Does anybody think this scenario could be "managed" to a soft landing?
I don't. Not in today's societal environment. I think it would be martial law and dictatorship at best, Mad Max and civil war at worst.
Posted on 12/03/2011 9:04:42 PM PST by kristinn
While there is no certainty of an economic crisis hitting the U.S. soon, there are warning signs everywhere that should the European sovereign debt/ Euro crisis blow up the U.S. will be harmed.
I'm looking for thoughts on what this might entail for everyday life in the U.S. for the next few months/next year.
Will it be like 2008-2009, or worse?
If worse, will there be bank runs, collapses, maybe a bank holiday? How bad would unemployment and homelessness get? Will there be shortages of food, medicines, fuel, clothing and household goods? Will basic utilities like water, electricity and natural gas be interrupted?
Will the federal government continue to make social security, medicare, food stamp and welfare payments?
How long would it take for the situation to settle down and start to improve?
I offer these quotes from today's National Journal as an indication that the possibility of an economic collapse is being seriously talked about at mainstream political publications, not just the usual 'chicken little' sites:
This is the worst-case scenario from Europe, and it just might come true: Italy defaults on its debts. Every major Italian bank collapses. Recession grips the eurozone. Sovereign defaults and bank failures ripple across the Continent. Saddled with bad loans to nations and lenders in Europe, American banks hemorrhage cash. Credit freezes in the United States. Multinational companies, unable to raise money, curb U.S. investment and hiring. Wall Street demands, but fails to get, new bailouts. The entire developed world plummets into recession and, quite possibly, depression.
...But the worst case is so much worse than Obama’s description, and Washington has failed to prepare voters for the possibility. “The [potential] shock we’re talking about is of very large magnitude,” says Viral Acharya, a New York University professor who studies financial risk extensively. “If you’re just having an Armageddon coming your way, [America’s] buffers may not be adequate.”
...But the situation could worsen quickly for the United States. The biggest risk is a massive credit freeze. Loans from European banks account for one-fifth to one-quarter of the American lending market, Acharya says, and loans from those banks would disappear fast if they begin tumbling under bad sovereign debts. American banks would likely pull back on lending, too. Consumers and businesses would curb spending. “The precipitating event for the global financial crisis and the Great Recession was the bankruptcy of a single, relatively small broker-dealer, Lehman Brothers. The bankruptcy of a nation as large as Italy would be many times more severe,” says Karl Smith, an economist at the University of North Carolina who cowrites the popular economics blog Modeled Behavior. “In theory, there is no limit to how bad it could get.”
Here's my take, if the worst comes to pass in Europe. The economic seize-up that was avoided in 2008 happens. Banks stop lending to each other. Lines of credit to businesses freeze, resulting in payrolls not being met and inventories not being restocked. Panic buying ensues amid mass withdrawals of bank and money market accounts.
Not every bank or business goes under, but enough are hurt by the sudden economic shock that unemployment jumps to 15% in two months, 20% in four months. (U6 at 25%, 30% respectively.) Black unemployment, which has been about six percent above the national average, surges to 25% with black youth unemployment hitting 60%.
The federal government is able to keep afloat as investors flee Europe for U.S. debt, meaning Social Security and other entitlements are paid in full for at least the first six months of the year. The federal budget deficit nears $2 trillion by Fall as tax revenues collapse and entitlement payments explode.
Rioting does not take place on a mass scale as most colleges and universities remain open while unemployment checks, food stamps and other welfare payments are met through Summer.
Food shortages are temporary (about two months) as the government intervenes to ensure basics like medicines, milk, eggs, bread, corn, poultry, pork and beef are distributed. Restaurants and fast food joints are hard hit, with some limping along through the shortages and others closing.
Many household products and clothing are in short supply as the just in time inventory system brings about bare shelves after the sudden credit freeze and panic buying. Hundreds, if not thousands of ships importing goods and petroleum products to the U.S. are halted, turned around or sit without being unloaded at docks as credit for delivery is refused--cash only.
But gasoline prices collapse as they did in 2008 as demand greatly weakens.
The world and the U.S. will survive, but it will be harder to recover with Obama in charge. Bernanke will still have a few cards to play for the Fed, but nothing like he had in 2008 to keep the house of cards propped up.
2012 could be the most difficult year economically since the 1930s. I don't believe it will be a total, end of the world, you better have seven years supplies collapse. But I do think it will be bad, if the worst comes to pass in Europe this month or in the next few months.
I think that is a wildly optimistic rosy scenario in the event of major bank failures across Europe rippling into the USA. Exactly how would the fedgov "intervene to ensure basics like medicines" etc are "distributed?"
How exactly does that work?
Simply declaring martial law and ordering that it be done does not accomplish all of that, but it would turn the USA into a dictatorship overnight.
I think it is going to get real ugly within the next year, I hope I am wrong.
Not to worry.
This world will come to an end soon enough.
Matthew 24:19
And woe unto them that are with child, and to them that give suck in those days!
Not quite time to freak, though those days will be coming. Good thing we love not our lives unto the end.
Peace!
Michele Bachmann interview on GBTV by Glenn Beck part 2
http://www.youtube.com/watch?v=IUWc11lc35E&feature=related
Martial law will not be declared. The left has been trying to stir up civil unrest for more than a decade. They have failed. Their latest effort, the Occupy movement, has failed quite visibly. Americans of certain generations remember the riots of the 60s and others remember the Rodney King/Los Angeles riots in the early 90s. Americans are not inclined to riot and destroy their own cities again.
“Disaster aid centers?” You’re joking, right? For the entire country, all at once? Where does the food come from, when the credit freezes? Is it all in FEMA centers in all 50 states, just waiting?
They couldn’t even get Katrina right, and that was 49 states riding to rescue one state.
Some containment might be needed, but it will be limited in scope.
Martial law is always dependant on working with the authorities. If they don’t jack with us, we’ll weather the first storm, at least.
That’s why I figure it will take about two months to get situated. The food will be there, but the distribution will be lacking at the onset. Credit guarantees will be used to get food and medicines to grocery stores and pharmacies. Hardest hit areas where the groceries and pharmacies went bust will need distribution centers. They wouldn’t be needed in every community.
It will be like a Black Friday when it comes to civility in many areas of the country.
If there is a banking holiday in Europe when they devalue/replace the Euro, it will most likely be over a normal holiday when the banks would be closed anyway, so December 25, 26, Jan 1, Jan 6 (Greece) and May 1 are important days where something might happen.
However, everyone will be thinking the same thing, so whether or not they are planning a bank holiday, there could be self fulfilling prophecy runs on the banks near those days.
I sure hope it works that way, but I doubt it would.
Frankly, I think our urban areas will utterly explode within two weeks of the gas stations, ATMs and supermarkets running dry.
Just imagine being a cashier in an urban grocery store when you have to tell people, “Cash only.” Those cashiers and managers will be lucky to avoid being lynched and stomped to death.
It will go total looting from floor to ceiling that same hour, IMO.
‘Die Welt’: Iran building rocket bases in Venezuela (17 May 2011)
http://www.freerepublic.com/focus/f-news/2721122/posts
Iran readies launch of new satellite
(Iran's second satellite launch, 11/09/2009
http://freerepublic.com/focus/f-news/2382720/posts
Russia, N.Korea, China give Iran missile aid -CIA
09/08/01
http://www.freerepublic.com/focus/fr/519198/posts
Iran military engineers on hand for N. Korea missile launch
http://www.freerepublic.com/focus/f-news/1664760/posts
(7/12/06)
10 Iranian Missile Engineers Visited N. Korea:Sankei reports(check on NK’s Chinese equipments)
http://www.freerepublic.com/focus/f-news/1658850/posts
(07/01/06)
S. Korea, U.S. verifying reports on test of new N.K. missile in Iran: source
http://www.freerepublic.com/focus/f-news/1834307/posts
(4,000 kilometer range—will reach the Vatican—May 16th, 2007)
US confirms Iran launch of first home-built satellite
afp ^ | 2-03-09 | staff
http://www.freerepublic.com/focus/news/2177582/posts
Iran Satellite Launch Heightens Missile Development Concerns
By Donna Miles
American Forces Press Service
WASHINGTON, Feb. 3, 2009
http://www.defense.gov/news/newsarticle.aspx?id=52939
Iran hails successful launch of satellite rocket
Posted on Wed 03 Feb 2010 02:51:50 AM MST
http://www.freerepublic.com/focus/f-news/2443266/posts
Iran's Nukes: Apocalypse Soon?
IBD Editorials ^ | June 8, 2011 | Staff
"Terror: Iran is speeding up its nuclear materials production and moving it underground amid reports that the regime is eight weeks from atomic bomb capability. Doomsday, anyone?"
Maybe we’ll whack a calf to celebrate.
Block the road if we must...
Does anybody think this scenario could be "managed" to a soft landing?
I don't. Not in today's societal environment. I think it would be martial law and dictatorship at best, Mad Max and civil war at worst.
I don’t doubt that in some neigborhoods in major urban and rural areas that will happen. But I don’t think it will be nationwide. I remember things being pretty calm during the northeast blackout one summer in the early 2000s.
How long did that last?
I don’t see the parallel.
I give up...what is a commodities net exporter? Thanks :)
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