Boom

[cbc58]

From what I've been reading, a return to a modified gold standard is a given.  Has happened throughout history on the collapse of fiat systems.   

Me... I'm going to buy some cases of whiskey and bury them.  If the SHTF then I've got some tradable goods, if not than it ages longer.  Not sure what kind to buy...

One things for sure... the folks on this board will be much better prepared than most with thier small well-built homes.

[Native_NM]

I'd suggest Vienna Sausage, Twinkies, and Spagettios.  The currency of the post-crash economy.   

[cbc58]

probably some twinkies buried from the last economic collapse that are still good...     

[OlJarhead]

http://johngaltfla.com/wordpress/2011/07/11/total-euro-chaos-tonight/

This is your Eurozone on Keynesian Economics.  Kinda reminds of that 'This is your brain on drugs' commercial.

[John Raabe]

A couple of fun videos. This from performance guru Tony Robbins: http://www.youtube.com/watch?v=Z_rShZA_IjE&feature=player_embedded

This about a family of "Preppers" in Phoenix: http://www.youtube.com/watch?v=SMPepJpadbo&feature=player_embedded

My own suspicion is that with all the concerns, fears, predictions and expectation of collapse that we are probably at or near the bottom and things will be looking up soon. Not that I expect a rosy recovery, but I do think we will likely muddle through and have a better economic picture 12 months from now.

Of course, I could be wrong and this could be the one time it really does all go down the gurgler! 

[peternap]

John, your muddle through predictions are based on sound history in this country.

My melt down prediction is based on reasoning which could well be flawed. The nice thing about my prediction is that I'll be delighted if I'm wrong, but everyone will be unhappy if you're wrong

I'll tell a short personal story that should cover all the predictions.

A number of years ago I got shot.
I had spent a lot of time and money learning how to NOT get shot but had also mentally prepared myself for the possibility and what it would be like.

When it actually happened, it took me a few seconds to realize it. There was no pain, I didn't go flying through the air and obviously, I didn't die.
I made a morbid observation at the time...."This isn't what I was expecting it to be like".

I think a lot of us will be saying that soon!

[John Raabe]

Yep, that's a good story and a good prediction. Most all of us will be surprised by the unexpected - and no matter how prepared we are for our idea of the future, it is unlikely we were preparing for what actually shows up.

[h0rizon]

I can't help but think that if our recent ancestors (from, say, the great depression era or earlier) came back and took a look around, they would laugh and say "suck it up solider, this ain't nothin'!"

Remember when most women stayed home and income was earned mostly by men?  By today's terms I think we'd call that 50% unemployment.

I don't think we're near the bottom yet, but I do think that this is the new norm and it's a sharp contrast to the old one.  Sorry no more 20% return on investments or shiny new shoes every month.  Learn to live on less, work fewer hours and spend time with family.  You know, all the stuff humans have been doing for millennium up until the last 30-40 years or so 

Of course I'm preaching to the choir here 

[rwanders]

Yep, that's a good story and a good prediction. Most all of us will be surprised by the unexpected - and no matter how prepared we are for our idea of the future, it is unlikely we were preparing for what actually shows up.

For some reason, your comment reminded me about a quote about something else many of us expect or hope for;

"To himself everyone is immortal; he may know that he is going to die, but he can never know that he is dead."

By   Samuel Butler (British Victorian era author)

Probably not really germane but, always thought it was an interesting viewpoint about a future event we may fear but cannot describe.

[muldoon]

09:36 15Jul11 RTRS-S&P PLACES U.S. 'AAA/A-1+' RTGS ON CREDITWATCH NEGATIVE
09:37 15Jul11 RTRS-S&P PLACES U.S. RATINGS ON CREDIT WATCH NEGATIVE
09:38 15Jul11 RTRS-S&P SAYS AT LEAST A 1 IN 2 CHANCE IT COULD CUT RATING
09:39 15Jul11 RTRS-S&P SAYS COULD LOWER U.S. RATINGS WITHIN 3 MONTHS

think about that wire feed, read each one and think about it because s&p has never said anything like that about us debt ever. 
...
http://www.reuters.com/article/2011/07/14/market-ratings-creditwatch-us-idUSWNA372820110714

...
credit events are global, the ripples from a few days ago are starting to show.  like I said then, the ripples take time to show up in daily lives but when they do -- people don't often line up the events.  There is a panic sign flashing in debt markets.

- as for better in 12 months, John I just don't see it. 

[OlJarhead]

If we used the same stats to determine the unemployment rate today as was done in the great Depression we would have as high unemployment today as we did then during the worst part of the depression.

During the depression we did not have Food Stamps, we had soup lines, we did not have HUD, we had Hoovervilles, we did not have Social Security, we had Grandparents living with family or eating dogfood.

However, social programs are like morphine.  Helps for a little while until you get addicted to them, then it ruins your life unless you break the habit.

Today we have Obamavilles, you're just not seeing them, we have 'Parking lot' sleeping towns, we have unemployment that is off the chart and poorly reported (when reported) and we have a lot of people hoping and not so many actually willing to make the hard choices to solve the problem.

We have Keynesians running the show and in the end, no matter what you believe, it will not work out.

I pray that all the guys who were right about the collapse of 08/09 who now say we're in for it still and aint seen nothing yet, will finally be wrong but I won't hold my breath.

So far though, Celente, Schiff, Roubini, Faber and the rest of that gang seem to continue to be right and Obama, Bernanke and the little tax cheating Elf continue to be wrong.  Who are you going to listen to?

I remember Obama and his crew claiming the Stimulus would keep unemployment rates from going above 8%....they went above 10% after the stimulus was passed and continue above 9%.

The above mentioned gentleman all warned of this.

I seem to recall the likes of Barney Frank and Chris Dodd claim that Freddy and Fanny were in perfect health and a great investment.....boy were they wrong!

The above mentioned all disagreed and warned us about them and others.

Today the 'DOOM and GLOOM' ers pretty much say buy farm land, buy guns and buy food.

They may be wrong, and I pray that they are and somehow the country wakes the hell up and realizes that the party is over and it's time to return to Liberty and the Free Market but I won't hold my breath because frankly I have little faith in mankind.  I've seen him at his worst (trust the old jarhead on that one) and best and frankly I doubt as a whole we're capable of stopping ourselves from collapse.

Increasing the debt ceiling based on some pie in the sky deficit cut (what a bloody joke that is -- kinda like selling a $200 billion INCREASE in spending as a tax cut -- amazing) program is nothing more then kicking the can further down the road....sooner or later folks we have to pay the piper.

Franklin was right:  "When the people find that they can vote themselves money, that will herald the end of the republic."

And each time American's demand their health care, social security, etc etc, they are doing just that.

Goodbye Republic.

So folks, what does America look like at the end of the Republic?  Every other nation in the world where Freedom is a pipe dream and the elite ruling class runs the show.

[muldoon]

This is not about doom, not about the republic, not about gold, not about guns.  not about all the boogiemen you have heard for thirty years that never came true. 

This is not about the republic, or Obamacare, or democrats and republicans.  Those are bread and circus; to give people seomthing to squawk about while they fight over a ever smaller piece of the pie.  this is much larger than national politicking. 

It's about debt, it's about sovereign credit.  Take a look at borrowing cost increases in the last week.  Just 5 business days.  No business can survive a 15% increase in cost of borrowing in a week, much less the 20%, and 30%ers in there.  It went boom, and no one gets it yet. 

[archimedes]

Jeez.  Try and cheer up a bit.

[rwanders]

You may think me an unrealistic optimist at best or, a fool at worst but, I still have some faith that we will survive this umpteenth existential crisis. We were founded as a nation with very few believing we would survive even ten years, indeed that we would never exist as an independent nation at all.

There is another quote I like to recall at times like this:

" The Americans will always do the right thing in the end but, not until they have first tried every other way."

By Winston Churchill c. 1940

I think what he was really saying was, we just don't give up or, as someone else said, " There ain't no quit in us." Doom forecasters are always with us. Someday, they will be right----but, not yet, Bubba, not yet.

RW

[archimedes]

That happens to be one of my favorite Churchill quotes.

But I think what he is saying is that America can be counted on the do evertything first,  before doing the right thing.

Kind of like now,  the rush to cut spending during an economic crisis.

All the anti-Keynsians are pushing for spending cuts,  in both parties,  when that is exactly the opposite of what we should be doing.  And we'll keep doing the wrong thing until there is nothing left to do,  except the right thing.

[muldoon]

All the anti-Keynsians are pushing for spending cuts,  in both parties,  when that is exactly the opposite of what we should be doing.  And we'll keep doing the wrong thing until there is nothing left to do,  except the right thing.

There is no such thing as a "bailout." It simply is a magical creature that doesn't really exist. A "bailout" is just a method of shifting the loss onto someone else.  That's why money printing doesn't work. It just shifts the loss around onto the general population destroying the real economy and making the problems worse.

To say that we have not done enough stimulus, while we go on credit watch negative today because of massive stimulus, is ludicris. 

That is besides the point, this, I repeat, is not about American politics.  This is about global debt.  The things that always preclude massive changes.  Let me ask this, given the above rates for cds swaps, should Greece be stimulating?  Italy?  Spain? 

How do you suppose it should be paid for?  Should they borrow at 30% to "invest" in their economy?  What kinda of return will they see?  Will they generate 30% back dollar for dollar.  or will it just be chewed up with the same fraud that created this mess like the last few trillion?

[rwanders]

I wouldn't deny the possibility or, even the certainty of big changes in the world and certainly we would not be immune from serious repercussions. It doesn't mean "the end of civilization as we know it". It could mean the decks we play with will be shuffled quite well. As in all sea changes, political or economic, there will be losers and winners.

I am pretty sure that the guys hiding in the woods, peering out at the world around them with fearful eyes and loaded guns, will not be among the winners. The winners will be the ones embracing the changes. Big changes bring big opportunities. They WILL bring big risks too---those two always appear among us holding hands. Ain't no guarantees.

RW

[OlJarhead]

That happens to be one of my favorite Churchill quotes.

But I think what he is saying is that America can be counted on the do evertything first,  before doing the right thing.

Kind of like now,  the rush to cut spending during an economic crisis.

All the anti-Keynsians are pushing for spending cuts,  in both parties,  when that is exactly the opposite of what we should be doing.  And we'll keep doing the wrong thing until there is nothing left to do,  except the right thing.

Nonsense.  There is historical evidence that proves unequivocally that spending cuts and tax cuts work.  Look up the depression of 1920 and the resultant roaring 20's.

Spending by government is never the answer.

And as for cuts, I'd start by cutting the 'watch the whales mate' program and all like it.  I'd cut DC's budget to a point in which it hurt like hell -- I think the cafeteria could serve mac -n- cheese before we cut SS spending.  I'd end the war on drugs (what a waste anyway) and so many other wasteful programs.

There are many many ways to cut the budget that would be a great help and would lower spending to a manageable level.  Those who disagree are being dishonest or informed.

[peternap]

You may think me an unrealistic optimist at best or, a fool at worst but, I still have some faith that we will survive this umpteenth existential crisis. We were founded as a nation with very few believing we would survive even ten years, indeed that we would never exist as an independent nation at all.

I guess a lot depends on your outlook Rewanders.

If you are happy with a top heavy government, red tape and taxes that make running a small business, which is the backbone of what made this country great...impossible, career politicians, a cop on every corner just looking for a violation that can bring in fine money...and all the other goodies we now have,
Then I guess it's Gloom and Doom!

If you aren't happy and see the collapse as a rebirth of American Values rather than the end of American values or as Genesis instead of Revelations,
It ain't all that gloomy.

One of my old laptops is so choked up with spy and spam, it hardly boots.
I can run antivirus and spyware all day and it won't help much. It's time to format the drive and reload. Give you any ideas.

[ScottA]

I agree with peternap. A reboot may be in order. The system is choking on it's own BS. On the topic of debt, only a portion of the so called debt is real. Most of it is owed to the fed. That money was made from nothing so can be re-payed with nothing. It's the money owed to China and other countries that concerns me.

[archimedes]

... while we go on credit watch negative today because of massive stimulus, is ludicris. 

We're going on credit watch not because of stimulus,  but because Congress has indicated that it may choose to default on our debts.  The whole debt limit fiasco is a totally manufactured crisis.  Completely unnecessary.

I am pretty sure that the guys hiding in the woods, peering out at the world around them with fearful eyes and loaded guns, will not be among the winners. The winners will be the ones embracing the changes. Big changes bring big opportunities. They WILL bring big risks too---those two always appear among us holding hands. Ain't no guarantees.

RW

RW,
I can pretty much guarantee that you're right about that.

[archimedes]

There is historical evidence that proves unequivocally that spending cuts and tax cuts work.  Look up the depression of 1920 and the resultant roaring 20's.

Spending by government is never the answer.

Anyone who can make a statement like that knows very little about history and even less about economics.

[OlJarhead]

You know very little about history and even less about economics.

I'm sorry you feel the need to make such a childish statement, however like many I suspect you probably never heard of the depression of 1920 and know even less of it's causes and what ended it.  If you do, then your statement is downright ignorant, if you don't then I suspect you just have some kind of political agenda and feel that insulting someone is a good way to hide your lack of knowledge. 

Of course, my Maryland State History Prof might have agreed with you but then since I was the top of the class I kinda doubt it.

You see sir, there was a depression in 1920 in which a huge portion of American workers lost their jobs.  Many in government wanted to try the Keynesian answer to such things but thankfully an election took place and Woodrow Wilson, a progressive Democrat, lost to Warren G Harding.

Wilson gave us the FED (actually the banks gave us the FED but that's for another discussion I guess), who's supposed role was to prevent the business cycle from happening -- no more boom bust cycles (ya right) and the WWI boom was over.  What was worse is the European soldiers went back to being farmers and US Agriculture took a major hit.  The depression started, revenues dropped, people were unemployed so what did Harding do?

Cut taxes and cut spending.

But Harding dies and Coolidge assumes the Presidency and continues the cut spending cut taxes plan and gee whiz Wally, the depression ended and the roaring 20's came out of it!  WOW!

But then I'm just a dumb Jarhead who doesn't know anything about history.  Heck I probably can't even read or write and I sure as heck can add two dollar bills together.

Fact is my insulting and unfriendly friend, you post like a pompous and arrogant elitist but I'm sure it's all just a misunderstanding and in real life, sir, you are a gentleman.  So this old marine will let your silly post go and continue to enjoy the debate even though I'm clearly just an old bullet stopper who has no business opening his mouth around the likes of geniuses like yourself.

[h0rizon]

Wow this is getting heated 

I think making a blanket statement of "spending cuts and tax cuts work/don't work" is wrong in and of itself.  There are alot of variables to consider, including:

     1.  Where the cuts are (Welfare? Education? The Poor? The Rich?)
     2.  Who benefits and who loses from the cuts
     3.  How many people are directly affected (# of government employees come to mind)
     4.  How the money gets re-invested

What worked in the 20's may not necessarily work now.

So much of this debt crises lies within the problem of FUD (Fear, Uncertainty, Doubt), Faith, and plain ol' bad balance sheets all around (Government, Corporate, Individual).  No one has any money because they used it 5 years ago.

[archimedes]

OlJarhead,
Your the one with the clear idealogical agenda.

For you to make a statement that history "proves unequivocally that spending cuts and tax cuts work".
Is a false statement.

Sometimes they do, sometimes they don't.  It depends on the need at the time.  

Your one size fits all solution to every situation is based on your idealogical beliefs grounded in your lack of willingness to look beyond any evidence that supports your beliefs.

There are plenty of historical examples where tax/spending cuts have not worked,  and plenty of examples where spending increases have worked,  you just choose not to look at those because it doesn't validate your idealogy.

In the appropriate situation,  tax and spending cuts are the right solution,  and can be very effective.  In others they are not.  And history and economic theory show that over and over again.