redwilldanaher January 7, 2011, 12:17 am

      That’s some enlightening stuff. Sounds like I’ll be safer and better nourished without a firearm to protect myself and to use for hunting. Where can I turn in my firearms so I can rely entirely on the statists that have produced such a long and glorious track-record? I sure hope the Yank statists are as effective as the ones in Germany, Russia and China were historically. 100 million less mouths to feed sure sounds good if your number isn’t called! It’s posts like this one and Mario’s that always remind me how much I over-value liberty and should really be on the short side of it. Come to think of it, I always did like style of beard that Rod Steiger wore in Zhivago. And to think, maybe a Julie Christie will end up on my arm too.

  • Kurt January 6, 2011, 2:32 pm

    Except from running to the hills, and falling back to primitive behavior there may be a total different solution, something which may never have been done before, something which is in the field of every person’s own responsibility, not an outward solution.
    Since isn’t, repeating what does not work (to accomplish peace and love for your children and your neighbour’s children), insane?
    Maybe, we should listen to what this person was suggesting a long time ago http://www.youtube.com/watch?v=d4meJIyDqpA&feature=related

    Best wishes,

    Kurt

  • mario cavolo January 6, 2011, 12:32 pm

    ….”revert to a more primitive state” is an interesting phrase. By primitive state you mean a basic lifestyle that most Asian live comfortably, then yes, it is by comparison to blown American middle-class lifestyle, primitive. But by Asian standards, it is comfortable. Even rich people in Tokyo live in relatively tiny apartments, let alone have two car garages and yards with pools.

    I’ll continue to heartily disagree with references to doomsday USD collapses and other silly such ideas which are actually becoming more of a distraction than a help to us in our attempts to face our future.

    I will be in Los Angeles in February and I will be giving a keynote speech at an event hosted by Grassroots Community Network, founded 20 years ago by my long time friend Al Brown. I will say that Americans facing a declining lifestyle need to embrace the local Asian / emerging country lifestyle without regarding it as being in poverty. Your life is local. You travel by foot, bus, bicycle or scooter. You don’t own a car. Your company will suddenly face 70% of its workers without cars and guess what, they will buy a bus to provide transportation back and forth to work every day and that’s called an employee benefit. Companies will feed you 3 square per day in the company cafeteria too. You’ll be skipping those nice meals out at Claimjumper permanently. And they will have dormitory apartments available for you to live in. When you’re not working you’ll go hang out together in the park and read books, you’ll watch movies together. And that’s it. That’s your life. Big ideas gone. Big dreams gone. Not in your lifetime. The tough part is the downgrade after having had it. But what Americans facing these changes must understand is that a basic, simple lifestyle is normal for hundreds of millions of people across the globe. Many are already doing it. Walk away from your mortgage, share rent with another family, rent out a room, get rid of the fancy car. When I was living in America, I was the greatest used car buyer in town; I took the time to older, cherry, garaged, driven by little old lady cars that were dirt cheap, just needed liability coverage.

    In line with the car reference I just made, when enough people complain, rise up, get rid of their cars and buy bicycles, the system, the local govt, the employers, the consumers will have to respond. That is where the lower/middle class American lifestyle is headed and it is going to be painful to face chose changes for alot of people. I’ll do my best to help people embrace that change.

    But to stretch this very real, declining, changing lifestyle issue out further by jumping into the dollar collapse scenarios seems an unrelated stretch; doesn’t fly in my view for a myriad of reasons stated elsewhere. The global financial system and govt’s are deeply interconnected (screwed up or not!) and will adjust along to the ongoing interplay of dynamics without allowing any one dynamic to get too far out of whack.

    Cheers and thanks always for your thoughts Cam,

    Mario

    • Steve January 6, 2011, 2:29 pm

      Slavery – well stated Mario

    • redwilldanaher January 6, 2011, 11:16 pm

      Is this Satire?: “Your company will suddenly face 70% of its workers without cars and guess what, they will buy a bus to provide transportation back and forth to work every day and that’s called an employee benefit. Companies will feed you 3 square per day in the company cafeteria too. You’ll be skipping those nice meals out at Claimjumper permanently. And they will have dormitory apartments available for you to live in. When you’re not working you’ll go hang out together in the park and read books, you’ll watch movies together. And that’s it. That’s your life. Big ideas gone. Big dreams gone. Not in your lifetime. The tough part is the downgrade after having had it. But what Americans facing these changes must understand is that a basic, simple lifestyle is normal for hundreds of millions of people across the globe. Many are already doing it. Walk away from your mortgage, share rent with another family, rent out a room, get rid of the fancy car. When I was living in America, I was the greatest used car buyer in town; I took the time to older, cherry, garaged, driven by little old lady cars that were dirt cheap, just needed liability coverage.”

      My God do I hope that is satire.

    • mario cavolo January 7, 2011, 12:57 pm

      Hi rwd, well satire for America or not, what I described is nothing more or less than normal life reality for hundreds of millions of families across most of the globe who essentially live simple daily lives right at their means with little opportunity to alter it…the now emerging Pan Asia/China/India area, Latin America also to a degree. There’s nothing much worse than getting a taste of the good life and then losing it I suppose…Cheers, Mario

    • redwilldanaher January 7, 2011, 6:45 pm

      Hi Mario, maybe I’m misunderstanding what you seem to be advancing and the tone along with it. Are you honestly suggesting that we “embrace” the loss of our liberty? Are you honestly suggesting that we look to corporatists/fascists/communists (the elites) to solve our problems of transportation and sustenance etc. once they’ve finally delivered the knockout blow to our way of life? They’ve got a saying around here in SC that seems appropriate if so: “Hell no!” No Mario, I won’t be at the meet and greets welcoming such a scenario. I’ll be working towards secession in SC.

    • mario cavolo January 9, 2011, 7:21 am

      Hi rwd,
      No attitude here, just describing what is. I’m with you on the secession idea. I’ve seen the situation in the U.S. deteriorate gradually and now the pace is steepening and its really sad and frustrating. History repeating itself again and again, as though its the same as the desire 100 years ago when everyone wanted to get out of Europe and go to America…where next? China/Asia option is limited to say the least; its definitely not a warm ‘n fuzzy “meet and greet” here, as you put it.

      My intended meaning is only that the U.S. middle class lifestyle was fabulous phenomenon, but now its over (for whatever reasons) and that what is regarded as comfortable middle class in the majority of the rest of the world is what they will most likely have to look forward to.

      Many mainstream low and mid-level professional Chinese (Asia/India) live simple lives and have secure jobs as described: low salaries and low expenses because their employee benefits include basic housing, shuttle bus transportation back and forth to work, medical, 3 meals/day. Plus local cost of living being on average 3x lower than in the states, they can be on a $500 month paycheck and still put $200 in the bank.

      Extending the thought a bit: those aren’t FABULOUS employee benefits? An American working at Walmart woudn’t jump for joy if they didn’t need their car anymore? If Walmart would provide them with a shared room in an apt, 3 meals/day, medical and a ride back and forth to work on the company shuttle bus on top of their minimum wage, they wouldn’t say thanks? Unfortunately, that deal’s sounding pretty damn good at the moment to alot of people.

      Of course the loss of liberty is very, very upsetting along with the other abuses and corruptions being fausted upon the citizenry. The American middle class has been shafted and pillaged and deceived again and again.

      Perhaps don’t misunderstand this as a communist/fascist notion. It is certainly socialist in terms of employment policy, but even in the hotel industry and other major corporate sectors worldwide, this is what typical employee benefit packages look like. I had a contract on an RCCL ship a few years back, working all the time but everythings covered. So is it called an excessive executive perk if the CEO gets a housing allowance and car w/driver but its called ugly communism if we provide housing and shuttle bus transportation for lower level workers? I don’t think so. I’m completely out of politics on this stuff. I’m just looking at a person’s straight daily reality; any country, any city, any job, anywhere.

      Cheers, Mario

    • redwilldanaher January 12, 2011, 5:35 pm

      “Many mainstream low and mid-level professional Chinese (Asia/India) live simple lives and have secure jobs as described: low salaries and low expenses because their employee benefits include basic housing, shuttle bus transportation back and forth to work, medical, 3 meals/day. Plus local cost of living being on average 3x lower than in the states, they can be on a $500 month paycheck and still put $200 in the bank.

      Extending the thought a bit: those aren’t FABULOUS employee benefits? An American working at Walmart woudn’t jump for joy if they didn’t need their car anymore? If Walmart would provide them with a shared room in an apt, 3 meals/day, medical and a ride back and forth to work on the company shuttle bus on top of their minimum wage, they wouldn’t say thanks? Unfortunately, that deal’s sounding pretty damn good at the moment to alot of people. ” – Mario, thanks for the courtesy of a response. You conclude with the deal “sounding… good” to paraphrase. Of course, it would have to sound good otherwise why would anyone be open to it? This is how and why the collectivist PTB have engineered “crises” since time immemorial. You know that. None of this sounds good to me at all. When you have lost liberty you’ve lost nearly everything. Are you seriously suggesting that we rely on the “higher ups” to navigate things on behalf of our company, industry, economy, for our betterment? You’re to intelligent to not know what that will result in, how foolhardy that is in practice. Look what the “best and brightest” have rendered thus far. You must be kidding on this one Mario. I find the suggestions repugnant to say the least. I’m sure you’re well-intended so please do not take offense when I state that your enthusiasm for this type of scenario alarms me. I think that people should aspire to be more than a cog in a machine that’s helmed by malevolent sociopaths that are all too happy to offer a subsidized, “cubiclized” lifestyle.

  • Zoltan Rostas January 6, 2011, 9:53 am

    Great article!

    Have anyone considered the possibility of a totalitarian regime in the US with 20000 nuclear warheads capable, and willing to use them on the World. That is where we, humankind, are heading. Oh I forgot the other super-secret weapons of who knows what. Great prospects for life on this planet, a word comes to mind say, extinction.

  • C.C. January 6, 2011, 9:50 am

    In the last paragraph here, Mr. Berwick gives a fair assessment of the current situation. It’s only a matter of time – how much time, we don’t know, but the wise fellow will see plenty of warning signs and have plenty of opportunities to prepare before the bottom falls out.

    http://news.goldseek.com/GoldSeek/1294297560.php

  • Steve January 6, 2011, 6:20 am

    Maslow’s Hierarchy does not jell with civilian and military training in regard to civil disorder. Maslow’s Hierarchy is the first hour of writing on the chalk board before some military officer sets the record straight. Nobody wants to know what that military officer said, except a few. It means that many will need to change, and that is not going to happen. So there you have it. Don’t worry; be happy. I’ve always loved to hear the stories of the “it’ll never happen” crowd that expect everyone else to take care of them. I guess we shouldn’t call them stories because the physical shaking of terror doesn’t settle with the kindness that the word story presents.

  • Teddy January 6, 2011, 6:05 am

    I would not agree with “fear mongering and nonsense”. But neither will I think about “doom and gloom”.
    The fact is that the US economy relies on debt to operate. Essentially, imagine that for decades you and your household have been living off of credit cards and have had the ability to continually get bigger and bigger credit cards.
    The US has the “ability” to get ever expanding credit via our military. But the historical track record is 100% clear that we can not continue to live this way by raping and pillaging the world (they don’t like it).
    The chickens are coming home to roost. “We” are building homeland security offices throughout the United States. US citizens are slowly becoming enemies of the State.
    Again…..not gloom and doom. Its merely a predictable repeat of history. I, personally, am kind of fascinated by how all this plays out and what possibilities there might be for an eventual resurrection of original US ideals as stated nicely in the Declaration of Independence and our Constitution.

    • roger erickson January 6, 2011, 5:26 pm

      For heavens sake, the USA does not operate on debt. We only think we do. Any organized group survives by their joint efforts, leveraged per the ratio of their ability to coordinate.

      start here: The beginning of US currency:
      A sovereign government can “be [tricked] into [pretending to] borrow “money’ instead of creating it”?
      [Yes. Ours was] http://www.monetary.org/briefusmonetaryhistory.htm
      (don’t bother reading more from AMI however, they don’t understand post-gold std monetary ops)

      then jump straight to this:

      for a real simplistic intro to how modern monetary operations actually work, (public/private deficits; currency creation; loans create reserves; reserve-drains, etc, etc)
      [explaining money-creation frauds]
      http://moslereconomics.com/2009/12/10/7-deadly-innocent-frauds/

      we need more operations, less politics, and less ideology

    • redwilldanaher January 6, 2011, 11:11 pm

      The grand illusions are all underpinned by debt. Electronic book entries make the world go round. Imagined into existence and the accounted for. If that stops, the music stops, and then the just in time economy stops. That’s when the joint efforts stop and the coordination stops.

      What we need is to leave the madness to those that would subject us to it.

  • Benjamin January 6, 2011, 5:03 am

    Yes, yes… extermination. And what are yall gonna do about it? Are you so-called humans finally ready to admit who is, in all reality, in charge of your fate? Are you finally ready to become fully human?

    Hmm. Probably not. After all, it’s been well over 3,000 years since man discovered the word “I”, and ever since he’s wanted to deny it’s existence as much as he could possibly get away with. I guess today won’t be the day. We can all now quietly proceed to our graves. And you know you want to. No more worries. No more dread of the future. No more having to come up empty on most important answers. Bliss, without being.

    But not many would take that shortcut out, either, mostly because the I in them nags that it’s not only impossible for that to be the answer, but surely that the answer isn’t all THAT impossible.

    And I’ve given the gist of that answer several times, here at Rick’s (Rick… I can’t thank you enough for allowing me the space to say, in a forum like this, with the kinds of people here to read it).

    I’ll say it again, but with more background this time…

    Long, long ago, according to a Dr. Julian Jaynes, man made a leap from being a mere highly intelligent, herd-like animal, into a fully self-aware individual.

    But, remanents of that old mentality remained. Thus, man hasn’t exactly ever lived honestly with himself. That is why we have authoritarian systems at all. The self viewed itself as the one being in the wrong, in many ways, with the systems of old civilization somehow or other always being right, what he needed to control himself.

    You see, folks, the hard part has been done for us. Not by your grandparents or great grandparents nor even the Founding Father of these United States. Your long, long lost ancestors learned to say “I am”. Learning self awareness was the single hardest thing mankind ever did simply because nature never intended it to be. But under the mounting complexities and pressures from the civilzations he created, his mind began to fail him. He had to learn, in the midst of mounting chaos, how to think not just for himself but OF himself. He had to learn that he existed not as a herd, but as an individual, so he could bring order to his over-loaded mind.

    But again, he didn’t fully embrace this reality. People say that today the world is more corrupt than ever. But the fact is, it has ALWAYS been this corrupt. It’s just that we didn’t have the populations and pressures and failing means at beyond capacity (the financial system and all it’s rooted in, ie) to reveal so much of it’s reality to failure. We’ve done some magnificent things, no dobut, but just as with the old bicameral mind that Dr Jaynes wrote about, we built our complexities to a point where the old and flawed ways no longer work.

    This cannot continue, as reality is what it is, and it cannot be lived outside of. The corruptions of the world today are the exact same ones of yesterday, just as a wheel in ancient times is a wheel today (that theirs was wood and ours vulcanized rubber and aluminum is just a superficial difference). We must not kid ourselves about that, lest we only repeat the mistakes of the past that we ***_cannot afford to make today_***.

    And yet, some metals, being ancient forms of money themselves, contain the answer. Well, we will always have wheels, even if we learn to hover. That’s the economics of things. But until we learn to hover in terms of money…

    What is debt and money? They are creations of man, and therefore mutable, provided they are based on a real measure.

    Who is the government? We are, for we are the individuals who comprise our societies.

    There can be no seperation of government and money, as some misguidedly insist. Indeed, that is what we have today! People don’t coin money and decide the weight of their currencies! Other parties have always handled it, be it through central banking, brute taxation, government issued fiat, and so on. But done through the power of the individual, by asking (not forcing) the individual what the weight of a dollar should be, he attains total control not only of government, but also his own destiny. The individual does what it always feared it would never do, which is to create a society of peace and justice, simply by deciding to, however he decides it…

    You walk into the Mint and see that, according to currenct figures, the future dollar will be 1/2 ounce pure silver. Do you coin more? Less? That is for you to decide, based on factors of your life that only you can know and understand. People can know some things, but no one but you can know everything, including those plans you’ve even yet put to word, let alone into business.

    And what of debts? If two parties are willing to settle in currency, rather than commodity weight, then there is no such thing as unpayble debts. If I borrow 1/2 ounce silver from you (one dollar, in our example), but later pay back with 1/4 ounce dollars… that is for us to decide whether or not it suffices. If you want the 1/2 ounce, I’ll see what I can do, but I can’t guarantee that I’ll come up with it. In any event, you have domestic currency equal to what I borrowed before, so if I can’t, you didn’t exactly lose either.

    As for the coined money, that is loaned to government and later returned, full weight, as per the conditions of the bond that the lender created with them. Certificates on them simply expire, leaving only as much price inflation in it’s wake as people in sum total demanded (which solves the legal tender issue… if more people coin to loan to government, they should have less problems of it being rejected, and vice versa).

    The problem with the old way of redeeming paper for coin is that it was based in the force of taxation, and later by plain old deceit. So many think that the nature of the tax, and it’s uniformity, is what matters. Stick to that, and we should have no troubles.

    Not so. When people can’t afford the burden, they come to learn that avoiding it works much better than protesting it. They borrow. They cheat. They avoid the thing being taxed. They also have no way to ensure that what was taken will be returned to them in full. Someone else gets the certficate, and they claim it, leaving the taxed person in the midst of price inflation from govt spending, with nothing to bear that burden with. So, he gets political. Once politics heats up too much, he begins to shun his countrymen. To keep the nation together under increasing pressures, governments adopt central banking, which, as we all know, is nothing at all but trouble with a capitol T.

    Conscious beings cannot be obligated to more than themselves, because that is to serve two seperate masters, which is scziophrenic duel-personality. There can be none of that, because in that there is no accountability to speak of, even though man absolutely requires it.

    So do away with all taxes and top-down obligations, and instead let people decide whether or not they want to lend any coined weight for government. Then call the dollar some portion of that weight loaned. Someone will always do so, because, if for no other reason, people want their municipalities to have water, roads, etc. State and Federal can take a portion of that, and then declare the dollar to be some portion of the certified weight that the Federal government took, thus not robbing the person and people of their original, local intent.

    In the process, people can get richer, monetarily, and always stay ahead of inflation and thus ensure government remains small. He is, in two words, The Master. The TRUE Master, not just in word and rhetoric only. Many will probably disagree, but I strongly doubt that the Founders gave us a real representative republic. Governments can tax us, go over our personal desires and decisions to make us do something we figure we may not need to do. That begins the slip down the slope, as I said before.

    Anyway, funding government to determine currency weight also allows for the settling of private debt in way that allows people to make personal/private mistakes without them killing themselves and their entire civilization in the process. He can explore, build, strive to advance… And if it doesn’t work out, he won’t threaten to die and require any bailouts that will ultimately screw someone else. Today’s losses become tomorrows returns, in lower currency weights, provided one is always wise enough to save at least a little and/or secure an income through productive work. And with man being finally free in the fullest sense, no longer doubting and chaining the reality of himself to obsolete practices, there should be plenty of work and saving to be had.

    And as I’ve also been saying, the beauty is that none of the bankers can possibly object to this. They have the lions share of gold and silver and would be rich. And really, the less weight anyone else has, the lower the currency weight will be. So we needn’t bother with trying to wrestle it back away from them. Let the bastards have it, and it will eventually, many of their generations down the line, wind up back in the hands of good, productive people.

    Governments may hem and haw about the loss of power over us, but they are few, we are many, and we’re all in deep, deep, deep shit if we don’t do this. Howerver, I think they can be bribed to step aside. Give them some gold and silver, too, and they can be rich for the rest of their lives, living out as lazy good-for-nothings (though ultimately harmless) who simply stay the hell out of our way.

    But until then, who knows… I’ve so much of the stuff that maybe, just maybe under the right circumstances, I will become very chartiable, enough to tide the good people over until the perpetrators spend their wealth back to them. Maybe even other hoarders would do so as well?

    Cameron is right, though. Things are heading to a certain, bloody conclusion. I oft express lots and lots of optimistic hope, but I’m not stupid and blind. There are minds that want an end to all the “over population” on earth. They see everything as dangerously low and over-crowded, when in reality, we humans have BARELY laid a footprint on this earth and all Her precious and abundant resources. That we sell short the TRUE scarce resource, human beings, is why we have so much trouble in the first place. It is why things look so grim. Not enough is produced because the old systems, always this corrupt but never revealed against so many mounting realities, simply cannot handle the demand. Nor can they be made to. Done is done.

    It’s game over time for the old ways, and we really should rejoice this liberation. I’m telling you all… Not only can we not afford to fail, but failure is damn-near impossible if one looks at this the right way. And some day, I know, people will look back and wonder why their ancestors ever had these kinds of problems. Why force? Why fraud? And, perhaps, why the destruction of so, so many?

    It’s coming, but we don’t have to go through with it. Yes, things need to shift to the world that got the short end when the U.S. took center stage from Europe, in the post wars era. But to suggest that for some to prosper, others need to be killed is just barbaric. We’re not barbarians, unless we want to be, and as reality would have it, we don’t need to be. I just showed you all how we can avoid it, retire every debt that is and ever will be (except the debt of lost life. Nothing can be done for that), and never have to worry about being screwed by authoritarian government. I also showed how there is no way anyone can possibly reject it, even those in charge of the Grand Illusions, and their stupid plans based on erroneous assumptions. They could be mega-rich and we could all get on with life. Time can and would provide justice, no bloody revolutions are needed.

    Compromise with the devil? Yes, I know. But one must ask themselves… aren’t we all the reason why they are here in the first place? I mean, every idea I’ve seen so far leaves a hole, a debt to someone that has too much risk of never being repaid in any way. History is rife with such examples. Seems Dr. Jaynes was right about one thing… we hold ourselves to “higher authorities” other than our own beings. We cling to this idea, so we rob ourselves, so… The central banking arrives to stay, to provide some illusion of relief to the unjustly burdened, while they unethically steal a very rich living for themselves (hey, playing God means godly rewards, right?)

    This no one has ever thought of doing away with in it’s entirety, that I’ve ever seen. The individual in control of it all? Ha! How could he without stepping on other people and thus devolve into utter chaos?! But I just showed how. And I hope you all don’t lose hope and instead begin to see things in a whole new light, one that I, too, never thought existed until fairly recently.

    Well, back to the world of hellish outcomes. Have a nice day.

    • Robert January 6, 2011, 4:56 pm

      Very nice, Benjamin… {thumbsup}

    • Benjamin January 6, 2011, 10:58 pm

      Thanks for reading through all that, Robert.

    • Steve January 6, 2011, 11:07 pm

      Hey; I was there with you. Just got distracted when I learned that Republican House members walked off the floor while the Constitution was being read. Why would anyone want to know what their contract requires? I’ll give a ‘good job’ to all.

    • Benjamin January 7, 2011, 12:49 am

      Steve,

      I forgot all about that reading, which I read about earlier this Thursday morning. The story didn’t anything else than that they were going to read it, and that it was going to take two hours.

      So they walked out… And they yammer on about flag burners, some of those republicans.

      Anyway, I’ll keep my eyes especially open for that walk-out story… I want to know who and why.

  • John Jay January 6, 2011, 4:48 am

    I think I can sum up the situation in the USA.
    Is there any conceivable way that that the ever growing national debt, pension liabilities, under water mortgages,
    student loans, Social Security, and Medicare etc. can ever be paid?
    That’s right, the answer is no.
    Next question, what will be the consequences when it all goes smash?
    The answer is BAD things will happen!
    Like that first nuclear explosion in New Mexico in 1945, the detonation will take on a life of it’s own, dictated by the laws of Physics.
    And just like Robert Oppenheimer and his crew, we all have our opinion as to how big the blast will be.
    We’ll know soon enough!

    • DonF January 6, 2011, 6:30 am

      Over the years $2.5 trillion has been stolen from the social security fund and IOU’s put in place of the cash. ( http://dissidentvoice.org/2010/07/was-the-social-security-money-%E2%80%9Cborrowed%E2%80%9D-or-%E2%80%9Cstolen%E2%80%9D/ ) And http://www.eons.com/groups/topic/865768-Social-Security-How-It-Got-Stolen- There are no shortage of references on that point.

      FICA was meant to be a totally separate fund from the general revenue. Congress raids the fund for wars and pork then puts worthless IOU’s in place of the cash and then blames the elderly. AND, due to the inflation tax, the purchasing power received back is less than the purchasing power put into the fund years ago. Remember, between 1970 and 2010 the dollar has lost 80% of it’s purchasing power. And due to revisions of the way inflation is calculated… no COLA.

      Our government spends 45% of it’s budget on the military. Some of it stolen from MY Social Security.

      I feel so bad that the rich Ms. Thatcher ran out of other people’s money. The money in the citizens Social Security fund was put there by the people who will receive it back, unless it gets stolen by a Thatcher or Clinton or Obama or Reid or Pelosi along the way.

      So Social Security has only become a problem because the money you and I put in was stolen! So if you are not already getting SS, you will be paying twice if you ever do get it. AND the recent 2% “tax cut” was really a 2% FICA cut! That’s 2% less money going into our Social Security fund! This is like insuring poverty will be your destiny in old age.

      While I’m on this rant…some rich investors like to blame us elderly for not saving enough for their retirement. Really? How can a working person ever save enough when real wages have gone down every year since 1970? How can a working person ever save enough when the inflation tax has eaten 80% of the dollar purchasing power since 1970? Inflation mocks and punishes savers severely! Many only maintained their standard of living by raiding their home equity. That is over for this lifetime!

      Do people really think that inflation is less now than it has been, on average, since 1970? Inflation in essentials alone will bring America to it’s knees! Real wages are still going down, people. Never mind the other enormous taxes we are beginning to face.

  • DonF January 6, 2011, 4:01 am

    Most of us in America have very little comprehension of what “Third World” means. Or even what Fascism means. Do not be concerned. You do not need to know. .

    Do not worry, it can’t happen here. The political party in power represents your interests. If something is slightly amiss, just vote and everything will return to normal. Continue enjoying your favorite programing on the television. Stay within the customary framework. You will be informed when your time comes.

    Swat teams are standing by for your protection. They will occasionally remove deviants from your neighborhood in the middle of the night so as not to alarm the sleeping good citizens. If you happen to awake, do not be alarmed, just return to sleep. You will be informed when your time comes.

    Your elected representatives are doing everything possible to ensure health and prosperity for you and your family in our great country. You will be informed when your time comes.

    • Steve January 6, 2011, 6:05 am

      Don F. looks like you have looked in the mirror and have seen the other side. It is good that the corporate bunches think that big bro will take care of them. That means that the bad guys will displace to the easy pickens, and graze close to home in the event of a meltdown. The more that deny possibility, the more time there will be for the prepared to be warned.

  • Anthony F January 6, 2011, 3:36 am

    ENERGY/Oil Issues…

    Unfortunately by kicking the can down the road, instead of resolving problems (energy being one)
    A number of good thinkers are looking at possible consequences…
    A very practical view of debt vs oil available:
    http://www.financialsense.com/contributors/jeff-rubin/is-there-enough-oil-to-pay-our-debt

    Best website on oil topics, there is a consensus that peak oil is here and will get worst:
    http://www.theoildrum.com/
    A philosophical perspective video :
    (Peak oil and changing climate)
    http://www.thenation.com/video/157441/peak-oil-and-changing-climate
    Political GOP Economic blunders:
    http://www.marketwatch.com/story/story/print?guid=C387638C-41A3-499B-9315-5AF8940C47DD

  • Anthony F January 6, 2011, 2:46 am

    Michael Brown has being researching and to some extent predicting the development of future events
    for over 20 years, he is extremely knowledgeable, honest and reliable.
    This is not necessarily an isolated economic crisis.
    Here are his latest views…
    http://spiritdaily.com/birdssignsiraq.htm

  • Jill January 6, 2011, 2:45 am

    It certainly is a worst case scenario. However, the problems described do actually exist– although they will not necesarily result in a big war, or in Americans starving or freezing to death.

    • Steve January 6, 2011, 5:58 am

      Jill, it is not a worst case senario. The worst case is without scope in regard to what hu mans will do to each other.

  • Ian January 6, 2011, 2:15 am

    Pat, which part do you say is nonsense. What makes you think we are smarter than the ancient Romans.
    Why would anyone think this cannot happen to us?

  • Pat January 6, 2011, 2:06 am

    This is nonsense and fear mongering

    • eric s January 6, 2011, 3:16 am

      agreed! Fear mongering and nonsense.

      When push comes to shove, what’s in N America will stay in N America, same for europe. No one’s going to starve, maybe we won’t be able to eat truffles, but no one’s starving. Same for heat, especially now with the advent of shale gas, there is pleanty of btu’s around to keep us warm, maybe not at 80F, but 65F is very attainable.

      Will the currency get trashed? Maybe. A solution might very well be the new USD, if you are an american, cash in your old usd’s for new ones, everyone else gets stiffed partially or completely. We all start over.

    • Steve January 6, 2011, 5:56 am

      Eric, the statements made are out of touch with federal reality.

    • pokerface January 6, 2011, 2:04 pm

      It is obvious by the ignorance of your comment that you will be among the first to be hauled to the landfill in the back of a dump truck when the SHTF. So, load up on financials, and have a nice day!

    • Robert January 6, 2011, 4:35 pm

      Cam’s article (which I enjoyed) uses potent language, but I see no fear mongering anywhere in the piece.

      I see a painted point of view that represents the author’s perception and forecast of a reality that is just as likely as any alternate reality swimming around in any of our own heads…

      For that, I say “Thanks Cam for taking the time for formulate the thought, and for typing it out”

      Poo-pooing his work with a one line editorial crack seems hardly worth the effort of even typing out the 6 words, in my opinion.

    • Cam Fitzgerald January 7, 2011, 3:34 am

      Thank you Robert,

      I thought I was pretty restrained actually and never touched on any of the hot button conspiracy ideas that percolate around the web and make my head swim. Nor did I give time to relate how similar disruptions in the financial/political arena led to unexpected results that blindsided the populations who lived through the trials of the day.

      I am not a conspiracy theorist nor an historian. I merely observe and note what is actually taking place and try to project that thought forward into the future.

      This is what I see. Millions of Americans are on food stamps. Millions more have been displaced from their homes through foreclosure or are trapped in a debt hell of negative equity from which there is no escape. The currency is being weakened in order to prop up a failing system and monetization is underway while some of our past creditors are abandoning us bit by bit.

      That is a dangerous picture and we have to wonder how all of these impacts are negatively affecting the nation’s confidence and its belief in the future.

      And now, to ice that sorry cake and make it all the more miserable, food costs are rising sharply as are most other commodities. We are talking about basic needs here on a personal level, and it does not get more real than that for someone who is already struggling.

      We are living in a time of change and in a system riddled with distortions. The whole system is out of balance as we come to grips with our past spending and living standards as they are under assault. That seems a mirage next to the evolving reality we face. We should anticipate extremes whether they be in how currencies function (or not) and how these dramas might play out in the psyche of the nation, and ultimately on the political stage.

      It is just prudent to take steps to ensure our security and that of our families at a time like this. The simplest of insurance against an unknown future is too keep your food stocks replenished. I do not say this to create fear. It is just common sense.

      The currency may never fail. None of us knows exactly what might come next. I do know this: If a real crisis does materialize it will likely be swift and take most off-guard. If the financial system unwinds you will get nothing out of the ATM when you stick your card in. If you don’t have cash on hand you will be in a world of trouble. Expect those who do have ready cash to strip bare the shelves of the grocery stores as fast as they can get their wallets opened.

      For all others, the time to prepare will have been lost.

  • us Zombee January 6, 2011, 2:06 am

    The government is not trying to solve any problem because there is no problem in the first place. The rich do not face a recession, depression, job loss or loss of income or any financial catastrophe. And they get fat bailouts and bonuses too!
    The recession and depression is only for the poor people and the middle class. And the government doesn’t care about YOU!

    Now go back to sleep.

    • Victor Laszlo January 6, 2011, 9:33 pm

      Absolutely!

      Those billions have gone somewhere, haven’t they? Gone into the pockets of the ruling elite, guaranteeing their prosperity and control of the masses for generations to come.

  • Jill January 6, 2011, 1:56 am

    So what does one do? Fiddle while Rome burns, given that we as individuals do not have the power to put out the fire? Our government is trying to, but there is a little problem with the method they are using.

    http://meltdown2011.files.wordpress.com/2008/10/boa_bailout_dees.jpg

    • Robert January 6, 2011, 4:27 pm

      What does one do?

      Simply be prepared to do what one must.

      Life, Liberty, and the PURSUIT of happiness. This is where so many have gone off the rails. Many today seem to think that their own happiness is a God given right, and it is therefore the obligation of others to provide that happiness.

      Our happiness must be an individual pursuit, and the pursuit must necessitate action (ie: work).

      Government can not, and therefore should not, charter itself to trying to keep people happy.

      If fiddling makes you happy, then I say fiddle away, because Rome is going to burn regardless… Might as well pass the time doing something you enjoy.


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