While You Were Sleeping… The Economy Collapsed

There are a number of half truths and financial fantasies floating around the U.S. today, which may explain why some have decided to throw caution to the wind, adopting a cult-like blind faith in the “unsinkable” American economy. I suspect that the consequences for this error in judgment will become quite clear to most by the end of next year, but until then, let’s examine our current situation, what the government has to say about it, and the reality they wish to gloss over.

It’s nice to maintain a rosy outlook on the economic situation we face. It makes us feel safe. The fact is, though, that we are far from safe, and denying the problem will not make it go away. The MSM’s main drive, at least for now, is to promote a sense of well being. Some of them do it because they believe the markets are driven by psychology and that by creating a positive atmosphere, we can somehow make our troubles disappear through shear force of will. Of course, this is an absurd notion.

Others ignore the facts and spin ideas of recovery deliberately and with malicious intent, because they know comfortable people are not alert, and those that are not alert are easy to surprise, and surprised people are easy to control.

Weimar HyperInflation: Time to Get Out the Wheelbarrows? || Economic crisis spurs spike in 'suburban survivalists'

Weimar HyperInflation: Time to Get Out the Wheelbarrows?

Ellen Brown | Web of Debt

May 19th, 2009

“It was horrible. Horrible! Like lightning it struck. No one was prepared. The shelves in the grocery stores were empty.You could buy nothing with your paper money.

– Harvard University law professor Friedrich Kessler on on the Weimar Republic hyperinflation (1993 interview)

Some worried commentators are predicting a massive hyperinflation of the sort suffered by Weimar Germany in 1923, when a wheelbarrow full of paper money could barely buy a loaf of bread. An April 29 editorial in the San Francisco Examiner warned:

“With an unprecedented deficit that’s approaching $2 trillion, [the President’s 2010] budget proposal is a surefire prescription for hyperinflation. So every senator and representative who votes for this monster $3.6 trillion budget will be endorsing a spending spree that could very well turn America into the next Weimar Republic.”1

In an investment newsletter called Money Morning on April 9, Martin Hutchinson pointed to disturbing parallels between current government monetary policy and Weimar Germany’s, when 50% of government spending was being funded by seigniorage – merely printing money.2 However, there is something puzzling in his data. He indicates that the British government is already funding more of its budget by seigniorage than Weimar Germany did at the height of its massive hyperinflation; yet the pound is still holding its own, under circumstances said to have caused the complete destruction of the German mark. Something else must have been responsible for the mark’s collapse besides mere money-printing to meet the government’s budget, but what? And are we threatened by the same risk today? Let’s take a closer look at the data.

Jim Kunstler's GeoPolitics 101 Forecast 2009 || Exponential Fiat Currency: The Dangers of Printing Money

Jim Kunstler's GeoPolitics 101 Forecast 2009

ClusterFuck Nation

Introduction

There are two realities "out there" now competing for verification among those who think about national affairs and make things happen. The dominant one (let's call it the Status Quo) is that our problems of finance and economy will self-correct and allow the project of a "consumer" economy to resume in "growth" mode. This view includes the idea that technology will rescue us from our fossil fuel predicament -- through "innovation," through the discovery of new techno rescue remedy fuels, and via "drill, baby, drill" policy. This view assumes an orderly transition through the current "rough patch" into a vibrant re-energized era of "green" Happy Motoring and resumed Blue Light Special shopping.

The minority reality (let's call it The Long Emergency) says that it is necessary to make radically new arrangements for daily life and rather soon. It says that a campaign to sustain the unsustainable will amount to a tragic squandering of our dwindling resources. It says that the "consumer" era of economics is over, that suburbia will lose its value, that the automobile will be a diminishing presence in daily life, that the major systems we've come to rely on will founder, and that the transition between where we are now and where we are going is apt to be tumultuous.

My own view is obviously the one called The Long Emergency.

Since the change it proposes is so severe, it naturally generates exactly the kind of cognitive dissonance that paradoxically reinforces the Status Quo view, especially the deep wishes associated with saving all the familiar, comfortable trappings of life as we have known it. The dialectic between the two realities can't be sorted out between the stupid and the bright, or even the altruistic and the selfish. The various tech industries are full of MIT-certified, high-achiever Status Quo techno-triumphalists who are convinced that electric cars or diesel-flavored algae excreta will save suburbia, the three thousand mile Caesar salad, and the theme park vacation. The environmental movement, especially at the elite levels found in places like Aspen, is full of Harvard graduates who believe that all the drive-in espresso stations in America can be run on a combination of solar and wind power. I quarrel with these people incessantly. It seems especially tragic to me that some of the brightest people I meet are bent on mounting the tragic campaign to sustain the unsustainable in one way or another. But I have long maintained that life is essentially tragic in the sense that history won't care if we succeed or fail at carrying on the project of civilization.