Escape and Fantasy -- Economic Commentary by: Richard Russell

safehaven.com ^ | July 29, 2003 | Richard Russell

[djf]

I heard a guesstimate that worldwide, since 1990, something like $10,000 in currency has been created for every single ounce of gold in the world.

[steve50]

When the SHTF, I only hope that folks turn their anger on their own stupid belief in socialism and free lunches.

Last time FDR channeled the anger into the "New Deal" to placate the sheep, I'd think this time we'll get the global version of the same animal. I see nothing good coming out of this.

[arete]

I would have no idea but that sounds a little low to me. Part of the problem of course, is that the global central banks (central planners) still own most of the worlds gold which means they can control and manipulate the market and prices to a great extent.

Richard W.

[arete]

Last time FDR channeled the anger into the "New Deal" to placate the sheep

Can you say, "evil-doer terrorists"?

Richard W.

[djf]

Is Russell the one that says POG and the DOW are gonna cross at 3,000?

[headsonpikes]

"This won't be like the last depression."

I agree - that was a depression in an essentially capitalist world economy. The values of Western Civilization were devalued and scorned, and new modes of living - fascism, communism, and New Dealism, were touted as solutions to the economic problem. The rest of the 20th Century was consumed by a struggle between the various socialist systems to achieve supremacy. When socialist systems collapsed, such as the former Soviet Union and its satellites, there governments turned belly-up; there was no wide-scale repression.

When this next crisis arrives, governments will lack faith in themselves and in their solutions - real change will be possible if the moment is seized by the youth of America and other nations.

Call it a revolution, if you will.

This next depression will be a depression in an essentially socialist world economy, in which governments make the economic decisions - over half of the world economy goes through government hands directly, and virtually all the rest is under regulatory control.

I don't know what will replace it, but socialism is going to be rejected.

[steve50]

Part of the problem of course, is that the global central banks (central planners) still own most of the worlds gold which means they can control and manipulate the market and prices to a great extent.

As long as they can deal in paper gold they are OK. From the leveraged positions required to maintain control they better hope not to many want to hold the stuff in their hand.

[headsonpikes]

See my #26.

I refuse to be a pessimist - history ain't over, not by a long shot!

[Semaphore Heathcliffe]

Technically, that might qualify as a revolution.

hey now, that's crazy talk! We've got a Ree-publican president up for reelection. Wave the flag and get with the program, citizen.

[steve50]

The trend, at least for the last 150 years, has always been the people allowing themselves to be duped into stronger federal control to solve the mess.

Socialism may be weakened, but it's ugly brother is going to have a pretty good run for a few years.

[arete]

but it's ugly brother is going to have a pretty good run for a few years

Yep -- that's what I've been thinking.

Richard W.

[Nick Danger]

The financial scenario presented here is certainly scary, but it's barely the tip of an iceberg.

A lot of us see the same thing that Rusell does — people are "tuning out," turning to escapism, and denying reality in massive numbers. They are diving into the television, or sex, or retreating into little communities of various kinds.

Is this because people are concerned that the Federal Reserve has misbehaved? I have trouble with that hypothesis. I just stopped the last 100 people who went by me at the mall here, and only two of them had ever heard of the Federal Reserve. One wanted to know if it was some kind new wine they should try.

Russell spends his time writing Dow Theory letters, so of course he thinks that this is all financial. But it's not; that's just one more symptom of the generalized rot that has set in. Were every 'dollar' out there backed in full by gold, we would still see massive numbers of people retreating into fantasy. It is how humans react to powerlessness in the face of overwhelming complexity.

The recent Supreme Court decision concerning the Texas sodomy law is an example. There are tens of millions of people who would never join a pogrom to eradicate homosexual humans, but who really wish such people would be a little discreet about it. A parent rails in vain against homosexual scoutmasters, men kissing each other on television, and so on. It just keeps coming, and no amount of effort seems to make any difference.

It is this way with everything. It is almost impossible anymore to find a clerk in a store who speaks English well enough to tell you where the pasta sauces are. They look at you like you just said, "Pas Taso?"

Is everything going down the tube financially? Well, no surprise there. Everything is going down the tube everywhere we look. The bubbly blonde behind the checkout counter has to ask the manager what number month 'April' is. Our young men are basically checking out of higher education; the only place you'll find men on a college campus today are in the science and engineering schools, and half of them are foreigners with names like Wong and Prindartha. Just as well, too, because the engineering jobs are moving to India.

Nobody knows what the law is. There's so much law that one or another law says anything you want said. Look at the California recall nonsense; the law is 'clear' that there shall be an election. Bustamante says 'no,' and cites the Constitution. The Constitution says there shall be an election, if appropriate. Like everything else, it all ends up being decided by some non-elected clown in a black robe.

People feel totally powerless in this environment. So they give up. They crawl into a hole and they hide from the complexity that they can no longer comprehend or effect. They can see where it's going. They may not understand the Federal Reserve, but they know what it means that half the kids aren't living with their fathers anymore. We've seen that one; it's called Watts, or the South Bronx. They look at 13-year-old girls dressed up and made up like French whores, and they can only shake their heads. So they wander into McDonald's and ask for a Big Mac and fries, and the kid behind the counter gives them that look. "What is big macanflies?"

Arrggh.

Has the population voted for politicians that have run up $44 trillion in promised benefits that no one knows how to pay for? Why not? 50% of the people don't know what "50%" means.

Antonio Gramsci, white courtesy telephone please. Paging Mr. Antonio Gramsci. Your country is ready.

[Question_Assumptions]

Japan has a high savings rate. A high saving rate does not support the consumption and service economy that has to replace a manufacturing based economy if you want to keep people employed. Japan is also seeing deflation. If you want to see where some of the ideas in this article go, look at Japan and bear in mind that Japan still hasn't dealt with all of its problems.

Given the high debt levels in this country, as well as the large amount of money that most people have invested in their real estate, I think that any deflationary scenario would be a disaster. I think the only exit lies through inflation, as painful as that may be. The current weak dollar policy may also help.

[Question_Assumptions]

Japan has a lot of escapism, too. The anime (Japanese animation) that is so popular now in the US is often quite escapist. I agree that it has to do with feelings of being powerless. Just bear in mind that when you pull security out from under the powerless, they can often become quite a nasty and violent bunch of people because then fear sets in.

[steve50]

I hear the new gold "dinar" is out in a day or two. Lot of countries taking interest in PM currency of late.

They get nice gold coins, we get a new shade of pink in our fiat $20's. Doesn't hardly seem fair.

[headsonpikes]

"I think the only exit lies through inflation..."

Coincidentally, that will be the only exit the Fed sees, too.

;^)

[bvw]

Yeah, but the bond market is coming down with hives.

[Beck_isright]

In Florida, we're lucky if 25% turn out in statewide elections. I think 50% is an optimistic number. The NEA and socialists have done their job. They have dumbed down American society to the point where we should replace the white stars with white lemmings. It would be more apporpriate.

[headsonpikes]

Only weeks ago, I recommended long bond puts as a speculation on one of these threads.

Call me prescient. ;^)