[arete]

I think Russell pretty much nails it.

Richard W.

[arete]

FYI

Comments and opinions welcome.

Richard W.

[anniegetyourgun]

The goldbugs were/are right.

[grania]

What I see now is ESCAPE. Nobody's protesting -- Americans are just escaping.

The author really goes through the topics, but I like the way he connects the dots.

The beginning of this article brought to mind something that has been bothering me lately. It's those "reality shows". Well, they aren't reality at all. They involve rigged, contrived situations that people must live with. That's what surviving in today's society is about...even reality isn't real.

Again, inflation comes up. Suggestion...hold on to cash, pay off debts (especially those that have interest rates that can increase), evaluate what your real necessities are and where money can be saved. Then, when interest rates go up, put the money somewhere safe, hopefully at 6-7 % interest rates.

[headsonpikes]

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

Pretty thin hopes, I know. My fall-back plan is for young people to repudiate all this socialist nonsense at one fell swoop.

Technically, that might qualify as a revolution.

[AntiGuv]

I'm telling you, it won't be hyperinflation for the United States, it'll be deflation. All roads to hyperinflation lead through deflation...period. You can't get from here to a hyperinflation or even a genuine stagflation scenario without plunging into a deflationary contraction. And, once such a development occurs, the economic dislocations will be so comprehensive as to render the very basis of these hyperinflation forecasts meaningless.

[Beck_isright]

"There are two choices. Repudiate a good chunk of this debt or at least cut it back drastically. Or finance the debt via the printing presses. Which one do you think the US government is going to choose? Look, if we're running the printing presses full speed now, and the BIG expenses haven't even hit yet, what do you think our leaders are going to do when the "debt hits the fan?" You guessed it, they're going to inflate at a level that has never been seen before."

And just what happens when we have a .25% Fed Funds rate, but the 30 year is still at 7.5-8% yields. This sounds like a trap of an unseen historical magnitude. We can print money, but it will be too expensive to borrow it. Imagine that scenario for a moment.

[boris]

Part of the problem is that everything changed on 9/11. We will be at war with Islam for the rest of my life--and that means more debt and more deficits into the foreseeable future.

We are at war, and nobody thinks about debt in wartime.

This is one reason I favor quick, nasty, terminal 'solutions' to the problem of militant Islam. Make it fast; get it over with, so we can get back to the job of saving Western Civilization--which may be unsaveable anyway.

--Boris

[Orangedog]

Russel is spot-on. Regarding gold and silver, in inflation adjusted dollars, the 1980 high for gold at $850/oz would be a little over $1800.00 and about $109.00 for silver. Let the polly-annas go ahead and scoff at us. Sure, I "might" miss a 20% upside in stocks (until reality takes over), but I won't have my ass handed to me like a lot of other people will.

[razorback-bert]

The future is going to be a flow of funds out of paper and into real wealth -- gold and silver.

I agreed with this statement once, but now don't. Too many talking pointy heads have beat the notion of owning gold as a wealth hedge down, saying it's so old fashioned, out dated, and simple minded.

Owning gold, paying cash, avoiding debt and putting money in the mattress for a rainy day are all passe in our modern society.

[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.

[djf]

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

[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.

[Tauzero]

"A third change will be employment. Jobs will be increasingly difficult to find."

On the bright side, customer service ought to improve...

[arete]

Great rant by the Mogambo Guru today who happens to think along the same lines as Russell.

The Save Our Butts Plan

Richard W.

[dennisw]

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