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Why This Market Needs To Crash

And likely will
Friday, March 24, 2017, 10:12 PM

Like an old vinyl record with a well-worn groove, the needle skipping merrily back to the same track over and over again, we repeat: Today's markets are dangerously overpriced.

Being market fundamentalists who don’t believe it’s possible to simply print prosperity out of thin air, we’ve been deeply skeptical of the financial markets ever since the central banks began their highly interventionist policies. Since 2009, they have unleashed over $12 Trillion in new money into the world, concentrating wealth into the hands of an elite few, while blowing asset price bubbles everywhere in the process (see our recent report The Mother Of All Financial Bubbles).

Our consistent view is that price bubbles always burst. Which is why we predict the world’s financial markets will implode spectacularly from today's heights -- destroying jobs, dreams, hopes, economies and political careers alike.

When this happens, it will frighten the central bankers enough (or merely embarrass them enough, being the egotists that they are) that they will respond with even more aggressive money printing -- and that will then cause the entire money system to blow up.  Ka-Poom!  First inwards in a compressed ball of deflation, then exploding outwards in a final hyperinflationary fireball (see our recent report When This All Blows Up...).

It really cannot end any other way.  Money is not wealth; it is merely a claim on wealth.  Debt is a claim on future money.  The only way to have faith in our current monetary policies is if one believes that we can always grow our debts at roughly twice the rate of GDP -- forever.   That is, compound the claims at twice the rate of income year after year from here on out.

This would be like having your credit card balance rolled over every month as the balance grows at 10% each year, while your income advances at only 5% per year.  Eventually you simply have a math problem: your income becomes swamped by your debt service payment.  First you are insolvent, then bankruptcy eventually follows.

At the national level, the US is already insolvent, meaning liabilities exceed assets.  The US has been spending far above our means for decades and decades, amassing a tremendous amount of public and private debt (as well as entitlement promises) along the way. And, yes, even nations can go bankrupt.

But bankruptcy is a legal process, and it’s not possible for an entire economy to enter a legal process, so what do we mean when by talking of a looming bankruptcy? Simply put, all those the claims represented by all the debt and excess printed currency have to be destroyed, or reduced, to bring things back into balance. 

The Austrian economist Ludwig von Mises said it best: “There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”

Sadly, there’s been absolutely no demonstrated willingness on behalf of our national leadership for  “voluntary abandonment of further credit expansion”. In fact, it’s been the exact opposite.  With the Federal Reserve leading the way, the ‘plan’ has been the voluntary, increasingly desperate, attempt to expand credit even more aggressively than before.

To understand just how dangerous this has become, we need look no further than this chart:

ious

Our current debts and other national liabilities now total more than 1,000%(!) of the nation's annual income, a.k.a GDP.

US economic growth began slowing due to its accelerating ‘too much debt’ problem back around 2000. Instead of allowing natural market forces to clear out the excessive debts, the Federal Reserve chose to go into overdrive to ‘remedy’ the problem. It's remedy? Drive interest rates to 0% to reduce the service burden of those debts, and print trillions of fresh dollars that in turn can fund new borrowing.

Of course, no true ‘solution’ for having too much debt involves piling up even more of it.  That's like treating cancer with more cancer.  Or alcoholism with more alcohol. But such has been the twisted logic of our central bankers.

The only path that history has shown works involves fiscal austerity and reducing debt.  Or, as von Mises put it, "a voluntary abandonment of the credit expansion".  But, that requires real political courage and a willingness from society to endure actual ‘pain’ in the form of living below its means to make up for the prior periods of living too lavishly. Don't expect that to happen anytime soon? Nether do we... 

Returning to the chart above, it’s sufficient to know that no country, ever, in all of history, has ever dug out from such a mountain of excess claims.  Never.  Not once.

The only possible way we're avoiding crisis is if the economy suddenly returns to extremely rapid economic growth for an extremely long time.  And that’s if AND ONLY IF during such a period of rapid growth, we use that windfall to pay down the debts and other associated IOU’s -- rather than as an excuse to once again look the other way because, hey, everything's awesome now!

At any rate, what we can divine from all of this is that there’s been zero effort towards ‘voluntary abandonment’ of the credit cycle. And there's been every effort made towards extending it farther. We're simply climbing ever higher up an extension ladder from which we will someday fall.  We passed the ‘moderately painful’ height a long time ago; now we're up at the ‘quite possibly lethal’ altitude.

But make no mistake, pushing us further up this credit ladder is exactly what 0% interest rates were meant to do.  The openly-stated intent of the central banks in treading into the never-before-tried ZIRP and NIRP waters was to spark more borrowing (and spending). 

The fact that savers and pension plans have been utterly decimated by these low (even negative rates in some parts of the world) is not even a passing concern to the Federal Reserve.  Their only goal has been to get credit expanding again as fast as possible.  Ditto for the European Central Bank, The Bank of England, and the Bank of Japan, as well as The People’s Bank of China.

All of them have the same plan: Expand!

But this ‘plan’ does not pencil out.  It fails basic math both here in the short term, as evidenced by more than a decade of sub-par GDP growth, but especially later over the long term. Why?  Because there’s no such thing as perpetual exponential expansion of anything. Even the universe itself is expected to one day stop expanding and eventually implode in a "big crunch".

Regrettably, though, that’s the ‘plan’ of every major central bank around the world right now.

Because it's mathematically guaranteed to fail, our only job as private individuals is to understand the situation accurately and to then take actions that are in alignment with the reality of living within such a broken system.  If we can’t stop the lunatics, at least we can foresee the consequences of their actions and begin to unhitch ourselves as best as possible from their nutty trajectory.

Just how reality-detached are these bankers?

As Adam Taggart recently wrote:

Janet Yellen just poured more gasoline on the anti-bank fire smoldering in my heart...

Speaking today at the 10th Biennial Federal Reserve System Community Development Research Conference in Washington, D.C, she delivered a short speech titled "Strong Foundations: The Economic Futures of Kids and Communities". In it, she focuses on the difficulties of growing up poor and is clearly trying to present herself as an advocate for raising families out of poverty.

Really, Janet? Really???

What about the record-low interest rates you've presided over?

The ones that have destroyed all incentive to save?

The ones that have starved American households of savings income, especially for those on a fixed income?

The ones that have created asset bubbles everywhere, making it nearly impossible for young families to buy a house and sending the cost of rent and other living expenses skyrocketing?

The ones that have made it tremendously cheap for companies to borrow and invest in automation, gutting future demand for unskilled/low-skilled workers?

The ones that have led to the greatest wealth disparity in our country's history?

This is a classic example of the shameless pathological hypocrisy/evil of those running our monetary and financial systems. It's akin to a bloody-handed serial killer lecturing to his dying victims "You know, someone should really do something about the murder rate in this town")

Janet has a strong tradition of “blaming the victim” which she did a few years ago by lecturing poor and working class Americans that their own lack of advancement had nothing to do with Federal Reserve policies that literally hand money to big banks and wealthy insiders. Instead, she saw the root causes as shoddy early childhood education, a lack of entrepreneurship, and not having had wealthy parents who passed down a reasonable inheritance.  I kid you not, she really said all that back in 2014. 

Maddening?  You bet.  But only if you're of the mind that Janet Yellen cares about connecting the consequences of her actions to real people and their increasingly poor outcomes.  Once you understand that Janet, et al., are psychologically unable to cross the chasm between their personal views of themselves and the consequences of their actions, it’s much less surprising. And much more sad and pathetic.

But also very human.  All throughout history, oppressors and genocidal maniacs have always deployed elaborate psychological defenses to protect their fragile egos from the sort of crushing destruction that would result from a clear-eyed view of themselves and their actions.  It’s hard to transition from one's self-inflated view of being a virtuous superhero to admitting you're actually the source of untold misery and heartbreak.

At Peak Prosperity, we hold out hope, dim though it may be, that the bankers and their bought-and-paid-for-politicians will be held accountable for the lives they are ruining, as well as the immoral and criminal acts they've committed in the process.  Without accountability, nothing ever changes. You only get a repeat of the same bad behavior that got you into trouble in the first place.

That right there, in a nutshell, describes the systemic abuse by the banking elite that began under Greenspan when he bailed out Wall Street in 1998 (during the LTCM debacle). This was followed closely by the repeal of Glass-Steagall under Clinton in 1999.  Since then, it has been an orgy of exploitation. And after a brief pause during the Great Recession (during which the banks paid themselves record bonuses while receiving taxpayer bailouts), it got worse than ever.

Conclusion (To Part 1)

All of the efforts to extend today's sky-high asset prices are drawing to a close. And the ending will be ugly. As prices correct, dazed investors will lose $trillions of market value, likely quite swiftly. 

But how was it ever supposed to end any differently?  The entire premise of what the Federal Reserve has been attempting to do is completely preposterous.  They have ignored (or just as alarming, have been ignorant of) the risks of everything from moral hazard, to historical precedent, to the role of incentives on human behavior, to common sense.

And just as happened in 2008, the accumulating instabilities within the system will reach a tipping point where they can no longer be suppressed. The deflation monster will escape from the box the central banks have been desperate to confine him within, and he will very quickly set about making up for lost time. A lot of wealth will get destroyed very quickly.

Strange as it may sound, it's our opinion that the sooner this happens, the better. Crash now while there’s still chance of picking up the pieces afterwards and making something useful from them. The longer we push off the inevitable correction, the more destructive it will be and the more difficult it will be to recover from.

Why risk taking the overdrafts to such extreme levels that the future is ruined for generations? Or ends in the sort of global warfare that can result from economically-wounded nations lashing out instead of holding themselves to proper account? 

The boomer generation in charge has a lot to answer for in this story; from their inability to lead boldly, to their selfish pushing-off of the repercussions of their own poor decisions onto future generations

More simply put: We not only need a market crash, but deserve one.  

So, with that somber realization in mind, what to do? Well, for individuals like yourself, our strongest advice is to position yourself for crisis before crisis arrives.

In Part 2: Positioning Yourself For The Crash we detail out the steps a prudent individual should seriously consider taking now, while things are still relatively tranquil.

You want to make sure the bulk of your investment capital is positioned for safety, and you want to make your lifestyle as resilient as possible so that, no matter what jarring developments the future may bring, you and the ones you love are least impacted by them.

Click here to read the report (free executive summary, enrollment required for full access)

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42 Comments

LesPhelps's picture
LesPhelps
Status: Platinum Member (Offline)
Joined: Apr 30 2009
Posts: 698
Big Crunch or Big Rip?

Astronomy, astrophotography, cosmology and physics are interests of mine.  I try to keep up with these fields in my amateurish, slow witted fashion.

So, Big Crunch is where gravity is strong enough to slow the expansion of the universe down, eventually the expansion stops, contraction begins and ultimately the universe collapses into... something smaller.  

Actually, collapsing back to another big bang doesn't seem to fit with the whole higgs boson/ inflationary big bang theory, so I have no idea what it's supposed to collapse into.

Big Rip, results if gravity isn't strong enough to slow expansion of the universe down.  As the universe continues to expand, the  pull of gravity weakens until at some point, the universe rips apart.

Years ago, there was no consensus on which of these outcomes was more likely.  From what I've heard more recently, the thinking is that the Big Rip is going to win.  Some time ago, it was determined that the expansion of the universe is accelerating.  The further away we look, the faster things are moving away from us.  Current theory holds that dark energy, which, in theory, makes up 70% of the universe, is repulsive and more prevalent than gravity, causing the acceleration in universe expansion.

If anyone is still hearing Big Crunch, I'd appreciate a link to the source.

Another relatively recent revelation that I found interesting is the Milky Way.  When I was growing up, I was consistently taught that the Milky Way was a spiral galaxy, like Andromeda.  Sometime around 2005 astronomers came to believe that the Milky Way is in fact a Barred Spiral.  I ran across this rarely disseminated change in thinking in a lecture about three years ago. 

I know the talk was about market crash, but cosmology rarely gets brought up in any conversation, so some of us get excited when it does.

aggrivated's picture
aggrivated
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Posts: 513
Banks and bouncers

"This is a real nice place you have here." We've all heard that line in every decent gangster movie. I'll get back to that later in this post. For now, I must say that I am not an economic guru. That maybe to my benefit in this case.

I predict that the banks will do everything possible to extend and pretend. To have the market reset would kill the whole system. In past resets there has been enough net energy. (high EROEI) to back the dollar with real potential for regrowth. In that scenario resets make sense.

With all the extreme measures the central bankers are taking now, it looks like they know that there will be NO recovery if we admit we are in a recession/depression due to declining net energy flows. Its do or die.

Historically the dollar moved from partial gold backing in the 1970's to oil backing. As long as oil is priced and traded with dollars then everyone loved the dollar. And if your love for it wavered then my Uncle Sam and his enforcers moved in to show the world what happens to those who forgot who was in charge. Just ask the Serbians, or the Iraqis, or Mr Gaddafi.

So where I think we are now is that the dollar is in reality greatly weakened because its backing, net oil energy, is declining. As a result, the enforcing side of keeping the dollar in use is more important than before. Its all that's left. Not strength of the underlying value, but intimidation and manipulation are the main tools to keep the dollar in world trade. Keeping the stock values inflated with easy money is like painting a house eaten up with termites. It's just empty show. At some point the military bluster of our famous uncle will also meet its Waterloo. I think in the end we have to go there to end this charade.

That's my non expert high altitude view of what is ahead.

rob@2disc.com's picture
[email protected]
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Great Economist Rebuttal to Address

I’d like to see a refutation of the argument below, which counters the view in this and many similar articles. I had the opportunity to question one of the most successful economist in the world as measured by tens of millions of dollars in text books sales, Campbell Macconnell, and he said, yes, the following is feasible:

"One question that has long perplexed me is about the macro-economic impact of money printing in its various forms. In very short, much depends on whether money printing can countervail debt defaults and zombies, such that the main impact is lower productivity and growth (like Japan), and not the long delayed financial armageddon. Non-performing loans, loans written off and marked to market, bankruptcies, and the like, eliminate money, but that money can be replaced by QE and other forms of money printing. So too can the velocity of money be compensated for in this way (via Freidman’s PT = MV). So, with moral hazard and cheap money, weak businesses ventures happen, yet those ventures employ people and move the economy, just inefficiently. But the efficiencies of technology are so huge in other areas, that, all told, the decline in productivity and GDP could be small, perhaps still positive. Yes, panic could undermine this long scenario, but panic gets simmered down sufficiently by central bank printing, in part because enough big investors/institutions understand the very logic I explain here. This synopsis might explain why the years of financial doom predictions (as opposed to ~20% down in markets) have not materialized since 2008, and may not materialize for a long time, if ever. Instead, it’s more like Japan—25 more years of tepid economy, but no thundering crash.”

 

Accordingly, debt could go up 10x from now at near zero central bank rates, and Chris's scenario not happen. 

 

Hope to hear a careful refutation. 

 

~Rob Laporte

cmartenson's picture
cmartenson
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An aside - link to today's conference event

I'll be speaking at a conference today  (Saturday 3/25) in Lancaster, PA. The speakers include James Howard Kunstler, Dmitry Orlov, John Michael Greer, Frank Morris and myself.

One person has termed it the doomer-realist Superbowl. I dunno about that, but I am excited to be on this particular panel with these particular individuals.

If you cannot make it, The event will be livestreamed on YouTube:https://www.youtube.com/channel/UClMxXslVnU9pM44AQuxhc7g

 

 

On to the Superbowl!

:)

charleshughsmith's picture
charleshughsmith
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not a rebuttal, just a comment

You pose an excellent question, and it's one that (in some variation or another) has been on many minds--especially those who have studied Japan, which is the poster child for the slow deflation, slow growth scenario the quote outlined. So this is not a rebuttal, just a comment.

I have visited Japan a number of times, have many Japanese friends, and am somewhat familiar with the peculiarities of its economy, which is a mix of state -corporate capitalism and small-business Main Street capitalism, with some practices that qualify as corruption in the US but which are "just doing business" in Japan.

A friend just returned from a visit to Japan, specifically Tokyo. He reports that the prices for food, hotel rooms, etc. are the same or lower than in the 1980s. A Western or Japanese breakfast is 480 yen or 500 yen (roughly $5),  This is a 'real" breakfast, not an egg McMuffin. Where can you buy breakfast in the US for $5? His nice hotel room with a washer, microwave, etc. was $85. In the US, it's difficult to find a crummy motel room for less than $100--and this is metro Tokyo.

The point here is prices for essentials must remain low or decline for the 'slow growth' scenario to work. If prices for essentials are jumping by leaps and bounds as in the US, the stagnant-income households eventually become impoverished, insolvent and politically restive.

The slow-growth stagnation scenario is very oppressive on young generations, who have little to hope for other than part-time poverty or crushing workloads to reach the top pay scales. So they give up on marriage, having kids, fostering relationships and even having sex (lots of articles on this manifestation in Japan).  So over time, the stagnant society is hollowed out by this erosion of hope and upward mobility.

The other factor is cheap energy. Other than the spike in 2008 or so, oil has been historically low in cost, and natural gas, which Japan now buys in bulk, has fallen from over $10/unit to $3/unit, due to the fracking "miracle." Should cheap energy go away, Japan's economy will have to become more efficient by the same factor as energy increases to maintain the status quo. Japan's economy is very rigid and brittle, in ways that would take pages to describe, and these inefficiencies cannot be "reformed" without disrupting the entire status quo.

Then there's income inequality and the flatness of the distribution of wealth and income. Japan has a relatively flat income distribution. CEOs don't earn 1000 times their employees' salaries. There are a handful of families that control enormous wealth (akin to the industrial giants of America's past), but these have been around since the war (1945) or in some cases even before. These are part of the landscape and not a disruptive force, given the relatively even distribution of income, though they do depress innovation and evolution by enforcing the status quo to their own benefit.

This suppression of adaptation and disruptive innovation hollows out the economy, the educational system, and so on. The building blocks of creating real wealth all corrode. I recently wrote on the decline of higher education in Japan, which is still optimized to 1955 and thus increasingly out of touch and unproductive.

One final factor is the mindset and values of the leadership generation. The Boomer and even Gen X leadership of Japan have maintained the same perverse incentives and rigidities as their seniors. Eventually this sclerotic leadership dies off or retires and a generation takes power with different values and ideas.

These are a few of the problems with the permanent-slow-growth-stagnation scenario. That said, Japan has definitively proven that with cheap energy, deflating prices for essentials and a fairly flat distribution of income, stagnation can endure for decades.

aggrivated's picture
aggrivated
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Charles, a question

Where does the medical 'industry' fit in the Japanese economy? It looks like the US could get a lot more mileage out of our struggling economy if the efficiency of our medical delivery were to be improved. 10% improvement in 18% of our GDP should have a positive effect on 0.9% growth. How does Japan do in this sector?

cmartenson's picture
cmartenson
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As long as nothing changes...
[email protected] wrote:

"One question that has long perplexed me is about the macro-economic impact of money printing in its various forms. In very short, much depends on whether money printing can countervail debt defaults and zombies, such that the main impact is lower productivity and growth (like Japan), and not the long delayed financial armageddon. Non-performing loans, loans written off and marked to market, bankruptcies, and the like, eliminate money, but that money can be replaced by QE and other forms of money printing. So too can the velocity of money be compensated for in this way (via Freidman’s PT = MV). So, with moral hazard and cheap money, weak businesses ventures happen, yet those ventures employ people and move the economy, just inefficiently. But the efficiencies of technology are so huge in other areas, that, all told, the decline in productivity and GDP could be small, perhaps still positive. Yes, panic could undermine this long scenario, but panic gets simmered down sufficiently by central bank printing, in part because enough big investors/institutions understand the very logic I explain here. This synopsis might explain why the years of financial doom predictions (as opposed to ~20% down in markets) have not materialized since 2008, and may not materialize for a long time, if ever. Instead, it’s more like Japan—25 more years of tepid economy, but no thundering crash.”

 

Accordingly, debt could go up 10x from now at near zero central bank rates, and Chris's scenario not happen. 

 

 

His argument, as best I can tell, rests upon the concept of Ceteris Paribus, or "all things remaining equal (or the same)."

 

As in, "while the prior two reflationary bubbles both burst with devastating effect, this one might not, because prior increases in productivity might or might not have been the saving factor and so, ceteris paribus, this time it might do the same."

 

As Charles points out above, the 'not equal' parts of this story include a lot of shifting pieces including, but not limited to, future rising energy prices, demographics, and stagnant to falling productivity.

 

For example, the only major new productivity factor on the horizon is the robot.  In fact it's here, displacing workers and lowering input wages.  Lest we forget, the consumer is the reason the economy exists in the first pace, and so a consumer saddled with steadily rising debts and less income is anything but a great spot to rest a 'ceteris paribus' assumption upon.

 

I realize that most people make great careers out of saying that everything will more or less remain the same, and even sell millions of economics textbooks, but that's why we exist here...we happen to think that assuming the past = the future is a very bad assumption to hold at this stage of history.

 

 

dryam2000's picture
dryam2000
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comparing U.S. to Japan?

Comparing the U.S. to Japan doesn't make any sense to me whatsoever.  One has the world's reserve currency (at least for now), one does not.  One has been running massive trade deficits over the past 30 years, one has not.  The cultures are vastly different.  Appealing to the so-called authority of an economist regardless of the reason is a fallacious argument.  Having this appeal based off of the volume of textbooks someone has authored on a topic such as economics, which is a pseudoscience at best, is an exceptionally fallacious argument.  People need to look at the hard data and come to their own conclusions.  

Chris, I really enjoy how you always bring hard data & reality to the table when discussing topics related to the 3E's.  If people want to selectively ignore hard & difficult to manipulate data at their own peril, so be it.  No man can save the world, and each person has to ultimately be responsible for their own behavior.  Theoretical arguments are good and great, but hard data tend to tell the real story no matter what topic you are talking about.

TPTB know eventually the day will come when they can't control the markets any further.  I'm sure a few of them took algebra in 8th or 9th grade. I love the graphs going back 6-7 years showing the projected GDP at the start of every year compared to what the actual GDP's for turn out being.  The initial GDP estimates have been wildly overestimated.  After 7 straight years of this, including this year & projecting forward, does anyone really think they have simply been mistaken, or that they have been purposely over projecting to achieve an ulterior motive?  When I've screwed something up once I usually try to figure out why & try to prevent it going forward.  7 times?  Really??  When oil is discussed these days it seems like just about all that's discussed by the MSM is oil production & oil supplies?  How often does one here about the clear declining levels of oil consumption in the U.S. and worldwide?  If one could only look at one metric of the economy of the U.S./world, total oil consumption would be the one I would look at.  

Brandon Smith at alt-market.com writes some good stuff.  His new article talks about TPTB waiting for the proper time to finally withdraw their artificial support of the markets so the blame can be displaced away from the entities most responsible for the crash.  The most likely candidates to project the blame to are the usual suspects:  Trump, those who voted for Trump and other populist voters around the world, Russia, N. Korea, the middle east, etc.

 

 

charleshughsmith's picture
charleshughsmith
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Posts: 614
a mixed bag

The chart here shows that Japan spends about half of what the US spends per capita (per person):

http://www.zerohedge.com/news/2017-03-23/americas-1-again-healthcare-costs-around-world
America's #1 Again (In Healthcare Costs Around The World)
 
Japan's system is quite different in many ways. Foreign born doctors are essentially barred from treating Japanese citizens, for example. Patients are hospitalized for trivial reasons so the hospitals can bill the system. People spend weeks in the hospital for conditions such as exhaustion. People are given injections of vitamins etc. for common colds.
 
The families are often expected to provide extra food/services to the patients. Some doctors expect cash payments for extra attention. This is not a "bribe" just "the way things work here."
 
The system is a mix of government insurance and private insurance. The wealthy get better medical care, just as they do elsewhere.
 
That said, the technology is good and some Japanese hospitals are seeking to sell their services to foreigners -- to capitalize on the "medical tourism" industry that is benefiting Thailand, India, etc.
 
Given that Japan's populace is aging, healthcare costs will rise in Japan, but given they spend less than half of what we spend per person, they have a lot more slack in the system. As a generalization, Japan is quite interested in applying robotics to the care of the elderly, as a way of lowering costs and of avoiding labor shortages.
 
aggrivated's picture
aggrivated
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Cost of medical care

Granted that medical care contributes to GDP, if the same level of care could be done at half the cost then the remainder could be applied to other areas of needed maintenance in the USA. If the growth of the economy is not to be expected then leaning out fat areas of the present mix of this economy it seems would only increase the benefits of the energy we have available to burn. Like most areas of business in our economy that receive some protection or direction from our law great inefficiency exists in many parts of our economy. To eliminate these would raise the standard of living.

derelict's picture
derelict
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Posts: 11
Japan

--"Comparing the U.S. to Japan doesn't make any sense to me whatsoever. "

Japan is worth looking at precisely because it is going where no one has gone before. You point out there are some differences between USA and Japan, and of course this is so. The position of the USD as reserve currency and the Fed being able to draw support from the world's central banks could easily allow the US to exceed what seem shocking metrics in Japan. 

So BoJ has 75% GDP on its balance sheet. This would equate to the Fed having $15.5 T. USA is nowhere close. Same with the total debt numbers. 

And so again we come back to why kapoom now, what is the trigger, or are these warnings the proverbial broken clock.

 

pat the rat's picture
pat the rat
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Posts: 95
malls
Dead malls video on you tube tells the story of the economy, some are abandon others are ghost towns. These malls reflect the economy of the past, they also reflect the economy of the today?  
dryam2000's picture
dryam2000
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Posts: 271
About comparing apples to oranges

derelict,

"Japan is worth looking at precisely because it is going where no one has gone before. You point out there are some differences between USA and Japan, and of course this is so."

Apples are quite different than oranges or bananas.  Inert gases are quite different than combustible gases. Sometimes linear equations can somewhat approximate exponential equations in a very limited fashion over a very limited amount of time, but otherwise these types of equations are two completely different beasts.

I stand by my assertion that any real-world comparison between the U.S. and Japan is just ridiculous.  Sure, they share the concept of the printing press & the concept that debts do not matter.  This leads to what I see as the most concerning comparison between the two countries.  Taking variables to infinity helps one see where an equation will go over time.  If the central banks continue on the current trajectory, most of world's wealth will be transferred to to the central banks and the concept of money will go away.  This leads to most citizens owning (or not owning) the same amount of wealth.  Thus, society becomes very socialistic and a vast amount of freedoms are taken away from the citizenry.  Property rights are fundamental to freedom.

Markets can never be timed (with the notable exception of JP Morgan who has had a whopping 2 days where they lost money via trading over the past 4 years....FOUR years!!  Who wants to show us how many zeros that is after a 1 in front in terms of statistical probability?, and the other megabanks who have inside knowledge).  I can not speak for PP, but my distinct sense is that the discussions are dominated by the desire to preserve financial wealth, not enhance it.  If you are into gaming the financial markets, I suggest PP is probably not the best website to visit.  PP talks much more about putting one's wealth towards the most tangible items in life.  I have always maintained people should have extremely diversified portfolios with more weighting towards more tangible assets.  Governments/TPTB have always shown they will pursue extreme measures to maintain power & control.  In other words, all bets are off when it comes to the level of evil humans are capable of when it comes to maintaining power.  This why all outcomes should be considered.

"And so again we come back to why kapoom now, what is the trigger, or are these warnings the proverbial broken clock."

Seismologists report when they detect rumblings in the earth, or other evidence of increased of tectonic stress.  PP reports hard data regarding stress related to the Economy, Energy, and the Environment.  The arguments are largely based on undisputable facts associated with difficult to manipulate data.  If people want to disregard the hard data of the world, then that's their prerogative.  PP is probably not going to help much in regards to predicting the human (political-financial) decisions by TPTB, but what PP is quite good at IMO is telling the story where the real world is and is going regardless of what empty words come out of the Feds mouths, ineffective financial policies as far as how they'll change the 3 E's, and shenanigans by TPTB.  

I'm curious to why you visit this website?  

 

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Are we an echo chamber?

Dryam just asked why derelict visits this site. What offense did derelict commit? Derelict asked a thoughtful question that challenges the basic assumption here at PP - that we're headed for a huge crash and soon. True, hard facts and reality show us our current life is unsustainable. But, I have, like derelict, wondered how long the central banks can keep propping us up while slowly pulling the air out the room. Derelict's premise that Japan is a good example of (to borrow Kunstler's term) perpetuating the long emergency is valid and worth discussing. It's not dramatic or sexy, but it is certainly possible that this thing could keep going on for a very long time.

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Re: Japan

Japan is a ward of the USA.  When the Petro $ fails then Japan will crash for sure and the Petro $ is on shaky ground now.

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No offense was committed

I was just curious.  It would better help me understand the question.Questioning is great.  We should all question more.  Do not accept anyone's narrative at face value, including anything read on this website.  Everyone needs to come to their own conclusions.

Some readers at PP have went through the entire Crash Course, while others have not.  Placing commentary in the context of the 3 E's is very different then without that context.  

Answering a question of when a crash might happen is all about likelihoods & percentages.  No one can definitively answer that question.  However, history tells us there are always crashes.  The financial shenanigans may last for a very long time.  Many people including myself believe this is a much less likely outcome.  I wouldn't expect the answer of when to come nicely packaged in any single article.

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Reminder

For anyone interested in Chris's forum discussion, it's on now (3pm ET)

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the broken clock

derelict-

"And so again we come back to why kapoom now, what is the trigger, or are these warnings the proverbial broken clock."

Sometimes things can be seen in advance, and sometimes they can't.  I think its worth exploring which one we might be dealing with here.

Archduke Franz Ferdinand shot -> World War 1 -> Effective End of the British Empire.

Outcome: Not predictable in advance.

200X Housing Bubble Pop.  When gardeners were buying $500,000 homes, the end was nigh.  There was literally nobody left to buy.   That's the top.

Outcome: Predictable in advance.

So are we in an Archduke Shot case, or a Housing Bubble pop case?

Perhaps some of both.  We could see an Archduke Shot event that nobody could predict.

On the other hand, there are specific events in the Eurozone that, if they come to pass, will most definitely bring about the Twilight of the Gods.

I would probably not say something like "we're going to crash soon".

I would say, if certain events occur, then we'll probably see a predictable correction (Housing Bubble) - and the unpredictable part (Archduke Shot) is the danger that a correction might become a lot more disorderly than we might imagine today due to lower liquidity, robot market-makers that all decide to pull their bids at the same time, etc.  The cascade from such an event could be really dramatic.  An unpredictable outcome from a predictable correction.

Rather than predicting crashes on timeframes, I'm looking for trigger events, while keeping in mind that somewhere, there may be an Archduke that is just about to be shot.

So to speak.

Let me add one more thing.  The EU will break up.  That's just the trend.  The currency will blow up creating all sorts of havoc.  Timeframe?  I'd say by 2018 - because of Ita-leave.  It could happen faster.  This is a Housing Bubble case.  Just watch the polls, the dates of the elections, and you have your timeline.

Japan didn't have breakup risk and/or political risk.  Europe for sure does, and capital will just go nuts once it happens.  ECB can buy all the EU debt it wants, but as BRExit proved, voters still matter.

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backwards

There is a expression the people have that are about to loose there medicare and housing help, it is called hustling backwards.

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The turning of the herd

We had quiet moment in the ED Friday night / early Saturday morning about 2:00 am and the staff was sitting about.  One nurse made a comment something about "those crazy doomsday preppers."  Stirring the pot, I chimed in and asked him how reliable he thought that a just-in-time food distribution system with only 3 day food reserves in the local stores was, and whether it really made sense to trust his life to its infallibility.  

He stopped.  You could see the wheels turning.

Surprisingly several co-workers popped out of the woodwork revealed themselves as preppers.

1.  Susan said "It is brittle.  The whole thing could go down just like that" snapping her fingers.  One or two nuclear blasts high in the atmosphere would take down the entire national grid.  She and her boyfriend had just gone to a seminar by a retired special forces soldier on how to stay alive when the electrical grid collapses.  She came home with a list.

2.  Rebecca admitted that the reason she moved out into the country to start a hobby farm and raise chickens is so that her family will have food in the event "things keep going the way they are headed."

3.  Jason believes we are well into "the end times."  He has a biblical mind set and stores food water and solar panels.  He preps, but not so much that he will become a target for thieves.

4.  Courtney's sister is Mormon and she increased her 1 years food stores to include not just for her own family but also for several relatives.

For the first time I can recall, the entire group stopped and really listened.  There was an Oh Sh*t What Have I Been Missing look on a couple of faces.  But there were enough of us that it no longer seemed to be just that crazy guy ....   It was in the open.

The herd had turned.

"I have a well.  If the electrical system stopped we wouldn't have water."  Others didn't know that the local hilltop water tanks that feed the city would only last 3 days and that an intact electrical grid was needed to refill them.  No electricity--> no tap water.   I showed her the 1,000 gallon poly tank we put in our side yard, the hand pump and told her about the rainwater collection project we are doing.  On the average, our area gets enough rainwater to sustain a household.

Myths were discussed.  "I have a gun and I'll just take what I need."  "No you won't, Josh.  You are a decent human being and a devout Christian.  You will not be murdering your neighbors to steal their food."  He looks down and knows I'm right.  "Being able to shoot someone may indeed be an essential skill, but it won't protect you from being shot.  You need to hunker down at home while the other people are out shooting each other.  Stored food and water let you shelter in place to ride out the initial weeks/month of chaos."

"Maybe I should get a generator?"  "For a short term crisis that is a great idea.  But if a crisis is prolonged gas won't be available.  The trucks will stop delivering gas and the electric pumps won't work.  And the noise of a running generator announces to everyone that a prepper lives here.  A few solar panels and inverter can run a few appliances, like a freezer and an electric drill, during the middle of sunny days.  Mostly though, we will all go Amish.

"Our house will be fine:  we have natural gas."  Uhhhh. How do you think the natural gas gets into the pipelines and stays pressurized?  Oh.

How will I wash my clothes?  How will I take a shower?

The prepper herd had enough mass that those who are not able to think outside the group consensus could consider the ideas.

 

 

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UrbanPlanner

UrbanPlanner,

My intent was not to be disparaging to the question of how long can the CB's keep printing & keep things propped up, nor did I disregard the question of comparing the U.S. to Japan.  I offered my opinion to why a comparison between the countries is fruitless....massive ongoing trade deficits by the U.S. since the 1980's, the USD being the reserve currency, distinctly different cultures, Japan being a large creditor nation at the start of their follies while the U.S. was already a massive debtor nation.  I'm all ears when it comes to counter commentary.  I'm just as much of an amateur financial hack as most others at this site.  However, a group's collective knowledge & IQ far exceeds any individual's.  Back & forth dialogue can be very productive.  I"m not sure I understand your echo chamber commentary.  The questions of how long the CB's can keep things propped up have been ongoing by pretty much all market participants since 2009.  It is the ubiquitous (and resounding echo chamber) question.  Any answer is going to be very complex & very incomplete.  Answers to when, how, & why things might crash are most likely going to be found within many pieces of the puzzle from innumerable sources.  

We are all in this together.

Peace

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Fed speeches this week

There are no less than 13 speeches by Fed officials this week.  Why all the financial babble?  I suspect there may be a coordinated effort to talk the markets in particular directions such as equities up, USD up, long bonds down, gold/silver down, and USD/JPY up.  Let's see how this week plays out.

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davefairtex
davefairtex wrote:

derelict-

"And so again we come back to why kapoom now, what is the trigger, or are these warnings the proverbial broken clock."

Sometimes things can be seen in advance, and sometimes they can't.  I think its worth exploring which one we might be dealing with here.

Archduke Franz Ferdinand shot -> World War 1 -> Effective End of the British Empire.

Outcome: Not predictable in advance.

Actually, the probability of a war between the European powers was predicted quite in advance of the actual conflict, as were the likely outcomes of it. However, the specific timing was not easily predictable. Many intellectuals as well as political or business leaders saw that the trends of imperialism and its inherent conflict, militarism, nationalism, the highly rigid military plans and alliances, arms races between the various powers, etc, meant that they were headed on a collision course and the results would not be pretty. I'll submit two such examples:

“…war between the great European industrial powers is nothing more than mutual suicide....there will be slaughter on a terrible scale....the shells will fall like thick iron rain...nothing will stand before them in their thousands....the spade will be the most indispensable weapon...it will be a war of massive entrenchments where only the vermin and dead will win....it will lead to the bankruptcy of nations and the breakup of the whole social organization”

 

-I.S. Bloch, Polish industrialist and banker, 1911 

 

 

“To pursue war as a form of resolution is to pursue folly for even a victorious warring power will suffer extraordinary economic, social, and financial loss on a scale unknown in human history” --Norman Angell, British author and member of Parliament, 1910.

 

 

None of this undermines your original point, DaveF. Like the intellectuals and people-with-brains-being-utilized in the early 1900s, we can all see the trends and where they are headed, as well as likely outcomes of all this. However what none of us can say for sure is which Archduke will be shot by which teenage idealist with lucky aim.

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dryam2000 wrote: There are no
dryam2000 wrote:

There are no less than 13 speeches by Fed officials this week.  Why all the financial babble?  I suspect there may be a coordinated effort to talk the markets in particular directions such as equities up, USD up, long bonds down, gold/silver down, and USD/JPY up.  Let's see how this week plays out.

I'd give the bolded about an 85% chance of being true by close of business on Friday.

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sand_puppy wrote: For the
sand_puppy wrote:

For the first time I can recall, the entire group stopped and really listened.  There was an Oh Sh*t What Have I Been Missing look on a couple of faces.  But there were enough of us that it no longer seemed to be just that crazy guy ....   It was in the open.

The herd had turned.

 

Now I am terrified. When a certain percentage of people come to realize the boiling pot of water we are all sitting in, it is usually far past the point where too many of our cells have already died. It also represents a key tipping point Chris and Adam have been saying is a key tipping point.

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The purpose of Fed speeches
dryam2000 wrote:

There are no less than 13 speeches by Fed officials this week.  Why all the financial babble?  I suspect there may be a coordinated effort to talk the markets in particular directions such as equities up, USD up, long bonds down, gold/silver down, and USD/JPY up.  Let's see how this week plays out.

The main purpose of the Fed, et al., if we can be frank among friends, is to prevent any ""market""
 sell-offs from happening, or if they do, stopping them dead in their tracks.

To wit, this morning the US equity ""markets"" opened down and immediately went the other way, 45 degree ramp up (literally), ruler straight with plenty of mini blasts along the way to make it clear which way is the "right" way.

These are not markets...these are ""markets"" tightly controlled of, by and for the rich.  Of course, that may not be the case, and this is all entirely coincidental, but I hate more than 300 coincidences in a row.

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survivor bias

snydeman-

Here's a thought.  Is it possible that we may be seeing survivor bias in those quotes you've identified?

Consider: with 20/20 hindsight, we can fish around among all the predictions made by everyone, everywhere, and select the people who predicted things that actually came true.  Boy were they smart.  Or maybe just lucky in that their correct predictions were remembered and selected.  How many incorrect predictions did these same people have?

https://en.wikipedia.org/wiki/Texas_sharpshooter_fallacy

My sense from my study of the period was, the prevailing sentiment was the war would be over in one season.  Nobody had any concept of 4 years of slogging trench warfare, mainly because it had never happened before.  This showed up all sorts of ways, especially in the tactics used.  It took years for that to sort itself out.  Would the British have changed course if they'd known it would mean the end of their Empire within 35 years time?  They went from "The Sun Never Sets" biggest creditor nation reserve currency to a broke little island in 35 years.  I do not think they saw that coming.

But I digress.  :)

So, we have essentially random precipitating events, and foreseeable events with possibly unpredictable outcomes.  That's my model.

"Who knew that Archduke would cause a global war?"  Random precipitating event.

"We can see that war might come - the stresses are there - but if it does, it will be over by Christmas."  Foreseeable event, but unpredictable outcome.  ("home by Christmas" vs 4 years of trench warfare that bankrupted the country.)

Market correction vs a 1987-like flash crash that ends up causing a derivatives "problem."

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As somebody totally bereft of

As somebody totally bereft of solutions I'd pathetically like to suggest we keep an eye out for what Henry Kissinger gets up to. I believe Henry may be road testing these esoteric life-extension techs and more importantly he's still connected into where the heavy action is. Wasn't he seen in China recently?

Alternatively, and on mature reflection, I am also available for stoning if that would help?

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Kissinger
Cornelius999 wrote:

As somebody totally bereft of solutions I'd pathetically like to suggest we keep an eye out for what Henry Kissinger gets up to. I believe Henry may be road testing these esoteric life-extension techs and more importantly he's still connected into where the heavy action is. Wasn't he seen in China recently?

Alternatively, and on mature reflection, I am also available for stoning if that would help?

 

Cornelius, please take a ticket and join the [rather lengthy] queue. That man is odiousness personified.

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Yes Locksmith, but " Where's

Yes Locksmith, but " Where's there muck there's brass".

Now to show my prowess as an historian I suggest that anyone checking " military history now/ ww1 will find that Fredreich Engles predicted a war that would last 3/4 yrs. 10 million dead, and topple european dynasties. So yes Dave, prediction is possible.

Lest Error Persist: I didn't want to stone Henry.  Merely that I might be suitable canditate ( in jest! )   I do of course realize there's a mob out to get him; I'd like him to have a trial first.

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davefairtex wrote:Here's a
davefairtex wrote:

Here's a thought.  Is it possible that we may be seeing survivor bias in those quotes you've identified?

Consider: with 20/20 hindsight, we can fish around among all the predictions made by everyone, everywhere, and select the people who predicted things that actually came true.  Boy were they smart.  Or maybe just lucky in that their correct predictions were remembered and selected.  How many incorrect predictions did these same people have?

https://en.wikipedia.org/wiki/Texas_sharpshooter_fallacy

 

Oh, most definitely. The situation, as I understand it, was that relatively few people were thinking clearly about the trends of their times and putting the pieces together in their minds, and it's far more clear now that we should have listened to the voices of warning then, but this serves to reinforce the point we are all making:

We, the tin-foil-hatters, are connecting the dots. We are relatively few, are largely ignored by the mainstream and most average people, and are countervailing voices railing against the generally accepted meme of our times. And when the shit hits the fan, in 20 years some historians will dredge up what we say and award us the same honors of hindsight. I expect a ribbon or trophy or something from those future generations for my sage wisdom and foresight. I have my doubts I'll get one.

davefairtex wrote:

My sense from my study of the period was, the prevailing sentiment was the war would be over in one season.  Nobody had any concept of 4 years of slogging trench warfare, mainly because it had never happened before.  This showed up all sorts of ways, especially in the tactics used.  It took years for that to sort itself out.  Would the British have changed course if they'd known it would mean the end of their Empire within 35 years time?  They went from "The Sun Never Sets" biggest creditor nation reserve currency to a broke little island in 35 years.  I do not think they saw that coming.

See, my mistake was teaching my Stopping Genocide course (focused today on the preconditions in Germany that led to Hitler's rise to power), while attempting to leverage one of the few areas of knowledge I can bring to bear here at PP. As such, I was less clear than I should have been...further evidence that splitting one's attention never results in good things on either end. So let me reiterate:

 

You are entirely correct. The prevailing opinion and common meme was that the war was not predictable, that it would end in glorious victory in short order, and that there was nothing that could have been done to prevent it. Hell, people cheered when the damned conflict broke out. Alas, stupidity and ignorance are a trait of our species when combined with civilization and large numbers, I fear. So I should amend my overall point to say that while the vast majority of nincompoops in any given European country did not see it coming, there was a fairly significant host of people who did. The tragedy of history is that no one listened to those voices of reason. I believe I can speak for many of us here at PP by saying "we can relate."

 

davefairtex wrote:

But I digress.  :)

I find that some of the best discussions and most salient gems of wisdom and knowledge I get here at PP stem from digressions!

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Parts of the blue collar herd are turning too

Some of the cops I work with (90% of whom have high school educations) are starting to wake up too.  There's a group of 5 of us who call ourselves "The Silver Bullion Gang" who have been investing in silver for three years together.  More and more people are dropping the ridicule and asking questions indicating dawning awareness.  They're not up to discussions about our monetary system, the Federal Reserve, etc, but they do sense the threat to their "guaranteed" city pensions and that they should start simplifying their lifestyles and saving for "a rainy day," if not yet a collapse of the economy and stock market.  They know they're being ripped off though they'd have trouble explaining how and by whom.  And being cops they're particularly attuned to the gathering nastiness and violence that appears to be on our near horizon and are preparing for what we joke about as "the zombie apocalypse."

One of these days we're going to reach a tipping point, and then watch out.

 

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Does Illinois have a leg up?

A family member of mine has a front row seat to the teachers pension crisis going on in Illinois. The math simply does not add up and she is awake enough to see the writing on the wall. Once you loose faith in your state government it isn't that hard to make the leap to the federal government... Illinois problems may be a 'blessing' of early awakening to the big predicament the US will soon face.

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Rules of the games will change.

During most of human history, Net energy to society has increased, thus fueling our development from nomadic to agrarian to industrial civilisation. Mankind's energy ascent. Economics as we know it today assumes that we are still in energy ascendancy. At some point in the future, we will start our energy descent and no amount of efficiency savings will disguise this fact. The economic theory of our energy descent will be very different from the economic theory of today.

We are starting to see this now. It will be a World where an increasing population will decrease national GDP rather than increase it and immigration becomes a problem. Where social mobility will stop and unrest increase. Where Nations compete for natural resources rather than cooperate. Where Nations fight to preserve their GDP by making others fail and migration from failed states increase.

The outcome is 'Winner takes All' taken to it's logical conclusion before the winner itself gets sucked down the energy descent whirlpool or maybe a failed nuclear state will decide that it is preferable to have no Winner.

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climber99 wrote:The outcome
climber99 wrote:

The outcome is 'Winner takes All' taken to it's logical conclusion before the winner itself gets sucked down the energy descent whirlpool or maybe a failed nuclear state will decide that it is preferable to have no Winner.

 

Are you trying to take my self-proclaimed crown of "most pessimistic on PP?" I clearly need to step up my game! ;P

 

Oh, and I agree. This is my greatest fear as well: a nuclear exchange. I suppose the silver lining of that scenario is we won't have to worry about survival then, because we'd all be dead either immediately or within a few months.

 

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For those trying to find this

For those trying to find this past weekend's discussion (3/25/17), they've replaced the video, here's the new link....

 

 

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Dryam - Thank you.

I meant no offense. I apologize if I provided offense. I, too, am not an expert, unless you're looking for someone to explain the fine nuance of a zoning code. I'm a terribly good technocrat but hopelessly bad at bureaucracy and politics, hence my self employed live or die on your own merits career. 

It's obvious to anyone paying even the slightest attention the train we're on is rapidly heading for the wall. And I don't think we have the time or the will to slow it down in anywhere near the way we need to to avoid total catastrophe. However, and here's the thing that lurks in the back of my head when I think about it, even though we aren't Japan, I do think there's an object lesson to be had. It isn't the specifics of who's a ward of the petro dollar or how the reserve currency plays into it. It's some other something constantly working to keep us afloat on our leaky raft. I just keep watching the plunge protection folks fly in at the 11th hour or the suppression of precious metals prices, or the increasingly hysterical propaganda, or a ton of other insidious plays by innumerable actors that make me think maybe this could be propped up for a very long time, maybe even long enough for us to do some good. Our dominant narrative keeps most of us completely deaf to increasingly loud warnings and blind to the obvious. In city planning we have a phrase to describe what we do, muddling through. I'm wondering at our creative ability to muddle through long past when the wheels should have come off. 

The other thing is an intense desire not to see us crash and burn. Personally, I'd very much like to believe my teenage son won't be living in some Pacific Northwest version of Kunstler's world made by hand. I'd like to believe his future won't suck. And, I'm a committed public servant. Whenever I think our only solution is to run off and live on homesteads and leave 90% or more of everybody to die of starvation, violence, pandemics or whatever, it galls me. We need to take our knowledge and passion and work to preserve more than just our own selfish interests and the privileged few. 

So when I talk about echo chambers, it's that. It's the PP narrative of the crash is coming, soon, and you'd better take care of you and yours while the unstated part of the message silently damns everybody else. That's not on you Dryam. That's me being a lot less practical and lot more bleeding heart than it's safe to be. And possibly a little optimistic, too. I very much apologize is I've offered cause for offense. 

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UrbanPlanner wrote:The other
UrbanPlanner wrote:

The other thing is an intense desire not to see us crash and burn. Personally, I'd very much like to believe my teenage son won't be living in some Pacific Northwest version of Kunstler's world made by hand. I'd like to believe his future won't suck. And, I'm a committed public servant. Whenever I think our only solution is to run off and live on homesteads and leave 90% or more of everybody to die of starvation, violence, pandemics or whatever, it galls me. We need to take our knowledge and passion and work to preserve more than just our own selfish interests and the privileged few. 

You aren't alone in this. None of us here with children (I have two beautiful young daughters) want to think about them living (and likely dying) in a world far less safe, secure, and prosperous as the one we are in now. Yet here we stand nonetheless, and I don't think many of us actually think this is going to end well, or even close to well, or even within 20,000 leagues near well. However, where I used to sit and let the fear of my kids' future freeze me, now I let my anger at the world they will inherit through no fault of their own push me onwards to prep as much as I can. Rum helps too, some days.

 

But know you aren't alone in this.

 

UrbanPlanner wrote:

So when I talk about echo chambers, it's that. It's the PP narrative of the crash is coming, soon, and you'd better take care of you and yours while the unstated part of the message silently damns everybody else. That's not on you Dryam. That's me being a lot less practical and lot more bleeding heart than it's safe to be. And possibly a little optimistic, too. I very much apologize is I've offered cause for offense. 

If you stick around long enough you'll hear how much Chris and Adam (and others) speak about how only community can save us, since the best protection isn't a gun, but rather a community of people around you who also have a vested interest in survival and who understand that we as a species have only ever survived collectively, as a group. Indeed, our brains developed out of a need to allow us ever increasing levels of sophisticated communities, not the other way around. We are a social animal, and few here on the site would advocate a dog-eat-dog rugged lone wolf approach to prepping. The tricky part, of course, is finding or establishing a community around you that shares the same goals. You'd be surprised what might result from systemic collapse though, and at the risk of losing my reputation as eternal pessimist here, while I have zero hope for civilization I have every hope that humanity can recover from even this (ssshh, don't tell anyone I said that). Hell, we've lived through some really touch shit on this rock, and in groups with the right tools we're almost as hard as cockroaches to dislodge.

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aggrivated
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Joined: Sep 22 2010
Posts: 513
3/25/17 round table discussion

Pertinent to some of the last few comments was John Michael Greer's insistence in the discussion that "we are already in decline." If you haven't heard it yet I think it is worth hearing some of the most aware minds around us discussing, "why are we in this handbasket and where are we going?"

To grasp how this plays out I imagine an amateur a Cappella choir. Each successive section of a piece is sung a little flatter than the one before. The harmony remains but each singer gets lower in their range. Then those who can't sing any lower start dropping out. The beauty diminishes as the pitch drops until by the end it is not a nice thing to hear.

We can look around at our society, at our neighbours and family. Is their economic 'pitch' declining? Around me the answer is a clear yes! Yet everyone tries to keep on living in harmony. Some have had to drop out.

The tipping point is when more have dropped out than are singing. Depending on what source you access you get different reports. " Over 51% of American workers earn less than $2500/month. " "Eleven US states have more riding in the wagon than pulling it." The specifics vary depending on what and how the measurements are made, but the message I keep hearing is 'decline is all around me'. I'm glad to still be singing, but as an entrepreneur I know that the whole choir is dropping in pitch as we go. The whole bucket tipping over is soon to follow.

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Cornelius999
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Joined: Oct 17 2008
Posts: 312
Chris the most impressive on

Chris the most impressive on the webinar INMO.

Cornelius999's picture
Cornelius999
Status: Gold Member (Offline)
Joined: Oct 17 2008
Posts: 312
In fact I've learned lots

In fact I've learned lots from watching most speakers in the webinar, but maybe most from Chris.

If it doesn't sound too adulatory I'm impressed by how much he cares and how fast he's prepared to grow.  I'm sure it's catching for lots of us which is just as well considering the hockey stick curves we need to get past!

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chipshot
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Joined: Mar 15 2010
Posts: 30
Bumblebee Drones

Chris (and anyone else interested),

In response to your story in the Lancaster seminar about people at NASA suggesting bumblebee drones as a fix, you may find the last episode  (Season 3, Ep 6--"Hated In the Nation") of Black Mirror on Netflix worthwhile.

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