What if a 'gentle crash'...

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What if a 'gentle crash'...

...is going to happen?

Whether 'planned' or just happenstance?  

The way the US economy is set up, the middle class is going down in droves.  It doesn't seem to me that there's much to be done to prevent that.  The downward spiral of the economy won't support (IMO) a middle class of the sort that has existed since shortly after WWII.  Too much of the economy is illusory money-moving, or the outright extraction of wealth from overseas -- and, increasingly, from domestic sources (like your 401-k etc.) -- and as such not enough value is produced here to support a middle class.

It wouldn't surprise me at all to see the MC sliced and pared down to a tiny fraction of its former size, leaving a miniscule (if dominant) upper class, a very small middle class, and everyone else relegated to the lower class (say, 1%, 9%, 90% respectively).  Other than the tip-top of the heap, everybody's life/lifestyle crashes down (or gets 'rightsized'?) until some sort of stasis is reached.  Millions of former white-collar workers end up farming (probably not on their own land) and so forth.

Seems to me that without major intervention in the housing market, its crash is inevitable in the face of persistently high unemployment and low or no growth.  Big housing crash would lead to further unemployment, leading to more downs in RE, and so forth in a self-perpetuation spiral.

With major government intervention, housing gets propped up and current conditions continue (keeping the downward spiral in slow-mo, unless crazy inflation sets in which could lead to a crash [see previous paragraph]) but if international investors bail out of the dollar or government debt (because of continued QE), we end up in a crash anyhoo.

Barring a miraculous event (new energy source?) that would provide employment and give internationals a new/better reason to hold dollars -- which I give a 1 in a million chance of happening -- I don't see a way out of this predicament.  I know, I'm no uberscholar, but my momma didn't raise no dummies, neither.  Wink  I'd be thrilled to be enlightened.

Just some thoughts on a gorgeous November afternoon.

Viva -- Sager

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Re: What if a 'gentle crash'...

First of all, there will not be a small middle class. There will be no middle class. Second of all, I believe it is this government's intention to create a slow and gentle crash. However, they are playing a very dangerous game and the whole thing could blow up in their (and our) faces.

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Re: What if a 'gentle crash'...

Heres a case study of a lower class suburb: Pomona, California.

INCOME

From wikipedia:

The median income for a household in the city was $40,021, and the median income for a family was $40,852. Males had a median income of $30,195 versus $26,135 for females. The per capita income for the city was $13,336. About 17.1% of families and 21.6% of the population were below the poverty line, including 27.4% of those under age 18 and 11.7% of those age 65 or over.

The national median household income is around $50,233. So Pomona is roughly 20% below the national average.

CRIME

        POMONA                      NATIONAL AVERAGE

Murder   .14 per 1000          .06 per 1000

Robbery 2.35 per 1000         1.41 per 1000

Assault  5.25 per 1000         2.91 per 1000

Car theft  10.5 per 1000        4.17 per 1000

Average home in Pomona with the typical bar cages on the windows.

The gangs in Pomona roam around and tag things up.

The cholos on youtube.

<img src="http://farm3.static.flickr.com/2132/1780622398_d67ccb2e69.jpg?v=0">

Point of the post is what will happen with these cities across the country. The only reason the crime rate isnt 3 times higher is because the cops arrest everyone who even looks like a gangster and throw them in jail. Now with California prisons and jails releasing prisoners early the streets are starting to fill up again. Also, as more businesses shut down and unemployment rises expect the gangsters to become more powerful as people go to them for money. I know Pomona very well as my family has a business there. During the bubble crime rates continued to fall as people were working and HELOCS were flying. Now that the crash has hit this town hard im curious to see how much worse it will get. God forbid we have a currency crisis as towns like this and others across the county blow up.

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Re: What if a 'gentle crash'...

If anything I consider this situation the MOST likely for the US.  There are so many people, rich and poor, who have a lot vested (mentally and materially) in this economy and the status quo.  Most or all of them aren't likely to give up on it overnight.  And I seem to remember CM making the case that this very large economy has a lot of "inertia" for lack of a better term, and that despite all its failings the economy will probably take some time to reach bottom.  There are outside events that could precipitate a faster, harder collapse (war, huge natural disaster, etc), but I'd say that's a less likely, though still possible, scenario. 

I would agree in either case the middle class will be a fraction of its former size (if even that).  I'm increasingly of the opinion that for most of us the best option in the long term is to detatch ourselves from the larger economy.  Not entirely and not forever, but in the short-to-medium term the game is not going to be friendly to the middle class.  Best not to play the game then, or as little as is prudent, if the odds are stacked so high against you.  And don't put more of your chips back into the game until we can bring about a new renaissance that allows a healthy middle class and a sane economy and society, whether that takes 2 years or 2 decades.

- Nickbert

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Re: What if a 'gentle crash'...

Middle class is a function of education and skill.  Take the income out of it.  Most of these folks are intelligent and can develop skills that will help them get by in a downturn.  Many will go back to farming.  Many will start small scale manufacture. It will be a shift out of service industry into more traditional industry.  I don't buy the assertion that they will just sit on their asses waiting for the gov't to bail them out.

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Re: What if a 'gentle crash'...

I don't believe that our middle class is well educated; high school drop-out rates are around 50%, only 25% of those who begin college graduate with a four-year degree and something like 60% don't believe in or don't know whether or not evolution as a theory is valid.

If someone has enough power and control over society to keep cable TV and sports in particular, in tact, I think a gentle landing might be possible.  Governmen providing free cable and internet would keep most of us off the streets, and of course that pre-supposes electricity.

The more intelligent would probably take advantage of the free Chinese lessons that would also start being broadcast so we could try and strike a deal with our new landlords that would be somewhat favorable.

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Re: What if a 'gentle crash'...

docmims-

I agree, but what you describe would take time.  Much more time for some than others, since some of their existing wealth will be lost or they will require new education or job skills training.  Many of the middle class have job skills now that may have little use in whatever new economy we see; many will adapt but it will take time.  When they do then the middle class will likely begin to regrow, but I don't expect a very quick adjustment for most folks.

- Nickbert

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Re: What if a 'gentle crash'...
sager wrote:

It wouldn't surprise me at all to see the MC sliced and pared down to a tiny fraction of its former size, leaving a miniscule (if dominant) upper class, a very small middle class, and everyone else relegated to the lower class

I agree...I think it's exactly where we're headed.  China is organized that way...the ruling class, the few middle class bourgeois that are needed to work in the corporate system, and the rest are lower class proletariat.  They figured out this is the stable form of top-down control that works as opposed to the Soviet version which tried to have no bourgeois.

Though this shift could happen quickly in the US, I'd guess it will shift over 20-30 years.  In the US, the limited middle class will be in things like high tech, academia, consulting, banking, so I'd get into one of those industries if you want to be middle class.  Other industries will continue being shipped offshore so middle class jobs there are going to disappear.  Personally I have no interest in being back in the corporate bourgeois--it's a hollow existence in my view--so I'm not heading back into high tech.  

lbart wrote:

the free Chinese lessons that would also start being broadcast so we could try and strike a deal with our new landlords that would be somewhat favorable

That's more true than folks may realize!  However it appears fannie/freddie will serve as the property managers for the Chinese, so tenants will still be able to speak english and remain in the dark about who owns them but their managers will be speaking chinese.

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Re: What if a 'gentle crash'...
strabes wrote:

I agree...I think it's exactly where we're headed.  China is organized that way...the ruling class, the few middle class bourgeois that are needed to work in the corporate system, and the rest are lower class proletariat.  They figured out this is the stable form of top-down control that works as opposed to the Soviet version which tried to have no bourgeois.

Though this shift could happen quickly in the US, I'd guess it will shift over 20-30 years.  In the US, the limited middle class will be in things like high tech, academia, consulting, banking, so I'd get into one of those industries if you want to be middle class.  Other industries will continue being shipped offshore so middle class jobs there are going to disappear.  Personally I have no interest in being back in the corporate bourgeois--it's a hollow existence in my view--so I'm not heading back into high tech.  

I agree as well.  I think Sager and you are on the mark.  Given our present path, we will gradually devolve into a second world nation as Asia rises. 

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Re: What if a 'gentle crash'...

My take,with little room for compromise, is "Either Or",sorry Kierkegaard.

Either it'll be "The Waltons" or "Mad Max"(pardon the reference to popular

pablum)

Robie, voting for"The Waltons" 

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Re: What if a 'gentle crash'...
robie robinson wrote:

Robie, voting for"The Waltons" 

Second that!  

"G'night, Sager-boy!" Smile

 

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Re: What if a 'gentle crash'...

I'm thinking we're already in the soft crash.

Cheers,

Aaron

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Re: What if a 'gentle crash'...
Aaron Moyer wrote:

I'm thinking we're already in the soft crash.

Second that.  I got this thread started to see what other folks think about where we'll end up -- where does all this downward grind lead?  Seems like I'm not alone.  

Great to see you around the boards, Aaron.

Viva -- Sager

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Re: What if a 'gentle crash'...
Lbart09 wrote:

The more intelligent would probably take advantage of the free Chinese lessons that would also start being broadcast so we could try and strike a deal with our new landlords that would be somewhat favorable.

I find it unlikely (though not impossible) that the US government will allow the Chinese gov't to have a 'majority stake' in the US, whether that means denominating our debt to them in something other than the dollar or some other scheme that would require large sacrifice on their part.  Don't get me wrong, I'm sure the big boys would sell us all down the road in the time it takes to say "Ni hao!" if they had something very substantial to gain from it (they've been doing it on a gradual scale for years).  I'm just saying that as the situation stands now, giving the Chinese more leverage over us would in turn negatively affect the ability of the big boys in this country to wield their power, exert influence, and manipulate wealth.  They don't seem the sharing type  (...and if the American people are going to be screwed over, by golly it will be them doing it and not some johnny-come-latelysWink)

If or when most of the wealth is transferred out of the country by the big boys, however.... then I'll see this as a likely possibility.  In the meantime though I expect whenever China complains about our dollar policy and debt our gov't will continue, as Denninger put it, to give them the middle finger.

- Nickbert

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Re: What if a 'gentle crash'...

Hey Sager,

Great to see you as well brother.
I've been following a couple of your threads and I'm always impressed with your insight and ability to lead and inspire.

I think this grind will end in a modern Dark Ages.
Grim, I know. But the mathematics don't equal out, no matter how you manipulate the variables;

Too many people packed too densely, too few resources which are harvested entirely by the magic of oil and trucked in from afar... Inability to produce sustainable amounts of food based on population density is a problem in and of itself, but when you start examining the secondary and tertiary details, things get really ugly.

For example, where do most people settle? Coastal areas, near flood plains. I'll use Washington State for an example, because it's what I'm familiar with.

Seattle was built on the eastern edge of the Puget Sound. To the East, the Cascade range adiabatically force moisture down and into the mountains, where it falls as snow, and compacts into ice during the winter, and is... just rain during the fall and spring. On the Lee side of the mountains, we've got semi-Arid and Arid desert, which has been transformed into an agricultural dynamo, thanks to the daming of the Columbia and the magic of irrigation. Dozens of rivers bring water and silt down into the lowlands during the fall and early spring, where it settles and "refreshes" the top soil. This process makes the basins phenomonally fertile.

When Seattle was sold down the river by Ken Berring (that is to say - DRASTICALLY overdeveloped) the metropolis spread outward into the surrounding plains which went from fertile riverine valleys to concrete slabs coated in warehouses to store MP3 Players, instantly devalued automobiles and strip malls.

So, we traded the ability to grow food for products produced by cultural specialists; careers that only exist because we have manipulated our food production system into an equation that goes something like this:
Land+Petrol=Food
Not only did we make this trade, but we made sure that it'd be generations before we that soil would be available again, due to the mass of concrete. The bright side, I bet that soil is black and fine once that concrete breaks up and is destroyed, several hundred years from now.

Already, we can see some very serious and endemic problems. Seattle is now a city of 3 million. Before Washington became a technological hub, (say, into the 1970's) the population of this state was roughly 1.7 Million

With that expanse came the depletion of natural lands with which we could sustain our population by growing our own food. That is to say, without importing much. If, for some *inconceivable* reason, we could no longer rely on exports from the Heartland, what would happen to a city of 3 million?

If we think this problem will alleviate with time, we can have a look at Washington State's projected population here:

http://www.ofm.wa.gov/pop/stfc/default.asp

By 2030 - we can expect to have to feed DOUBLE the amount of people - 8 Million. So if our doubling time is approximately 21 years, we can expect to be trying to feed 16 million people by 2050. As the population increases, what do you think will happen to the amount of land/space available for food production?
Do humans ever develop the undesirable areas first? Can we count on Urban Sprawl to build up, rather than out?
The proof is in the pudding, and a quick look at most "urban planning" says no.

But wait - we still have Eastern Washington! We can get our food from there, right?
Eastern Washington is entirely dependant on irrigation from the 9 dams along the Columbia, chemical fertilizers, machinery run on petrol and diesel and available labor. If we witness any sort of decline in overall productivity, we can expect that the state will produce less inversely proportional to the amount of fuel available.

Even if we could, as a state, provide enough food to stop only our state's 5 million from starving, too few people know the ropes of producing and preserving food. Food storage is a process that develops over the course of several years - especially if you can, smoke or dry your food. You will not have a "surplus" in one year.

So, where does that leave the vast (uncalculatable) majority of the population?
Hungry.

When this starts to develop into riots, that'll be the "que" to GTFO, IMHO. In fact, if you haven't, you can expect to have a quality of life similar to say... Sierra Leone, or Liberia.

The thing that really alarms me is desperation.
I've seen some intelligent people here, old and new, talking about whether or not this collapse will be SHTF or TEOTWAWKI (Thanks, REM) and I think that the final arbiter of that deliniation is going to be panic.

I've also seen intelligent people who think that things are fine, as they sip coolers on the back porch of their .25 Acre home that costed them $400,000. What happens to people who fail to plan when a disaster finally does strike?
Are they cool and collected? How about the opportunists who had nothing to begin with?
Are they generally imbued with the Christian spirit of Charity and Good Will towards their neighbors? Hurricane Katrina gave us some insight.

Density in any capacity is gravitational.
This principle holds equally true for populations, bowling balls and black holes.
Density draws everything.

Our population centers are primed for implosion, and it won't take much more density (25-50 years worth) before they must implode.
If we're able to stave off a catastrophe, we'll be worse off for having exponentially more people, and inversely proportionally less land to sustain them.

I hope this rant makes sense... it's built on some relatively abstract ideas I've got rolling around in the 'ole melon.
...And it doesn't even touch desertification, destruction of wild game and fish and resources, the implications and damage done by the dams to wild fish runs... The Columbia had 14 MILLION Pacific Salmon running through it in 1909.
Last year, we had nearly 600,000... and that was considered a great return.
Translation? Pacific Salmon are extinct without human intervention.

The guys out there fishing knee-to-knee, and boat-to-boat are doing it because they like eating.
The lakes and rivers are packed with sportsment trying to get away from nagging wives.

If families were starving? What would those same lakes look like?
How about the fish runs? How about the Deer, Elk and Moose population?
How do we divide up a herd of 4,000 Roosevelt Elk amongst 5 million starving people, who have no idea WTF just happened to the cozy world they're used to?

Cheers?

Aaron

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Re: What if a 'gentle crash'...

Elaborating:
I try and find base, analogious concepts that exist in the natural world, and apply them to sociology. I know at times this can be hard to follow, but here's an example:

The self development process of a storm, for example requires a variety of circumstances to become "favorable".
Moisture, instability, lift and Exhaust are all required for the development of mesoscale rotation; a process which draws in moisture, particulates and mass down a gradient and lifts it up, where it cools inside the cell as it rises in the atmosphere - areas that are less dense and cooler. This process creates a very small vaccum and on the leading edge, the product of this process is presented; Rain and electrical discharges. Instability creates the channeling of mass upward, which "feeds" the storm.

In the mid level, dry air tilts the storm. If this does not exist, the storm will grow vertically, and eventually, the mass displaced vertically will begin to resettle, and essentially "choke" the storm... disallowing it to develop further. This intrusion of dry air creates the exhaust.

In the same way, Societies have similar requisites;
Sustanance, productivity, imports and exports.

If the mass to support and feed the population isn't there, the society will choke and die just as will the storm; without productivity, the society cannot generate anything of use to export and the collusion of new ideas, thoughts, materials and technologies is like the dry-air intrusion spoke of above; it "seasons" a culture the way that the exhaust of a storm allows it forward momentum.

This process in Meteorology is called the "self development" process, and I believe that societies follow a similar pattern during their formation.
Some storms are relatively benign, as are some cultures. Others, have rapid, explosive growth, amass influence and importance, and take on a significance that's impossible to deny.

The United States did this. The British Empire did this, and when it collapsed, the outflow created the United states, which like a storm collected the residual energy generated by the British Empire. Rome followed a similar, albeit much slower pattern as did Sumaria, Persia, Greece, Egypt and so on.

All of these things have a natural cycle that can be described in four phases:
Birth (genesis) Maturity, Decay and Death.

The United states happened to mature along side the Exploitation of oil, which would make it tantamount to a literal global super-storm. Naturally impossible, a creature of unnatural tampering. A storm that redistributed everything the world's ever know; technology, knowledge, cultures, flora and fauna, disease and microbes... a Herculaen event that is unprecidented since the breaking up of Pangea, and it's taken less than 500 years from the Dawn of the British Empire to the Space race.

We are solidly in our Decay Phase. Our inflow of technology, goods, ideas and concepts has hit a point of dimishing returns. More importantly, the momentum generated by our rapid forward progress literally cannot be controlled.

The influence we hold on the world is being lost as we deteriorate proportionally to the speed with which we ascended... and without the energy generated here, it's unlikely that a successor will be born from the residual energy; which we drew from crude.

The rest of the worlds economies are inexorably linked to our own, no different than the cars of a train... and when that train derails, going waaaay too fast (as it is), the rest will derail with us; the ones tied closest to us will be the hardest hit, and it'll be generations before the survivors can pick through the rubble to cobble together another "world power".

I see the collapse of the Soviet Union on a Global scale.
If the Iron Curtain hadn't restrained and controlled the collapse, we might very well not be in this position now..

Cheers, and all apologies for the rambling thoughts.

Aaron

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Re: What if a 'gentle crash'...

Pithy stuff as always, Aaron.

A few thoughts of my own:  although my thinking isn't as detailed as yours is, I can't imagine that food production will keep up for even another 10 years.  IMO petro-products that support industrial-scale agriculture will become too expensive -- the new underclass (ex-middle-class/working-class) won't be able to afford it -- unless there's some sort of gubmint subsidy (as there is w/a lot of foodstuffs already).  But the food that's subsidized is the cheapest, least-nutritional garbage food.  So my point here around food being that there either won't be enough of it or what there is will only exist because the gov is helping pay for it -- leaving too many people eating empty-calorie/low-nutrient food.  One can make all sorts of philosophical hay out of that situation.

As for me and mine I would expect to be growing/storing the yuge majority of our own food (and trade with like-minded others for the rest).  

[Wife & I watched "Food Inc." last night, and while it didn't tell us anything we didn't already know, I can say that it's finally got me *this* close to utter refusal to eat any meat that isn't organic/free-range/local...and that takes a lotta doing {unabashed carnivore that I am}]...

As for what all went on in China this week between Hu & Obama...  I think they were frankly negotiating the terms of the letdown.

One last thought:  simple physics:  in a world of declining BTUs of available cheap energy, everybody has to get by on less, no matter how entitled we feel as a culture.  To the extent anyone out there can read that last sentence and be OK with it, the gentle crash will be easier for you.  To the extent one reads that sentence as has a problem, well...the crash is going to be harder for you (and everybody around you).

Viva, ya'lls -- Sager

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Re: What if a 'gentle crash'...

Hi Sager,

I agree with Aaron. I think this past year has been the gentle part of the crash. Now its time to get our tray tables and seatbacks in an upright and locked position. When the reality that there is simply not enough energy to go around becomes common knowledge it will be a game changer in a way populations have never dealt with.

Aaron,

Good to see your posts!  I share your "ramblings" so to speak!  I cannot see how our civilization can avoid an inevitable clash with hunger as the energy and the natural resources vaporize in front of our expanding population.  The trigger could be an economic one such as global currency collapse but that IMHO will quickly translate into a food and energy crisis that population centers will not be able to deal with.

I would expect governments to impose rationing of food and fuel to try and control the crisis but that effort will be way too little way too late. Beyond that, the variables as to outcomes increase for each area of the planet and their populations but I do envision a point of stability much farther down the road once a balance has been restored regarding living systems and available energy (photosynthesis).

Nickbert,

I found it interesting that Obama thought it a good idea for China to invest in US Banks to help with stability! That way when the forclosure proceedings occur it will be much easier to "transfer the wealth".  Unbelievable!

Coop

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Re: What if a 'gentle crash'...

you guys seem to think that the paper the chinese hold is more valuable than the paper the paper we are holding.  Bottom line is both are worthless.  The Chinese are as big a suckers as we are on the dollar.

Do the Japanese own America, now?  They own way more paper than the Chinese by a factor of 8.

Bottom line is the chinese are not buying us.  They are just buying us off to look the other way when they expand locally. Actually, quite frankly, I hope their first "liberation" is North Korea.

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Re: What if a 'gentle crash'...

This is turning into a really interesting thread, and thanks to Aaron for the rambling, I enjoyed that..... because exactly the same thing's happening here in Australia.  At least "we" have just successfully managed to rid ourselves of a totally ridiculous plan for a new dam just over the hill which would have flooded some of the best farmland around here (such as it is...) with water so shallow that it would've been empty for much of the time due to evaporation....  Let's face it, TPTB are now truly clutching at straws to keep BAU going and keep the masses in their torpor...

An d if you think you're going down in flames soon, just think of us who have some of the world's poorest soils, and truly cannot sustain ANYTHING Of any quality without FFs....  and we are primed to run out of oil in 20121 (OR AS GOOD AS)

TPTB here are floating ideas of unbelievable population growth, as if it WILL happen, and when people like me open their gobs and say "It'll never happen because we'll be in collapse mode before you know it", of course I'm told I'm just a nut case.....  except I can now see more and more people actually taking me seriously, even our local representative......  who admits there's not  a lot he can do......  because there isn't, hey!

And Sager, "As for what all went on in China this week between Hu & Obama...  I think they were frankly negotiating the terms of the letdown", you know, I thought EXACTLY the same thing when that appeared on our TV news....

Has anyone here seen 2012 the movie?  We went to see it yestarday afternoon...  Apart from the fact it was all ludicrous fantasy made for Hollywood to flex its CGI muscles (I couldn't stop laughing for much of it..), I thought the message was clearly "WTSHTF - you're on your own!"

Mike

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Re: What if a 'gentle crash'...

Docmims,

You're preaching to the choir. At this point, anything that lacks a nutritional value or a utility has no "value".
There is a period of time after you've leaped from the cliff and before you hit the ground that you realize "Ut-oh, this situation is unfavorable".

That's exactly where the political world is right now.
They know what's happening, but for the present moment, the only thing they can do is quietly contemplate how far we'll fall, while trying to fall on something relatively soft.

The brunt will be dealt to the commoners.

DTM,
You said:

Quote:

"WTSHTF - you're on your own!"

This might be the most painfully true statement I've ever heard.

Cheers,

Aaron

(and thanks for the thanks for the ramble ;)

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Re: What if a 'gentle crash'...
Damnthematrix wrote:

And Sager, "As for what all went on in China this week between Hu & Obama...  I think they were frankly negotiating the terms of the letdown",
you know, I thought EXACTLY the same thing when that appeared on our TV news....

A lot of my friends here feel the same way, too, DTM.  It'll be interesting to read between the international monetary policy lines over the next few months...

Viva -- Sager

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Re: What if a 'gentle crash'...

DTM,

And here in California the seeds are being sewn to create public opinion for support of a new dam, most likely on the American River East of Sacramento.  Environmental suits have been brought to stop pumping water from the Sacramento/San Joaquin delta into the California Aqueduct due to the impact on the "Delta Smelt" fish. The canal carries water South through the Central Valley farmlands before it is again pumped up and over the Tehachapi Range to Los Angeles and the 20 million thirsty desert dwellers there. Of interest is that water supplies have been cut to farmers along the way where farmlands and orchards (very visible along US Interstate 5) have been allowed to dry up.  Meanwhile in Los Angeles there is no mention of a water problem so the lawns and car washing continue unabated!

Now, public opinion is changing as regards construction of a dam because of all the devastation to the drying farmland and crops!  When Arnie (Calif. Governor) decides to push for the dam the public will likely support it ....and the environmentalists will have to find a new fish to protect in the American River.

We have no middle ground nor appreciation for the real underlying issues. We spend precious time going nowhere. We will not have the energy to construct a new dam even if it were a good thing to do especially considering the time it would take for approvals. We support a system that is abused (no appreciation for conservation or the energy to make it function) and itself is utterly dependent on electric pumps to function. A power down scenario will take out the water system for about half of the southern portion of the Central Valley farming, a good portion of the Southern Calif. water supply and with it a large portion of the States GDP which has been about the worlds eighth largest economy.  No worries mate! Arnie the "Terminator" will rescue us!

I say bring on the crash. The sooner it happens the smaller the carnage heap. Maybe I'll go to the movies tonight and see 2012!

Coop

 

 

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A. M.
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Re: What if a 'gentle crash'...

"The Road" comes out the 25th...

Should be pretty gritty.

Cheers,

Aaron

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Re: What if a 'gentle crash'...
Damnthematrix wrote:

... I thought the message was clearly "WTSHTF - you're on your own!"

I rarely put heavy meaning on any of my dreams, but two nights ago I had one that was disturbingly relevant. 

My family and I were in a plane, which was slowly losing altitude along with another jet off in the distance.  I keep saying something is wrong, but everyone else on the plane just goes "we do seem close to the ground" with their tone and manner having the unspoken addition "I'm sure there's a good reason".  I ask the attendants "WTF? the plane is losing altitude!"; however they say everything is fine and that this is all normal.  I see the jet in the distance hit the water.... my wife and I tighten our seatbelts and the baby's seat strap, and a few seconds later our plane lands in the ocean as well.  We come through fine but see everyone else, including the flight attendants, is hurt and with that deer-in-the-headlights look.  I bring my family to the emergency exit; we're the ONLY ones to it, and even after opening up the door ourselves and bringing my family down to the raft I see just blank stares from the windows.  I remember being pissed and yelling something really rude at them, and they finally start leaving the plane for the exits.  We get picked up by a cruise ship, and we're told by the staff that everything's fine now and this was all just a minor problem and everyone should enjoy themselves.  Everyone else eagerly heads for the buffet and the pool (a weird image since they're still visibly banged up and bloody) to eat and party.  I'm still disturbed by whatever brought both planes down at the same time and somehow know that the problem is still there, and that the ship is heading straight for it.  Everyone's busy partying like nothing happened and not listening to me at all.  I ask to see the captain of the ship; I'm told he's busy eating dinner and can't be bothered.  I ask to see one of the senior officers; I'm told none are available, but hey, the buffet and beer is free so enjoy and stop worrying.  The dream ended about there before anything else happened, but up to that point I was sure that something else was about to happen and we were looking for ways off the boat.

One of things I realized near the end of the dream was that not only had I never seen any sign of the senior officers on the cruise ship, but I had never seen any of the pilots from the plane at any point during the flight or after the crash.  Like they had never been there in the first place.... only some mouthpieces conveying false calm and reassurances. 

If I had to guess, I'd say this is my unconscious telling me like Mike said.... we are truly on our own.  And even worse, those supposedly steering the boats and flying the planes (metaphorically speaking) have already bailed, all the while leaving the rest of us steered toward the danger and encouraging us to ignore it.  I have little doubt this is the very situation we're facing; we have to work on preparing for rough times ahead with zero help from the top, and now we've got the guys at the top running interference every step of the way. 

- Nickbert

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Re: What if a 'gentle crash'...

Nickbert,

Some of the recent research I've seen on Science Daily is that dreams are one way we help ourselves to prepare for tomorrow (future).  Very excellent dream!

My only question, I hope you didn't see me or any other other CMers on the plane with you!

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Re: What if a 'gentle crash'...

If the crew,TBTB, bailed, or if our current leaders have bailed, how did they

or what did they do?

 

hum,Robie

Husband,Father,Farmer,Optometrist

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Re: What if a 'gentle crash'...

Lbart09 -

Heh... no I didn't see anyone I recognized on the plane or the ship, just a bunch of random people.  I just hope reality doesn't reflect that dream, because in my dream my family were the only ones reacting in any significant way.  I remember the whole dream being in a constantly pissed-off state at everyone around me.  Here in the waking world I try not to lose my patience with some people's display of willful ignorance, but lately it's been wearing thin.  If I happened to regularly carry a rolled-up newspaper around with me, the temptation each day to bop certain people upside the head with it would be simply too much to resist.

robie -

How are TPTB bailing out?  Probably by moving their money out of the paper assets and stocks and real estate markets they've encouraged the rest of us to support.  And any of that wealth that's not being taken out of the country is probably being used in buying up resources and certain critical infrastructure industries (energy, transportation, health care, etc).  As CM said, there's an overabundance of paper wealth compared to tangible, real things used to produce and create goods and services.  Maybe my dream was telling me that TPTB are not just content with being the first ones to the exit, but are intentionally steering us in the wrong direction so we don't get access to any of the real wealth before they've had their fill.  Kind of like evacuating from a sinking ship.... there are still people on board the ship screaming for help as the lifeboat drifts away, because some of the selfish douchebags that were first to the lifeboat felt like keeping some seats empty just so they could stretch out and put their feet up.

- Nickbert

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Re: What if a 'gentle crash'...

Courting Convulsion

     How infantile is American society?  Last night's CBS "Business Update" (in the midst of its "60 Minutes" program) featured three items: 1.) The New Moon teen vampire movie led the weekend box-office receipts; 2.) Cadbury shares hit an all-time high; 3.) Michael Jackson's rhinestone-studded white glove sold at auction for $350,000. Some in-house CBS-News producer is responsible for this fucking nonsense.  How does he or she keep her job? Is there no adult supervision at the network?

     Meanwhile, over at The New York Times this morning, Paul "Nobel Prize" Krugman writes:

"Most economists I talk to believe that the big risk to recovery comes from the inadequacy of government efforts; the stimulus was too small, and it will fade out next year, while high unemployment is undermining both consumer and business confidence."

     Disclosure: I'm not one of the economists that Mr. Krugman talks to (nor am I an economist). But it's sure interesting to know that the ones palavering with Mr. Krugman imagine that that the US can possibly return to an economy based on the fraudulent securitization of reckless debt. Does Mr. Krugman think that the production housing industry can resume paving over the nether exurbs with half-million-dollar houses (to be bought with no money down loans by the sheet-rockers working inside them)? Does he think all those people receiving cancellation notices from their credit card issuers are in a position to flash their plastic at the Gallerias this Friday? Or ever will be again?  Is he perhaps misusing the term "recovery?"  After all, that is generally taken to mean resuming a prior state, which is, in turn, presumed to be a healthy prior state.  Is that what the economy of the past decade was?  And, incidentally, what exactly is a "consumer?"  And why, at the highest levels of journalism in this land, do we refer to citizens that way?  As if the American people have no other purpose except to buy things? Or is that the only way an "economist" can imagine them?

     I'm sorry to burden the reader with so many questions, but the idiots running the mainstream news media in this land are not doing it and somebody has to. 

     If a "recovery" is not in the cards, then what exactly is going on out there?

    What's going on in the US economy is a slow-motion convulsion from which we will emerge as a very different nation with a different economy.  The wild irresponsibility of the media in pretending otherwise is only going to make the convulsion worse, more painful, more socially and politically destructive. The convulsion can be described with precision as one of compressive contraction. Historic circumstances are requiring us to change our behavior, to make new arrangements for everyday life in all the major particulars: capital accumulation and deployment; food production; commerce; habitation; transport; education; and health care. These new arrangements must be organized at a smaller and finer scale, and on a much more local basis.

     The main "historic circumstance" mandating these changes goes under the heading of "peak oil."  We've come to the end of our ability in this world to increase energy inputs to the global economy.  The routine "growth" in industrial activity and production that has been the basis of our financial arrangements for 200-odd years is no longer possible.  Offsetting this decline in oil energy "input" with "alt.energy" is a dangerous fantasy because it distracts us from the urgent task of making new arrangements for trade, food production, et cetera - the very things that would provide jobs and social roles for our citizens in the future.

     We are seeing a comprehensive failure of leadership in every sector and every level of American life - in politics, business, banking, education, news media, medicine, and the clergy. All are determined to pretend that we can somehow continue the habits and behaviors of the pre peak oil era. They are all unwilling to face reality, and are all engaged in mutually supporting each other's dangerous fantasies.

     If we don't attend to the transformation of American life by downscaling our activities and changing the way they are carried out, and re-localizing them, we will see our society disintegrate - and I use the word "dis-integrate" with purposeful precision. Everything will come apart - our political arrangements, our households, our health and well-being.

     At the moment, banking is disintegrating.  It's happening because the end of regular, predictable, cyclical, industrial growth means the end of our ability to generate credit without limits, and in fact we passed this point by stealth some time ago leaving the banks in "Wile E. Coyote" suspension above an abyss, where they have lately been joined by government at all levels and the indebted citizens of the land. The profound nausea spreading through the offices of America is the somatic recognition of exactly where we are in all this: off the cliff.

     It's important to remind readers that so-called "capitalism" is not to blame.  Capitalism is not an ideology.  It refers to a set of laws governing the disposition of surplus wealth.  There is going to be surplus wealth somewhere in the years ahead, even if our living standards fall substantially, even under the strictures of peak oil.  All the communist experiments of the 20th century produced some kind of surplus wealth. All of them were subject to the phenomenon of compound interest. What matters in the disposition of capital are the rules created for accumulating and deploying it.  In the USA the past two decades, we ignored the rules, repealed some of the critical laws, and failed to enforce the existing ones so that, when faced by the historic circumstances of peak oil, we allowed fraud and swindling to run wild - just at the moment when we should have taken the most care.  That is why our money system ran off the rails.

     We're now seeing worldwide a kind of race between the assertion of peak oil and the failures of capital management as to which will provoke a widespread convulsion first.  They are obviously related and whichever gets us in the most trouble fastest, our destination is the same: the absolute necessity to reorganize how we live.  Among the many elements of this is the fact that "globalism," in the Thomas Friedman sense of the word, is over. The urgent need to re-localize economies makes this self-evident. As a practical matter for us, this means committing to import replacement - making things we need in the US, probably much more regionally.  "Globalism" now joins the many other fantasies that we can no longer indulge in.

     At the moment, going into Thanksgiving 2009, America's leadership has dedicated itself to the worst action it could take under the circumstances: a campaign to sustain the unsustainable. This is what's embodied in the foolish term "recovery."  The way we try to explain things to ourselves matters, if we don't want to be crushed by history. Go back to the top of this blog and look at the things we pay attention to.  Aren't you ashamed?

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Re: What if a 'gentle crash'...

Everyone agrees: our economy is sick. The inescapable symptoms include declines in consumer spending and consumer confidence, together with a contraction of international trade and available credit. Add a collapse in real estate values and carnage in the automotive and airline industries and the picture looks grim indeed.

(Download pdf version of this article.)

But why are both the U.S. economy and the larger global economy ailing? Among the mainstream media, world leaders, and America's economists-in-chief (Treasury Secretary Geithner and Federal Reserve Chairman Bernanke) there is near-unanimity of opinion: these recent troubles are primarily due to a combination of bad real estate loans and poor regulation of financial derivatives.

This is the Conventional Diagnosis. If it is correct, then the treatment for our economic malady might logically include heavy doses of bailout money for beleaguered financial institutions, mortgage lenders, and car companies; better regulation of derivatives and futures markets; and stimulus programs to jumpstart consumer spending.

But what if this diagnosis is fundamentally flawed? The metaphor needs no belaboring: we all know that tragedy can result from a doctor's misreading of symptoms, mistaking one disease for another.

Something similar holds for our national and global economic infirmity. If we don't understand why the world's industrial and financial metabolism is seizing up, we are unlikely to apply the right medicine and could end up making matters much worse than they would otherwise be.

To be sure: the Conventional Diagnosis is clearly at least partly right. The causal connections between subprime mortgage loans and the crises at Fannie Mae, Freddie Mac, and Lehman Brothers have been thoroughly explored and are well known. Clearly, over the past few years, speculative bubbles in real estate and the financial industry were blown up to colossal dimensions, and their bursting was inevitable. It is hard to disagree with the words of Australian Prime Minister Kevin Rudd, in his July 25 essay in the Sydney Morning Herald: "The roots of the crisis lie in the preceding decade of excess. In it the world enjoyed an extraordinary boom...However, as we later learnt, the global boom was built in large part...on a house of cards. First, in many Western countries the boom was created on a pile of debt held by consumers, corporations and some governments. As the global financier George Soros put it: 'For 25 years [the West] has been consuming more than we have been producing...living beyond our means.'" (1)

But is this as far as we need look to get to the root of the continuing global economic meltdown?

A case can be made that dire events having to do with real estate, the derivatives markets, and the auto and airline industries were themselves merely symptoms of an even deeper, systemic dysfunction that spells the end of economic growth as we have known it.

In short, I am suggesting an Alternative Diagnosis. This explanation for the economic crisis is not for the faint of heart because, if correct, it implies that the patient is far sicker than even the most pessimistic economists are telling us. But if it is correct, then by ignoring it we risk even greater peril.

Economic Growth, The Financial Crisis, and Peak Oil  <MORE>

ao's picture
ao
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Re: What if a 'gentle crash'...

Nickbert,

Dreams such as this are always symbolic.  Yours is a doozy.  Thanks for sharing that.

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