Skip to comments.Five Things You Need to Know: I'm Finished (coming collapse of our financial system)
Posted on 06/01/2011 12:21:06 PM PDT by Kartographer
These are the worst of all possible times. Just ask any cab driver. The US default and inevitable currency collapse is only the tip of the iceberg. Hyperinflation, or deflation, or stagnation, take your pick. There will be no winners this time; we will all be impoverished by the banking system, slaves to the global elite. Government has never been more corrupt. Businessmen and bankers, never more villainous. Our schools are failing. College is a scam. The environment is being polluted, our children's future traded away in a maze of carbon credits and energy derivatives. Or, on the other side of the coin, environmentalism itself is little more than a clever ploy by cynical capitalists to wring out the last dollar from a foolish public only too eager to trade cash for recycled plastic plates and over-priced vinegar-based solutions branded with little green pine trees. And we are obsessed with distraction, pop culture, celebrity, bread and circuses facilitated by technology and rapid-fire communication, if one can even call it that, rewiring our brains to crave the Pavlovian immediacy of the virtual call and response, Twitter, Facebook, a vast ocean of meaninglessness which crowds out the significant, narrative broken by unbound connectivity and emergent complexity. Nothing makes sense anymore. That's one way to look at it.
(Excerpt) Read more at minyanville.com ...
For those who havent prepared and would like to start or for those that have and are just interested you may download my Preparedness Manual at:
As the LDS say When the emergency is upon us the time for preparedness has past.
Or as the bible says: A prudent man sees danger and takes refuge, but the simple keep going and suffer for it.
NIV Proverbs 22:3
“...things you buy everyday start buying two and put one up.”
I would if I could double my income.
The wisdom of the prudent is to understand his way: but the folly of fools is deceit. - Proverbs 14:8
Discretion shall preserve thee, understanding shall keep thee. - Proverbs 2:11
Thanks for this.
Homes in my neighborhood are selling again. I go to the mall and EVERYONE is buying. Now, they've been doing this for two or three years. You say, "they're using credit cards." Really? For three years?
My wife goes in Kohls or Macy's and people are lined up, with (it seems) plenty of money. And, until today, the stock market has been going up pretty steadily.
” Explanation? “
Some parts of the Titanic were not impacted by the iceberg - by your (implied) logic, those parts didn’t sink....
My explanation is that America is stronger and more resilient than many folks think.
Make no mistake. I think we're in for hard times ahead. And it always pays to be prepared and have a good backup plan.
But if we can beat both Hitler and Tojo at the same time, we need not let anything scare us.
It just takes the right leader. And America has a history of having the right leader emerge when crisis is upon us. See my tagline for details.
Someone has to stand on the bridge waiting for FEMA to bring them a blanket, a bottle of water and a MRE so the TV news anchor can have his money shot.
This is a function purely of regulation. Corruption necessarily accompanies the necessity to get leave of a government office to do something. The more such necessity, the more corruption.
Do some detective work and see what those houses are selling for. Not near what they originally sold for.
Those people in the stores you see are the ones with EBT cards, EITC cash and other supplementary income that they can use to buy whimsy’s. They use the government money for staples (at least for what’s leftover that they don’t sell to others for cash).
What’s a gallon of milk cost you? Eggs? Have you seen the price of bacon lately?
The right leader? As in a ‘man’? Putting your faith in man will always bring destruction. This country has turned away from God, especially in the last 40 years or so. HE is the leader this country needs.
In a recession, you do not see people lined up at Kohls. The "they are using credit" works as an explanation once or twice, but not for two years. At some point, the credit cards max out . . . or, they don't because they are getting paid off. My next door neighbor lost his job with J. P. Morgan mortgage. He hasn't changed his lifestyle. He did get a job selling cars---but that can't be doing well.
All I'm saying is, I'll believe we're in a recession when I go to the mall and all the high-dollar stores are empty, or go to P. F. Changs on a Friday night and don't have to wait 45 min.
I travel a lot. Yes, the airlines have cut down the number of routes. But almost all flights I take are full. I don't see the Vegas hotels cutting fantastic deals.
” ll I’m saying is, I’ll believe we’re in a recession when I go to the mall and all the high-dollar stores are empty, or go to P. F. Changs on a Friday night and don’t have to wait 45 min.
I travel a lot. Yes, the airlines have cut down the number of routes. But almost all flights I take are full. I don’t see the Vegas hotels cutting fantastic deals. “
Well, you’re going to believe what you want to believe, but for those who go to Walmart (or Target if we’re feeling particularly ‘rich’) instead of the Malls, and have had to give up restaurants (the kind with tables and silverware and no dollar menu, anyway) altogether - and have to buy gasoline to go to work instead of airline tickets to go to Vegas, there’s a recession on....
Of course they are full if fewer flights are available. It's the most efficient load anyway - why would an airline want to fly a half-empty airplane? Modern automation certainly helps the airline to learn about potential passengers (perhaps from other airlines) and offer them a seat.
"Cheesecake Factory" at the Greens, a high-dollar mall area, is always full.
One potential explanation for seeing people merrily shopping during a recession is that the shopper is maxing out his credit lines.
What is happening today is that the U.S. government is spending 1.6 trillion dollars more each year than they are taking in and the government is maxing out its credit lines.
Where do you suppose that 1.6 trillion dollars is going? How much longer can such money be supplied? What must happen to economic activity if a large portion of the 1.6 trillion dollars stops flowing?
Keep in mind that the U.S. government is not an exception in this matter but is merely behaving as most governments are throughout the world.
Mr. Tell, I appreciate the notion that people are “maxing out credit.” But I’ve heard this explanation now for almost three years. You don’t “max out” credit for three years. Trust me. I used to do it. It’s gone in a few months. With home prices falling, people can’t be taking out money from their houses. So I just don’t buy the hypothesis that consumer spending is the result of a boom in credit. Moreover, credit rates are high as heck, while banks won’t lend to ANYONE. (I have stellar credit and couldn’t get a lousy loan for $50k for my business from Chase, which I dealt with for 30 years).
I didn't make myself clear. I meant that the U.S. government has become the source of borrowed money which is propping up the economy. Some of the people at the shopping malls are employed today simply because the U.S. is spending 1.6 trillion dollars per year that is borrowed money. To some extent, there isn't even a "lender", but just the Federal Reserve printing money.
Whatever prosperity is sending people to the malls today can be expected to disappear if the deficit spending is reduced or eliminated. Evidently 40% of federal spending is borrowed money.
I don't see how this can continue. We're either going to be inflating our currency at that rate our we will be reducing spending at that rate. The trend line has got to be toward a painful future of having some money but rapidly rising prices or having no money due to joblessness. The middle ground of reducing deficit spending to 800 billion per year simply distributes the pain differently but won't reduce the total pain.
The deficit of 1.6 trillion dollars per year is equivalent to about $20,000 per family of four EVERY YEAR. The family of four won't be getting a monthly bill, they won't see the incredible interest burden that credit cards carry, but they will be paying for it sooner rather than later. This federal annual indebtedness is in ADDITION to whatever personal debt is carried by the family.
Individuals "max out" their credit cards when the lenders refuse to lend more. The U.S. government has obviously "maxed out" its credit cards or we wouldn't be seeing the Fed buying our debt. There won't be enough federal revenue to pay the interest rates that the world will demand should the Fed stop buying our debt.
I can identify with that. I similarly have great credit and didn't get a loan for a condo I was buying for a family member. The loan agent was telling me all kinds of contradictory things about why the loan wouldn't qualify for Fannie Mae. It became obvious to me that what happened is that the people upstairs at the lender simply threw a switch and dictated that there would be no lending.
The other is a financial adviser, who really knows his stuff and has protected my portfolio, who says we are on the brink of DEFLATION---that housing prices are down, that wages haven't recovered, that interest rates are very low. Now, if these two pretty smart people keep coming to exactly opposite conclusions, how are poor schmucks like us supposed to survive?
"It's different this time."
Well, perhaps it is.
Over the last century and a half, American productivity has created a rising standard of living for the average person. Productivity is now rising rapidly outside the U.S. at a time when Americans have become undisciplined socialists. While our productivity is stagnant, we continue to spend money we don't have and to ignore the unfunded liabilities yet to come.
I think the key word is "undisciplined". As a nation we are going to continue doing what is easiest to do politically, morally, and economically.
This means that "quantitative easing" (money printing) will continue. Deficits on the order of 40% of the federal budget will continue. Nothing will be done about our unfunded long-term liabilities. Government policies will continue to be anti-business and anti-energy.
Some states will practically go to war against the U.S. government, but the courts will probably rule against them.
The only thing I see that will turn this around is HUNGER. If not for the bread lines in the ex Soviet Union, that state would still exist. Hungry people found themselves standing in line to buy bread that nobody had any economic incentive to create. That is our future.
We will find ourselves standing in line to renew our car registrations, wishing that the bureaucracy could mangage to take our money and renew our car licenses. We will stand in line to get whatever products manage to find their way to our local markets. We will stand in line to get vouchers to be able to buy new tires for our car.
We will stand in lines waiting for a chance to see a doctor or get new eyeglasses; to get a new dress or suit of clothes. Rationing will be justified because otherwise only the "rich" will have access to these products and services.
Already the incentives for doing business in Kalifornia are on the wane. Heard of any businesses relocating to the Golden State recently? The crews roaming the county patching the roads can't keep up with the rate at which the roads are failing.
I see nothing short of years of prolonged hunger able to turn this around. It will have to be long enough to completely exhaust the empty promises of the socialists. It will be long enough for those who think, "It can't happen here" to realize that it can.
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