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Zeus

How Are You Preparing for Economic Doomsday?

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With American government deficits of 1.5 trillion dollars for each of the past three years, it seems like the scumbag moron right-wing conservatives, and the scumbag moron left-wing progressives, are driving the American economy right off the edge of the cliff. America seems to be going the way of Greece, Ireland, Spain, Portugal, California, New York, and Illinois. Is economic Doomsday really near?

And, if so, what is everybody doing to personally prepare? More importantly, what should I be doing to prepare?

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How near is doomsday depends on one's resources. It is here for some people; there are areas of this city (Flint, MI) that look like the third world. Many people lack the resources even to take full advantage of government handouts - transportation, reading and writing skills. Many more are close to that and there are many who used to have economic resources but are "shell-shocked". A lot depends on whether the Government can continue to get enough financing to continue the "training" and other programs; many students where I teach part time (Personal Finance!) are going to school only to get the money and housing. Other peopel are doing better and some - especially those with government jobs - quite well. If this place is any barometer, how the next round of elections go will be critical. The Progressives still in charge here are planning city and school district tax increases on the few remaining healthy residents. For the first time I am considering abandoning our 1955 modern era house here or breaking it up and selling the fixtures, mahagony panneling etc. If the next round of elections goes back to the progressives, doomsday is near - tow to four years.

The Republicans could slow the process significantly; we'd need a John Galt to precipitate a mercy death. But, abscent real reform and restraint, the path is still downward. The debt levels and the promises made by governments who can't pay have sealed the future for many parts of the country.

How to protect yourself? Move to a stable area, with as rational a local government as you can find. Perhaps start a movement ala the gays in San Francisco to get effective control over a local unit somewhere. But I've thought a lot lately that the financial markets are increasingly risky, in their own operation and in the ease of appropriation of financial assets by the government. I think there's a lot to be said for a small business, really small, yourself and your wife as the only employees. We may be reduced to High Acston status and that might be living well in our lifetimes. Be as self sufficient as possible; build a greenhouse, drive a high milage car, live in a small house, consume little energy; think of waht the houses and amenities were like in Galt's Gulch - there is no mention of mansions. I teach my students you don't have to spend a lot of money to live well.

Most of all, be smart. I tell my students I have a new career and that is educating myself on how to live as I wish given the constraints that are growing.

Not that I've thought about this a lot, you see.

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I am not. One can stop (shrug) their financial/economical and moral support for something (such as a government) but the fight for one's life and freedom is never ending whether abstract or concrete the battle never ends.

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If the next round of elections goes back to the progressives, doomsday is near - tow to four years.

The Republicans could slow the process significantly;

I don't think there will be a difference really. The most hardcore, right-wing Republican in the senate has a budget proposal that will only reduce deficit spending by 500 billion. That means that the US will still go in the hole at a trillion per year, not counting the entitlements that both Republicans and Democrats are afraid to touch. Not counting all the municipalities and states that are set to go bankrupt. And it's unlikely Rand Paul's proposal will even be passed.

In fact, I think most of the damage has already been done. There's going to be a recession and moderate inflation whether we like it or not. The only thing political change could do is prevent us from having high inflation rather than moderate inflation, if, in the one in a million chance we could get the unelected Federal reserve to stop injecting money into the economy. But more than likely with the debt spiraling out of control there will be no choice but for them to start monetizing it. I doubt they would default on it.

If we follow Austrian business cycle theory, then we know that we need the recession. We have two decades of cheap money coming out of the Fed, so obviously there has been malinvestment on an enormous scale. There really is no getting around that problem.

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There really is no getting around that problem.

I agree that there is not getting around the problem, but to win one must face their enemy and engage them.

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I find the current debt situation ($14 trillion or 100% of GDP) nothing less than terrifying. I think bankruptcy and a sudden horrific crash is looming.

When it comes to all this drunken sailor spending and our impending financial collapse, I think the key point to remember is this: Everything will be fine -- until it isn't. No-one will panic -- until they do.

Then it will be too too late. A long, deep, and annihilating Depression will take place, such as to make the 1930s look like a walk in the park. Finger-pointing and scapegoating may lead to nuclear war and "soft" communism -- even in America. :D

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I find the current debt situation ($14 trillion or 100% of GDP) nothing less than terrifying. I think bankruptcy and a sudden horrific crash is looming.

When it comes to all this drunken sailor spending and our impending financial collapse, I think the key point to remember is this: Everything will be fine -- until it isn't. No-one will panic -- until they do.

Then it will be too too late. A long, deep, and annihilating Depression will take place, such as to make the 1930s look like a walk in the park. Finger-pointing and scapegoating may lead to nuclear war and "soft" communism -- even in America. :D

And getting overwhelmed by the situation helps in what way?

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There really is no getting around that problem.

I agree that there is not getting around the problem, but to win one must face their enemy and engage them.

As one who has, in the past, bid on hundreds of million dollars of treasury debt, and tens of millions of dollars of local government debt, I ask you: how are you going to "engage them"? "They" don't want to be engaged and don't consider anything debatable. The original question posed was in essence: are we past the point of effective resistance, of influence? If so, what can we do from where we are? I really believe the question left for most of us is, given we are not invited to Galt's Gulch, for whatever reason, do we give up on the status quo and look to ourselves and, if so, how best? I can tell you, here in Flint, MI, home of a university of Michigan campus, the home of General Motors and the modern union movement, the current modus operendi: is eat the healthy. I will campaign as hard as I can for champions of free enterprise and rule of law legislators and judges; recent legal rulings have made it likely the MEA, UAW, AFL-CIO, AFSCME and SEIU voices will trump mine.

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There really is no getting around that problem.

I agree that there is not getting around the problem, but to win one must face their enemy and engage them.

As one who has, in the past, bid on hundreds of million dollars of treasury debt, and tens of millions of dollars of local government debt, I ask you: how are you going to "engage them"? "They" don't want to be engaged and don't consider anything debatable. The original question posed was in essence: are we past the point of effective resistance, of influence? If so, what can we do from where we are? I really believe the question left for most of us is, given we are not invited to Galt's Gulch, for whatever reason, do we give up on the status quo and look to ourselves and, if so, how best? I can tell you, here in Flint, MI, home of a university of Michigan campus, the home of General Motors and the modern union movement, the current modus operendi: is eat the healthy. I will campaign as hard as I can for champions of free enterprise and rule of law legislators and judges; recent legal rulings have made it likely the MEA, UAW, AFL-CIO, AFSCME and SEIU voices will trump mine.

And I ask what would have happened if individuals would have taken the same path it seems is being offered. There are many more people in the history of man that took a lot bigger chances of which many from America's past could be named. Unless one is going to go and hide in the woods, which is not even an undetectable place to hide anymore, then there is no place to go if "Doomsday" comes. Chaos will reign until some tyrant steps up that guarantees he will stop the chaos as long as he is given "more power." I ask that people check history and find one country that collapsed (Doomsday) and was not swallowed up by the first tyrant to raise his weapon. I offer that people read The Black Book Of Communism: Crimes, Terror, Repression if they want to get a look at what awaits us if we give up and just wait for the collapse/Doomsday. And the first to groups of people to die are the young and the old.

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It's hard to avoid the conclusion that "doomsday" is at hand. Look at the article on the forum where Sysco invokes Act of God provision; but also see the articles on the Detroit school system, which wants taxpayers around the State to pour even more money into Detroit, and the suburban Kansas City school district, where the State will not permit tax increases the members would vote for to improve their schools. Why not? It wouldn't be fair to poorer districts. Then see this column on Bloomberg today:

http://noir.bloomberg.com/apps/news?pid=20...id=acEAHWWm4fpk.

Ayn Rand's vision of events and Schumpeter's dissection of how such events come to be (Capitalism, Socialism and Democracy) appear to be comming true. No matter which party is in power, the critical turn here will be whether policy goes far enough back from the "eat the healthy" strategy or stays that course. The elites have already turned more authoritarian; they are implimenting ObamaCare without regard to its constitutionality, including deployment of the police power in secure your cooperation. They cannot and will not be persuaded.

I'm not for heading for the woods just yet; but it is past time to have a plan.

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Two barometers of the issue under discussion come this week: Obama's budget, released this morning and Michigan Governor Rick Snider's budget released this week. We won't know the outcome of the Fedral budget for a while; Snider, who ran as a Republican, promises to have it finalized with about 90 days. Michigan has been a Progressive stronghold for about ten years now. "Republicans" swept the government last election, controling the governor and both State houses. The unions, industrial and government, effectively control the media and are skilled progressive agenda campaigners. If the Progressive agenda survives this new government, I will count all as lost, certainly here in Michigan and ditto the national government if the same scenario plays out nationally.

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I offer that one study Lincoln's presidency, the Great Depression/Roosevelt's presidency and Carter's presidiency just to name a few former "Dooomsday" situations that America did come back from. Hell, Lincoln did more to hurt the republic than any president until Roosevelt, yet we are still here, although moving down a corrupt, slippery road.

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To those who think an emerging market is sheltered from inflation...

There are two paths that country can take. Either your thesis is right, and the country will prosper. In that case, the vast mass of jobless humans is going to get jobs, and the vast mass of working class humans is going to upgrade theirs, as economic growth means more labour opportunities abound. Eventually, as is currently the case in Chinese spinning mills, there will be a shortage of labour. So wages go up, and labour is harder to come by. Goodbye cheap restaurant meals. And then there is more demand on food, whilst supply by and large hasn't changed (it takes a while for governments to open their borders to world markets, for commercials to bring food to an opened market, and for farmers to switch crops once they realise demand has gone up). So food prices go up. And so with petrol. And of course everybody wants to live in central Seoul, not in some faraway burb. So house prices go up. Meanwhile, your expat salary, which looked pretty good when your emerging market was like India is now, looks a lot less impressive as that country turned into Singapore (which is almost as expensive as London to live in; and whose real estate definitely is more expensive).

Path 2: you're wrong. The country collapses onto itself. I don't need to explain why it is a bad trade to live in a poor country that is getting poorer.

If you take out Europe, doesn't leave you many places to go live in does it?

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I offer that people read The Black Book Of Communism: Crimes, Terror, Repression if they want to get a look at what awaits us if we give up and just wait for the collapse/Doomsday. And the first to groups of people to die are the young and the old.

And the poors. High inflation will hurt the poors much more than the more productive, of course.

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