Maxwell Smart and Agent 99 have been taken captive aboard a U-Boat commanded by their KAOS arch-nemesis, Siegfried.
A Navy destroyer pursuing the KAOS sub releases depth charges that detonate nearby.
“Look, Siegfried," Agent 99 exclaims, "your men look like they are about to panic.”
“Never!" Siegfried defiantly cries. "My men have been thoroughly trained. They will not panic unless I give the order to panic.”
Less than a split-second passes before the sub is tossed around by an even stronger explosion.
“Prepare to panic!” bellows a rattled Siegfried.
"There will probably be some bank failures."Federal Reserve Commissar Ben Bernanke, in a presentation to Congress last week intended to forestall panic.
The U.S. economy is sinking, and it will take the global economy with it. This is the perfect time to panic. If we wait until our rulers give us permission to panic, we'll be dragged to the bottom along with everyone else.
One needn't be a devoted student of history to recall the proud boast that attended the launch of the Titanic: "Not even God could sink this ship." As it happens, God didn't have to bother, since an iceberg -- not one of his more notable creations -- proved adequate to that task.
Just as the Titanic was too mighty and cunningly designed to sink, Citigroup is supposed to be too big and too powerful to fail. In fact, Citi is supposed to help rescue smaller banks when they get in trouble.
After England's Northern Rock began its terminal swoon last fall, Citi was called in to help rescue the ailing bank, that country's eighth-largest mortgage lender.
That rescue plan, which would have involved Richard Branson as well, didn't work out. I suspect this is due, at least in part, to the fact that Citi is poised on the brink of oblivion itself. Just shortly before offering to help save Northern Rock, Citi was given a lifeline by the United Arab Emirates in the form of a buy-in by the Abu Dhabi Investment Authority (ADIA).
It looks like ADIA is experiencing severe buyer's remorse.
The Citi rescue is a collaborative effort of two Gulf State sovereign wealth funds and one Saudi mega-investor. Of this multi-billion-dollar bailout, ADIA's Sameer al-Ansari warns: "It's going to take more than that to rescue Citi." But it's doubtful that the Arabs are going to pony up the petro-dollars like they used to now that Alan "The Annihilator" Greenspan has urged them to abandon the dollar he destroyed.
So Citi is going to implode, most likely this year. Another possibility is a huge taxpayer bail-out -- socialism for the uber-wealthy investor class disguised as humanitarian intervention for homeowners facing foreclosure -- of the sort Bank of America has discussed in a memo quietly making the rounds on Capitol Hill.
Of course, the $739 billion BoA talks about is pitifully small when compared to the volume of bad mortgage debt we confront: A "fix" that size would be as useless as using a band-aid to treat decapitation.
So it's not an "either/or" proposition for the economy: We'll probably see huge bank failures and even larger taxpayer bailouts. And Washington will continue to hemorrhage on that unique imperial fixer-upper project in Mesopotamia, which has already cost us $2 trillion (plus an incalculable fortune in lost lives).
Expect to see this kind of thing frequently in the near future: A 1933 bank run in New York City.
Ambrose Evans-Pritchard warns that "economic winter" is setting in, and not just in the northern part of the Western Hemisphere.
"Half the eurozone is grinding to a halt," he writes. "Italy is slipping into recession. Property prices are flat or falling in Ireland, Spain, France, southern Italy and now Germany. French consumer morale is the lowest in 20 years."
And, let us not forget, in terms of the exchange rate, the eurozone is doing much better than the U.S.
The Fed and its comrades are doing what they can to hold winter in abeyance, and failing.
John Williams, publisher of the U.S. Government Shadow Statistics news-site, summarizes:
"[If not] for systemic intervention and manipulations by the Federal Reserve, it appears we might be contemplating a collapsed U.S. banking system and a looming deflationary great depression that could have dwarfed the bad times of the 1930s. Such is the good news. The bad news is that with those same systemic interventions, the Fed is locking in a hyperinflationary great depression in the decade ahead, with the turmoil possibly breaking by 2010 or earlier."
(Emphasis added.)
There are people who will be genuinely surprised when this happens, just as there are people who are taken by surprise when winter returns every year.
We can't avoid winter, but it is possible to mitigate its impact.
Get liquid. Get out of debt. Get some food stored up in quantity, against the possibility of sudden price spikes and shortages.
And to the extent possible, apart from what's necessary to pay expenses and debts, get out of FRNs in favor of real money -- right now.
If I seem to be counseling panic, remember: Now -- not after we've been given permission -- is the perfect time to panic.
Video extra
Liberty in Eclipse is on sale now. Dum spiro, pugno!
I know we are hooked on plunder right now and we have to take action as individuals but what about this solution?
ReplyDeleteWould it work?
I've read that paper and have tremendous respect for its author. His view, boiled down to its essence, is that we have no rational choice other than, in effect, permitting the existing system to collapse, and then building anew on the foundational principles of the republic that was stolen from us.
ReplyDeleteIf there is a terrestrial solution to our predicament, that's the form it would take. There is going to be a collapse; that much is inevitable. I'm not encouraged by our chances of creating a new republic, given the degeneracy of the present demos (tip of the sombrero here to DixieDog).
But ... God will "save the island of the innocent," as the Bible says, and it's possible that a few pockets of liberty could survive the coming catastrophe. Or, thanks to divine intervention, we may find some way to redeem our institutions.
In either case, our immediate task is to care for ourselves and our own, and that's becoming more than enough for any of us to handle.
If you are fortunate to live in a rural area network with local farmers - get to know them they may be of great assistance. Learn to be resilient and to live frugally. Learn the art of country living - burning/heating by wood/ hunting/ gardening and yes even bartering. I live in New Hampshire right on the border of Vermont an we are blessed to still have many working hill farms both beef and dairy in existence. Many of these farms are also fully self sufficient.Vermont especially is filled with many individuals who for various reasons both political and philosophical are committed to maintaining local agriculture and farmers markets. Despite some of the loony socialism that abounds it tends to be a throwback to another era. Anyone that can afford to move there - should. It, along with western NH, is an extremely self sufficient region.
ReplyDeleteSir, I agree w/ you on some points, but I think the call to panic is greatly overblown. With the global economy as strong as it is at this moment, putting money to work in other parts of the world is as simple as a few clicks of a mouse.
ReplyDeleteBy investing in companies w/ real cash, real return on equity, and a strong fundamental balance sheet, it would take divine intervention to make them collapse.
Those of us who are experienced in asset protection do this everyday, and I think any panic of this situation can only be exacerbated by comments of "the sky is falling". As a man of faith, I would hope this is not an attempt to get more clicks to your website.
Will,
ReplyDeleteIt's a totally unrelated matter, but I thought that I'd end you the link below as you seem to be interested in covering these types of stories.
http://www.pittsburghlive.com/x/tribunereview/news/fayette/s_555761.html
niklaus, I'm not suggesting that people should eschew investments altogether, or get their backs up against the nearest mountain.
ReplyDeleteThere's reason to think that companies that have operated in the black are going to survive, and they might be good investments; I don't know, and wouldn't presume to say, whether this is so.
But the inescapable fact is that the dollar is collapsing, our banking system is on the verge of a major crisis, and Americans are BADLY unprepared for the coming crisis.
We're still being told that it's going to be mild and trivial, and urged to keep spending rather than reducing their debts and building a foundation of tangible wealth.
Of course, the fundamental problem here is the hideously skewed priorities that define us as a culture.
We're deeply materialistic, allergic to thrift, addicted to immediate gratification, and see nothing amiss in deferring or re-distributing responsibility for our profligacy. (I speak as one of the greater offenders in all of this.)
As a believer, I understand that repentance -- a sudden and radical change of direction -- is what we need, and obviously not just in economic affairs. Toward that end, panic can be a healthy thing, if it's justified and properly directed.
Citi almost went under in the 1990 recession. Part of the 1991 rescue program is falling into place again: a positively-sloped yield curve (meaning that the interest rate on 30-year Treasurys is three full percentage points higher than on T-bills). Whether the old "positive-carry" banker giveaway will be sufficient this time is unclear.
ReplyDeleteWhat's truly sad is that the only rescue plan is to create another Bubble. In a fiat-currency economy, "investment" consists of identifying the currently-developing Bubble, and speculating in it before others do.
Bubble I was the Dotcoms (ended 2000).
Bubble II was real estate (ended 2005).
Bubble III appears to be a runaway commodity spike, similar to the late Seventies. Needless to say, if war inflation wasn't devaluing the currency, there would be no particular reason for gold to be exploding in price.
It doesn't take a Harvard MBA (e.g., George W. Bush) to ascertain that every war has been inflationary, and so has this one. Duh! And you don't need a PhD Econ (e.g., Alan Greenspan) to project that if the next president keeps U.S. middle eastern intervention going, inflation is going to keep on cranking. Duh!
Whether it's "making the world safe for democracy" or merely rescuing Citibank, the only lever they've got is printing more worthless scrip. Just as monkeys with a lever wired to a cocaine drip will keep whacking that lever till their brain corrodes. Go, go! Go, Benny, go! GO, Benny B. Goode!
be afraid, watch tv, consume, obey, shut up be happy
ReplyDeleteInteresting verbal sparring going on here. Congrats on a successful article!
ReplyDeleteI agree that we're being told to calm down way too often. Kinda reminds me of the Anthrax debacle when Congress and every other bureaucrat ran for the hills, but everyone else was told DON'T WORRY YOU'LL BE FINE!
Complete BS!
But in some ways William, I'm not saddened by this. Perhaps I've grown shallow, but with the amount of information available in this information age, you were either clueless or indifferent to the impending collapse.
Reminds me of an old adage my grandfather told me about playing poker -- NEVER BET THE FARM! In fact, that's exactly what happened. I have a hard time understanding bailing out people who used their homes as a 2000 sqft credit card, and honestly, I don't feel that sorry for them.
Granted, I'm an atheist, and a believer of Darwinism/Natural Selection, but humans are the only species in which evolution no longer applies. Thus, we're soft, lazy, and stupid, and I'm pissed that the ones who followed the rules are AGAIN paying for the morons mistakes.
Solid advice. The task is to remain nimble and avoid the complacency that prevents most people from taking prudent action. One further comment: The reason America's social condition is so bad is that great success leads to great complacency...which leads to collapse, compelling a return to core values...which leads to renewed success... and the cycle goes on. The best blueprint for "what to do" was published in 2003 by Robert Prechter. Get a copy of his "Conquer the Crash" from Amazon (or wherever) and see if you still think gold or other inflation hedges are the way to go at this moment in time.
ReplyDeleteExcellent article and superb advice. I do not think there is 1 person in a 100,000 that understands what the implications of the FED's actions will be for the economy. The current statist hyperinflationary cures have been tried and have failed in the past all over the world. I would add a couple of other suggestion to Mr Grigg's; keep the amount of money held in a US bank at a minimum and certainily under $100,000 per account. If you have substantial wealth consider getting on a plane to Panama, Switzerland, Austria or some of the other excellent banking centers and opening a foreign account in a foreign bank. I would certainily expect capital controls at some point in the US if the dollar really begins to nose dive. If you are not out by then you will not get out and will suffer the fate of seeing your wealth destroyed. If you are of modest means squirreling away gold and silver coins like a French peasant is a great idea. Be aware though the federal government has in the past outlawed gold ownership in the US. All for the common good of course. Google national hero FDR gold confiscation for more detail. You may want to investigate a crib outside the US if you have the means. Again Panama and Argentina are cheap, modern, and nice. Please do not consider this advice do your own due diligence.
ReplyDeleteIt's a very simple history lesson we never seem to learn. Socialism, no matter what you call it, is expensive. Central planning is less efficient than the free market. Keynes was a snake oil salesman dealing in the same potions guaranteed to make us all prosperous with no side effects. The lure of something for nothing has been irresistible. It has given us the forty hour work week, beautiful homes, two cars, three TVs, paved roads ... The last 100 years has been a fun ride but there's no such thing as a free lunch. Most of the world's economies have been consuming faster than producing for an awful long time. The prestidigitation of inflation is reaching the point where the trick just ain't working anymore. The ride's over and someone has to pay the tab. It's a bitter pill to swallow, but when looked at realistically, economic downturns are nothing more than the natural corrective adjustment to artificially created upswings. It was a fun date, we all had a great time. Now it's time to wash daddy's car, mow the lawn and take out the trash. You know, all the stuff we should have been doing all along.
ReplyDeletehttp://bryandmorton.blogspot.com/2008/02/physical-laws-of-economics.html
Dr. Grigg's "Prepare to Panic" headline is looking rather timely on Friday morning, as falling payrolls deepen the realization that we're in recession.
ReplyDeleteFlailing desperately, the Federal Reserve increased its emergency auctions of four-week funds to $100 billion. (The captain has illuminated the 'Fasten Seatbelts' sign!) Fed Funds futures project a 32% chance that the Fed Funds rate will be slashed a full point to 2% by March 18th. As Jim Morrison used to croon, "Save our Citi! RIGHT NOW!"
Don't mourn the Bubble that has passed. From its ashes, a new Bubble is being born. Gentlemen -- start your printing presses!
David said:"The best blueprint for "what to do" was published in 2003 by Robert Prechter. Get a copy of his "Conquer the Crash" from Amazon (or wherever) and see if you still think gold or other inflation hedges are the way to go at this moment in time. "
ReplyDeleteI looked up the book you are talking about. It's full title is:
Conquer the Crash: You Can Survive and Prosper in a Deflationary Depression
I want a book on how to survive during a hyper inflationary depression.
From what I have been told during a deflationary depression you can hang on to your property but during an inflationary depression almost all property is lost.
I think there will be a detailed paper about the stages of an inflationary depression in about three weeks at the http://www.christianlibertyparty.com website.
Will,
ReplyDeleteAs usual, nice discussion. Just one minor nit, though. Subprime mortgages are simply an excuse for the economic dislocations going on. The banks' loses are coming out of a veritable mountain of completely unregulated (as requested of Congress by Sir Alan) hedge fund activity. These economic "bets," with their stratospheric odds, have suddenly turned bad. You recall Long Term Capital Management? A bunch of eggheads turned a billion dollars into four billion in short order. Based on this success, they were soon borrowing on the order of over a hundred billion dollars and claiming a notational value of over a trilion on their "assets" (that is, others' debts). When the Russians defaulted, many of LTCM's bets went bad during the resultant "flight to liquidity," and the house declared the game over.
Thus is the story today. Except, now, it is the U.S. that is playing the role of the Russians' defaulting. Want to see the future of the U.S.? Look to the disarry of the former Soviet Union. Yes, the people are better off now than pre-collapse, and we will be as well. (After we collapse, that is.) But in the meanwhile ...
traitor2tyranny ...
ReplyDeleteLike your website (if it's yours) but would comment that a "inflationary depression" is something of an oxymoronic phrase. People think of a "depression" as being marked by loss of jobs. But it was a liquidity issue that, intially, drove the U.S. into the Great Depression of the 30s. (High debts were taken on that, when called in, were disavowed by those with the means.) Inflation, on the other hand, is a currency effect. Hyperinflation, on its most basic level, occurs when fiat currency becomes unvalued. The two (depression and hyperinflation) are related as to effect, certainly, but they're not the same thing and do not have like causes.
That said, my view is yours: we will soon experience hyperinflation. Will we lose jobs? We already have, with the loss of service jobs soon to follow, as must happen. This will continue until equilibrium with other economies takes place, so prepare for some reduction in U.S. standards of living. Also expect to see the pirates (our government and its agents) feeding upon the carcass. (That's us.)
As Will has documented here time and again, this process has already begun. How can you protect yours and your loved ones? Gold, guns and grub? Many of us know the "solution" already. See Matt. 6:19-21. Best begin living it, for we are but the grasses of the fields.
(anon of 9:29 a.m.)
The US$DOLLAR is Cancer, if you Hold dollars you hold CANCER.Everything denominated in dollars, stocks, bonds, cancer. Period, end of discussion, ever county, every individual, every corporation will return the dollar to where it came, When all the cancer returns, you have a Weimer Republic 1923, all over again.
ReplyDeleteGoogle hyperinflation, dispute what i say, learn from history, for those who do, are Doomed to RELIVE IT.
By 2010, CFR, will have no problem convincing the prolateriat to accept the NAU, north american union, and the amero as its currency, at which time all sovreign rights as a country are lost. GOD, GOLD, GUNS. A milk cow, a few chickens,a water well and 5 acres, and mabe just mabe you will survive.
To: Anon 9:29 am/1:06 pm
ReplyDeleteYour last comment was especially insightful! Good points! Kudos to Will G. too!
Anon 3:44 pm,
ReplyDeleteYou make your point with passion! I'm with you. I maintain a chicken coop myself. I don't know what I would do if the police state goons confiscated my beloved and delicious chickens! God, they are so tasty! Have you ever tasted farm fresh eggs? My God! If the government thugs denied me my source of poultry -fresh poultry, mind you- I would transmorgrify into a complete raving homicidal maniac! No more rotisserie chicken? People, I really couldn't live without my chickens. I mean it! I've grown accustomed to fresh eggs, chicken wings and BBQ'd chicken breasts. Not to mention that I can make a mean chicken soup with my own homemade chicken broth ....Mmmmmm, man! What do I do? Don't touch those chickens!
Gotta hide my chickens. Think man! How in the Hell does one go about hiding chickens? Oh God, these circumstances don't look so good.
-Chicken Man
William,
ReplyDeleteYou say to get out of debt. Isn't low fixed rate debt good during hyperinflation? Wouldn't it be better to use that money to buy gold or silver as opposed to paying off debt?
disinter, if you have a low fixed rate on a debt you can handle, AND unassailable job security, then your course of action makes sense.
ReplyDeleteBUT -- If you suddenly find yourself unemployed and/or dealing with a major crisis (injury, illness, or the like), what was a manageable debt suddenly becomes a crisis.
Please indulge a lengthy moment of personal reflection and confession on my part.
In the late 1990s, my family grew and my salary didn't keep pace. I also had five years of acute trouble with the IRS that sapped what little we had by way of discretionary income. So, like millions of others, I found myself snared in the credit card trap.
I should have been smarter. I wasn't.
In the early 2000s, I managed to pay off most of the credit cards, while launching a business venture on the side to clear the last of them. That venture ... wasn't successful. We took some "dings" (as Dave Ramsay would put it), but our head was above water.
We moved to Idaho in part out of a desire to economize and pay off our debt: Idaho is less expensive than Wisconsin, and with access to my parents' gardens we'd be able to economize on grocery shopping. By mid-2006, we were within a few months of being debt-free.
Two things then happened.
First, My wife Korrin became catastrophically ill.
Second, my dear friends in the management of the JBS, knowing our family's circumstances, decided to fire me for no reason they care to explain.
That happened in October 2006. By December my severance was exhausted and we had no health insurance. Korrin has been hospitalized seven times since April 2006. You do the math.
Ah, heck, I'll do it for you.
We're now more than $30,000 in debt for medical bills alone. I pay what I can when I can, but the bills have accumulated faster than I can make money to pay them down. (An emergency room visit costs at least $1,200; we have five children, and this past winter has been a festival of respiratory sicknesses. When one of my kids has trouble breathing, and the walk-in clinic is closed, I take him to the emergency room and defer my concerns about paying the fee until I'm sure my child won't suffocate.)
Had I not been kicked to the curb, on the other hand, we'd be debt-free and accumulating savings.
(We did have had to sell nearly all of our savings in precious metals, for one thing: I started buying silver when it was less than $7/ounce, and gold at about $600/ounce. That really hurts.)
As the economy worsens, millions of households are going to end up in situations like ours: One day, the breadwinner is a valued, productive employee -- the next he's entirely disposable, and quickly disposed of,irrespective of the harm done to his family.
(In my case, the process took a week: On one Monday, my editor was praising my work, hymning my virtues as an employee, and apologizing for the burdens placed on me by management; the following Monday, the same editor was party to the decision to fire me, and on the following day he informed me that it was "the right decision" to do so. I can't understand such pusillanimity, but then again I'm in possession of only one face.)
Nobody should assume that his job is secure, and if you don't have a job, you can't pay your debts. That's why I think it's best to pay off debt WHILE investing what we can in precious metals.
Thanks for indulging me!
Thanks William. That makes sense.
ReplyDeleteSorry to hear about your situation.
Will,
ReplyDeleteI have a few questions if you have time to respond. First it seems to me that getting food, water, lead stored should be of higher priority should SHTF, than paying off debt. What good would being debt free be if someone were forced to live in squalor and wait in bread lines and/or government work camps. If there is an outright repudiation of debt by millions of people, how in the world will the powers that be collect on it all? Secondly, assuming all credit card debt could be paid off, what about school debt? I will have over $100,000 to pay. Will they take the skin off my back?
anonymous @ 12:35 -- You've got a splendid point here about the urgency of "hoarding" necessities (including ammo). And there are various kinds of debt that can be handled in different ways.
ReplyDeleteBy "school debt," do you mean federal student loans? These are nasty, because the regime uses federal marshals as debt enforcers, and they have ways of squeezing money out of those who default. So keeping current on student loan payments has to be a priority. The good news here is that it's relatively easy to work out payment arrangements if you anticipate problems,
Being debt-free won't fill your pantry or dig a well, of course. But in the event we see debtors' prisons come back (a very strong possibility, in my view), paying off what you can and keeping current on the rest will help keep you out of the proverbial government work camp.
And it shouldn't be forgotten that there are hundreds of thousands of people already in a form of debtor's prisons. Many of them are men run down by the Office of Child Support Enforcement because they can't pay the punitive, confiscatory judgments and still have sufficient money for food and shelter. And we could probably think of other examples like this.
My situation is similar in a few ways to Will's, but minus the wife and five children.
ReplyDeleteI was let go from my job as a network admin/field tech in 2001 from the military base I worked at. I got into an argument with a co-worker who had more tenure there than I and it escalated. He had a ceaseless and coarse bell clapper that I wasn't gifted with and my tolerance for grating nonsense only goes so far. So, after the initial exchange, I tried to ignore this guy as much as possible whenever he and I were in the office together. After all, we didn't usually work as a team on projects in the office, per se, as all four of us had our own particular jobs that each of us alone was responsible for.
Anyway, I lost my cool and gave that guy a piece of my mind with a few spiced words for effect. He freaked out and whined to the boss and the rest as they say is history. I regretted the outburst, but I told the boss that I'd had enough of his mouthing off and purposeful agitation and he seemed to understand somewhat and said that he had no choice in letting me go because the co-worker in question had taken his complaint to the top. He said he would provide a good reference for me in any event.
Predictably, when my savings ran out a year and a half later during which jobs were intermittent and income was sporadic at best, my car was repossessed. I managed to find two cheap motorcycles over the next four years that I paid cash for outright and they provide my mobility.
Probably one of my biggest liabilities in terms of "unassailable" job security is that I've never been a boot licker throughout my life, other than when I was in the military myself in the 1980s. Ergo, I've always viewed jobs as here one day, gone the next day and with a life-long health problem, by extension, never wanted to get into any long-term, grinding debt like a mortgage or new car loan, get married and have kids, etc., etc., without a solid long-term financial outlook. Needless to say, I couldn't clearly see one and certainly don't now, obviously. In addition, 18 years of roller coaster sugar levels from Type 1 diabetes has contributed greatly in entrenching in my head that overall mindset as well.
Speaking of health insurance, like Will, I have none and I was going to the VA during the early years for my prescriptions because funds were extremely tight, but nevertheless, I gradually grew tired of the VA and the sloooow, dragging pace of the whole outfit. It's how I imagine universal health care will be. If anyone wants to imagine UHC in action, simply visit any VA Hospital. I don't doubt for a minute that what you observe there won't be far off the mark.
Anyway, since the latter 1990s I've bought my own insulin, syringes, and testing supplies since (THANK GOD!) a doctor's prescription is not required in Virginia to procure those required for life items. I've never been one who was addicted to doctors or legal/illegal drugs, a hypochondriac in essence; I only want what I absolutely need to survive. Yet many folk seem to want to "hang out" at doctor's offices and clinics for whatever whimsical reason and then have no intention to pay for whatever services or prescriptions that are rendered to top it all off. Insane!
Back to the job situation, since 2001, I've worked intermittently as an independent contractor and my income is modest now by comparison. As I mentioned earlier, I have two old motorcycles that I ride around for transportation to keep the gas budget reasonable and do most of my own mechanical repairs and upkeep on them myself. I try to avoid paying shops to do tasks that I can manage, albeit with some difficulty perhaps, myself.
That's an abridged, but nevertheless accurate, version of my life since 1990 in a nutshell.
All that said, I'm relatively content at this point in life. I don't care to keep up with the Jones, have the latest and greatest gadgets, rarely watch the booby, and don't care to watch any sitcoms or movies. However, I do every now and again watch an episode of that classic ol' sitcom, Sanford & Son ;).
Will
ReplyDeleteYour story is nearly identical to my own - although my wife and I have no children. Like yourself my wife suffers from a serious chronic illness. Also I was within $1200 of settling a very large IRS lien when last August (2007) I was kicked to the curb by my former employer. Literally until the last minute they were telling me "you're doing a great job" etc...The next moment I am out on my a#$.
Immediately I started a small business -relative to my field of expertise/training. But unfortunately had to incur over $12,000 of debt to do so. Currently my life consists of relying on a shoestring and many a prayer to stay afloat.
Take heart my good brother - the Lord gives us no more than we can bear.He will provide for His elect.
Keep up the good work - I am a great fan of your hard hitting "no holds barred" journalism.
In Christ,
Stuart
Stuart, thanks so much! I earnestly hope that you surmount your present difficulties and that God gives you the success you deserve.
ReplyDeleteDear Will,
ReplyDeleteSo sorry to hear of your family's circumstances. Keep faith in the Creator, it is absolutely true from my own experience that not a sparrow falls but He takes notice. You know, we always understand that tribulations come to test us, but what few understand is that good fortune also comes to test us. Those who are blessed have a responsibility to increase the talents the Creator has given them, not to hoard those talents and hide them under the mattress. Love is a blessing. Blessing shared is blessing grown. May you be blessed with much love in your life.
First, I must respond to Bryan Morton, 6:12 am, who said:
"It's a very simple history lesson we never seem to learn. Socialism, no matter what you call it, is expensive. Central planning is less efficient than the free market."
Absolutely true! Yes! Yes! But what you fail to mention Bryan is that there has never BEEN a "free market." We have ALWAYS had socialism, from the dawn of human history, except that you also do not mention that it has been a socialism, by, for, and for the benefit of the rich and the powerful and the government. The rulers and the merchants have always worked hand in glove to exploit and squeeze the blood out of the gullible peasants. There has always been welfare. Except it is welfare for the rich. There have always been handouts and free lunches - but only for the rich. There has always been a greedy class which wants something for nothing. They are called The Rich.
Who makes the "central planning" you rail against? The Center. Who is the Center? Well, at last count, about 98 out of the 100 Senators in Congress were worth over 10 million dollars.
And you honestly believe, you poor little worm, that with all this power in their hands they are going to pass laws to benefit YOU? Oh my, I feel so sorry for you. Your school reports must have been a great disappointment to your mother. Never mind, there are nice places for people like you where you can keep warm and comfortable.
You said: "Keynes was a snake oil salesman dealing in the same potions guaranteed to make us all prosperous with no side effects. The lure of something for nothing has been irresistible."
Oh, yes, yes! Yes! Genghis Khan, Attila the Hun, King Henry the Eighth, Moutu Sese Seko, Imelda Marcos, George H.W. Bush and his daddy before him, and about 100,000 CEO's of American companies would agree with you wholeheartedly. Something for nothing is wonderful!
I am heartily sick of the rich and their paid shills telling me I should be content with the moldy crumbs they throw in my direction. They steal my taxes - about 50% of the fruits of my labor - out of my pocket with one hand, and redistribute the money among themselves with the other. And if I ask for some of it back, they call me greedy and lazy and not willing to do an honest day's work.
Say WHAT?
Since Ronald Reagan took office, the share of IRS tax receipts paid by US corporations has decreased from about 45% to about 8%. The rest is made up by you and me, Will, the lazy, greedy socialists.
You know how they caught Elliott Spitzer? His bank reported his sexpenditures to the IRS. But Kellogg, Brown and Root can move its "head office" to a file drawer in the Cayman Islands and pay no taxes on the $16 billion in no-bid Iraq contracts which we lazy socialist taxpayers have laid out, and for which our sons and daughters have died, in order to drive their stock price into the stratosphere and make Dick Cheney a very, very rich man.
Give me a break.
Mr. Bryan Morton, you may take your goddamn imperialist doctrine about us "lazy socialists" and put it where you find it most uncomfortable.
Here is Economics 101 as nobody will tell it to you, because all the academics and economists work for institutions who depend for their funding on gifts from corporations and the rich and the government which sucks at the tits of all of them:
Money is created when someone borrows it. You want to buy a car, the bank says, sure, go ahead and write a check and we will honor it. You write the check to the car dealer, and the next day he deposits it in the bank. The same money the bank loaned you yesterday comes right bank into the bank today as a deposit. Every penny the banks lend out is redeposited right back into the banks the next day. This is how "money" is manufactured -the banks lend it into existence.
What this means is that since 1970 when Nixon delinked the dollar from gold, which is a tangible thing, all the money created is purely imaginary, nonexistent, and an illusion. How much money? Keep reading....
People think money is wealth. No it isn't. A house is wealth. Food is wealth. Gold is wealth. Clothes are wealth. The stapler sitting on your desk is wealth. Anything physical and tangible which is of any use, even just for pleasure, is wealth. Money USED to be wealth when it was gold or silver or copper. No longer. Money today does not exist. It is only electrons and magnetic spots on a bank's computer server. Pure imagination.
Now this is where it gets devious. For the past 27 years, the corporations and the owning classes, the CEO's, VP's and other employers, have been paying the "lazy socialists" who work for them insufficient imaginary money to be able to buy the things those workers produce in the factories and service industries those workers work in. (This is how they get you to accept imaginary money for your real sweat and toil, you see - they let you exchange it for the stuff you make at work. I seem to remember a song about another day older and deeper in debt, I owe my soul to the Company Store...) Since 1989 and the collapse of Communism, things have gotten even worse. I just read that in China last year (2007) the number of dollar billionaires grew from 14 to over 100. In twelve months! Those are 100+ Chinese "communists" as they call themselves, with over $1,000 million dollars - not yuan - dollars - each! While Chinese "lazy socialist" workers who generate that wealth for the 100+ Chinese billionaires get $1 a day - if they are lucky.
You know how they pull that off? Since 1990 there is no more guaranteed work, free housing, free health care, free school, free everything in China. You have to work for it. But there is no work in the countryside. No more collective farms. But to be able to move to the city you need to be a resident of the city already, and to buy a residency permit for Beijing, for instance, costs $100,000. Yes, you read it right. I got that $100k number direct from the daughter of a Red Army General who grew up in Beijing and went to school with the children of Deng Xiao Ping - a child of privelige who now lives secretly in America. (Because if the Beijing givernment knew, she would lose her residency and have to shell out $100,000 to get it back. Being who they are, nobody questions her parents when they say she is away visiting her aunt.)
So Mr. Chong Wei wants to open a factory in Beijing or Shanghai making Nike sneakers. He bribes the city government to give him permits to import 300 workers from the countryside. But once there, those workers cannot leave and get another job. No, they can only work for Mr. Chong in the sneaker factory. For $1 a day. And if they leave and try to go back to their villages, he sends the police to seize them at the train or the bus station and drag them back to work. He tells the police the worker owes him for his uniform, his lodging, his whatever. Yes, we would call it slave labor. Mr Bryan Morton would call it free market capitalism.
(What Mr. Morton does not mention is that the real free market is between Mr. Chong Wei and the city government and has to do with bribes for cheap residency permits. More welfare and socialism for billionaire capitalists.)
Nobody forced the peasant to take the job, it is true. What forced him was the sound of his children crying in the night from hunger. Such a lazy, greedy man, that Chinese socialist peasant.
So workers, especially in America, have had to borrow in order to buy the goods of life, whether you call them necessities or luxuries. Buyers and consumers have borrowed and borrowed, and the money has gone to the manufacturers and the employers, who have redeposited it into the banks. We the workers have ended up with all the debts, and the rich employing classes have ended up with all the deposits.
Now, comes a time when the working and producing classes cannot borrow any more. We are maxed out. No way to borrow any more. No way. Only one thing to do - stop buying stuff.
So now what happens? Well, when we stop buying stuff the capitalists will see that they can't sell their goods, so they will lay off workers. This will reduce the buying power of the working consumers, and cause even less sales. So they will lay off more workers. Thereby reducing buying power, so they lay off more. And down and down into a spiral until the factory or service business closes its doors.
This is how you define a depression. And it is coming soon to a town near you. The handouts from Bush and the Congress, and the lowering of interest rates, are a vain attempt to cure the sickness of the last 27 years with more of the same. They are hoping that by making it easier for the borrowing classes to borrow more, and to keep buying, the party can be kept going through November 4, 2008.
These handouts are NOT because Bush has suddenly found compassion for the poor. What a droll concept! No, it is because he and his rich friends are afraid for their own fortunes if we poor schmucks stop borrowing and spending.
But a few hundred billion is a drop in the ocean. Will, do you know the sum total of all the credit default swaps, and futures contracts, and options, and interest rate collars, and straddles, and forex hedges, and collateralized debt obligations, and subprime discounted bonds, and all the other funny derivative contracts out there in the world?
500 Trillion.
And JP Morgan Chase is holding about $70 trillion of that, and Citibank is holding about $40 trillion. Trillion. Not billion. Trillion.
The entire US GDP for one year is "only" about 12 trillion. The current obligations of the US Government, not counting the future obligations to Social Security, etc., is about $9 trillion. Counting future SS and Medicare and Medicaid obligations, it is about $55 trillion.
And a couple of hundred billion is supposed to make a difference? Har-de-har-de-har!!! (No that is not Santa Calus arriving early. It is me having a choking fit. Excuse me while I catch my breath.)
So if nobody is buying because nobody has a job, where does this threatened inflation come from? Well, it comes from all that money, all those trillions, that was created over all those years, which is now in the hands of the rich, who are beginning to see that there is not enough stuff to go around, so they are speculating with all that money in wheat, and oil, and soybeans, and water, and orange juice, and milk, and any tangible thing which they know the masses will absolutely need to survive. These things will always be in demand, no matter how poor people are, so why not bid up the prices and squeeze the lazy socialist peasant morons some more?
Will, do you know who Jackson Pollock was? He was the painter who sloshed paint aganst a sheet of canvas, then walked on it, rolled around on it, threw a few leftovers from the dinner table on it, peed on it, then cut it into six pieces and called them "paintings." You can Google him for samples of his "work."
Last year a Jackson Pollock "painting" sold at auction for $140 million. No, not a typo - one hundred and forty million dollars. I tell you this to make a point: The rich have too much money, so much that they do not know what to do with it. That sum was more than the GDP of some small nations.
How about foregoing the "painting" and helping several thousand families in Africa avoid dying of starvation? But no, if one can say anything about the rich classes who rail against us lazy, greedy socialists who pay 90% of the taxes in this country, it is that THEIR greed is insatiable, enormous, and as boundless as the Universe.
Not to worry. The Good Book says everything we need to know. It says, "Be of good cheer, for God is not mocked."
Amen. When we working people, the geese who laid the golden eggs for the capitalists, and who have been slowly being slaughtered for decades now, are eating leaves and grass, the rich will also be bemoaning the consequences of their greed. Their businesses will go bankrupt, their factories will close, their stocks will be worthless, their houses will be worthless, and their worthless bloody spoiled-rotten children will be doubly worthless. I hope their worthless children will take the $10,000 shotgun out of the gun cabinet and blow their worthless parents' worthless heads off because there is no gas for their Porsche they got as their last birthday present.
Add to that overpopulation in the world, and climate change which means less food and rising sea levels, and the end of petroleum to keep it all going, and droughts, floods, hurricanes, forest fires, and what do you get? You get what happened for one year only, so far, in 1995, the year of Hurricane Katrina. The Atlantic Ocean was so warm in 2005 that no rain fell in the Amazon rainforest, and the Brazilian government had to fly water in planes to remote villages in the Amazon because the natives would have died of thirst otherwise. The mouth of the Amazon, normally 150 miles wide, was only 15 miles wide. On either side was 60 miles of new grassland which used to be the bed of the greatest river on Earth.
That happened from one year to the next. If the warm ocean becomes permanent, goodbye Amazon rainforest. Not in a century. No, it could happen in two or three years. Just as the Greenland ice cap could suddenly melt in two or three years. And 17 million people in Florida will be holed up in football stadiums and in Cinderella's Castle. What a television extravaganza! Millions to be made in advertising, not to mention the residual copyrights on the film footage. No doubt when it happens, Condi Rice will go shopping, Dick Cheney will go golfing, and George Bush will be incommunicado - falling-down drunk and passed out cold at his ranch in Crawford.
Anyone got a canoe?
Human beings are perhaps the smartest and also the most astonishingly stupid species to ever inhabit the Earth. Perhaps only locusts are dumber.
Yours sincerely,
Lemuel Gulliver.
Hello again Will,
ReplyDeleteWhat did I tell you? Chrysler has just announced a 2-week closure in July to conserve money, (I would bet it will come a lot sooner and might last a lot longer than 2 weeks) and Carlyle Capital Corporation has defaulted on $16.6 billion in obligations and gone into bankruptcy. Carlyle Capital was formed in 2006 as a subsidiary of The Carlyle Group, which was itself formed in 1987.
The significance of the bankruptcy of Carlyle Capital is that the parent company's shareholders are among the most powerful people in the world: John Major, James Baker III, Madeleine Allbright, George H.W. Bush, George W. Bush, and a roster of bank presidents, ambassadors, heads of state, finance ministers, and chairmen of some of the world's biggest corporations. You can see some of them on Wikipedia:
http://en.wikipedia.org/wiki/Carlyle_Group
Others rumored to be shareholders are the Bin Laden family and the Emirs of Kuwait and Abu Dhabi.
If these people are losing their shirts (which will happen - the collapse of the subsidiary will NOT have a beneficial effect on the parent company) then what I said above is coming to pass. Unbridled, cold, vicious, and outrageous greed has killed the goose that laid the golden eggs.
Doesn't this cheer you up? These caricatures of human beings are evil vermin - Madeleine Allbright could say the deaths of half a million Iraqi children because of the Clinton sanctions were "worth it" (which Hillary did *nothing* to prevent - so much for her famous compassion and womanly tenderness and all the BS she wrote in her book It Takes a Village to Raise a Child - no, Hillary, you heartless fraud, it takes food and clean water and the absence of cluster bombs which you voted for in the Senate in September 2006) and all of them are utterly devoid of normal human sympathy for suffering humanity. Good! Hallelujah! Thank you Lord! May their suffering in the coming economic collpase be long, profound and deeply painful to them. THEN they will finally understand to some little degree how the rest of humanity feels, and that will be a wonderful outcome for them.
Be of good cheer, Will, God is not mocked. His millstones of justice grind slowly, but they grind exceedingly fine.
Kind wishes to you, and sincere prayers for your wife's and your family's good health.
As always,
Lemuel Gulliver.
What a great discussion you all have going here. I had a couple of thoughts while reading all of this. The first thing I was reminded of is something I learned recently, that back in the 1700's just before the revolutionary war the economy in the colonies was going great. Within one year inflation went up 90% and their currency was worth hardly anything. Should something like that happen today what good would hoarding money in the bank/under your mattress do? Useless paper is all it would be. IMHO it's better to invest in things that will have value regardless of our economy, such as food, clothing, land, ammo, basic necessities.
ReplyDeleteAs far as debt goes, I'm not an expert but it seems to me there are different kinds of debt. With some types the lenders can take your possessions in exchange for what you owe (as in the case of having a mortgage or auto loan). Other kinds can simply send you to collections, haul you into court, write threatening letters. I'm not so concerned about those. But most definitely focus on paying off that debt that could cause you to lose something of value and something that you could need.